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HomeMy WebLinkAboutCouncil Packet - 5/8/2017Amended Council Agenda Items Council Meeting Monday, May 8, 2017 Add Item 1.B.1.a. Travel Requests Name & Title of Personnel Class/Meeting Destination Date(s) Amount not to Exceed P.O. Ehlers Midwest Gang Investigators Association 2017 Conference Wisconsin Dells, WI May 21- 24, 2017 $249.06 Added as an emergency because item was inadvertently left off of the Council Agenda, but did show on the Finance Committee Agenda on this same date. Roll Call. Prayer or Moment of Silence Pledge of Allegiance Jerome Amos, Ward 4 Council Member Agenda, as proposed or amended. Minutes of May 1, 2017, Regular Session, as proposed. Proclamation declaring May 13, 2017, as Letter Carriers' Food Drive Day. Proclamation declaring May 15 - 21, 2017 as National Police Week and May 17, 2016 as Peace Officer's Memorial Day. Recognition of Todd Moudry as the May 2017 Team Member of the Month. ORAL PRESENTATIONS Iowa Code Chapter 21 gives the public the right to attend council meetings but it does not require cities to allow public participation except during public hearings. The City of Waterloo encourages the public to participate during the Oral Presentations by following the rules listed on the front of the agenda. 1. Consent Agenda: (The following items will be acted upon by voice vote on a single motion without separate discussion, unless someone from the council or public requests that a specific item be considered separately.) A. Resolution to approve the following: 1. Bills Payment, Finance Committee Invoice Summary Report, a copy of which is on file in the office of the City Clerk. 2. Resolution approving Request from 105.7 KOKZ to hold its 36th Annual 4th Street Cruise on Saturday, May 27, 2016 from noon until 4:00 p.m. in the downtown area with the 700 block of Mulberry Street being blocked off from 8:00 a.m. until noon and 4th Street to be cleared of traffic by 11:20 a.m. Submitted By: Joe Leibold, Captain of Police Services 3. Request by Financial Resource Advisors (FRA) for a Variance to the Noise Ordinance on Saturday, June 3, 2017 from 4:00 p.m. to 8:00 p.m. to hold their annual car show in the parking lot located at 816 W. Tower Park Drive, along with the use of a PA system. Submitted By: Joe Leibold, Captain of Police Services 4. Resolution approving request of ABATE of Iowa, District 16, to hold its annual motorcycle awareness ride on May 20th, 2017, starting at 10:30 a.m. in the Black Page 2 of 486 Hawk County Courthouse parking lot, traveling throughout Black Hawk County, and ending the ride at Silver Eagle Harley Davidson. Submitted By: Joe Leibold, Captain of Police Services 5. Resolution approving the request of Full House Productions dba Spicolis for a Variance to the Noise Ordinance on May 25, 26, and 27, 2017 from 6:00 p.m. to 11:00 p.m. in conjunction with the Cornstock event to be held in the outdoor beer garden located at 3555 University Avenue, including a live band and the use of a PA system. Submitted By: Joe Leibold, Captain of Police Services 6. Resolution approving request of Chris Starbuck for a waiver for an asphalt driveway located at 2725 Randolph Street, with the elimination of the sidewalk section. Submitted By: Eric Thorson, PE, City Engineer 7. Resolution approving request of Kim Sullivan for a waiver for an asphalt driveway, located at 2719 Randolph Street with elimination of the sidewalk section. Submitted By: Eric Thorson, PE, City Engineer 8. Resolution setting date of public hearing as May 22, 2017 to approve proposed repairs in conjunction with the Sidewalk Inspection and Repair Program — Zone 7; and approve request to send out notification to property owners of proposed sidewalk repairs and estimate of costs; and authorize City Clerk to publish notice of said hearing. Submitted By: Wayne Castle, PLS, El, Associate Engineer 9. Resolution approving preliminary plans, specifications, form of contract, etc. and setting date of bid opening as May 25, 2017, and date of public hearing as June 5, 2017, for the FY 2017 Sidewalk Repair Program and Trail Repairs - Zone 7, Contract No. 914. Wayne Castle, PLS, PE, Associate Engineer 10. Resolution setting a date of public hearing as May 22, 2017 for the sale and conveyance of city owned property located north of 3488 Wagner Road to Mathias Properties, LLC, in the amount of $30,000 plus up to $5,000 in City costs, and authorize City Clerk to publish said notice. Submitted By: Noel Anderson, Community Planing & Development Director 11. Resolution approving abatement of assessment for 1221 W. 6th Street in the amount of $347.25, and authorize City Clerk to notify Black Hawk County Treasurer of said cancellation. Submitted By: Kelley Felchle, City Clerk 12. Resolution directing process for the sale of certain tracts of land formerly portions of West San Marnan Drive and setting the date of public hearing on an opportunity to be heard as July 10, 2017, setting the date of bid opening as July 13, 2017, and setting the date of public hearing on the sale and taking of bids for said property as July 17, 2017, and instruct City Clerk to publish and mail notice of said hearings and taking of bids. Submitted By: Noel Anderson, Community Planning & Development Director 13. Resolution approving preliminary plans, specifications, form of contract, etc. and setting date of bid opening as May 18, 2017 and date of public hearing as May 22, 2017 for salvaged asphalt crushing. Page 3 of 486 Submitted By:Sandie Greco, Interim Public Works Director 14. Resolution setting date of public hearing as May 22, 2017 for an amendment to the FYE2017 Budget and instruct the City Clerk to publish notice. Submitted By: Michelle Weidner, Chief Financial Officer B. Motion to approve the following: 1. TRAVEL REQUESTS a. P.O. Ehlers Class/Meeting: Midwest Gang Investigators Association 2017 Conference Destination: Wisconsin Dells, WI Dates: May 21-24, 2017 Amount not to exceed: $249.06 2. LIQUOR LICENSES a. Beck's Taproom Grill, 3295 University Avenue *Premise Update - adding another outdoor area* Class: C Liquor w/Outdoor Service New Application Includes Sunday Expiration Date: 12/31/2017 b. Ray's Supermarket, 1975 Franklin Street Class: B Wine / C Beer / E Liquor Renewal Application Includes Sunday Expiration Date: 3/2/2018 c. Red Carpet Golf, 1409 Newell Street Class: C Liquor w/Outdoor Service Renewal Application Includes Sunday Expiration Date: 4/4/2018 d. Sunnyside Country Club, 1600 Olympic Drive Class: A Liquor w/Outdoor Service Renewal Application Includes Sunday Expiration Date: 4/13/2018 e. Texas Street Mart, 4335 Texas Street Class: B Wine / C Beer New Application Includes Sunday Expiration Date: 3/14/2018 f. UNA Bar Restaurant, 910 W. 5th Street Class: C Liquor Renewal Application Includes Sunday Expiration Date: 3/9/2018 g. Waterloo Bucks, 850 Park Road Class: B Beer w/Outdoor Service New Application Includes Sunday Expiration Date: 10/15/2017 Page 4of486 3. APPOINTMENTS a. Tajah Wright Board/Commission: Human Rights Commission Expiration Date: 5/8/2020 New Appointment b. Ronald Miller Board/Commission: Historic Preservation Commission Expiration Date: 5/8/2020 New Appointment c. R. Kenneth Earnest Board/Commission: ADA Compliance Commission Expiration Date: 5/8/2020 New Appointment d. Daniel Channer Board/Commission: General Contractors Board of Licensing, Examiners & Appeals Expiration Date: 5/8/2020 New Appointment e. William Kugler Board/Commission: General Contractors Board of Licensing, Examiners & Appeals Expiration Date: 5/8/2020 New Appointment f. Ross Samek Board/Commission: General Contractors Board of Licensing, Examiners & Appeals Expiration Date: 5/8/2020 New Appointment g. Dennis Wilson Board/Commission: General Contractors Board of Licensing, Examiners & Appeals Expiration Date: 5/8/2020 New Appointment h. Scott Yount Board/Commission: General Contractors Board of Licensing, Examiners & Appeals Expiration Date: 5/8/2020 New Appointment i. Deb Waterman Board/Commission: General Contractors Board of Licensing, Examiners & Appeals Page 5 of 486 Expiration Date: 5/8/2020 New Appointment 4. Bonds. PUBLIC HEARINGS 2. Sale and conveyance of public alley right-of-way located adjacent to and north of 1118 Ansborough Avenue to Village Properties, LLC in the amount of $1.00 and approve development agreement. Motion to receive and file proof of publication of notice of public hearing. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments and recommendation of approval of the Planning, Programming and Zoning Commission. Motion to receive, file and consider and pass for the first time an Ordinance vacating a portion of public alley right-of-way located adjacent to and north of 1118 Ansborough Avenue, subject to retention of an easement over the northerly 10' of the vacate area. Motion to suspend the rules. Motion to consider and pass for second and third times and adopt the ordinance. Resolution authorizing sale and conveyance of platted alley, located adjacent to and north of 1118 Ansborough Avenue, to Village Properties, LLC for $1.00 plus costs, subject to the retention of an easement over the north 10 feet of the area to be conveyed, and authorize City Attorney to prepare and deliver deed accordingly and authorize Mayor and City Clerk to execute said documents. Resolution approving Development Agreement and authorize Mayor and City Clerk to execute said agreement. Submitted By: Noel Anderson, Community Planning & Development Director 3. General Obligation Bonds - ECP -2 - The issuance of not to exceed $200,000 General Obligation Bonds for essential corporate purposes. General Obligation Bonds - ECP -2 - The issuance of not to exceed $200,000 General Obligation Bonds for essential corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of ECP -2 - Not to exceed $200,000 General Obligation Bonds for essential corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer 4. General Obligation Bonds - GCP-3 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. General Obligation Bonds - GCP-3 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-3 - Not to exceed $700,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer Page 6of486 5. General Obligation Bonds - GCP-4 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. General Obligation Bonds - GCP-4 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-4 - Not to exceed $700,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer 6. General Obligation Bonds - GCP-5 - The issuance of not to exceed $500,000 General Obligation Bonds for general corporate purposes. General Obligation Bonds - GCP-5 - The issuance of not to exceed $500,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-5 - Not to exceed $500,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer 7. General Obligation Bonds - GCP-6 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. General Obligation Bonds - GCP-6 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-6 - Not to exceed $700,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer 8. General Obligation Bonds - ECP/UR-7 - The issuance of not to exceed $3,000,000 General Obligation Bonds for essential corporate purposes. General Obligation Bonds - ECP/UR-7 - The issuance of not to exceed $3,000,000 General Obligation Bonds for essential corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of ECP/UR-7 - Not to exceed $3,000,000 General Obligation Bonds for essential corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer RESOLUTIONS Page 7 of 486 9. Resolution awarding bid in the amount of $119,016.50 to Pritchard Auto Company of Britt, Iowa for the purchase of one (1) 2017 service truck for the Sewer Department. Submitted By: Sandie Greco, Interim Public Works Director 10. Resolution awarding bid in the amount of $29,802 to Bill Colwell Ford of Hudson, Iowa for one (1) 2017 cargo van for the Traffic Operations Department. Submitted By: Sandie Greco, Interim Public Works Director 11. Resolution awarding bid in the amount of $231,250 to Cedar Rapids Truck Center, Inc. of Cedar Rapids, Iowa for the purchase of one (1) automated side load garbage truck. Submitted By: Sandie Greco, Interim Public Works Director 12. Motion approving final quantity adjustment for a net decrease of $90 for the FY 2017 Tree Clearing - City Composting Site, Contract No. 927 and authorize the Mayor and City Clerk to execute said document. Submitted By: Dennis Gentz, PE, Assistant City Engineer 13. Resolution approving Completion of Project and Recommendation of Acceptance of Work performed by AIA Sandblasting, Marion, Iowa, at a total cost of $63,929.50 in conjunction with the FY 2017 Byrnes and Gates Pool Painting Project, Contract No. 923. Submitted By: Travis Nichols, Facilities/Project Manager, Leisure Services 14. Resolution approving Completion of Project and Recommendation of Acceptance of Work for work performed by Wapsi Pines Lawn Care & Landscaping, of Cedar Falls, Iowa, at a total cost of $17,060 for the FY 2017 Tree Clearing - City Composting Site, Contract No. 927. Submitted By: Eric Thorson, PE, City Engineer 15. Resolution approving contract with the Cedar Valley Jaycees for the 84th Annual Greater Cedar Valley Jaycees Waterloo Open Golf Classic, with a rental payment to the City in the amount of $3,000, and authorize Mayor and City Clerk to execute said documents. Submitted By: JB Bolger, Golf & Downtown Area Maintenance Manager 16. Resolution approving Special Construction agreement with CenturyLink in the amount of $27,511.77 for relocating a cross box to alleviate conflict with reconfigured driveway access to Center for the Arts parking lot and to accommodate truck traffic for the Single Speed Brewery. Submitted By: Eric Thorson, PE, City Engineer 17. Resolution directing the advertisement for sale of $9,245,000 General Obligation Bonds, Series 2017A; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Submitted By: Michelle Weidner, Chief Financial Officer 18. Resolution directing the advertisement for sale of $3,600,000 Taxable General Obligation Bonds, Series 2017B; setting the sale date as May 17, 2017, approving Page 8 of 486 lectrgniciddin procedures and the Official Statement for the sale. Submitted By: Mgichelle Weidner, Chief Financial Officer 19. Resolution directing the advertisement for sale of $8,100,000 Taxable General Obligation Bonds, Series 2016C; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Submitted By: Michelle Weidner, Chief Financial Officer 20. Resolution approving sales agreement with Conference Technologies, Inc., to upgrade the public access television studio to digital high-definition in the amount of $111,653.51 and authorize mayor to execute said document. Submitted By: Chris Youngblut, Director of Information Technology OTHER COUNCIL BUSINESS 21. Motion approving Change Order No. 6 (Extra Work) for $48,903.18 for the FY 2016 W 2nd, Cedar, and W. 3rd Streets Street Improvements, Contract No. 912. Submitted By: Eric Thorson, PE, City Engineer ADJOURNMENT Motion to adjourn. Kelley Felchle City Clerk MEETINGS 4:05 p.m. Council Work Session, Harold E. Getty Council Chambers 4:35 p.m. Ordinance Committee, Harold E. Getty Council Chambers 4:55 p.m. Boards and Commissions, Harold E. Getty Council Chambers 5:10 p.m. Finance Committee, Harold E. Getty Council Chambers Page 9 of 486 CITY OF WATERLOO Council Communication Minutes of May 1, 2017, Regular Session, as proposed. City Council Meeting: 5/8/2017 Prepared: REVIEWERS: Department Reviewer Action Date Clerk Office Higby, Nancy Approved 5/2/2017 - 11:16 AM ATTACHMENTS: Description Type D Minutes of May 1, 2017 Backup Material Submitted by: Submitted By: Page 10 of 486 111, V JL411V11 Vl L11, V1 LJ Vl VV LLL,11VV, Alf VV LL, 111,L 111 1\, ,L41LL1 41,UU1V11 LLL 11W1 VILA L. VVLL,' VVLL11 V11 ._11LL111V,1 U, Waterloo, Iowa, at 5:30 p.m., on Monday, May 1, 2017. Mayor Quentin Hart in the Chair. Roll Call: Jacobs, Morrissey, Powers, Lind, Amos, and Welper. Mr. Schmitt entered the meeting at 5:33. Prayer or Moment of Silence. Pledge of Allegiance: Pat Morrissey, Ward 3 Council Member 146370 - Welper/Schmitt that the Agenda, of the April 24, 2017 City Council meeting as proposed, for the Regular Session on Monday, May 1, 2017, at 5:30 p.m., be accepted and approved. Voice vote -Ayes: Seven. Motion carried. 146371 - that the minutes, of the April 24, 2017 City Council meeting as proposed, for the Regular Session on Monday, May 1, 2017, at 5:30 p.m., be accepted and approved. Voice vote -Ayes: Seven. Motion carried. Mayor read a Proclamation declaring May 4, 2017 2017 as A Day of Reason. Mayor read a Proclamation declaring May 2017 as Bicycle Month. Mayor read a Proclamation declaring May 6, 2017 as Latino Heritage Day. Mayor read a Proclamation declaring April 30 -May 7, 2017 as Soil and Water Conservation Week. ORAL PRESENTATIONS David Dryer, 3145 W. 4th Street questioned the location of three lots purchased from KWWL, as he only recalled one purchase and the cost of those lots. Noel Anderson, Community Planning and Development Director, explained the original development agreement with KWWL allowed the City to purchase additional parcels. The City is reselling the parcels to First Presbyterian Church to help them with their investment into redeveloping their property along with KWWL. He stated the American Legion also owned lots which were acquired by the City when they relocated in downtown Waterloo. MAYOR AND COUNCIL REPORTS Mr. Powers commended the Engineering and Building Departments regarding work on disconnect issues between Hughes Drive and Valley Drive and their suggestions to the residents in that area, the Traffic Department's efforts and positive progress near Greenhill Road and the Police Department for providing extra attention regarding vandalism in the neighborhoods along 4th Street and Kimball Avenue. Mr. Morrissey updated the council regarding his Ward meeting, stating the topics, for him, were very informative and helpful, the meetings are well attended, and the next meeting will be May 25, 2017. Mr. Morrissey commented to on Council discussion last week regarding $20,000 allocated for sidewalk infill, stating the infill was for sidewalks in the area of Hoover and Kitrell Schools. Mr. Lind commented he and Mr. Schmitt attended Veterans events at the Grout Museum and American Legion. Mr. Lind questioned if the City and possibly KWWL could assist in fundraising to replace the roof of the American Legion building. Mr. Jacobs discussed input he has received from citizens interested in being involved in the Citizen's Advisory Committee. Mr. Jacobs advised the council the next meeting will be held May 3, 2017, at 722 Water Street, 5:00 p.m. if anyone was interested in attending. the meeting on Wednesday night, contact information can be obtained on the City website or by contacting council members, Jacobs, Lind or Schmitt. 146372 - Welper/Schmitt that the above oral comments be received and placed on file. Voice vote -Ayes: Seven. Motion carried. CONSENT AGENDA 146373 - Welper/Schmitt that the following items on the consent agenda be received, placed on file and approved: a. Resolutions to approve the following: 1. Resolution approving Finance Committee Invoice Summary Report, dated May 1, 2017, in the amount of $2,497,461.48, a copy of which is on file in the City Clerk's office, together with recommendation of approval of the Finance Committee. Resolution adopted and upon approval by Mayor assigned No. 2017-319. 2. Request of the Screaming Eagle American Bar & Grill, 228 East 4th Street, to close the 600 block of Lafayette Street every Thursday between May 4, 2017 and October 26, 2017 from 5:00 p.m. to 11:00 p.m., with use of city barricades, and for a variance to the Noise Ordinance including a band and the use of a PA system. Resolution adopted and upon approval by Mayor assigned No. 2017-320. 3. Resolution approving the request of Loretta K. Brimmer for tax exemptions on the construction of a new garage valued at $4,563 for the property located at 1133 Columbia Street and located within the Consolidated Urban Revitalization Area (CURA). Resolution adopted and upon approval by Mayor assigned No. 2017-321. 4. Resolution approving the request of Edis Hudzikic for tax exemptions on the construction of a new single family home valued at $197,993 for property located at 1412 Hummingbird Circle, and located in the City Limits Urban Revitalization Area (CLURA). Resolution adopted and upon approval by Mayor assigned No. 2017-322. 5. Resolution approving the request of Eric Charley for tax exemptions on the construction of a new single family home valued at $197,173 for property located at 1307 Hummingbird Circle, and located in the City Limits Urban Revitalization Area (CLURA). Resolution adopted and upon approval by Mayor assigned No. 2017-323. 6. Resolution re -setting date of bid opening as May 11, 2017 and date of public hearing as May 15, 2017 for the Purchase of two (2) compact pickup trucks for the Engineering Department and instruct City Clerk to publish said notice. Resolution adopted and upon approval by Mayor assigned No. 2017-324. 7. Resolution re -setting date of bid opening as May 11, 2017 and date of public hearing as May 15, 2017 for the Purchase of one (1) Salt Brine Blender for the Street Department and instruct City Clerk to publish said notice. 2. a b a. b. c. d. e. f. g. 11a Vl,11\lJ ILIA.,313 Name & Title of Personnel Class/Meeting Destination Date(s) Amount not to Exceed Mayor Hart & Michelle Weidner, CFO Meet with Moody's Investor Services Chicago, IL May 4-5, 2017 $910.00 Michelle Weidner, CFO Iowa Governmental Audits- Local Government Update Webcast or Des Moines, IA May 15, 2017 $435.00 Approved Beer, Liquor, and Wine Applications Name & Address of Business Class New or Renewal Expiration Date Includes Sunday Basal Wood Fired Pizza, 223-225 W. 4th Street C Liquor w/Outdoor Service New 4/30/2018 Cork's Grocery, 1956 Lafayette Street C Beer Renewal 4/30/2018 X Dollar General Store #10073, 3 815 University Avenue B Wine / C Beer Renewal 2/28/2018 X Half Pint Saloon, 1831 Independence Avenue C Liquor w/Outdoor Service Renewal 4/18/2018 X Iry Warren Memorial Golf Course, 1000 Fletcher Avenue Special Class C Liquor w/Outdoor Service Renewal 3/31/2018 X Panchero's Mexican Grill, 2845 Crossroads Blvd. B Beer w/Outdoor Service Renewal 3/31/2018 X Sam's Club #6514, 210 E. Tower Park Drive B Wine / C Beer / E Liquor Renewal 2/28/2018 X 3. Motion to approve Cigarette/Tobacco/Nicotine/Vapor Permit Application for Kings & Queens, 304 W. 4th Street. 4. Recommendation of appointment of Lance Dunn to the position of Human Resources Director, effective May 15, 2017. 5. Bonds. Mr. Lind commented that if the departments had refrained from traveling, total expenditures to date $74,000, the levy rate could have been lowered by $.035. Mr. Lind further commented on the need for a hiring freeze until a re -organization plan is in place or the Council has discussed a plan so the City is not stuck with unneeded department heads. Mr. Lind stated he is not satisfied with the hiring process as the council is not involved and does not receive information on the candidates. He asked that council be provided with resumes and salary information. Mayor Hart suggested he and Mr. Lind meet to discuss the process. Roll call vote -Ayes: Five. Nays: Two. Schmitt and Jacobs on item 1B4(Appointment of Human Resources Director). Motion carried. PUBLIC HEARINGS Mr. Lind stated the public hearing for the purchase of one (1) Salt Brine Blender is postponed due to timing constraints. April 21, 2017, be received and placed on file. Voice vote -Ayes: Seven. Motion carried. This being the time and place of public hearing, the Mayor called for written and oral comments and there were none. 146375- Schmitt/Powers that the hearing be closed. Voice vote -Ayes: Seven. Motion carried. 146376 - Schmitt/Lind that "Resolution authorizing the sale and conveyance of a certain tract of land known as 525 East 4th Street (also known as 525 Franklin Street), in the amount of $58,500.00 and up to $2,000 in closing costs, and authorizing the Mayor and City Clerk to execute necessary documents", be adopted. Roll call votes -Ayes: Seven. Motion carried Mr. Schmitt questioned why this proposal would be accepted when previously the Queen of Peace Church parking lot proposal was not supported by the council. Noel Anderson explained Queen of Peace Church had other parking available, the parking lot was not being used by the Church, and therefore deemed a good redevelopment site. Mr. Anderson stated it is the recommendation of the Building & Grounds Committee to sell the property as proposed. Mr. Morrissey stated the previous decision was a revenue based decision as the space was being developed as opposed to a parking lot which does not generate revenue. Mr. Jacobs stated the project supports the City's efforts in the Walnut Street Neighborhood and he fully supports the measure. Resolution adopted and upon approval by Mayor assigned No. 2017-326. RESOLUTIONS 146377 - Morrissey/Schmitt that "Resolution approving Notice of Intent for NPDES coverage under general permit to the Iowa Department of Natural Resources for the University Avenue and Midway Drive Reconstruction and authorize Mayor and City Clerk to execute said document", be adopted. Roll call vote -Ayes: Seven. Motion carried. Sandie Greco, Interim Public Works Director, explained the grant application process to obtain funds for traffic adaptive system and the system will automatically adapt according to traffic flow. Resolution adopted and upon approval by Mayor assigned No. 2017-327. 146378 - Morrissey/Schmitt that "Resolution authorizing the Traffic Operations Department to hire Bolton & Menk of Cedar Rapids, Iowa to develop two (2) grant applications for Iowa Clean Air Attainment Program for the installation of fiber optics and a traffic adaptive system on Ansborough Avenue from San Marnan Drive to Downing Avenue and on Broadway Street from Park Road to Airport Boulevard for a total cost of $7,200", be adopted. Roll call vote -Ayes: Seven. Motion carried. Resolution adopted and upon approval by Mayor assigned No. 2017-328. LeAnn M. Even, CMC, ICMC Deputy City Clerk City of Waterloo Finance Committee Open Invoice Report For May 08, 2017 pprov Finance Committee Accounts Payable Open Invoice Report Total As of Friday, May 05, 2017 EFT Transactions: Add:Wellmark Weekly Claims Add:Wellmark Monthly Claims Adjustment Republic Parking Add:Tandem Graphics 1, 010, 924.43 162,692.71 221,191.21 (36,000.00) 1,382.50 ISubtotal - as of Monday, May o8, 2017 1,360,190.85 Workers Compensation Issued by TPA Housing Authority Housing Assistance EFT's Housing Authority Housing Assistance EFT's Payroll 9,448.09 9,339.20 IBill Payment Total - Monday, May o8, 2017 1,378,978.14 Payment to Council members or related entities: CITY OF WATERLOO Council Communication Proclamation declaring May 13, 2017, as Letter Carriers' Food Drive Day. City Council Meeting: 5/8/2017 Prepared: 3/22/2017 REVIEWERS: Department Reviewer Action Date Mayor Office Westphal, Michelle Approved 3/22/2017 - 4:35 PM Clerk Office Higby, Nancy Approved 5/2/2017 - 11:13 AM ATTACHMENTS: Description Type D Proclamation Letter Carriers' Food Drive Day Cover Memo Submitted by: Submitted By: Mayor Quentin Hart Page 16 of 486 C1TY OF WATERLOO, I01YA PROCLAMATION WHEREAS, every year on the second Saturday in May, letter carriers across the country collect non-perishable food as part of the nation's largest one -day food drive, distributing the donations to local food banks; and IEREAS, the Letter Carriers' Stamp Out Hunger Food Drive is just one example of how letter carriers work to make a difference in the lives of those they serve as more than a billion pounds of food have been collected since the 1991 pilot program; and ViTHEREAS, we would like to recognize all letter carriers for their hard work and their commitment to their communities. All of the food collected in our community stays in our community and we support the carriers' efforts to help those in need in our community. NOW, THEREFORE, I, Quentin Hart, Mayor of the City of Waterloo, Iowa, do hereby proclaim Saturday, May 13, 2017, as LETTER CARRIERS' FOOD DRIVE DAY and encourage the citizens of our community to support the food drive by placing non- perishable food items in or near your mailbox for pick-up on Saturday, May 13th_ Together, we can all help those in need. IN'WITNESS WHEREOF, I have hereunto set my hand and caused this official seal of the City of Waterloo, Iowa, to be affixed this 8th day of May 2017. ATTEST: Kelley FelcIJ , City Clerk \!`,'r' 1 'rj '0 ,c( )'O 4\1 •1 1 Al 11 ll Quentin Hart, Mayor r' 'J Page 17 of 486 CITY OF WATERLOO Council Communication Proclamation declaring May 15 - 21, 2017 as National Police Week and May 17, 2016 as Peace Officer's Memorial Day. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Mayor Office Westphal, Michelle Approved 5/3/2017 - 10:55 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:42 AM ATTACHMENTS: Description Type ❑ Proclamation Police Week 2017 Cover Memo Submitted by: Submitted By: Mayor Quentin Hart Page 18 of 486 u r LI -OZ Am 4o r(ep ua8 s!y} pare aq o} ooIJG}eM }01(}!o ay} }o lees oq} pasneo pue aweu /fw paquosgns o}unaleq aney I ,logavawit ssauvi , NI Mel ay} a}elo!n p!nom oqM Ile }su!e6e }uawwano6 pue AI.Jadomd 'saw) !Deno! ano pJen6 0} `ICJessaoau 4! `sen!! J!ay} ao!}uoes 01. 6u!!l!M uewoM pue uaw i(q pa}oa}ad ale art 6U!MOUn{ sawoq Jno o} wn}am o} pue i(ep pea If}a}es u! 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A}!unwwoo anO •ap!Muo!}eu A}np }o au!I ay} u! pally! ale snow) eo!!od ua}}o oo} Ile ley} uMOU)I s! 1.! pue `sseu!ddey }o }!nsand ay} pue A}Jaq!I 'em }o uo!}e,vasaJd ay} o} pa}eo!pap pue aw!Jo }sU!e6e JeM ay} u! sJoUJeM `uewoM pue uaw eau eq o} }y6!J lenp!n!pu! ay} 4o sJapua}ap `ApadoJd pue a4!l 4o sue!pJen6 _Ina ale sJao!J.Q }uawa3Jo}u3 Me -1 ay} pue `«itea lepowavg s,Jao!}}O aoeed„ aq o}meal( s!y} }o q L G ABV! pue „lawM a3!lod leuo!}eN„ se `L I -OZ ` 1 Z - g L AelAl 40 NleaM ay} pa}eu6!sep sey eo!Jawy }o sa}e}S pa}!un ay} 4o ssaJ6uo0 ay} )rte u3flod WATOLLVNNI estravawa Page 19 of 486 CITY OF WATERLOO Council Communication Resolution approving Request from 105.7 KOKZ to hold its 36th Annual 4th Street Cruise on Saturday, May 27, 2016 from noon until 4:00 p.m. in the downtown area with the 700 block of Mulberry Street being blocked off from 8:00 a.m. until noon and 4th Street to be cleared of traffic by 11:20 a.m. City Council Meeting: 5/8/2017 Prepared: 4/27/2017 REVIEWERS: Department Reviewer Action Date Police Department Leibold, Joe Approved 4/27/2017 - 10:01 AM Clerk Office Higby, Nancy Approved 5/2/2017 - 2:25 PM ATTACHMENTS: Description Type D Request Cover Memo SUBJECT: Resolution approving Request from 105.7 KOKZ to hold its 36thAnnual 4th Street Cruise on Saturday, May 27, 2016 from noon until 4:00 p.m. in the downtown area with the 700 block of Mulberry Street being blocked off from 8:00 a.m. until noon and 4th Street to be cleared of traffic by 11:20 a.m. Submitted by: Submitted By: Joe Leibold, Captain of Police Services Recommended Action: Approve Request This event begins on May 26th at the National Cattle Congress Grounds with a Show and Shine show from 5PM to 9PM. The Cruise will take Summary Statement: place on Saturday May, 27th beginning at Noon. The cruise route will utilize Bluff, Park Ave, 4th, 5th Street and Franklin. The route has been expanded to accommodate a large turnout. Street closures will begin at approximately 1100 and be released by 5PM. Expenditure Required: Cost associated with providing route security, placing and retrieving barricades. Source of Funds: General Policy Issue: None Alternative: None Background Information: This is an annual event with no significant problems. Legal Descriptions: None Page 20 of 486 36th Annual 105.7 KOKZ "4TH STREET CRUISE" Waterloo -Iowa The Honorable Quentin Hart Mayor, Waterloo, Iowa 715 Mulberry Street Waterloo, Iowa 50703 RECEIVED APR 2 5 2017 April 17, 2017 Mayor Hart, This letter is a request for permission to hold the 2017 105.7 KOKZ Fourth Street Cruise on the dates and times as outlined below. This year the 36th Annual 105.7 KOKZ Fourth Street Cruise will be held in downtown Waterloo, Iowa from 12:00 noon until 4:00 pm on Saturday May 27, 2017 and at the National Cattle Congress from 5:00 pm until 9:00 pm on Friday May 26, 2017 for the Annual 105.7 KOKZ Fourth Street Cruise Show & Shine car show. The route of the cruise will have some change from last year. Cars from the East side will move from Mulberry Street across the river on Fourth Street to Bluff Street and return on Park Avenue back to Franklin Street. Cars from the West side will move from Bluff Street across the river on Fourth Street to Franklin Street and return to Bluff on Fifth Street. Prior to the start of the cruise, the cars will stage in the Black Hawk County courthouse parking lot on the East side and under the Washington Street overpasses on the West side. We are requesting the 700 block of Mulberry Street be blocked off from 8:00 AM until shortly after 12 Noon to stage the overflow of cars expected from the Courthouse parking lot. The cars will move out of these areas a few minutes prior to 12 noon in order to meet at the East side of the Fourth Street Bridge at noon. We are requesting that Fourth Street be cleared of traffic by 11:20 AM. There will be a remote radio broadcasting area set up in the 100 block of East Fourth Street on the sidewalk, adjacent to the street, as in the past. The event will require electrical service on Fourth Street on both sides of the river for vendors and speaker systems. The exact location of vendors will be determined by Main Street. The event will also require police presence for security and traffic control. Your office should determine the amount of manpower needed. We are also requesting the Waterloo Street Department distribute of barricades and stop signs per a map that will be given to them if this request is acknowledged. If you need further information or have any concerns with this event, please address any questions to Co -Chairs Jim Koch 319-415-7361 or Chuck Held 319-239-9193. Jim Koch Chuck Held May 27, 2017 - Waterloo, Iowa - "Rockin' the Hits at Cruise 36" Page 21 of 486 CITY OF WATERLOO Council Communication Request by Financial Resource Advisors (FRA) for a Variance to the Noise Ordinance on Saturday, June 3, 2017 from 4:00 p.m. to 8:00 p.m. to hold their annual car show in the parking lot located at 816 W. Tower Park Drive, along with the use of a PA system. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Reviewer Action Date Police Department Higby, Nancy Approved 5/2/2017 - 1:46 PM SUBJECT: Request by Financial Resource Advisors (FRA) for a Variance to the Noise Ordinance on Saturday, June 3, 2017 from 4:00 p.m. to 8:00 p.m. to hold their annual car show in the parking lot located at 816 W. Tower Park Drive, along with the use of a PA system. Submitted by: Submitted By: Joe Leibold, Captain of Police Services Recommended Action: Approve Summary Statement: The event will take place in the parking lot of FRA, NXT Bank, Physical Therapy P artners, C hristian/F reeseman. All businesses are closed during the event. This is the 7th annual event with no traffic or other problems. Page 22 of 486 CITY OF WATERLOO Council Communication Resolution approving request of ABATE of Iowa, District 16, to hold its annual motorcycle awareness ride on May 20th, 2017, starting at 10:30 a.m. in the Black Hawk County Courthouse parking lot, traveling throughout Black Hawk County, and ending the ride at Silver Eagle Harley Davidson. City Council Meeting: 5/8/2017 Prepared: 4/27/2017 REVIEWERS: Department Police Department Clerk Office ATTACHMENTS: Description D Request SUBJECT: Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Policy Issue: Alternative: Background Information: Reviewer Leibold, Joe Higby, Nancy Action Approved Approved Type Cover Memo D ate 4/27/2017 - 3:03 PM 5/2/2017 - 2:28 PM Resolution approving request of ABATE of Iowa, District 16, to hold its annual motorcycle awareness ride on May 20th, 2017, starting at 10:30 a.m. in the Black Hawk County Courthouse parking lot, traveling throughout Black Hawk County, and ending the ride at Silver Eagle Harley Davidson. Submitted By: Joe Leibold, Captain of Police Services Approve Request This is an annual event that requires limited support at major intersections. Cost with providing limited traffic control. General None None This is an annual event with no historical problems. Page 23 of 486 ABATE OF IOWA Making sure motorcyclists are seen and heard. Sharon Stone-Husmann Coordinator, District 16 319-961-2644 anytime abatedistrict16@yahoo.com April 16, 2017 Chief Daniel Trelka Waterloo Police Department 715 Mulberry Street Waterloo, IA 50703 Dear Chief Trelka, In support of National Motorcycle Safety & Awareness month each year ABATE of Iowa, District 16 sponsors a Motorcycle Awareness Ride in May. This letter is requesting permission to hold the ride & escort assistance for this annual event scheduled for Saturday, May 20. We begin participant registration at 10:00 a.m. at the Black Hawk County Courthouse with the ride departing promptly at noon. The tentative route will travel through Evansdale, Waterloo & Cedar Falls concluding at Silver Eagle Harley-Davidson, as we have the past several years. The finalized route will be determined as we get closer to the event date, allowing the escorting officers final approval on the day of the ride. Please contact me at the numbers listed above if you need further information or have any questions or concerns. Respectfully, Sharon Stone-Husmann coordinator ABATE of Iowa, District 16 cc: Tony Thompson, Black Hawk County Sheriff Chief Jeff Olson, Cedar Falls Police Department Evansdale Fire Department Iowa Highway Patrol Page 24 of 486 CITY OF WATERLOO Council Communication Resolution approving the request of Full House Productions dba Spicolis for a Variance to the Noise Ordinance on May 25, 26, and 27, 2017 from 6:00 p.m. to 11:00 p.m. in conjunction with the Comstock event to be held in the outdoor beer garden located at 3555 University Avenue, including a live band and the use of a PA system. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Reviewer Action Date Police Department Higby, Nancy Approved 5/2/2017 - 3:39 PM SUBJECT: Resolution approving the request of Full House Productions dba Spicolis for a Variance to the Noise Ordinance on May 25, 26, and 27, 2017 from 6:00 p.m. to 11:00 p.m. in conjunction with the Comstock event to be held in the outdoor beer garden located at 3555 University Avenue, including a live band and the use of a PA system. Submitted by: Submitted By: Joe Leibold, Captain of Police Services Page 26 of 486 CITY OF WATERLOO Council Communication Resolution approving request of Chris Starbuck for a waiver for an asphalt driveway located at 2725 Randolph Street, with the elimination of the sidewalk section. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Engineering Clerk Office Reviewer Thorson, Eric Even, LeAnn ATTACHMENTS: Description ❑ DW Waiver_2725 Randolph SUBJECT: Action Approved Approved Type Cover Memo D ate 5/3/2017 - 10:03 AM 5/3/2017 - 10:23 AM Resolution approving request of Chris Starbuck for a waiver for an asphalt driveway located at 2725 Randolph Street, with the elimination of the sidewalk section. Submitted by: Submitted By: Eric Thorson, PE, City Engineer Recommended Action: Recommended for approval by the City Engineer. Summary Statement: Background Information: Legal Descriptions: Attached is a request for construction of an asphalt driveway with the elimination of the sidewalk section, to be located at 2725 Randolph Street. I have reviewed this request and recommend its approval subject to the following provisions: 1. Work to be performed by an approved and bonded contractor. 2. A permit is to be obtained from the office of the City Engineer prior to construction. 3. All work shall be performed under the supervision of the City Engineer and at no cost to the City of Waterloo. $7.00 cash for the purpose of recording this waiver and a copy of the legal description have been provided to the City Clerk's office. This is a waiver of the City's Standard Specifications for Driveway Construction. It requires Council approval so that it can be recorded to the property, so that the waiver requirements run with the property ownership. LIBERTY ADDITION LOT 5 BLK 16 Page 27 of 486 WAIVER Date: 5/1 /Zo7 Honorable Mayor and City Council City Hall Waterloo, IA 50703 Council Persons: 1 hereby request a waiver to the driveway and sidewalk specifications for the construction of a driveway or sidewalk located at (concrete asphalt) .Z72 5 qn,A(11.01p6 5 4, (Address) This waiver is needed because of: special surface texture to be used on the concrete approach (i.e., exposed aggregate, brick stamped pattern, paving brick). elimination of the sidewalk section due to the inability to meet the grade requirements. X elimination of the sidewalk section for asphalt driveways:\ M6 placement of a driveway or sidewalk on City right-of-way on an unimproved street. Other: I agree to the following: 1. To remove and replace this driveway to an official elevation at no additional expense to the City of Waterloo at such time that sidewalk is constructed. 2. To remove and replace the private driveway, as needed, to an official elevation at no additional expense to the City of Waterloo at such time that curb and gutter is constructed. 3. To pay for any additional expenses for the replacement of any such textured driveway or sidewalk that has been removed for any City of Waterloo project. 4. To employ a bonded contractor who shall obtain a permit from the office of the City Engineer. 5. To have the driveway constructed according, to the specifications and policies of the City Engineer and under his supervision. 6. This waiver is for this property only. Attached herewith is a payment in the amount of seven dollars ($7.00) for the purpose of recording this agreement. Respectfully submitted, 4 Printed Name of Property Owner Signature of Property Owner Page 28 of 486 CITY OF WATERLOO Council Communication Resolution approving request of Kim Sullivan for a waiver for an asphalt driveway, located at 2719 Randolph Street with elimination of the sidewalk section. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Engineering Clerk Office Reviewer Thorson, Eric Even, LeAnn ATTACHMENTS: Description ❑ DW Waiver_2719 Randolph SUBJECT: Action Approved Approved Type Cover Memo D ate 5/3/2017 - 10:04 AM 5/3/2017 - 10:26 AM Resolution approving request of Kim Sullivan for a waiver for an asphalt driveway, located at 2719 Randolph Street with elimination of the sidewalk section. Submitted by: Submitted By: Eric Thorson, PE, City Engineer Recommended Action: Recommended for approval by the City Engineer. Summary Statement: Background Information: Legal Descriptions: Attached is a request for construction of an asphalt driveway with the elimination of the sidewalk section, to be located at 2719 Randolph Street. I have reviewed this request and recommend its approval subject to the following provisions: 1. Work to be performed by an approved and bonded contractor. 2. A permit is to be obtained from the office of the City Engineer prior to construction. 3. All work shall be performed under the supervision of the City Engineer and at no cost to the City of Waterloo. $7.00 cash for the purpose of recording this waiver and a copy of the legal description have been provided to the City Clerk's office. This is a waiver of the City's Standard Specifications for Driveway Construction. It requires Council approval so that it can be recorded to the property, so that the waiver requirements run with the property ownership. LIBERTY ADDITION LOT 4 BLK 16 Page 29 of 486 WAVER Date: 5% I / 26 17 Honorable Mayor and City Council City Hall Waterloo, IA 50703 Council Persons: I hereby request a waiver to the driveway and sidewalk specifications for the construction of a driveway or sidewalk located at (concrete ophalt) 27/ garicloigh(Adress) This waiver is needed because of: special surface texture to be used on the concrete approach (i.e., exposed aggregate, brick stamped pattern, paving brick). elimination of the sidewalk section due to the inability to meet the grade requirements, elimination of the sidewalk section for asphalt driveways. iV15 placement of a driveway or sidewalk on City right-of-way on an unimproved street. Other: I agree to the following: 1. To remove and replace this driveway to an official elevation at no additional expense to the City of Waterloo at such time that sidewalk is constructed. 2. To remove and replace the private driveway, as needed, to an official elevation at no additional expense to the City of Waterloo at such time that curb and gutter is constructed. 3. To pay for any additional expenses for the replacement of any such textured driveway or sidewalk that has been removed for any City of Waterloo project. 4. To employ a bonded contractor who shall obtain a permit from the office of the City Engineer. 5. To have the driveway constructed according, to the specifications and policies of the City Engineer and under his supervision. 6. This waiver is for this property only. Attached herewith is a payment in the amount of seven dollars ($7.00) for the purpose of recording this agreement. Respectfully submitted, Printed Name of Property Owner E Signature of Property Owner Page 30 of 486 CITY OF WATERLOO Council Communication Resolution setting date of public hearing as May 22, 2017 to approve proposed repairs in conjunction with the Sidewalk Inspection and Repair Program — Zone 7; and approve request to send out notification to property owners of proposed sidewalk repairs and estimate of costs; and authorize City Clerk to publish notice of said hearing. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Reviewer Action Date Engineering Thorson, Eric Approved 5/3/2017 - 11:09 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:50 PM SUBJECT: Submitted by: Recommended Action: Summary Statement: Resolution setting date of public hearing as May 22, 2017 to approve proposed repairs in conjunction with the Sidewalk Inspection and Repair Program — Zone 7; and approve request to send out notification to property owners of proposed sidewalk repairs and estimate of costs; and authorize City Clerk to publish notice of said hearing. Submitted By: Wayne Castle, PLS, EI, Associate Engineer I request that Council authorize the Engineering Department to notify the property owners of the necessary sidewalk repairs. I also request that Council set May 22, 2017 as the date for a public hearing on the proposed repairs, for discussion on errors and omissions but not costs, and instruct the City Clerk to publish said notice. City staff has completed the sidewalk inspection for Zone 7 and calculated the estimated repair costs for each affected property and are ready to notify property owners. Included in this notice will be an estimate of the repair cost, if included in an assessment program. Source of Funds: Property Owner Assessments Background Information: Under Waterloo ordinance section 7-2A, property owners will be allowed 67 days from the date of notice to voluntarily repair their walk. Property owners, or their designated contractors, will be allowed to obtain sidewalk permits during that 67 -day period. The final day to obtain a permit will be Friday, July 7, 2017. All sidewalk repair construction will be required to be completed by Friday, July 14, 2017. Any unrepaired sidewalk remaining would then be included in an assessment program. The assessment program will be prepared following the 67 -day period with construction let as soon as possible thereafter. Page 31 of 486 CITY OF WATERLOO Council Communication Resolution approving preliminary plans, specifications, form of contract, etc. and setting date ofbid opening as May 25, 2017, and date ofpublic hearing as June 5, 2017, for the FY 2017 Sidewalk Repair Program and Trail Repairs - Zone 7, Contract No. 914. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Engineering Clerk Office SUBJECT: Submitted by: Summary Statement: Expenditure Required: Source of Funds: Reviewer Thorson, Eric Even, LeAnn Action Approved Approved D ate 5/3/2017 - 9:58 AM 5/3/2017 - 10:04 AM Resolution approving preliminary plans, specifications, form of contract, etc. and setting date ofbid opening as May 25, 2017, and date ofpublic hearing as June 5, 2017, for the FY 2017 Sidewalk Repair Program and Trail Repairs - Zone 7, Contract No. 914. Wayne Castle, PLS, PE, Associate Engineer Plans prepared by the City Engineer's Office. To be determined G.O. Bonds Page 32 of 486 CITY OF WATERLOO Council Communication Resolution setting a date ofpublic hearing as May 22, 2017 for the sale and conveyance of city owned property located north of 3488 Wagner Road to Mathias Properties, LLC, in the amount of $30,000 plus up to $5,000 in City costs, and authorize City Clerk to publish said notice. City Council Meeting: 5/8/2017 Prepared: 5/4/2017 REVIEWERS: Department Planning & Zoning ATTACHMENTS: Description ❑ Plat with lot ❑ Mathias email • Mathias DA SUBJECT: Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Policy Issue: Reviewer Even, LeAnn Action Approved Type Cover Memo Cover Memo Cover Memo D ate 5/4/2017 - 4:52 PM Resolution setting a date ofpublic hearing as May 22, 2017 for the sale and conveyance of city owned property located north of 3488 Wagner Road to Mathias Properties, LLC, in the amount of $30,000 plus up to $5,000 in City costs, and authorize City Clerk to publish said notice. Submitted By: Noel Anderson, Community Planing & Development Director Adopt resolution to set date of hearing The City of Waterloo has acquired 14 acres of land north of 8488 Wagner Road for industrial development. The City is a currently platting, grading, and providing sewer to the site for the creation of 6 lots - 5 of which can be served by the new sewer. This northerly lot will not be served by the new sewer system, due to the creation of a new storm water drainage way in area to better help industrial development and alleviate and lessen the floodplain area of the site. The City's cost per lot, with sewer is approximately $100,000 per lot. Without the sewer costs, it is $30,000 per lot. This is the lot where sewer cannot be served due to the new storm water improvements. Closing costs Bonds and TIF funds Economic Development Page 33 of 486 Alternative: Background Information: Legal Descriptions: NA Mathias Properties LLC is Mathias Landscaping at 3170 Wagner Road, just south of the propsed site. This sale will help an existing business grow in Waterloo by providing Mathias Landscaping with more land to properly recycle and mulch landscaping materials for reuse in their business. They will be able to put this lot to a good industrial use, without need for sewer, as a landscaped and screened recycle site for the landscape business. This will allow the City to recoup costs for the development of land, help an existing business grow, and keep the door open for future lean-to type structures or other similar structures on site. Lot 1 Wagner Road Subdivision, Waterloo, Black Hawk County, Iowa. Page 34 of 486 )' ESTABLISHED RIGHT-OF-WAY WAGNER RD. BY EASEMENT S88A51'36"W 680.41' STORM SEWER DRAINAGE EASEMENT L c -AL ,013 S88A51'36'W 675.15' S88A51'36"W 674.90' (40') SANITARY SEWER EASEMENT S88"51'36"W 674.65' NOEL ANDERSON From: Doug Matthias <doug@matthiaslandscaping.com> Sent: Tuesday, Aprii 25, 2017 3:01 PM To: NOEL ANDERSON Subject: Land Purchase Noel I agree to purchase lot one of Wagner Rd. addition for the disused amount of $30,000.00. Let me know if you need anything else. Thank you Doug Matthias President i',uttlii;a:9 1...mth5capivig :3:i370 Iiii.1911473r Rd. Vilaterloo IA 50703 Officr:4: 319-226-660n 319-226-6003 doupftmatthiasiandscaping.com 1 Page 36 of 486 Prepared by Noel Anderson, 715 Mulberry Street, Waterloo, IA 50703 Phone (319) 291-4366 DEVELOPMENT AGREEMENT This Development Agreement is entered into as of , 2017, by and between Mathias Properties LLC ("Developer") and the City of Waterloo, Iowa (the "City"). RECITALS A. City considers economic development within the City a benefit to the community and is willing for the overall good and welfare of the community to provide financial incentives so as to encourage that goal. B. Developer is willing and able to finance and construct a screened recycle site for landscaping materials and related improvements on property located along Wagner Road in the Airport Area Development Plan Area. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Sale of Property. On or before , 2017, City shall convey, or cause to be conveyed, to Developer the real property described in Exhibit "A" hereto (the "Property") for the sum of $30,000.00 (the "Purchase Price"). Conveyance shall be by special warranty deed, free and clear of all encumbrances arising by or through City except: (a) easements, conditions and restrictions of record; (b) current and future real estate real property taxes and assessments subject to the agreements made herein; (c) general utility and right-of-way easements serving the Property; and (d) restrictions imposed by the City zoning ordinances, other applicable law, and subdivision platting documents. 2. Improvements by Developer. Developer shall construct a screened landscaping material recycle site, and related landscaping, (collectively, the "Improvements"). The Improvements shall be constructed in accordance with all applicable City, state and federal building codes and applicable subdivision restrictions and shall comply with all applicable City ordinances and other applicable law. The 1 Page 37 of 486 Property, the Improvements, and all site preparation and development -related work to make the Property usable for Developer's purposes as contemplated by this Agreement are collectively referred to as the "Project". 3. Utilities. Developer will be responsible for extending water, sewer, telephone, telecommunications, electric, gas and other utility services to any location on the Property that it desires and for payment of any associated connection fees. 4. Representations and Warranties of City. City hereby represents and warrants as follows: A. City is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Each person who executes and delivers this Agreement and all documents to be delivered hereunder is and shall be authorized to do so on behalf of City. 5. Representations and Warranties of Developer. Developer hereby represents and warrants as follows: A. Developer is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Developer has full right, title, and authority to execute and perform this Agreement and to consummate all of the transactions contemplated herein, and each person who executes and delivers this Agreement and all documents to be delivered to City hereunder is and shall be authorized to do so on behalf of Developer. 6. Abstracting. No less than fourteen (14) days prior to the anticipated date of conveyance, City shall, at its own expense, deliver to Developer an updated abstract of title, or in lieu thereof Developer may, at its own expense, obtain whatever form of title evidence it desires. If title is unmarketable or subject to matters not acceptable to Developer, and if City does not remedy or remove such objectionable matters in timely fashion following written notice of such objections from Developer, Developer may terminate this Agreement. 7. Materiality of Company's Promises, Covenants, Representations, and Warranties. Each and every promise, covenant, representation, and warranty set forth in this Agreement on the part of Company to be performed is a material term of this Agreement, and each and every such promise, covenant, representation, and warranty constitutes a material inducement for City to enter this Agreement. Company acknowledges that without such promises, covenants, representations, and warranties, City would not have entered this Agreement. Upon breach of any promise or covenant, or in the event of the incorrectness or falsity of any representation or warranty, City 2 Page 38 of 486 may, at its sole option and in addition to any other right or remedy available to it, terminate this Agreement and declare it null and void. 8. Obligations Contingent. Each and every obligation of City under this Agreement is expressly made subject to and contingent upon City's completion of all procedures, hearings and approvals deemed necessary by City or its legal counsel for amendment of the urban renewal plan applicable to the Property and/or project area, all of which must be completed within 180 days from the date this Agreement is approved by the City council. If such completion does not occur, then this Agreement shall be deemed canceled and shall be null and void. 9. Notices. Any notice under this Agreement shall be in writing and shall be delivered in person, by overnight air courier service, by United States registered or certified mail, postage prepaid, or by facsimile (with an additional copy delivered by one of the foregoing means), and addressed: (a) if to City, at 715 Mulberry Street, Waterloo, Iowa 50703, facsimile number 319-291-4571, Attention: Mayor, with copies to the City Attorney and the Community Planning and Development Director. (b) if to Developer, to Mathias Properties LLC, 3170 Wagner Road, Waterloo, Iowa 50703. Delivery of notice shall be deemed to occur (i) on the date of delivery when delivered in person, (ii) one (1) business day following deposit for overnight delivery to an overnight air courier service which guarantees next day delivery, (iii) three (3) business days following the date of deposit if mailed by United States registered or certified mail, postage prepaid, or (iv) when transmitted by facsimile so long as the sender obtains written electronic confirmation from the sending facsimile machine that such transmission was successful. 10. No Joint Venture. Nothing in this Agreement shall, or shall be deemed or construed to, create or constitute any joint venture, partnership, agency, employment, or any other relationship between the City and Developer nor to create any liability for one party with respect to the liabilities or obligations of the other party or any other person. 11. Amendment, Modification, and Waiver. No amendment, modification, or waiver of any condition, provision, or term of this Agreement shall be valid or of any effect unless made in writing, signed by the party or parties to be bound or by the duly authorized representative of same, and specifying with particularity the extent and nature of the amendment, modification, or waiver. Any waiver by any party of any default by another party shall not affect or impair any rights arising from any subsequent default. 12. Severability. Each provision, section, sentence, clause, phrase, and word of this Agreement is intended to be severable. If any portion of this Agreement 3 Page 39 of 486 shall be deemed invalid or unenforceable, whether in whole or in part, the offending provision or part thereof shall be deemed severed from this Agreement and the remaining provisions of this Agreement shall not be affected thereby and shall continue in full force and effect. If, for any reason, a court finds that any portion of this Agreement is invalid or unenforceable as written, but that by limiting such provision or portion thereof it would become valid and enforceable, then such provision or portion thereof shall be deemed to be written, and shall be construed and enforced, as so limited. 13. Captions. All captions, headings, or titles in the paragraphs or sections of this Agreement are inserted only as a matter of convenience and/or reference, and they shall in no way be construed as limiting, extending, or describing either the scope or intent of this Agreement or of any provisions hereof. 14. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 16. Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior or contemporaneous negotiations, discussions, understandings, or agreements, whether oral or written, with respect to the subject matter hereof. 17. Time of Essence. Time is of the essence of this Agreement. IN WITNESS WHEREOF, the parties have executed this Development Agreement by their duly authorized officers as of the date first set forth above. CITY OF WATERLOO, IOWA By: Quentin M. Hart, Mayor Doug Mathias Attest: City Clerk/Deputy Clerk 4 Page 40 of 486 EXHIBIT "A" Lot 1 Wagner Road Subdivision, Waterloo, Black Hawk County, Iowa. 1 Page 41 of 486 CITY OF WATERLOO Council Communication Resolution approving abatement of assessment for 1221 W. 6th Street in the amount of $347.25, and authorize City Clerk to notify Black Hawk County Treasurer of said cancellation. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Reviewer Action Date Clerk Office Higby, Nancy Approved 5/2/2017 - 5:22 PM SUBJECT: Submitted by: Resolution approving abatement of assessment for 1221 W. 6th Street in the amount of $347.25, and authorize City Clerk to notify Black Hawk County Treasurer of said cancellation. Submitted By: Kelley Felchle, City Clerk Page 43 of 486 TRAVEL REQUEST CITY OF WATERLOO FINANCE DEPT. STAFF ONLY LINE ITEM USED 010-11-1100-1346 FY _2017_ BUDGETED i4V' i b C) 0.00 EXPENDED YTD .2- 22.' ' THIS REQUEST `Z` [ 11. LA -P LEFT AFTER THIS REQUEST CI .0 I DATE /1 fl 11 Ce) Original - Clerk/Finance Co. - De•artment NAME(S) AND POSITION(S): P.O. Jordan Ehlers DATE May 3rd, 2017 NAME OF CLASS / MEETING: Midwest Gang Investigators Association 2017 Conference DESTINATION Wisconsin Dells, Wisconsin DEPARTURE POINT IF NOT WATERLOO: DEPARTURE DATE: May 21st, 2017 Return Date: May 24th, 2017 DATE(S) OF MEETING: May 21-24, 2017 PURPOSE OF TRAVEL: Lt. McClelland is requesting authorization to send P.O. Ehlers to the 2017 Midwest Gang Investigators Association Conference in Wisconsin Dells, Wisconsin, on May 21-24, 2017. Ehlers received a scholarship to cover the registration cost and lodging. The only cost to the city will be meals, fuel and membership to MGIA. The conference will cover the following topics: Gang Tattoos, Gang Intel gathering and sharing, gang debriefing, national gangs and mafia, and motorcycle gangs. A city vehicle will be needed for this training. WILL TRAVEL REQUIRE ADDITIONAL PERSONNEL: x COST $ YES NO METHOD OF TRAVEL: x CITY VEHICLE AIRFARE DEPARTING FROM: PRIVATE VEHICLE ESTIMATE OF COST: $.00 LODGING .00 Car rental $173.00 MEALS .00 Shuttle/taxi $.00 REGISTRATION .00 AIRFARE $50.00 MILEAGE/FUEL 26.06 Membership TOTAL FOR ALL: $ 249.06 BUDGET LINE ITEM: x GRANT REIMBURSABLE YES NO x REQUIRED CERTIFICATION YES NO TOTAL: $ 249.06 PER PERSON I BELIEVE THIS TRIP SERVES A PUBLIC PURPOSE AND IS NECESSARY AND BENEFICIAL TO THE CITY OF WATERLOO tSEPARTM NT HEAD MAYOR DATE /3fl DATE I APPROVE THIS TRAVEL REQUEST C.-4qt CITY OF WATERLOO Council Communication Resolution directing process for the sale of certain tracts of land formerly portions of West San Marnan Drive and setting the date ofpublic hearing on an opportunity to be heard as July 10, 2017, setting the date ofbid opening as July 13, 2017, and setting the date of public hearing on the sale and taking of bids for said property as July 17, 2017, and instruct City Clerk to publish and mail notice of said hearings and taking of bids. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Planning & Zoning Clerk Office Reviewer Schroeder, Aric Even, LeAnn ATTACHMENTS: Description D Appraisal Report D Notice to Property Owner - D Notice to Property Owner - D Notice to Property Owner - D Notice to Property Owner - D Draft Resolution SUBJECT: Submitted by: Recommended Action: Summary Statement: Tract 1 Tract 2 Tract 3 Tract 4 Final Final Final Final Action Approved Approved Type Backup Material Backup Material Backup Material Backup Material Backup Material Backup Material D ate 5/3/2017 - 12:45 PM 5/3/2017 - 1:48 PM Resolution directing process for the sale of certain tracts of land formerly portions of West San Marnan Drive and setting the date ofpublic hearing on an opportunity to be heard as July 10, 2017, setting the date ofbid opening as July 13, 2017, and setting the date ofpublic hearing on the sale and taking of bids for said property as July 17, 2017, and instruct City Clerk to publish and mail notice of said hearings and taking of bids. Submitted By: Noel Anderson, Community Planning & Development Director Approval The City previously took action to vacate and convey portions of right-of- way of West San Marnan Drive, and the Iowa Supreme Court declared that the City did not use the proper procedure in conveying said property, and enjoined the City from selling or transferring the land without following the procedures prescribed in Iowa Code Section 306.23. The City has now obtained an independent appraisal of the land from Rally Appraisal, LLC and is proposing to sell the land in accordance with Iowa Code Section 306.23, which will include notices to be mailed by certified mail to persons entitled to notice, and publication of such notices, and the accepting of sealed bids, which shall be due July 13, 2017 at 1:00 p.m. in the offices of the City Clerk, and all bids received shall be considered at a hearing on July Page 44 of 486 Expenditure Required: Source of Funds: Policy Issue: Background Information: 17, 2017. There will also be a hearing on July 10, 2017 to provide an opportunity to be heard to ensure compliance with Iowa Code Section 306.23. The hearing dates and bid opening complies with the 60 day notice requirement of the Code. None n/a Land Disposal Please find attached a draft resolution directing the process for the sale of the land as well as setting date of hearings, and the notices that would be mailed. Also attached is an overview aerial photo and an aerial photo for each of the 4 tracts to be sold. Per Iowa Code Section 306.23, the area to be sold is broken into the 4 different tracts as these 4 areas were originally acquired by the IDOT from different property owners. Legal Descriptions: See attached resolution. Page 45 of 486 APPRAISAL REPORT OF Twenty Four Lot Residential Subdivision West San Marnan Drive Waterloo, IA 50701 File # C17D2WHO2 PREPARED FOR: The City of Waterloo 715 Mulberry Street Waterloo, Iowa 50703 Attn: Mr. Aric Schroeder AS OF: April 12, 2017 As Is Fee Simple Interest PREPARED BY: RALLY APPRAISAL, LLC JAMES HERINK CERTIFIED GENERAL REAL PROPERTY APPRAISER 2302 WEST 1ST STREET SUITE 201D CEDAR FALLS, IOWA 50613 Phone: (319) 266-9373 Page 46 of 486 RALLY APPRAISAL LLC 2 Page 47 of 486 ,.- IgHLL 6f L.L. C May 3, 2017 Aric Schroeder Community Planner City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Cedar Falls Office • 2502 W. 1St St. Ste 2011 D • Cedar Falls, IA 50611 5 Clint Cote - Office Manager Jim Herink Adam Horan David D. Passmore, MAI Dexter Klostermann Phone: [31 9] 266-9373 www.rallyappraisal.com RE: Twenty Four Lot Subdivision, West San Marnan Drive, Waterloo, Iowa Dear Mr. Schroeder: I have completed an appraisal of the above -referenced property. This Appraisal Report is intended to comply with the reporting requirements set forth under Standards Rule 2-2 (a) of the Uniform Standards of Professional Appraisal Practice (USPAP) for an Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning data, reasoning, and analyses is retained in the appraiser's files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use as stated on the following page. The appraiser is not responsible for unauthorized use of this report. This report is prepared for the client, The City of Waterloo, for future bidding purposes or possible future purchase negotiations. This report represents my analysis and conclusion of the estimated as is market value of the fee simple interest in the subject property as of the date of the inspection which occurred on April 12, 2017. This appraisal is based on the following hypothetical conditions, which are defined later in this report: • That the platted lots have clear title and can be sold on the open market. • The prior owners are willing to accept their pro -rata share of the land area previously acquired. The subject property is a developed subdivision with frontage along the Sunnyside Country Club off West San Marnan Drive. It features 24 lots which range in size from 16,125 to 22,400 square feet. The indicated market value is based upon the enclosed data, and contingent upon the limiting conditions set forth in the Scope of Work section of this appraisal. This transmittal letter is considered a part of the appraisal report. RALLY APPRAISAL LLC 3 Page 48 of 486 I certify that, to the best of my knowledge and belief: • The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and they are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. • I have no present or prospective interest in the property that is the subject of this report, and no personal interest or bias with respect to the parties involved. • I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. • My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. • The reported analyses, opinions, and conclusions were vacant, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of the Professional Appraisal Practice of the Appraisal Institute. • The reported analyses, opinions, and conclusions were vacant, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal practice. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • Mr. James Herink inspected the subject property and prepared this report. • No one provided significant real property appraisal assistance to the persons signing this certification. • I have provided services regarding the subject property the prior three years, as an appraiser or in a related capacity. The estimated as is market value of the fee simple interest in the subject property as of April 12, 2017 is $1,825,000. (One Million Eight Hundred Twenty Five Thousand Dollars) This is subject to the extraordinary assumptions outlined in the Scope of Work Section of this report. ONE MILLION EIGHT HUNDRED TWENTY FIVE THOUSAND DOLLARS ($1,825,000) As /s RALLY APPRAISAL LLC 4 Page 49 of 486 Per the request of the client, the total present value of the subject was allocated into four tracts. The amount of allocation per tract is being extracted by the total number of acres within all four tracts and dividing that number by the value estimate. I then applied the value per acre to the number of acres within each tract to determine the amount of allocation, which is shown below. Tract Number Acres Total Allocation Tract 1 1.695 $318,248 Tract 2 4.175 $783,886 Tract 3 2.666 $500,561 Tract 4 1.184 $222,305 The total allocation to Tract 1 is $318,248. (Three Hundred Eighteen Thousand Two Hundred Forty Eight Dollars) THREE HUNDRED EIGHTEEN THOUSAND TWO HUNDRED FORTY EIGHT DOLLARS $318,248 The total allocation to Tract 2 is $783,886. (Seven Hundred Eighty Three Thousand Eight Hundred Eighty Six Dollars) SEVEN HUNDRED EIGHTY THREE THOUSAND EIGHT HUNDRED EIGHTY SIX DOLLARS $783,886 The total allocation to Tract 3 is $500,561. (Five Hundred Thousand Five Hundred Sixty One Dollars) FIVE HUNDRED THOUSAND FIVE HUNDRED SIXTY ONE DOLLARS $500,561 The total allocation to Tract 4 is $222,305. (Two Hundred Twenty Two Thousand Three Hundred Five Dollars) TWO HUNDRED TWENTY TWO THOUSAND THREE HUNDRED FIVE DOLLARS $222,305 This transmittal letter and certification of appraisal precede the appraisal report, further describing the subject property and containing the reasoning and pertinent data leading to the opinion of value. Your attention is directed to the "General Underlying Assumptions" and "Limiting Conditions" which are considered usual for this type assignment and have been included at the beginning of the report. Please contact me if you have any questions. Sincerely, James Herink Certified General Real Property Appraiser, CG02627 RALLY APPRAISAL LLC 5 Page 50 of 486 GENERAL UNDERLYING ASSUMPTIONS LEGAL MATTERS The legal description used in this report is assumed to be correct, but it may not necessarily have been confirmed by survey. No responsibility is assumed in connection with a survey or for encroachments or overlapping or other discrepancies that might be revealed thereby. Any sketches included in the report are only for the purpose of aiding the reader in visualizing the property and are not necessarily a result of a survey. No responsibility is assumed for an opinion of legal nature, such as to ownership of the property or condition of title. The appraisers assume the title to the property to be marketable; that, unless stated to the contrary, the property is appraised as an unencumbered fee which is not used in violation of acceptable ordinances, statutes or other governmental regulations. Confidential Information - information that is either: identified by the client as confidential when providing it to an appraiser and that is not available from any other source; or classified as confidential or private by applicable law or regulation*. *NOTICE: For example, pursuant to the passage of the Gramm -Leach -Bliley Act in November 1999, some public agencies have adopted privacy regulations that affect appraisers. As a result, the Federal Trade Commission issued a rule focused on the protection of "non-public personal information" provided by consumers to those involved in financial activities "found to be closely related to banking or usual in connection with the transaction of banking." These activities have been deemed to include "appraising real or personal property." (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; Final Rule, 16 CFR Part 313) UNAPPARENT CONDITIONS The appraisers assume that there are no hidden or unapparent conditions of the property, subsoil or structures which would render it more or less valuable than otherwise comparable property. The appraisers are not experts in determining the presence or absence of hazardous substance, defined as all hazardous or toxic materials, waste, pollutants or contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used in construction or otherwise present on the property. The appraisers assume no responsibility for any engineering studies or analysis which would be required to conclude or discover the presence or absence of such substances or for loss as a result of the presence of such substances, or for unapparent conditions. The client is urged to retain an expert in this field, if desired. The value estimate is based on the assumption that the subject property is not so affected. RALLY APPRAISAL LLC 6 Page 51 of 486 INFORMATION AND DATA Information and opinions furnished to the appraisers and contained in the report were obtained from sources considered reliable and believed to be true and correct. However, no warranty is given for the accuracy of such items furnished the appraisers. All mortgages, liens, encumbrances, and servitudes have been disregarded unless so specified within the appraisal report. The subject property is appraised as though under responsible ownership and competent management. ZONING AND LICENSES It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconforming use has been stated, defined and considered in the valuation. It is assumed that the subject property complies with all applicable federal, state and local environmental regulations and laws unless noncompliance is stated, defined and considered in the valuation. It is assumed that the information relating to the location of or existence of public utilities that has been obtained through a verbal inquiry from the appropriate utility authority, or has been ascertained from visual evidence is correct. No warranty has been made regarding the exact location or capacities of public utility systems. It is assumed that all licenses, consents or other legislative or administrative authority from local, state or national governmental or private entity or organization have been, or can be, obtained or renewed for any use on which the value estimate contained in the valuation report is based. The appraisers will not be required to give testimony or appear in court due to preparing the appraisal with reference to the subject property in question, unless prior arrangements have been made. Possession of the report does not carry with it the right of publication. Out -of -context quoting from or partial reprinting of this appraisal report is not authorized. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of media for public communication without the prior written consent of the appraisers signing this appraisal report. Disclosure of the contents of this report is governed by the By -Laws and Regulations of the Appraisal Institute. Neither all nor any part of the contents of this report shall be conveyed to any person or entity, other than the appraiser's client, through advertising, solicitation materials, public relations, news, sales, or any other media without the written consent and approval of the author, particularly as to valuation conclusions, the identity of the appraiser with which they are connected, or any reference to the Appraisal Institute or to the MAI designation. Further, the appraiser assumes no obligation, liability, or accountability to any third party. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of the assignment. The distribution of the total valuation in this report, between land and improvements, is applicable only as a part of the whole property. The land value, or the separate value of the improvements, must not be used in conjunction with any other appraisal or estimate and is invalid if so used. No environmental or concurrency impact studies were either requested or made in conjunction with this appraisal report. The appraisers, thereby, reserve the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental or concurrency impact studies, research or investigation. RALLY APPRAISAL LLC 7 Page 52 of 486 The Americans with Disabilities Act ("ADA") became effective January 26, 1992. The appraisers have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the appraisers have no direct evidence relating to this issue, possible noncompliance with the requirements of ADA in estimating the value of the property has not been considered. An appraisal related to an estate in land that is less than the whole fee simple estate applies only to the fractional interest involved. The value of this fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole. The appraisal report related to a geographical portion of a larger parcel is applied only to such geographical portion and should not be considered as applying with equal validity to other portions of the larger parcel or tract. The value for such geographical portions plus the value of all other geographical portions may or may not equal the value of the entire parcel or tract considered as an entity. The appraisal is subject to any proposed improvements or additions being completed as set forth in the plans, specifications, and representations referred to in the report, and all work being performed in a good and workmanlike manner. The appraisal is further subject to the proposed improvements or additions being constructed in accordance with the regulations of the local, county, and state authorities. The plans, specifications, and representations referred to are an integral part of the appraisal report when new construction or new additions, renovations, refurbishing, or remodeling applies. If this appraisal is used for mortgage loan purposes, the appraisers invite attention to the fact that (1) the equity cash requirements of the sponsor have not been analyzed, (2) the loan ratio has not been suggested, and (3) the amortization method and term have not been suggested. The function of this report is not for use in conjunction with a syndication of real property. This report cannot be used for said purposes and, therefore, any use of this report relating to syndication activities is strictly prohibited and unauthorized. If such an unauthorized use of this report takes place, it is understood and agreed that Rally Appraisal, LLC has no liability to the client and/or third parties. Acceptance of and/or use of this appraisal report constitutes acceptance of the foregoing General Underlying Assumptions and General Limiting Conditions. The appraisers' duties, pursuant to the employment to make the appraisal, are complete upon delivery and acceptance of the appraisal report. However, any corrections or errors should be called to the attention of the appraisers within 60 days of the delivery of the report. This report is intended for use only by the identified client and identified other known intended users stated within the cover letter. Use of this report by others is not intended by the appraiser. RALLY APPRAISAL LLC 8 Page 53 of 486 Table of Contents Preface: Title Page Letter of Transmittal Table of Contents Summary of Salient Data 18 Definitions: Scope of Report 24 Definition of Market Value 26 Identification of Property 31 Appraisal Process 33 Descriptions: Community Data . 35 Neighborhood Data 42 Market Analysis 45 Site Description 49 Improvement Description 55 Highest and Best Use 89 Valuation Conclusion: Valuation Methodology 58 Cost Approach 59 Direct Sales Comparison Approach 60 Income Approach 64 Reconciliation and Final Value Conclusion 68 Addenda 71 RALLY APPRAISAL LLC 9 Page 54 of 486 g. ,4 Kaw- a Location Map 53 Byrnes Park RALLY APPRAISAL LLC 10 WEs7 CENTAL Kimball Ave E MltdiplI Ave Rom Howe,' E Ridge Hu Page 55 of 486 Aerial Photo \\'s r'k1.'\. '] ' :r 1 1 11 RALLY APPRAISAL LLC 11 Page 56 of 486 Subject Photos SUBDIVISION LOOKING EAST TYPICAL LOT RALLY APPRAISAL LLC 12 Page 57 of 486 TYPICAL LOT RALLY APPRAISAL LLC TYPICAL LOT 13 Page 58 of 486 TYPICAL LOT TYPICAL LOT RALLY APPRAISAL LLC 14 Page 59 of 486 TYPICAL LOT RALLY APPRAISAL LLC SUBDIVISION LOOKING WEST 15 Page 60 of 486 SUBDIVISION LOOKING NORTHWEST WEST SAN MARNAN DRIVE LOOKING WEST RALLY APPRAISAL LLC 16 Page 61 of 486 WEST SAN MARNAN DRIVE LOOKING EAST WEST SAN MARNAN DRIVE LOOKING WEST RALLY APPRAISAL LLC 17 Page 62 of 486 SUMMARY OF SALIENT DATA PROPERTY TYPE PROPERTY LOCATION OWNER DATE OF VALUATION DATE OF REPORT Single -Family Subdivision West San Marnan Drive, Waterloo, IA Sunnyside South Addition, LLC April 12, 2017 As Is May 3, 2017 PROPERTY RIGHTS APPRAISED Fee Simple Interest IMPROVEMENT DATA ZONING HIGHEST & BEST USE Lot Size(SF) 1 22,400 2 22,350 3 10,800 4 19,800 5 18,392 6 18,500 7 18,125 8 17,875 9 17,500 10 17,125 11 16,875 12 16,500 Lot Size(SF) 13 14 15 16 17 18 19 20 21 22 23 24 16,383 16,250 16,250 16,250 16,250 16,250 16,250 16,250 17,160 17,160 16,125 16,390 R-1 One and Two -Family Residence District Single Family Lots VALUE INDICATIONS SALES APPROACH COST APPROACH INCOME APPROACH FINAL VALUE ESTIMATE $2,700,000 Aggregate Retail Sales (NOT THE VALUE) Not Developed $1,825,000 As Is (Present Value) $1,825,000 As Is (Present Value) RALLY APPRAISAL LLC 18 Page 63 of 486 Plat Map 1 ...,"-' ...v -.may �'.e.�..... _:_' __r .......-..., --- .._.:_, RALLY APPRAISAL LLC 19 • • r Q1} Page 64 of 486 Surveys for Allocation Tract 1 Tract 1 Appraisal Exhibit SW 114 Sec. 5-88-13 (Flat a Plat of SUrvcyl That pall or the Southwest Ouarlet511 Seaton S Te W1 shirt SS NMA. R 441 13 WIC 5541* FAIL P . 1115tH Hawk County, Iowa. 405411ed es Woes: COmmenc07 aD me 044154'est corner o1 sail $5404411 Rwrtar, lhanq N!9'4935'E 1155.53 feet along Inc SPUN int of said 0Sorthweat 0 terser N me 75/11 5# 655111015; Mena N2.21'21' W 21.34 knew VJ the fomar North rlgnlaWr55 Ina of bleat San M5rn4n d'w5 ilorrrelly Pr1mary Reay 515 4121, Meref4 N97`3925'E 1 4117 02 1501 511241 sail (Sana, no tall-vlyl01110 Fj 1 Iinp of said Squt111510ux4er thence 50'1:19'45'E 77.49 155115 the Soothe.' corner of said Sg5I7•4,11 Qs Wmo thence °1B4'4035"W 1496.51 fest along Me 554/5111 of Sad Southeast Ouirler eylhv point of beginning'. aon1anung'. 1.695 40150. POiry 01 Ceawnenpethe t Seative4a[ Comer 5W 144 Section 5. THAN, 151347 N89.4Y35'E 1195.65 11102.2131154 21.34' NORTH 100 250 400 &mitr Nana right-of-way of West San 51an1en Driaal Pont 01' 11eglnning j FEATURE LEGEND o SET 5.171120X 24' RERAN Nif RED CRP L5. 512[811 • PROPERTY CORNER FOUND A SET SECTION CORNER 555T171CORNER FWNO 159.00 DIMENSION OF SURVEY (100-00) a!ENSI0f4DF RECORD _)SeuN 11151511 Seutews41 Quaf110I 1407.92' —� AKa in 8W111= 12695 5044 5gulh 051.4.45 51 West Sen Mamoru Duro Survey Nutter. The Scum Inc of the SIN 174 of 1-0613 was mammal to tear NH -49'35M. 2.l fel duneavo55 ere in US Survey fest end Weenies thereof 11.) The arca of thatuly m b,557 than 1 10.070 4.) Tho Eohibh is 1107 appf1101 purposes only aro ia nota plat 0115uresy. 9711464 77.89' So441r.eft Cans Southwa0t 1M 645 5 Found 11210 Amber .. 12588 v. 5711,54341 J 4upN44 ,y �z - *, incest+ wily mai rue Wuwpire ecaereetelaparva vvwr M. tr, mr uugr ...w e..d 5v orw.w, w c• ..,.r.. ; ?. re' mlgp tr...r,v. Afi-4' 115 • u<TE r WLNULLLL 1 P140- LS Lea'm -u+row 10101 5411, A N' Inn. .44444, awe .4 5. b I•�j1!fr.. tem.3 sreuwtl. Section 5—$8-13 Tract 1 Appraise! Exhibit RALLY APPRAISAL LLC 20 15807 2., Page 65 of 486 Tract 2 w0pere Deserplina Thal Gar 01 the Southeast Quarter of Sauter t, Stank Hage Cop, taws wsc red ae Va. Tract 2 Appraisal Exhibit SE 114 Sec. 5 -BB -13 [Plot a Plat of Survey) 418 Norte, Renee 13 Wed el to Filth Pl1 $.pmnln0 41 I1013oornuar 4 000roh 01 Bala 5aumeasr Quarter; thence 746102'0611,1 77 @p awl teem loan r 010010 rgnr Pr •ar .a P1 VOW Sin Masa✓' dr et 1301mtlr10 01.ew, 5014 St 4121. third! M.YVd7'11-t. 1541 43. Peet il004 11r9 forma' •g'+ Vr ar.7 teens., 52.77 491 1933 RS feet thaw 344.1hw0Slerly 3, 01 "eel aIzng a 010 00 Inpt radn.6 µArtie concave Soutte.94 one 04100 haulms yb 31 37.41 reel and b.a-ng 13 5;7444W, Surce Sourlwesterty 95 21 ler[ along ■ 610.00 loci •adu3 .0130. censure Ne 0.104 90,1 curare h 0..14 a chord of 96 35 trey 404Deanne 571-15114W urr Swum try 90 wig Sc.uaneas1 Quarter: lhenee 539'51354W 1515.34 feet slang the Saute Ing diel &unheastl Quarter to Te neral 01hag sang roma nog 4175 vara } 5e 1111We l Cara" SE 144 � 5114:6311 4. Te PMI, 00310/ Found 112' Rebar Peal el Fawning l�"'Y MS•tn lighted- carr d Watt Sen Merman unwell Neap SE 114 Ban S • 4,176 A1o.. 8407385.W / 1614.34" ■ L (5euh line ol5avnreheel nlrroerj Survey Notes 1 Tr. 3a0ra ` 1 n1 tno 51 IA.1019-410,3 was aa10med :0 nest 2 } 44 tlnrlrMrat a 4,0 0 US Surra. 9 49 ih0 do-umele Iherad 31 Trhaurwdo0'tee .02ellar:han ', 10.090 4 l Thea E41r.a s Int appraisal tureens. only aria la nal a WOO 005.5 NOR 1th 0 905 200 400 .: aYYe�Yltaf. I -- SOW .32,430 Taj :q GS SC44.40i 1cwnr, 54.00.al 114 Ser, 3 . Fv.,rra Wass Cap is Co^vga R1re.lent ��h Y Gln. Ti*. Curve L+•q0 j Roque Chore NON ..... C1 4 3761 It 570NT 57 e1' $$73444W 08 ca l 71 57000' ?744' (.....$7 walma.n.rr. soe.sw.LLrtes. a.} Trr w Wan Hhrrl�.M ��a letlew,." '2 awMaswarw. yYENl7C Lti J 1 pre W., t S. pen i'. 0030,1010. 030 elk wh.,.. h...,-i.r; .. Yu.a� ]• tm RALLY APPRAISAL LLC 21 Section 5-88-13 2 Apprnisol Exnibr l...l (17 .- T71177, Page 66 of 486 Tract 3 Tract 3 Appraisal Exhihll NW 114 54c. 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San Marluln 05x9 Survee No71s. 1 3 T1ro14o1 tis 01 9M r4W 114 0169613 was eeeuTed b 0040 589-44560 2141 di1000104 14 von, US Survey Teat 550 dear51•1155555, 3) Tile aroma dmure a 0410001/45 t 10,000 L I fila 1ahb4 NIfor eprn5el41 401411144 only an,1 a nn[ 4 d45[ er yyrv4ry I Noa^.eelrw P. +40.n..0 yryr wyrWv penlr4• ww4er, 1..1. roc I an. a ay kanIre unr 9,r•t`p Yrr C•I.l } PN C S .. ... u.+[ >• ..M An sLMwIMH 5.010 RALLY APPRAISAL LLC 22 158O12 Page 67 of 486 Tract 4 Tract 4 Appraisal Exhibit NE 1!4 Sec. 8-88-13 (Mpt a Flat of Survey) Property oeaoipisn Thal Perl of Inn Nm.2'herd 0,5•x+SW 11en a TxenWp M Wolk Range 13 114•41 of 1ha FM P Y @IMO 44 County ,x^i earcrela w fellawa. 130900 111 a1 the Neat l• ix ., mrrer of slid NMene.11 149-50 54' 1515 11 r1' "'.: ere Narlh lira pf iat7 N7,1,valt Qua,, ,, Mena SOU:hwaat¢+'try 9+ 51 4a[ alrng a 510 WM. Oanrawe No.rterty sap 5.re narlfl a ctmra 01 5111 411 y_ur ry sa2•D!1' n :,... •..r 56*"27-111V 47, leot'_"e0Ce S69 -39'59'W 94522 feet penx Nu'G': "i:• -...rl -. ... 016e91nar15. o.Na.n.r5 1 164 aces. NwMweal. Caere!. MSE 14 Sado; 5 ,15W. R13W - Found 1:2' R415mr • 00151 of aeginning Ana M'.E 1,^4- 1.181 lope -..r 145frO '31 5 1515 Nbelh 11,18 hiea..aN Omfee5 ' '`L 140.01H6W 52,11' 5118'755ww W6.7Y yj{'r-f '1I VY 411 10 SLIrsey MOBS 1 1 Tea Hn11h Ilse n1Ih0 NE 1 1 tlf 19•150•13 Nal 0ee4llmK110 080' NW9'Y3"14t IAedirneewan..l. 1n p5 Sumer, 881,811 O 1',8l1lle 9.5 501 3 1 TN, M0r M dpw r n 1 W Man 1 10,000 4 1. li Na Erh$it 4 for apwa Wal purpas. Mfr snare het a Om d'sane, NORTH C IW 700 K M:H7+aau 4-01881 Norsr^_aat 1:+ 540,1 , Foy,: &'ass Cat CT17,4 Pa.�rrgnl Cteve rata Lengln_ 5aaius GNoO 6..0N G I $4 51 5101X1' 54 45' 5;97-'0B1 B"W •. rWW n .w raM•'wq ty murr lira, rww•r ,r,rar nr. �r.r Y(•�SWxM ww. 5VENOELL f1 LJ'iNtS L $ wn 1h Kane ire++^dam I I:s .Y. 1114 Pyu a .n.m. eww4 W W Sectioi 8-88-13 RALLY APPRAISAL LLC 23 15887 l Page 68 of 486 SCOPE OF REPORT Intended use and user and effective date of value The scope of the appraisal encompasses the necessary research and analysis to prepare a report in accordance with the intended use, the Standards of Professional Practice of the Appraisal Institute, and the Uniform Standards of Professional Appraisal Practice Foundation. This appraisal is prepared for the client, The City of Waterloo, for bidding purposes and possible future purchase negotiations. This appraisal report represents my analysis and conclusion of the estimated As Is market value of the subject property as of the date of the inspection, April 12, 2017. The subject property is a developed subdivision on the south side of Waterloo with 24 lots which front the Sunnyside Country Club. The lots range in size from 16,125 square feet to 22,400 square feet and all feature golf course frontage and views. Appraisal Process and inspection The property was inspected on April 12, 2017. The photographs included in this report were taken on April 12, 2017. The appraiser inspected the site and reviewed the site plans and market data for the area. This was essentially a drive around the site. The appraiser is relying on the plats as well as the County Assessor's Records and the Northeast Iowa Regional Board of Realtors MLS Service. In developing approaches to value, the market data were collected from the engineer, assessor's office files, other appraisers, realtors, or persons knowledgeable to the subject property and marketplace. Attempts were made to confirm sales data with at least one of the parties involved in the transaction. Regional, city, county and neighborhood data were based upon information available from the city, county and Iowa Economic Development. In estimating the highest and best use of the property, an analysis was made of data compiled form sources noted above. In addition, a study of the market in the subject area has been made to determine the economic feasibility of the lots and the number of homes available in the price range for these lots. RALLY APPRAISAL LLC 24 Page 69 of 486 The appraiser is not a building or environmental inspector. An inspection was made of the visible areas at the time of the inspection. The site is assumed to be stable and free of any environmental contamination, the building improvements are assumed to be sound, and there are no encroachments by the subject property or on the subject property unless otherwise stated in this report. The subject is an existing subdivision so no additional construction costs are necessary to sell the lots. Therefore, the cost approach will not be developed in this report. The typical investor would not consider the cost approach relevant since the subdivision already exists. Investors are going to consider the sales approach as the primary approach to value. The appraiser is not qualified to: • Detect if the site contains any environmental contamination. • Survey the subject property to verify actual size or to make a determination as to whether or not the subject property encroaches on another property or another property is encroaching on the subject property. • Determine the condition of the infrastructure. If there is any question regarding any of these issues it is the responsibility of the client to obtain verification from qualified sources. Type of report and Definition of Value: The appraiser is estimating the market value of the fee simple interest for the subject as is. Fee Simple Estate: Absolute ownership unencumbered by any other interest or estate, subject only to the limitation imposed by the government powers of taxation, eminent domain, police power, and escheat. Assignment Results: An appraiser's opinions or conclusions developed specific to an assignment. Comment: Assignment results include an appraiser's: • opinions or conclusions developed in an appraisal assignment, not limited to value; • opinions or conclusions developed in an appraisal review assignment, not limited to an opinion about the quality of another appraiser's work; or • opinions or conclusions developed when performing a valuation service other than an appraisal or appraisal review assignment. Physical characteristics are not ASSIGNMENT RESULTS. RALLY APPRAISAL LLC 25 Page 70 of 486 DEFINITION OF MARKET VALUE: Market value, as herein used, is defined as follows: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1) Buyer and seller are typically motivated; 2) Both parties are well informed or well advised, and acting in what they consider their own best interests; 3) A reasonable time is allowed for exposure in the open market; 4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. I [Source: Section 225.63 added at 55 Fed. Reg. 27772, July 5, 1990, effective August 9, 1990; amended at 58 Fed. Reg. 15077, March 19, 1993; 59 Fed. Reg. 29500, June 7, 1994; 63 Fed. Reg. 65532, November 27, 1998 effective December 28, 1998] RALLY APPRAISAL LLC 26 Page 71 of 486 Assignment Conditions: The appraisal assignment is based on the assumptions/conditions outlined below. Pursuant to the requirement within Uniform Standards of Professional Appraisal Practice (USPAP, 2016-2017 Edition) Standards Rule 2-2 (a) (xi), it is stated here that the use of these extraordinary assumptions and/or hypothetical conditions may affect the assignment results. Extraordinary Assumption: an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which if found to be false, could alter the appraiser's opinions or conclusions. Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis. The appraiser is making the following extraordinary assumptions: • The information provided to the appraiser by the client is true, complete, and not misleading. • The lots meet or exceed all state and local code requirements. • The site area is assumed to be free of bedrock and soil contamination. • That platted lots have clear title and can be sold on the open market • The prior owners are willing to accept their pro -rata share of the land area previously acquired. Hypothetical Condition: a condition directly related to a specific assignment, which is contrary to what exists but is used for the purpose of analysis. This report was not subject to any hypothetical conditions. RALLY APPRAISAL LLC 27 Page 72 of 486 COMPETENCY PROVISION James A. Herink is a Certified General Real Property Appraiser currently certified by the State of Iowa. Mr. Herink has been appraising residential and multi -family properties for 13 years. He is a graduate of Denver University, with a Bachelor's Degree in Journalism. He is currently taking courses from the Appraisal Institute and working towards a future designation. He successfully achieved his General Certification in August of 2012. The appraiser has appraised retail properties, light industrial, mini -storage, warehouses and multi -family properties in the past nine years and is familiar with the processes of valuation. The appraiser is seeking guidance from other knowledgeable persons within Rally Appraisal who have experience with valuation of this type as well. A list of qualifications and a list of various property types appraised are in the addendum section of this report. RALLY APPRAISAL LLC 28 Page 73 of 486 APPRAISAL DEFINITIONS, MARKETING AND EXPOSURE TIME APPRAISAL2: (noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services. TYPE OF REPORT: According to the Uniform Standards of Professional Appraisal Practice, Standards Rule 2-2, an appraisal report must be prepared under one the following two options: Appraisal Report or Restricted Appraisal Report. These two report types are described as follows: Appraisal Report: Should contain a summary of all information significant to the solution of the appraisal problem. "Summarize" is the distinguishing term related to the Appraisal Report. Restricted Appraisal Report: Should contain a brief statement of information significant to the solution of the appraisal problem. "State" is the distinguishing term related to the Restricted Appraisal Report. This is an Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 (a) of the Uniform Standards of Professional Appraisal Practice (USPAP) for an Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning data, reasoning, and analyses is retained in the appraiser's files. The depth of discussion contained in this report is specific to the needs of the client and for the intended use as stated in the scope of work. The appraiser is not responsible for unauthorized use of this report. 2 Uniform Standards of Professional Appraisal Practice and Advisory Opinions, 2016-17 Edition, Appraisal Standards Board, The Appraisal Foundation, page 1. RALLY APPRAISAL LLC 29 Page 74 of 486 Date of Value: The effective date of this appraisal, the date of which the valuation applies is: April 12, 2017 As Is Estimated Marketing Time: 6 to 12 months Market data indicates the anticipated marketing time for the subject is 6 to 12 months. This is based on historical marketing periods of other similar properties that have sold in this market and other similar market areas. However, the list price and the marketing effort are paramount to getting a sale within the indicated marketing time. Properties which are over -priced often experience extended marketing times. Exposure Time: is defined as "the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal....lt is noted that the overall concept of reasonable exposure encompasses not only adequate, sufficient, and reasonable time but also adequate, sufficient, and reasonable effect.3 In case of the subject, exposure time is determined between 6 and 12 months. 3 Uniform Standards of Professional Appraisal Practices & Advisory Opinions, Appraisal Standards Board, The Appraisal Foundation, 2016-17. RALLY APPRAISAL LLC 30 Page 75 of 486 IDENTIFICATION OF THE PROPERTY PROPERTY TYPE PROPERTY LOCATION 24 Lot Single -Family Subdivision West San Marnan Drive, Waterloo, IA 50701 OWNER OF RECORD PROPERTY HISTORY ENCROACHMENTS/ENCUMBRANCES Sunnyside South Addition, LLC The subject transferred by way of a Special Warranty Deed for $1.00 on April 22, 2013. (Bk 2014 Pg 003182) The prior transfer was not arm's-length. There are no other recorded transfers of the subject in the last 36 month per the records from the Black Hawk County Assessor. None of the lots within the subject have been marketed for sale within the last 12 months per the Northeast Iowa Regional Board of Realtors Multiple Listing Service. Additionally, there are no known pending sales contracts on any of the lots as of the effective date of this report. There are typical easements for utilities and right of way but no encroachments or encumbrances. RALLY APPRAISAL LLC 31 Page 76 of 486 Legal Description Sunnyside South Addition Lots 1 through 24 ASSESSED VALUE & TAXES The subject property is an existing subdivision and the lots are subject to taxation. Their assessment falls under the State of Iowa's subdivided/platted lots law which keeps the assessed value of the lots the same for eight years unless they are developed. Since all portions of the subdivision are classified as residential, they are subject to the State's rollback for residential real estate. The current assessment, based on the current levy rate of 40.78414 is below. 2016 Assessment Totals Total Assessed Value Land $57,560 Total Assessed Value Building $0 Total Assessed Value $57,560 Total Taxable Value $32,770 Levy Rate 40.73414 Forecast Gross Tax $1,336 The total taxes payable for the subject is $1,336 or $55.69 per lot. The current assessed value for each parcel is lower than their market value due to the eight-year plat rule currently in place in the State of Iowa. The lots will likely be sold prior the expiration of the plat law so any taxes payable during the holding period are minimal. The appraiser recommends the client monitor future assessments. RALLY APPRAISAL LLC 32 Page 77 of 486 THE APPRAISAL PROCESS The appraisal process is the orderly gathering, organizing and analyzing of factual data, in order to estimate a logical conclusion of a defined value as of a given date. The valuation process begins when an appraiser fully identifies the appraisal problem and ends when he/she reports the solution to the client. The valuation process is accomplished by following specific steps; the number of steps used depends on the nature of the appraisal assignment and the data available. The first step is defining the appraisal problem, which involves determining the following considerations: 1. Identification of real estate; 2. Identification of the property rights to be appraised 3. Date of value estimate; 4. Use of appraisal 5. Definition of value 6. Other limiting conditions Once the appraisal problem is defined, the appraiser collects and analyzes data that affects the market value of the subject property. The necessary data to be gathered includes general data for the region, community, and neighborhood in which the subject property is located. This general data includes; socio-economic, governmental, and environmental information. Also, specific data is gathered for the subject property and possible comparable properties. This specific data includes; site and improvements, sales and listings, costs and depreciation, income/expense and capitalization rate information. It is most desirable to use specific data within close proximity of the property to be appraised, but is sometimes necessary to search beyond neighborhood or community boundaries in order to find sufficient and/or reliable data. The examination of the data should lead to an understanding of the interrelationships specific area. It also provides raw data from which to extract numerical measurements and other evidence of market trends. The next step in this process is to analyze and estimate the highest and best use for the subject site, as vacant, and as improved (in the case of improved properties). Then the specific data is analyzed and used in one or more of the three standard approaches to value that are generally recognized by the appraisal community. The most common titles for these approaches are; The Cost Approach, The Direct Sales Comparison Approach, and The Income Approach. RALLY APPRAISAL LLC 33 Page 78 of 486 The final step in the appraisal process is the reconciliation of the value indications given by each of the applied approaches into a single dollar figure. When all three approaches are used, the appraiser examines the spread among the three separate indications. A wide spread may indicate that one or more of the approaches is not truly applicable to the appraisal problem. The appraiser must always consider the relative dependability and applicability of each approach in reconciling the value indications into a final estimate of defined value. In the reconciliation the appraiser considers the following critical factors; which of the approaches is based upon the greatest amount of reliable data, which approach most closely reflects the actual attitudes of typical buyers and sellers, and which approach (s) is most pertinent given the objective of the appraisal. The reconciliation also provides an opportunity to resolve variations and inconsistencies among the value indications and the methods with which they were derived. The report of defined value provides the client with a summary of the data analyzed, the methods used, and the reasoning that led to the value estimate. RALLY APPRAISAL LLC 34 Page 79 of 486 Y 1st St 20 COMMUNITY DATA NORTH CEDIR 27 Cedar Falls 218 } 4.3 J GATES PARK 63 Waterloo 101 Ridgeway Ave Hudson Population and Household Income f Dunkerton Rd El Run Heights L A C. K H A W Dewar Independence Ave Gittheriville 27 The Waterloo/Cedar Falls metro area includes the communities of Waterloo, Cedar Falls, Evansdale, and the outlying communities of Elk Run Heights, Hudson, Washburn and Raymond. The population, education and household statistics for the Waterloo/Cedar Falls metro area as reported by the Cedar Valley Alliance are on the following pages. RALLY APPRAISAL LLC 35 Page 80 of 486 • V. CEDAR VALLEY FACT SHEET The Cedar Valley economic area consists of the following Ciauntlesi Black Hawk, Bremer, Buchanan, Butler, Chickasaw. ayette, Grundy and Tama. klditionat demographic Information E at wraw.ceclanoallEyalliancecom. Sh ado'. of Rhythm Amphitheater in lh 'weft% 1E1110 RALLY APPRAISAL LLC 36 Page 81 of 486 Education The Waterloo/Cedar Falls metro area is currently served by two public school districts: Cedar Falls Community School District and the Waterloo Community School District. The community of Hudson has its own school district. Cedar Falls is home to the University of Northern Iowa. The University of Northern Iowa is a four-year state university with an approximate enrollment of 12,000 students. Hawkeye Community College is a two-year college located on the south side of Waterloo with an enrollment of approximately 5,000. RALLY APPRAISAL LLC 37 Page 82 of 486 The Cedar Valley boasts strong public and private educational systems from early childhood education to PhD programs. The universities and colleges serving the Cedar Walley award tiara than moo degrees annually, and the community colleges and technical schools graduate over 3,000 students per year. 1 FADER VALLEY The Deader Valley talent initiative, born out of the Greater Cedar Vakyalliance&Chamberxptrioritytodevelop a strongworkforce and to strengthen business and education collaboration, has been formed to expand the reach of leadership and 2P century employability skills development opportunities to all student dent in the Cedar Valley. Leader Valley's primary focus is implementation of Leader in Mei across school district in the Cedar Valley. The Leader in Me is based on the Stephen Covey's 7 Habits of Highly Effectiiim Vie. For more information on Leader Fn Mei arid other Leader Valley talent initiatives of the Greater Cedar Valley Alliance & Chamber visit wnnalsadervalley_org. Cedar Falls Cedar Valley Catholic Schools Gladbrook-Reinbeck Hudson Avg. ACT sc ore 24.S 22.9 21.4 2L9 Enrollment S,2s1 1079 587 679 ';oendence EDUCATIONAL ATTAINMENT 22.6 1,430 CV lA. 10,935 1,953 U5 High school diploma Some collage, no degree Associate's degree Bachelor's degree Graduate or professional degree Source (JS Censers Bwpau A43 2014 90.3 % 9L0% 86.0% 53.6 % 56.1 % 57.9 % 315 % 364% 26.7% 22.5% 25.8% 23.9 6.9L 8.1% 10.8% HIGHER, Er 'ATI 'NAL IN Title Type Enrollment Urivetstty of Northern Iowa Hawkeye Community College Wartburg College Allan Collage Upper levee University Kaplan University University CommunityjFethnical. College Pnvate University/College 1HvaIt91Sciences Programs Priv teunnversityJCollege Private University/Collage 11,981 5,300 1,537 625 540 410 Wr.: «w w5 AMP The TuchWorks Campus is a 30 -acre advanced manufacturing, research & development, innovation, education, cornn,orcial and manufacturing center. Located in downtown Waterloo. the campus is comprised of nacres of commercial and industrial development sites and 300,000 stxuare Feet of flex space divided among two historic John Deere manufacturing, buildings: Tech 1 and Techs 2. It is home to the Iowa Advanced Manufacturing Network Hub including the University of Northern (UMI) Iowa Metal Casting and Additive Mantrfacturng Center and the Additive Manufacturing Design Center - a partrnershi p of UN I and Hawkeye Community College. Also on campus is the John Deer+a Tractor and Engine Museum and Cedar Valley Mlakerspace. The Courtyard Waterloo Cedar Falls hotel is under construction along with outer amenities;. RALLY APPRAISAL LLC 38 Page 83 of 486 Employment The leading employers for the Waterloo/Cedar Falls are shown below. The U.S. Bureau of Labor Statistics is indicating an overall unemployment rate for Black Hawk County of 4.1% as of February 2017. This is lower than February of 2016 when the unemployment rate was 5.0%. This is compared with 3.2% for the entire state of Iowa and 4.6% for the United States. UTI0Ii; Talent Solutions programming are services of the Greater Cedar Valley Alliance & Chamber for existing regional businesses_ The program helps Cedar Valley employers attract, retain and connect with prospective workforce both locally and outside of the region with events such as "'Live the Valley" summer intern series, access to the Alliance & Chamber job board, and career fairs. For more information on Talent Solutions programming„ visit www. cedarvalieya[Lia rxe.00m. The Cedar Valley has an array of space, social groups and events that connect Like-minded entrepreneurs who are interested in the synergy that can happen when connections are made. • Two Locations offer co-wo rkingof'fice space with more pla nned throughout the CedarValley Region. • TAakerspace housed at the TechWorks Campus is for inventors to use machinery and equipment to transform their idea to a product Job OPportunity Sources workth evalley_org cedarvalleyjobs,com RALLY APPRAISAL LLC 39 MAJOR EMPLOYERS John Deere Tyson Fresh Meats Wheaton Franciscan Healthcare UnityPoint Health University of Northern Iowa Hy -Vee Foods Store {6} Waterloo Community Schools Target Regional Distribution CUE Companies, Inc. City of W at@r{oo Bertch Cabinets, Ltd. Cedar Falls Community Schools Dm@ga Cabinets, Ltd. VGM Group Black Hawk County Hawkey@ Community College Western Horne Communities Area 267 Education Agency Martin Brothers Distributing CUNA Mutual Group Wartburg College Isle Casino & Hotel Waterloo Viking Pump Veridian Credit Union Peterson Contractors, Inc Waverly Health Center Cedar Valley Medical Specialists TriMark Manufacturing Food Processing HeaCth Care Health Care Education Grocery Education Distribution Financial Government Manufacturing Education Manufacturing Diversified Government Education HeaCth Care/Housing Education Support Distribution Finance/Insurance Education Entertainment Manufacturing Financial Construction HeaCth Care Health Care Manufacturing 5,500 2,910 2,893 2,520 1,819 1,719 1,604 950 900 800 770 752 750 720 717 671 668 605 600 575 572 551 520 486 440 440 436 378 Data c erfedSpring aio;aorc„ic;udesboth, fig &permartarprpai-ameposifioni,For GI rornpreheruitieristdarea Eripkbyers5rstr Prww.C&iTINEI UNience.COM. Page 84 of 486 TOP INDUSTRY ST L.7 Cr.)is THE CEDAR VALLEY Average Earnings & Pereenta , of Labor Force (Salary and hearty positions combined) 0 0 IIIANS 4541AIION i .OUSI"LG rlirANCL& INSURANCE H-AL"lqARE & r,^;S SIAVCE GnVr74r4".,"INT :PUBLIC L)LCATION) N.,iI r, 1.1 RING The largest employers in the metro area are John Deere, Wheaton Franciscan Health Care and Tyson. The large classification of the workforce is education, manufacturing and health care. John Deere has lain off approximately 1,000 employees in the last nine months due to lagging equipment sales. Some of the affected employees have found employment elsewhere and no significant negative economic impacts have been noted due to the layoffs. RALLY APPRAISAL LLC 40 Page 85 of 486 Transportation The Waterloo/Cedar Falls metro area has good regional transportation linkages. U.S. Highway 218, U.S. Highway 20, and U.S. Highway 63 all intersect in the Waterloo/Cedar Falls metro area. Interstate -380 is located on the southeast side of Waterloo. U.S. Highway 218 and Interstate -380 are a part of the Avenue of the Saints Project which was recently completed. The Avenue of the Saints is a regional highway system linking St. Paul, Minnesota with St. Louis, Missouri. There are multiple railroads in the metro area. Air service is provided by the Waterloo Municipal Airport on the north side of the metro area. Conclusion The Waterloo/Cedar Falls metro area experienced a major economic downturn in the late 1970s and early 1980s with the community's largest employer John Deere laying off several thousand employees. Rath Packing, another major employer, also shut down their facility in Waterloo about the same time laying -off several thousand more workers. Over the past two decades this metro area has been making progress recovering jobs lost during that economic downturn. The Cedar Falls Industrial Park has been rapidly expanding over the past decade with several local businesses relocating and new businesses coming into the area. This office park has an aggregate employment base of approximately 5,000 jobs. There has been some growth with IBP, now Tyson's, on the northeast side of Waterloo in the past decade. The Isle of Capri Casino recently opened in Waterloo creating nearly 800 jobs. There are several apartment projects on the west side of Cedar Falls that have been developed in the past 10-15 years that are oriented to students of the university. The population projections reported by the Cedar Valley Alliance online may be unjustified given the amount of growth in this area. At the very least the population is expected to remain stable for this metro area with a potential slight increase in population. RALLY APPRAISAL LLC 41 Page 86 of 486 NEIGHBORHOOD DATA ��fi� Cyt :-esr Va II ey 3 Gett Ce i er W Ridgeway Ave ▪ ,Allow tri Ridgernjnr Rd W. Sari Maman G' we Waterloo, IA.50701 ympic Dr W Ridgeway RI 8 Gj S br L9 s Adjoining Property Uses North Private Country Club/Single Family Residential South Farmland/US Highway 20 East Professional Office West Condominiums/Cemetery W San Marnan Neighborhood Composition The neighborhood consists of a mix of office, condominiums and single family on the south side of Waterloo. The subject is located along the north side of West San Marnan Drive west of Ansborough Avenue and east of West 4th Street. Sunnyside County Club is located directly to the north and is surrounded by single-family homes. Undeveloped farmland is located across West San Marnan to the south. Professional office is located further to east at the corner of San Marnan and Ansborough while condominiums and a cemetery are located to the west. The neighborhood is comprised of office, medical and service related industries as well as medium density residential. Neighborhood Boundaries The west boundary is West 4th Street, the east boundary is Kimball Avenue, the south boundary is US Highway 20, and Ridgeway Avenue is the north boundary. RALLY APPRAISAL LLC 42 Page 87 of 486 Transportation Linkages and Major Arterials Transportation and linkages are convenient due to the subject's location near the corner of Ansborough Avenue and San Marnan Drive. Both arterials provide easy access to US Highway 20 and The Avenue of the Saints. San Marnan drive is the main east/west commercial corridor for the southern side of Waterloo while Ansborough Avenue is a primary north/south corridor. Ansborough Avenue intersects with US Highway 20 less than one mile to the south of the subject's location and US Highway 218/Avenue of the Saints, less than five miles to the north. US Highway 20 is a main four lane highway that runs along the southern side of the Metro Area and provides the northern portion of Iowa with four -lane east/west interstate travel. Neighborhood Trends The subject's neighborhood has been a stable residential neighborhood for the past few decades. It is home to both executive and modest single-family subdivisions and also includes some condominium developments. The subject is adjacent to the Sunnyside Country Club that is Waterloo's only private country club. Dwellings which surround the club are predominately over 25 years old with some newer construction on a fill-in basis. The neighborhood is very established and is nearly 100% developed. There are some newer subdivisions on the south side of Waterloo, south of US Highway 20. The newer subdivisions include the third addition of Nottingham Estates, an executive subdivision on the south side of Waterloo with 12 lots. Skogman Homes started developing a 100+ lot subdivision off Shaulis Road in 2014 and this is the first large-scale residential subdivision in Waterloo in many years. Many other small-time developers have developed smaller subdivision in the subject's immediate area in the last 10-15 years. However, nearly all of the subdivisions are tailored to mid-range single-family homes. Housing in Waterloo has recently gained some momentum, mostly in the price range below $300,000. The City of Waterloo recently renewed a three-year property tax abatement on new single-family homes which has increased housing starts in the community. Vacancy There are currently 11 lots available for sale in Waterloo within the price ranges from $62,900 to $125,000 as of the effective date of this report. Realtors interviewed as part of this appraisal indicate there is a shortage of available lots in the Waterloo market. Employment John Deere is the largest employer in the metro area and employs just more than 5,000 people. John Deere has four plants within the metro area, three of which are located within a few miles north and west of the subject. The University of Northern Iowa is the largest employer in Cedar Falls and the campus is less than ten miles from the subject property. Other large employers include Target Distribution, Allen Hospital, Covenant Hospital and several other small to mid-sized industrial service employers in this area. RALLY APPRAISAL LLC 43 Page 88 of 486 Proposed Development There are limited competing executive subdivisions in Waterloo that have lots available. Nottingham 3rd Addition has nine lots currently available for sale and has 12 total lots. Skogman Homes is currently offering a few lots for sale within its 100+ lot subdivision which is not typical for this developer. Skogman Homes usually builds on a speculative basis and their lots are not typically available for sale to the public. This developer offered more than ten lots to any buyer and two remain unsold as of the effective date of this report. Both of these subdivisions compete with the subject but they lack a golf course view which is considered an asset by most buyers. Neighborhood Comments The immediate neighborhood is an established area consisting of single-family homes built during the last 30-40 years with some new construction on a fill-in basis. The dwellings range from custom executive homes, which cost over one million dollars to build, to modest homes worth less than $250,000. The neighborhood is accessible by West San Marnan Drive just northwest of the interchange between Ansborough Avenue and US Highway 20 and is within close proximity to the main retail and employment centers in the metro area. This area has been very stable for many years and is expected to remain that way due to its location. RALLY APPRAISAL LLC 44 Page 89 of 486 MARKET ANALYSIS The subject is a new subdivision on the south side of Waterloo along Sunnyside Country Club. Some local developers entered into a development agreement with the City of Waterloo to relocate West San Marnan Drive in order for the subdivision to be developed. The subject is considered to be an upscale subdivision due to its location around the country club as well as its market appeal. Sunnyside Country Club was originally developed in the early 1970's and features mostly older single -homes and there are currently no lots available for development around the course. The developer hopes the development will fill a void in the market by offering upscale lots with country club/golf course views. The subdivision offers 24 lots which range in size from 16,125 square feet to 22,400 square feet and all 24 lots back to the country club. The number permits issued for single-family homes has increased over the last few years due a new three-year tax abatement that was recently put in place and subsequently renewed by the City of Waterloo. The chart below shows the number of single-family building permits in Waterloo since fiscal year 2013. Year Permits FY 2013 45 FY 2014 90 FY 2015 69 FY 2016 80 'STD FY 2017 47 The number of single-family building permits in Waterloo ranged from 45 to 90 for the fiscal years between 2013 and 2016. Through May of 2017 there were 47 single-family home permits in Waterloo that indicates the city on pace for approximately 56 single-family home permits in the 2017 fiscal year. The annualized number of 2017 is slightly below the three prior years but higher than the 2013 fiscal year. Overall, Waterloo has seen a steady amount of single-family home permits during the last year years. Mostly due to the city's three three- year tax abatement on newly constructed single-family homes. RALLY APPRAISAL LLC 45 Page 90 of 486 Waterloo Lot Sales: The following two charts show the lots sales within Waterloo since January of 2014. These sales encompass the entire south side of Waterloo. of Sales 8 Waterloo Lot Sales: January 2016 to Present Lot Pricing Low S36 000 High Sliiii iiiiii Lot SizeISF Small Large 14 176 33.110 SaleslMonth 0.47 # of Sales 23 Waterloo Lot Sales: January 2014 to December 2015 Lot Pricing Low High $30.000 52010 000 Lot SizeISF Small Large 6.500 63 597 Sales/Month 0.96 The number of sales of buildable lots comparable to the subject in Waterloo has a decreased slightly since January of 2016 when compared to 2014 and 2015. Over the last 17 months there have been eight single-family lot sales on the south side of Waterloo or approximately 0.47 sales per month. These statistics include one vacant lot currently under contract. In 2014 and 2015 there were 23 lot sales with an average of approximately 0.96 sales per month. The decrease is due to in part of the low supply of available lots plus the presence of Skogman Homes that offers built -to -suit options to buyers in the new construction market. This developer typically does not sell their lots on the open market but instead includes the lot price in its construction packages. Buyers sometimes have the choice to pick their lot so the presence of Skogman Homes is factor in the demand for lots in Waterloo. However, the sales of single-family homes constructed by Skogman are not included in the statistics above. Per MLS, Skogman Homes has sold nine new construction houses in its subdivision since January of 2016 and there are currently three properties under offer which are being constructed. If you were to consider these numbers in statistics above, there would be 20 total lots sales on the south side of Waterloo since January of 2016 and the absorption rate would be approximately 1.18 sales per month. RALLY APPRAISAL LLC 46 Page 91 of 486 Sales of Competing Lots: The subject's proposed lots are located in an executive subdivision which is superior to most of the subdivisions in the community. The following chart shows the sales of lots within competing executive subdivisions in Waterloo. Sale Date Subdivison Lot Size Sale Price $!SF Apr -17 Nottingham 16,700 $100,000 $5.99 Oct -16 South Fork Estates 33,116 $57,500 $1.74 Sep -16 Nottingham 22,800 $95,000 $4.17 Apr -16 Audubon Heights 4th Add 30,143 $92,500 $3.07 Oct -15 Audubon Heights 4th Add 21,329 $75,000 $3.52 Sep -15 Audubon Heights 4th Add 20,820 $65,000 $3.12 Aug -15 Audubon Heights 4th Add 16,402 $65,000 $3.96 Aug -15 Audubon Heights 4th Add 25,703 $80,000 $3.11 Aug -15 Waterloo Country Club 20,250 $200,000 $9.88 Sep -14 Waterloo Country Club 16,650 $260,000 $15.62 Jul -14 Waterloo Country Club 18,825 $290,000 $15.41 May -14 South Fork Estates 15,485 $60,000 $3.87 Jul -14 South Fork Estates 13,040 $45,000 $3.45 Apr -14 Nottingham 23,475 $56,000 $2.39 Average Sale Per Month 0.41 Since the beginning of 2014, there have been 14 lots sales in executive subdivisions in Waterloo which includes three vacant land sales of lots which surround Sunnyside Country Club like the subject. This indicates an absorption rate of approximately 0.41 sales per month or fewer than five sales per year. Supply: Per MLS, there are 11 lots available for sale within the price range from $62,900 to $125,000 in Waterloo. RALLY APPRAISAL LLC 47 Page 92 of 486 Summary of Absorption: The absorption rate for lots in Waterloo has ranged from 0.47 to 0.96 sales per month that does not include the lots developed by Skogman Homes which are sold along with a single- family home. If these statistics are included in the analysis the absorption rate over the last 17 months is 1.18 sales per month. These numbers encompass the lots within all price ranges in areas similar to the subject's location and the historical data indicates the absorption rates on executive lots are usually less than more affordable lots. The absorption rate for lots within executive subdivisions in Waterloo is approximately 0.41 sales per month based on the sales data since the beginning of 2014. Based on the historical sales of executive lots in Waterloo and the recent increase in demand for buildable lots due to the city's tax abatement, the estimated absorption rate for the subject's lots is approximately 0.50 sales per month or six sales per year. This is slightly higher than the absorption rate of executive lots shown on the prior page but the subject's lots features a favorable location and would likely be well received by the market. 24 lots / 6 sales per year equals four years or a 48 month supply. RALLY APPRAISAL LLC 48 Page 93 of 486 SITE DESCRIPTION Subject Aerial Map (Source: County Assessor's Map) Shape/Size The subject's site consists of 24 lots which all form a mostly rectangular shape. The lots vary in size, as indicated on the following page. RALLY APPRAISAL LLC 49 Page 94 of 486 Lot Size(SF) Lot Size(SF). 1 22,400 13 16,383 2 22,350 14 16,250 3 19,800 15 16,250 4 19,800 16 16,250 5 18,392 17 16,250 6 18,500 18 16,250 7 18,125 19 16,250 8 17,875 20 16,250 9 17,500 21 17,160 10 17,125 22 17,160 11 16,875 23 16,125 12 16,500 24 16,390 Lots Size Range High 22,400 Low 16,126 Average 17,592 The subject's lot range in size from 16,125 to 22,400 square feet with an average of 17,592 square feet. The width of the lots is from 125' to 175' while the depth is from 128' to 152'. RALLY APPRAISAL LLC 50 Page 95 of 486 RALLY APPRAISAL LLC 51 Page 96 of 486 Topography/Soil Conditions: The subject's 24 lots are mostly level with some sloping toward the rear as you move north from West San Marnan Drive to the golf course. Some of the lots will have potential for a walk -out or daylight basement windows. Visibility/Access The subject is located along the north side of West San Marnan Drive between Ansborough Avenue and West 4th Street. They all have access along West San Marnan Drive with frontage along the Sunnyside Country Club. Overall the visibility and access is above average. Utilities: Electricity Public Cable Yes Natural Gas Yes Water City Sanitary Sewer City Per the developer, water and sewer is stubbed to each lot but natural gas and electricity are not available to each lot but are nearby. The developer says these two utilities could be available within 30 days. This is typical for newer subdivisions and not adverse. Flood Zone: No portions of the 24 lots appear to be in the flood plain. Panel: 19013CO284F Zone: Zone X Date: July 18, 2011 RALLY APPRAISAL LLC 52 Page 97 of 486 coo STEM ONLI NI E 9c orn 74111111/V FL OD CAPEU"d/ PROPERTY ADDRESS: Let%3A*52297' .4993+16%2C+Lon%3A+-1 D284089,0 73427 OLYMPIC DR North KC. ..,.,e . _ d ti. SPAM M'IARI'A,1 GR I - _.... v , al L2 I 5 g FLOOD DSCARE'"' 11► larWm'1. .Bilk 1 I.A 141 —"---,— — _ I Flood Hazards hair Map Number 1 gC 13 00234 F Effective ate J,-,'a8,a iit NO ". r,13.P FEA 3-0.10h Cr. 'THIS FA‘el,„. IS1CJI:r{"Y:'I /v"iuir r:;INN SHIP t,8,NO-4IH 16,41,47,1- -•-' d+,F T d PrrAvraI ( � � 9� 'CraOs..;r �.':i Flood II Tr,:...exeI common or taftweerneti STDBamhere.cc 4e0.574.1234 .' Legend -ilgh fcodk Lim Accdrmk mpei fi b cam_ emrncy n f ooasw-r _. 0 -- RALLY APPRAISAL LLC 53 Page 98 of 486 Zoning The subject property is zoned R-1, One & Two Family Residence District. The current use of the subject property is an allowed use in this zoning district. Comments: The subject property is a 24 -lot subdivision on the south side of Waterloo along Sunnyside Country Club. The lots range in size from 16,125 to 22,400 square feet. Water and sewer have been stubbed into each lot and electricity and natural gas can be available within 30 days, per the developer. The current competition is moderate at this time because there are very few lots in executive areas available for sale and none are available with golf course frontage. The subdivision will cater to move -up buyers who desire a custom home with a favorable view. RALLY APPRAISAL LLC 54 Page 99 of 486 IMPROVEMENT DESCRIPTION: Type of Property: The subject property is an executive single-family subdivision that contains 24 total lots. The improvements consist of concrete streets, storm sewer plus curb and gutter. The development is similar to other competing subdivisions in Waterloo. RALLY APPRAISAL LLC 55 Page 100 of 486 HIGHEST AND BEST USE ANALYSIS Highest and Best Use is defined as: "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value."4 The competitive market forces where the subject property is located determine whether or not the current use is the highest and best use of the subject property, not the appraiser, developer, or property owner. If the property is improved it is possible that the highest and best use may be different from the current use for which the property is currently improved. If the value of the land less the cost to raze the existing improvements is greater than the value of the subject property as it is currently improved then the current use is not considered to be the highest and best use of the subject property. Other factors such as whether or not the existing or an alternative use is legally allowed by zoning or other legal circumstances has to be considered in determining the highest and best use. A use of a property may be physically possible, legally permissible, but not economically feasible due to cost or other external factors such as an oversupply in the market. In order for the highest and best use of a property to be achieved the use must be economically feasible. In an analysis of the highest and best use the use that maximizes the value of the subject property represents the highest and best use of the subject property. The highest and best use of the land as though vacant and/or property as improved must meet the following four criteria: Physically Possible: The subject property is a platted 24 -lot subdivision and is physically possible. 4 The Appraisal of Real Estate, Fourteenth Edition RALLY APPRAISAL LLC 56 Page 101 of 486 Legally Permissible: The subject property is zoned R-1, One and Two Family Residence District. This zoning classification allows for one and two-family residential dwellings. Therefore, the current use of the subject as a single-family subdivision is legally permissible. Financially Feasible: Historical sales and permits indicate the Waterloo market is steady and stable. Historical absorption rates indicate the market is absorbing approximately one lot per month. The development is feasible. Maximally Productive: Of the financially feasible uses, the use that produces the highest price, or value, consistent with the rate of return warranted by the market for that use is the highest and best use. The current use will achieve an adequate return to the developer and is consistent with the intended use for this area. AS VACANT: The highest and best use of the subject site as though vacant at this time would be to develop single-family residential lots. AS IMPROVED: The highest and best use is to develop and sell lots as quickly as possible to achieve the greatest return with the least interest expense possible. RALLY APPRAISAL LLC 57 Page 102 of 486 VALUATION METHODOLOGY The valuation process is used to develop a well -supported estimate of a defined value, which is based upon consideration of all pertinent general and specific data. Appraisers estimate property value by applying specific appraisal procedures, which reflect three distinct methods for analyzing data mathematically: cost, direct sales comparison, and income capitalization. All three standard approaches to value will be considered herein; The Cost Approach, The Direct Sales Comparison Approach and The Income Approach. All approaches will be processed and included whenever the data is sufficient. However, there are instances when data is inadequate for an approach. In such cases, an explanation will be provided as to why the approach was deleted. The Cost Approach involves estimating the land value based on market sales and adding the depreciated cost of the improvements. The estimated cost is based on Marshall and Swift online service and/or the owner's actual cost for proposed construction projects. The estimated replacement cost represents the cost of functional replacement cost and not reproduction cost. Depreciation is based on the economic age -life method and supported based on market sales. The cost approach is best used on newer properties where the amount of depreciation is less and makes this approach more reliable. The Direct Sales Comparison Approach requires the gathering of data as similar to the subject property as possible and provides an indication of value through the comparative process. The approach compares units that have sold, with the subject as a unit, recognizing differences of individual characteristics of each property. Determining the degree of comparability between market data and the subject involves their similarity with respect to many valuation factors including physical characteristics. Adjustments are made for market recognized differences. The sales comparison approach is most useful when a number of similar properties have sold recently or are currently for sale in the subject property's market. The Income Approach is a discounted present value of the future net cash flows from the sales of the lots during the holding period. The methodology employed in the development of the income approach is the only relevant approach to valuing subdivisions. It should be noted that, while all applicable approaches should have some reasonable correlation, specific adjustments will not be exactly the same in each approach. This is because each approach indicates that market value of the subject property by measuring different types of market data and different market participants. For example; the location adjustment for the subject site in Cost Approach may not be the same amount of adjustment ($ or %) as in the Direct Sales Comparison Approach. This is because the purchasers of vacant land look at the land as having a larger choice of improvements or uses; it has greater possible utility as a vacant site. The purchaser of an existing improved property is `locked' into a smaller number of choices that are limited by the existing improvements. And in the Income Approach, a prospective tenant will determine an even different interpretation of that location based upon his or her own desires and the particular leasable space and not the whole improvement or not the consideration of the vacant site. Detailed explanations and processes for each reliable approach follow in the report. It is suggested that all data be studied prior to evaluation. RALLY APPRAISAL LLC 58 Page 103 of 486 EXPLANATION OF THE COST APPROACH The principle of substitution is basic to the Cost Approach. This principle affirms that no informed buyer would pay more for an improved property than it would cost to construct a similar property offering similar utility and amenities, in a normal market without undue delay. The Cost Approach is a summation of land values, as vacant and depreciated value of the improvements. Land value, as vacant, is estimated by comparison with sale transactions of unimproved land. Sales that are used for comparison would be similar to the land of the Subject Property, particularly, as to highest and best use and size. Building value is based on present depreciated value (i.e. cost less allowance for physical deterioration, functional obsolescence, and/or economic obsolescence). Cost new is based on construction costs as of date of the appraisal. Such costs are based on information obtained from local contractors and cost indices such as Dodge Cost Calculator, Boeck Manual, and/or Marshall and Swift Services. The separate items of depreciation are based on observed conditions, historical life, remaining economic life, and any adverse conditions that may affect the property. When possible, assigned depreciation is based on analysis of factual data. External and functional obsolescence are determined by studying sales of comparable properties that have depreciated to the same extent as the subject. The land value is subtracted from the sale price, and then the estimated depreciation is subtracted from the estimated cost new. The land value is added back to this figure. Then the actual sale price is subtracted to find the functional and/or external obsolescence, if any. The data for this process is done periodically in each market. The data and calculations are not included in this report; only the value findings are utilized in this appraisal. If the entire data were used it would be cumbersome and quite possibly be misinterpreted. This approach is generally most influential when there is adequate data to determine and accurate indication of market value for the site, as vacant, and when depreciation and obsolescence is minimal. This approach, then, has a high degree of influence in the appraisal of 'new or near new' properties. In older properties, this approach serves only as a check, and illustrates the comparative costs and depreciation figures. Data is usually insufficient to determine exact amounts for significant depreciation and obsolescence; thus reasonable estimates are used from market data. The subject property is an existing subdivision and most investors would not consider the replacement cost a reliable indication of market value. The cost approach is not being developed in this report. There is enough reliable market data available for the development of the income and sales comparison approaches that a credible value estimate can be developed without doing the cost approach. RALLY APPRAISAL LLC 59 Page 104 of 486 DIRECT SALES COMPARISON APPROACH The Direct Sales Comparison Approach is a method of arriving at an indication of value by comparison of sale properties as a unit, with the Subject Property as a unit. Limited sales data exists for bulk purchase transactions of lots in the Cedar Falls/Waterloo metro area but there is adequate sales data to indicate the value of a single lot, which is necessary to develop the retail value of the subject. The tables below show the recent sales of lots in Waterloo. No. Sale Date Subdivison Lot Size Sale Price $ISF Comments View 1 Apr -17 Nottingham 16,700 $100;000 $5.99 Similar Location Standard 2 Oct -16 South Fork Estates 33;116 $57,500 $1.74 Similar Location Standard 3 Sep -16 Nottingham 22,800 395,000 $4.17 Similar Location Standard 4 May -16 Georgian Heights 20,651 335,000 $1.69 Inferior Location Standard 5 May -16 Lichty 2nd Addition 22,816 $46,500 $2.04 Inferior Location Standard 6 Apr -16 Audubon Heights 4th Add 30,143 $92,500 $3.07 Similar Location Standard 7 Apr -16 Grangers Addition 14,17.5 344;000 $3.10 Inferior Location Standard 8 Oct -15 Audubon Heights 4th Add 21,329 $75,000 $3.52 Similar Location Standard 9 Sep -15 Audubon Heights 4th Add 20,820 $65,000 $3.12 Similar Location Standard 10 Aug -15 Audubon Heights 4th Add 16,402 365;000 $3.96 Similar Location Standard 11 Aug -15 Audubon Heights 4th Add 25,703 380,000 $3.11 Similar Location Standard 12 Aug -15 Waterloo County Club 20,250 $200,000 $9.88 Similar Location Country Club 13 Apr -15 Summerland 6,500 $30,000 $4.62 Inferior Location Standard 14 Mar -15 Pine Meadows 63,597 $93.000 $1.46 Inferior Location Standard 15 Oct -14 Klingaman Park 11,440 355,000 $4.81 Inferior Location Standard 16 17 Aug -14 Audubon Park 6th Add 36,748 $45,750 $1.24 Inferior Location Standard 18 Jul -14 Audubon Park 6th Add 16,252 336,000 $2.22 Inferior Location Standard 19 Jul -14 South Fork Estates 13,040 $45.000 $3.45 Similar Location Standard 20 Jul -14 Waterloo County Club 18,825 $290,000 $15.41 Superior Location Country Club 21 Jun -14 Audubon Park 6th Add 15,926 $35,000 $2.20 Inferior Location Standard 22 Jun -14 Audubon Park 6th Add 17,348 $36,000 $2.08 Inferior Location Standard 23 Jun -14 Audubon Park 6th Add 16,993 $36,000 $2.12 Inferior Location Standard 24 Jun -14 Audubon Park 6th Add 16,637 $36,000 $2.16 Inferior Location Standard 25 Jun -14 Audubon Park 6th Add 22,583 $41,500 $1.84 Inferior Location Standard 26 May -14 South Fork Estates 15,485 $60,000 $3.87 Similar Location Standard 27 May -14 Audubon Park 6th Add 17,073 336,000 $2.11 Inferior Location Standard 28 May -14 Audubon Park 6th Add 14,603 $37,800 $2.59 Inferior Location Standard 29 Apr -14 Klingaman Park 11,900 $37,000 $3.11 Inferior Location Standard 30 Apr -14 Nottingham 23,475 $56,000 $2.39 Similar Location Standard 31 Mar -14 Klingaman Park 23,132 $49,000 $2.12 Inferior Location Standard 32 Mar -14 Klingaman Park 11,440 337,000 $3.23 Inferior Location Standard 33 Feb -14 Klingaman Park 11,440 $46,000 $4.02 Inferior Location Standard 34 Jan -14 Audubon Park 6th Add 21,837 $41,000 $1.88 Inferior Location Standard Sep -14 Waterloo County Club 16,650 $260,000 $15.62 Superior Location Country Club RALLY APPRAISAL LLC 60 Page 105 of 486 The table above shows all of the vacant lots sales on the south side of Waterloo since January of 2014 as reported by the Northeast Iowa Regional Board of Realtors MLS and the Black Hawk County Assessor. The majority of the lots in the table above are located in inferior subdivisions which lack the appeal of the subject's subdivision. There have been three lots with frontage along Sunnyside Country Club that have sold since July of 2014. These three lots are highlighted in yellow in the chart above and indicate a value range from $9.88 to $15.62 per square foot. These sales indicate the location difference between the subject's location and the location of the other subdivisions. The sales prices vary based on location and lot size, a summary of the lots sales is on the next page. RALLY APPRAISAL LLC 61 Page 106 of 486 SUMMARY OF SALES APPROACH: Summary of Lot Sales (All Sales Since Jan. 2014) Lots Sales Lot Size SF Price!SF Low High Low High Low High S30 000 5290.000 6 500 63.597 51 24 515.62 Average Price!SF $3.82 Median Price!SF $3.09 The sales indicate a range of value range from $1.24 to $15.62 per square foot. The average price per square foot is $3.82 while the median is $3.07. As previously mentioned, there are only a few sales in the last three years which are within executive subdivisions similar to the subject. Prior Listings The subject's lots were previously listed for sale but were taken off the market in July of 2015. Not all of the lots were listed since the developers planned on keeping some for their own personal use. The prior listing prices and list price per square foot are detailed in the table on the following page. RALLY APPRAISAL LLC 62 Page 107 of 486 Lot# Lot Size (SF} Asking Price Asking PriceISF 1 22,400 $112,500 $5.02 5 18,392 $112,500 $6.12 6 18,500 $112,500 $6.08 7 18,125 $112,500 $6.21 8 17,875 $112,500 $6.29 9 17,500 $112,500 $6.43 12 16,500 $112,500 $6.82 13 16,383 $112,500 $6.87 14 16,250 $112,500 $6.92 15 16,250 $112,500 $6.92 16 16,250 $112,500 $6.92 17 16,250 $112,500 $6.92 18 16,250 $112,500 $6.92 19 16,250 $112,500 $6.92 20 16,250 $112,500 $6.92 21 17.160 $112.500 $6.56 22 17,160 $112,500 $6.56 23 16,125 $112,500 $6.98 24 16,930 $112,500 $6.65 High $6.98 List Price per Sqft Low $5.02 Average $6.58 The 19 lots that were listed previously were all being marketed for $112,500 or from $5.02 to $6.98 per square foot. The prior list prices is above the median and average for the market but reasonable given the subject's golf course frontage. They are well below price per square foot of the three comparable sales which have frontage along the country club. Given the favorable location of the subject's lots as well as the demand for golf course lots in the metro area, the prior listings prices of the lots is considered reasonable and will be used in this analysis. The total retail sales of the subject's lot are as follows. 24 X $112,500 = $2,700,000 The estimated total retail value of the 24 lots is $2,700,000. RALLY APPRAISAL LLC 63 Page 108 of 486 INCOME APPROACH Generally the most acceptable methodology for valuing subdivisions is a discounted cash flow analysis. This methodology takes into account the retail lot sales during each holding period less selling and holding expenses and then discounting the net income from each year or period at an appropriate discount rate. Potential Gross Sales: The first step is to estimate the retail value of each of the subject's lots. The appraiser researched the market and estimated the projected single family lot sale prices. This analysis was completed in the Sales Comparison Approach on the preceding pages and estimated retail value of the proposed subdivision is $2,700,000 which averages out to $112,500 per lot. Absorption: Per the Jim Sulentic with Sulentic-Fischels Commercial Group, who was the listing realtor when the lots were being developed, eight of the 24 lots were pre -sold prior to the completion of the subdivision. This was on par with the developer's expectations which were to sell one-third of the subdivision, or eight lots within the first year. It is likely that interest in the subject property has waned slightly since there have been two other newer subdivisions developed in the last two years. The 3rd Addition of Nottingham and the 4th Addition of Audubon Heights are now available and provide direct competition to the subject property. These two competing subdivisions will likely reduce the subject's absorption going forward. The historical absorption rate for executive lots in Waterloo has been approximately 0.41 lots sales per month or fewer than five sales per year. (0.41 X 12 = 4.92) It is expected that the subject's lots will be absorbed at a rate that is slightly higher than noted above due to the subject's country club frontage. The estimated absorption rate of the subject's lots is estimated to be 0.50 sales per month or approximately six sales per year. Therefore, it is likely the subject's lots will be fully absorbed in 48 months or less. RALLY APPRAISAL LLC 64 Page 109 of 486 Gross Sales Year 1 Year 2 Year 3 Year 4 Totals $675,000 $575,000 $675,000 $675,000 $2,700,000 Real Estate Commissions @ 5% Gross Sales $33.750 $33.750 $33.750 $33,750 Revenue Stamps @ $1.60$1000 Gross Sales $1.080 $1..080 $1.080 $1.080 Real Estate Taxes $1..002 $668 $334 $167 Maintenance @1a $60/remaining lot/year $900 $600 $300 $150 Total Expenses $36.732 $36.098 $35.464 $35.147 $108.295 Cash Flow $638.268 $638.902 $639.536 $639.853 $1.916.705 PV Factor @ 15% 0.8696 0.7561 0.6575 0.5718 PV of Cash Flows $555,015 $483.101 $420..505 $365.838 $1.824.460 $1.825.000 $76.042 Selling Expenses and Carrying Costs The operating expenses for the subject property include selling expenses and carrying costs during the holding period. These include real estate commissions, revenue stamps, and miscellaneous expenses which include real estate taxes, liability insurance, and lot maintenance during the holding period. Real Estate Commissions The first expense is real estate commissions. A typical real estate commission in this market is 5% to 7%. A broker could be commissioned for 5% to have exclusive marketing rights to an entire subdivision. A 5% real estate commission will be used in this analysis. Revenue Stamps The revenue stamps are a minor selling expense paid by the seller at the time of sale. The revenue stamps are estimated at $1.60 per $1,000 of sales. Real Estate Taxes The real estate taxes are based on the actual taxes payable and are based on the information provided by the County Treasurer. The taxes on the 24 lots are $1,336 or $55.69 per lot. This expense is estimated at $55.69 per remaining lot per year. Maintenance Expenses Maintenance expenses cover liability insurance and lot maintenance during the holding period. This expense is estimated at $50 per remaining lot per year. Net Revenues The net revenue is the income remaining after selling expenses and carrying costs are removed from the retail sales of the lots. RALLY APPRAISAL LLC 65 Page 110 of 486 Discounting Market Commentary Per RealtyRates.com the prices on all sell-out properties have continued their upward trends while inventories on a nationwide basis remain low. However, increases in the average discount rates for all sell-out property types were reported during the 4th Quarter 2016. Site -build residential subdivisions and PUD rates increased and average of 23 basis points during the 4th quarter. The rates for other sell-out properties include manufactured housing, business parks, industrial parks, residential condominiums and cooperative also increased during the 4th quarter. Overall, pro -forma and actual discount rates moved largely in tandem, indicating a market consistent outlook by developers. The following summarizes discount rates for conventionally financed subdivisions and planned unit developments (PUDs) in the Midwest. Actual Rates are historical rates achieved by survey respondents, while Pro -Forma Rates reflect forward-looking revenue and expenses and developer's profit is not treated as an expense. RALLY APPRAISAL LLC 66 Page 111 of 486 Mid -West — AR, IA, MO, MN RealtyRates.com DEVELOPER SURVEY -1 t quarter ?Q1 Z" Mid -West - Subdivisions & PUDi Actual nates Pro -Fauna Rates Min Mas Aug Min Mal Arg Site -Guilt Resident ial i►".; 27% x'3.24}. 25 71% 15.1:27.... 37.6.75. 24.1;1% •100 Ltndt_ 1E.275. 33.3w5: 24.557. 15.62,. 32.45. 23.57% 1i.117-500 Units 18.67% u7 21% 25.;87% Ib 015. 35.7:;% 24.;x; 50 0. Units 17.02% ::8-815: 26.31>. 16.40% 37.355. 25.265. i�1ax�4ltse 17.074 3'x.'45. 2$ 1C'. 16%79% 37.87% 25.05n Discount rates were selected based on rates reported by RealtyRates.com. The discount rates for small subdivisions (defined as 100 lots or less) range from 16.27% to 39.24% with an average of 25.71%. These rates are per the 4th Quarter 2016 national survey for single- family developments per Realtyrates.com. The estimated discount rate for the subject is estimated at 15% which is below the national surveys but reflects the favorable demand for the subdivision due to its location and the limited competition. Additionally, it features a small number of lots with several pre -sold lots during the construction period. It was been well- received by the market during its marketing period and will likely be absorbed by the market within four years from completion. The discounted cash flow analysis is indicating a discounted value of $1,825,000 ($76,042 per lot) based on a 15% cash on cash discount rate. The discounted cash flow valuation method is the most widely accepted methodology to valuing subdivisions and sell-out properties. The estimated value of the 24 lots within the subdivision is $1,825,000. The market value of the 24 developed lots within the subject as of April 12, 2017 is $1,825,000 As Is. ONE MILLION EIGHT HUNDRED TWENTY FIVE THOUSAND DOLLARS ($1,825,000) As Is RALLY APPRAISAL LLC 67 Page 112 of 486 RECONCILIATION & FINAL VALUE CONCLUSION The value indicated by application of each of the utilized approaches is: Cost Approach Income Approach Sales Comparison Approach RECONCILIATION CONSIDERATIONS: Not Completed $1,825,000 As Is $2,700,000 Aggregate Retail Sales Not the value Reconciling the indicated value into a final value conclusion necessitates focusing on the following critical factors: 1. Which of the approaches is based on the greatest amount of reliable data; 2. In which approach are the attitudes of typical buyers and sellers most faithfully represented; 3. In consideration of the objective of the appraisal and the present use of the subject property, which approach is the most pertinent. RALLY APPRAISAL LLC 68 Page 113 of 486 RECONCILIATION DISCUSSION: Cost Approach: The cost approach is not being developed in this report. The quality and quantity of market data available for the development of the income and sales comparison approaches is adequate that a credible value conclusion can be reached without doing the cost approach. Income Approach: The income approach is done using a yield analysis to discount the present value of the future net income streams from the sales of the units during the holding period. This is the only recognized methodology for valuing subdivisions (sellout properties). The quality of market data used in the development of the income approach is good and provides the most reliable estimate of market value and is receiving the most emphasis. Sales Comparison Approach: The sales comparison approach estimates the retail value of the lots in the proposed subdivision. The sales data is adequate to form a credible value opinion. The holding period is estimated to be approximately four years therefore discounting is necessary. This approach has been completed but is given no weight in the final value estimate. SUMMARY OF RECONCILIATION AND FINAL VALUE CONCLUSION: The estimated As Is fee simple value of the subject property as of April 12, 2017 is as follows. ONE MILLION EIGHT HUNDRED TWENTY FIVE THOUSAND DOLLARS ($1,825,000) As Is RALLY APPRAISAL LLC 69 Page 114 of 486 ALLOCATIONS Per the request of the client, we are allocating the total present value of the subject into four tracts. The amount of allocation per tract is being extracted by the total number of acres within all four tracts and dividing that number by the value estimate. I then applied the value per acre to the number of acres within each tract to determine the amount of allocation, which is shown below. Tract Number Acres Total Allocation Tract 1 1.695 $318,248 Tract 2 4.175 $783,886 Tract 3 2.666 $600,661 Tract 4 1.184 $222,306 The total allocation to Tract 1 is $318,248. (Three Hundred Eighteen Thousand Two Hundred Forty Eight Dollars) THREE HUNDRED EIGHTEEN THOUSAND TWO HUNDRED FORTY EIGHT DOLLARS $318,248 The total allocation to Tract 2 is $783,886. (Seven Hundred Eighty Three Thousand Eight Hundred Eighty Six Dollars) SEVEN HUNDRED EIGHTY THREE THOUSAND EIGHT HUNDRED EIGHTY SIX DOLLARS $783,886 The total allocation to Tract 3 is $500,561. (Five Hundred Thousand Five Hundred Sixty One Dollars) FIVE HUNDRED THOUSAND FIVE HUNDRED SIXTY ONE DOLLARS $500,561 The total allocation to Tract 4 is $222,305. (Two Hundred Twenty Two Thousand Three Hundred Five Dollars) TWO HUNDRED TWENTY TWO THOUSAND THREE HUNDRED FIVE DOLLARS $222,305 RALLY APPRAISAL LLC 70 Page 115 of 486 ADDENDA RALLY APPRAISAL LLC 71 Page 116 of 486 Rally Appraisal, L.L.C. c.. Oar Falb Office • 2302 W 1" Street Su/le 21310 • Ceder Fait, ra 54a 13 Carl Cala • hlrurrrya:r ,rtl'n 1ar:rrf*. • rior +lpprdrtllir Adorn Ratan C*Ir*Ir ICkro errs inn Dave Passmore- Corrffnerolgi ilerrsBer r1AI April d. 2017 Mr. Aric Schroeder Cagy Planner City of Waterloo 715 Mulberry Street Waterloo, IA 50703 RE Appraisal of Sunnyside South Subdivision, Waterloo, Iowa 50701 Prom (319) 7!6&-9373 Fax: 04E1216-1232 Dear Mr. Schroeder; As requested I can appraise the above-relerenced property. The purpose of [NB Appraisal Report will be to estimate the felt market value of the property ec rtif thof inspection. The intended use of this report Is Future bidding purposes or possible future pJrchase negotiations, The intended user is the City of Waterloo. This report is not intend d for any other use or for ,rsn by others_ No responsibility Is accepted for unaulhortsed use of this report_ The appraisal veil be based on the following hypothetical rnnrtltiona. --That the platted Tata helve clear lith* lin' -an be soul on 11)0 Open Market --That the prior owners ere willing to ,r:,. ; Iheir pro.1.1'' share of the area f:: evicusly arc Liked The appraisa, .r.: i1 wit Xprlt10-rlrHli: I .-H A[4010 111: In vii The rrayrrentof the fee slut! not be contirrgern .loan $F w, lc, ; :' , al,: , •I,; ,r ; :d The lappraasal .holt :;e prepared in compliance with the Standards of Profess rr ; tit ',3i a I f i -ir r 1h Apr 1ir::1 Irv? •.Ito and in accordance mill Tile II c i FI EA dated Jt, „a J', ,UJB. ICI u, LIALL,J1rit all II r4:12 upprrcaches to value will be cons,dirroci The appraisal report Is intended to 1ply° with 111k: rctu; I requirements set forth under Standards Rule 2 2(o} of the Uniform Standards ^cr Pr _1L.:;s)0r1i11 .L.Frpr-sisal f rS actioe and will be in ocmpliance wrfh 111x, ho,„va Departrrient of Tri i'sporl it, • A.. .., p 'i ; 11, present summary dismiss ins of the Hata. reasoning and analyses thatin 1r= a f-rai .51 process to develop the opinion of value. Ar1dilk;1!i ,t :}upporling tiocurrlenlailul lc:s:onilwij I.I '. data. reasoning, and analyse may bo retained in fie. The depth of discussion r:r',^ ir,rd in t}, ;; r • .,: in I r $p FlL 1[a ya.r need$ far the attended use stated above. Your AIeck+lr;,', ^;circ your acceptance of the attad,ed G ntwat Conditions, darted April r.' :';i i T, this agree rnent and authorization to perform the appraisal assignment. The fee For the appraisal will be rlo more than $1,200 and the a ssignnnen1 wit I be comp alr.iie as soon as possible. but no Maier than four weeks aflef this signed engsgerrioilt has brim reil,rrert t,:) the appraiser. Sincerely. James Hermit Canned General Real Pin:10 1y Aplprelur CGQ2627 (Iowa} RALLY APPRAISAL LLC 72 Page 117 of 486 Rally Appraisal, 1_,LC. Cedar aJl c1lc 25132WeStrt, S_P.e 1:01D ar5. IrA Clint - Jim Flennk Apr. raiser Der.21' l'..10.770171121.'" DALori Passruoirti LI:irrMeritI211 Reanager General 111riarrlaCeindl(ions Phi: (31D) 26B-13373 Fax: (e44) 21a.12.'1.2 Y•Wliri.1115‘.1111.110*4.c.ii4n T. The appraisers i rot bo lo give testimony or appear in court hecai.,se cif inAdeLhpirrpr.,i 1 A!,.•.-fli !.: ,i.^1)1t4.C1 n question unless arrangemems Vi.'3 _15;1? i 71. Dr ;.; A !vv., 1.,1 IIn isit it L.? rJublic.;;ilikil 0 ol-of-cor Huoti7io rurr tiT.E. I I I s lot =tirther, le.l.her cI nor any part Z.13 55?!--113'..ed to the 1:: cef rnedm 'cir ::..11'1' .uri1CMI.,011 iithuut the pia)! wii1.1.u,n consent of Lhu appra,sers signing this ppfaL:•4',11 3. Disfilemiire...1 11u4... conl.f.mls rif thr report is.. governed b tJBy-Lit;; and Rogulations of the Aprii Institute. No Akel I nor an par: of the conten-:s o tis reaci-t (es p ezial any conckisions as to value. id"entity of 111,0 o II firm roi-.1 c.on H -i r any rpfurence •:c1 fie A1.:praisi-31 Inlit bo di.sl'iorimated kJ the.:pLbIic 1.1voLigh adveMsi-ig media, pubic relations meia, rev,s sales rnI'i o rr'y okr.Pr 'Tear* of comrminirAtion without !he F.;,n Q.- Uri.nitI all id pprr.iI,.71 she 4. The distributiTri c' 1.1-c Latp,' va,Lation in 1.11F. r.port, tyelvmen And applicable onlv 71i6! piOrK.'ily Tie land value, or s op 3 rate value cf Impooven-erlsmust not the used In conjunaon with any other appraisa c s:•mi•ite and is invalic ;f so used. 5. Igo cirennental ir'noact studies were either requested rrnar:'.e_ in co.1ji2i-r..tion with this ar.r.k.71r LW, r4sE4rve ,c.o.,,ge. any I he value opiniurr subsoquont ervi rutin-P.:Tito! irnr...oct studies, roszirch or invostlgation. Iffiksilmsnitc,;c..iili.1014;,is.1 ralsers assume, that there- are no hidden or (inapparent condilicls of Lie croperty, subsol! or structures vitch itic.,0c, render it more or Ie ILIaL Thiu I C.:Mill' tl";i J0Itui iuiq !he ptetio•i.L7,1.: ui j rIci uf • iazaiduJ uubstance. cefiriec as alll-zzarktis or to:eic wk. p....)11..r:arit.; Or Corto,ri-frianr,F.: nut not Lmitec 1ns5bps`.os, I ,C,H, 1..11- I -I, or olt.pr n%ilerkils sir (!hen-kri:s;! in constri...(:::::!. or n111 !-.2 rwkc uri pi G:10FLy TI•u apprasers PAS.177.1.!.1nr. lPDilsibildy for any orginoorirg studios c' analysis w h would be ,equi,oc r.o conc cr ciF.:coyer I he n. ;.,.th!..,;r:r.g.! n jcI1 Killt)!-.1.9r1C-ini5cir 4-ih A t or [N+ re.6kulc.i.! ("1.° s.: ii! RIF rIL 111HILl. 1 ILLVIJI-LIC ▪ s Dr iI ii Jri1 ri 1.1•,-.:1 the .ubjoc oioporty not SO aected. 7. The America -1'5. brasEj :w1Ic cfructivu JLI51'}i 2G, "1992. The suivey anrJ analysis ct property to i* II Pie rE:iiiirtinii+1&;i1 Inc ADA. 11 iiii h r Li a corn.!:: 'al ;1...r....wyof thu pre, party together wi-,h a derailed a a!'iS o Elio iuminctriieultsr.if r.ho ADA 1 ..1.! I roveal LIi (ho picioerW i..9 1101 ,r rice viitt% ore o:. mnre • the requ 'ernent5 or1i II rn hii I FJ:•. rm. rr upori .i-31JE2jL [Kir iwp.) tliriAEL i. iIC le MIS iSSUC.. possible *id LlL 11..)cp...11-"erne,is of ADA in esIrri n...1 the value of the properly has not been considered RALLY APPRAISAL LLC 73 Page 118 of 486 ,Rally Appraisal, L.L.C. • Ce.:.ljr r" 111:, Qjrlsci • 22.7.-2 Vd 1" Slre+K Shite 201D • Ceder Fats, 1A 50613 i;irni (01a - manager ,.;•rl 1 ^'l il3+. ::. iic ri�siprr§iser 1i 11.V1"1 11.1�uiI .:rxl:v 11...':I.:r11+41, r' 714x• I-'21; SI°':;I r Llalri si i M A Phone: (319) 266-9371 Fay. (P44) 7'x.1212 ?3. .4"1 =i1 (1rlissl rL 41�J It land Cha: i less LI's r khv',+!hlp'e lee 51r1ple r traIr �IuI}Ill::i COIN tU 'I -Io fru boll?I r1,3rest ft.'. -Ave" The ,:a I.F ^i this rr;i:-1.Iona1 ,rtIwresi Flus IF! �al,ia 111 tall ,111r•!r Rr:at:kirinryl .I1IHr:, t5 rn i ' :'r Il riy 1 ILA ;:i` :;f xna is:t'. ei! 'ee simple '. stair: 7. Thr.rppri1 s 1 •epnrl rµl,ated to pi rleor:r lar!tir:,I! :::r•ll,iri Or ii I<I:(;1 I parcel •s iap(!I Od ul',ly 7C. srie'1 gm: :I':i1,}I Ilial. I}I}I'. tilll a1'ryJ shnuld not L'o consicerei as appying 14111 eq.] al vra idity la po1'lioris of the Iarger:!n1'ceI or tract TheVsid.rs 1:: :;.1;;Y :i!1ia(Ihic;;-I portion:; 1: val.ie cf aka c!th erg otlr;i r:'lir: l ; :r°ic1:IS Ir AV or Ir: i:?,' rut L::uil tl:c vdluu of .hr1 ur1Ei'O parcel I], 1'r�c;lcuosidetted ahrjr'1 or y. Ini n' this i•±p(}rrils.11 repot^ ccrati7dte occc:prance cf:ho `e7ogc'ing Cirz;lclrii1 b1 L4yI ' irlll ! "sill i3 iu'1 < 4arc General Lirlilir r•- C :r';;itinns, 71.e N ppr i ,Rrti' du'1J=,, pars: art tu err1p jrrenk k J TI [rhe the prr 1I4i1: rI'fr 1:{,x11;:!i!i"' IIFE'::; 1 (id 1Vf'r }. Fr Id riliv •'t I IlaovvL:I 01 ':.riilrs S11cu.c bo c i Iod to HIT.? ;1111:11111 a1' iai lhf a:. I:'ri1 i !s .'liI in tit:the dellYery of the report. 11 ,.::Ili,r.",rrr(i-I t:ithui. •ki1:litified by the cllenl as Corfic onti::+ iA;r r pmvidilla L avpr@irc? and that iu n.a.avw!Iaale from any otner,:5our:r': r..r(1:1!- ,ifi .:l �1r1 co ificlortiril rlr r.rivlte r.y pplinahle Ia M: „a regi. al ion' 'IKURILE: I -or the f„:.,::r . r:1 : 1ci C:;; rrir i -I. LI;h-bliIi • i c;l 111 f\LivoirIL'!or 1 9.9i), ::;nae lc agencies havo Ar:ilptr:e p1.vac,' re.gula1 ens tat a`fect appraisers. A a re5.1 t, 1.•1e FFrls✓r Commission issued ci ride- focus.! .• 1.•I I 1 IN;:`L:; 1 r1°',Iaa!,I:ulrlil: 111-!' C: -1c,' illfi}1'1? ]tion' far:virlecf by clnrltiririer i 11) ll lrr';I.; I""II °1. ,,:•I 1 III Irlsli Vit u'S r+.`.._1'7x1 tU be c o my re le;i 1ti b,,rllti r,i or usua.'. in coinoction with tl•e t~ansaction of banking, Tn zF i;:kiviti F 4•a b( -Jori deeded :rl inr'113ii f' 'rrllflr;1iS nr: •('.,j: in per Otanit (ar:)p11`.y.° ttjul}ta1LI]r l;:::Ir u hum Trade (r.1nlrlibs :.:1, Pri'ra±.y cif CoriL;urllul lute, 16 CFR Part 313} RALLY APPRAISAL LLC 74 Page 119 of 486 APPRAISAL LALIFIC•_4TIO S - BALLY.APPRAISAL f,gr sAHe 23112 W. 1' Straei Stith- Ol D Cedar Fes. L% #Il3 auni 166-9373 STATE' OF IOWA OEMER.AL CERTIFICATION iC*di' >Eica�tn: 1 - Efigh. Ltigh. Cacianazity School, LeiN ei 1-B¢rrlr_lorcfAiri. ofLiver_ CoLorado _wed CIApprL _ +'+Pre r 5 44 AL -TV in3cer c• -._ ;_ I= 0600-05 t0 Aminsit t. ottt.c: 'SPA_a : i :° 2001 Natioualt.W.4.7pdatEd. 1037 Appheaor FHA oar 2000 Adp*# =.°:2 vasoon :001 Eikeieve Approdol Wring 1/301 Natiocil ' S 1" are►2 cm2o:&N. DMZ :C.F 204 NOrtiOial Lz Sap Trimm° Agnowlinnet. Cm* 20114 1.ameritu.3m7.:_)±20E2.0 Ed Hi Hovel " ppra¢ P ' 11 F rA Walesa of Zoinmercial Alazaisers MI5 [ rod Prat ,30(}4 Genet ApplaErl/mom Approach Part 1.2Cb9 Cr¢ ad A] pThI. i o®x AParaach Pmt 2 2009 511 z Cocqariiom Approach. 1010 Fes, Eirale Ficazzzg Srwttss►clir.4 Vahon100 M ldieLoiI 1010 C++rwal Appr[at' P.ipa r Wraitiair I0 [ e .lppr�rtii :am Appr$aeh .A^pra i sr BES1r 1011 Tror.4f Propertrr:Ap+or:iiird:. FASZiell441 112:61Z1Z4411211. 44,C=1 dtror C gi IrPt1 o[ liodoL71, ,,i: • . •:. a i44ul °. one tonal. mbdivrataa, zun. aac to. afEcr > .u1 •_. ::w. 1p4061111%e pavlova. auto die_ttL rems1 fim®l harms, [ 23, els RALLY APPRAISAL LLC 75 Page 120 of 486 fge rcl,arLS�n�LIr TATE QF IOWA. 1°WUFE xtsk]nLL L Lw6 u�G GrS+L.oL�`C}M IF: 1'JC'fRTIF'K TH tit'THE PEL&, . Nov. i4FFtti:,.N yM.F.F',cERTIFICATEA3JF, to: Pro; .-t4TY APPRAISEFI CLPct 1 GATE r ri GCyvei T rMPi ( ...13311C1S 111 I<INIti .IF.h1 '3 RAJ I Y L L C !1_,T S31i.IL U1J1I I, 1U I 1 CLOArtFA 1' 114 ! li, James iknn h,11Y111CII Rwtl 1 !II 111 1ry1/Am 4rEl commolutli III _/AR footpurono'° r-,-rN1!Iy*SMO*NJ-4'h4/R*1E f,.! . I.am®wy /°.} r r RALLY APPRAISAL LLC 76 Page 121 of 486 NOTICE May 10, 2017 VIA CERTIFIED LETTER TO: See attached Exhibit "A" Ladies and Gentlemen: This letter is sent to you to comply with the provisions of Section 306.23, Iowa Code. These provisions require the City of Waterloo to notify you as the present owner of the adjacent land from which certain lands were originally acquired, or as an owner of certain lands when originally purchased or condemned for highway purposes, that we are selling the tract of land described below: Tract 1 That part of the Southwest Quarter of Section 5, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Commencing at the Southwest corner of said Southwest Quarter; thence N89°49'35" E 1166.63 feet along the South line of said Southwest Quarter to the point of beginning; thence N2°21'21" W 21.34 feet to the former North right-of- way line of West San Marnan Drive (formerly Primary Road No. 412); thence N87°38'39'E 1487.92 feet along said former right-of-way to the East line of said Southwest Quarter; thence S0°09'45" E 77.99 feet to the Southeast corner of said Southwest Quarter; thence S89°49'35" W 1486.01 feet along the South line of said Southwest Quarter to the point of beginning, containing 1.695 acres. You and all other persons qualified under these provisions are provided a period of 60 days from the date of this letter to be heard and make offers for this tract. The names and addresses of others receiving this notice, if any, are shown on attached Exhibit "A". Offers received from persons qualified under these provisions that equal or exceed other offers, and equal or exceed fair market value, shall be given preference. Fair market value for the tract has been established at $318,248. If you are interested in submitting an offer, please complete and return the enclosed Offer to Buy form, along with your payment. If no offers are received by 1:00 p.m. on July 13, 2017, or no offer equals or exceeds the fair market value, the property will be disposed of by the City of Waterloo by other means. 1 Page 122 of 486 If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on the appropriate form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 1 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. The City Council will provide a hearing for an opportunity to be heard and comment at its meeting of July 10, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. The City Council will provide a hearing authorizing the sale and conveyance of said property and will consider all offers received and accept comment at its meeting of July 17, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. You have a right to be heard at these meetings in regard to this matter. The City reserves the right to reject all offers. <el.i,ecy 7eteit2e Kelley Felchle, City Clerk, City of Waterloo 2 Page 123 of 486 Page 124 of 486 Tract 1 - Page 1 taxmailto4 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701 WATERLOO, IA 50704-0000 CEDAR FALLS, IA 50613-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 CEDAR FALLS, IA 50613-0000 PORT RICHEY, FL 34668-0000 WATERLOO, IA 50701-0000 taxmailto3 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 1925 WESTCHESTER RD #204 WATERLOO, IA 50701 1900 WESTCHESTER RD #G WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 1925 WESTCHESTER RD #208 1964 KAMILLE CT 1959 KAMILLE CT 3846 TRENT LN WATERLOO, IA 50701-0000 1962 KAMILLE CT WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 o cnz X O m O a 5135 SWEET BASIL LN PO BOX 802 1925 WESTCHESTER RD #316 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 1941 KAMILLE CT 300 STATE ST #304 WATERLOO, IA 50701 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 cc 0 z 0 m m 0 1848 WESTCHESTER RD WATERLOO, IA 50701-0000 taxmailto2 1925 WESTCHESTER RD #112 3909 BRADLEY RD 1900 WESTCHESTER RD #D FRUSHOUR,MARGARET M 1975 WESTCHESTER RD GIBBS,MARSHA 1928 KAMILLE CT 1925 WESTCHESTER RD #222 GONNERMAN,DONALD G HACKETT,CONNIE J HARN,KARLA K HELLMAN,BETTY L 1925 WESTCHESTER RD #116 HERRING,MARY C 1925 WESTCHESTER RD #312 1925 WESTCHESTER RD #308 1900 WESTCHESTER RD #B HUMBLE,BONNIE J 3927 BRADLEY RD JASCHEN,ANNA MAE 1977 KAMILLE CT 1900 WESTCHESTER RD #C 3844 TRENT LN 1925 WESTCHESTER RD #210 2233 WESTVIEW AV 2 a 0 z J z J LEE,DEBRA 5 1870 WESTCHESTER RD 3913 BRADLEY RD 1925 WESTCHESTER RD #220 MALAISE,DAWN M TRUST MARR,CAROL A 1925 WESTCHESTER RD #216 taxmailtol FOUTS,TAMARA J FREMONT,LINDAJ FRITTS,JANICE K FRUSHOUR,DAVID R GEARHART,DIANNE E TRUST GIBBS,DANIELT GIENGER,KATHERINE M GLASSON,JANICE L GONNERMAN,MARILYN M HACKETT,DAVID F HARN,BYRON E HELLMAN,ROBERT B SR HENKLE,BARBARA M HERRING,RONALD P HILDEBRANDT,CAROL A HOLSTAD,A JOHN HUGHES,MAXINE C TRUST HUMBLE,ROBERT M HURM,VIRGINIA A JASCHEN,DUANE M JORGENSON,MARY A KAPP,ELIZABETH KARR JENNER TRUST KELLEY,MARJORIE A LAUTERBACH,GORDON R LAYLIN,WILLIAM K LEE,RANDALL R LINDQUIST,MICHELLE A LOGAN,STEPHANIE E LYNCH,JANET MALAISE,LARRY L TRUST MARR,MERRILL J MARTENS,MAXINE M Page 125 of 486 Tract 1 - Page 2 taxmailto4 WATERLOO, IA 50701 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 WATERLOO, IA 50701 WATERLOO, IA 50701-0000 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 taxmailto3 1972 KAMILLE CT 1925 WESTCHESTER RD #322 3865 TRENT LN 1925 W WESTCHESTER RD WATERLOO, IA 50704 WATERLOO, IA 50701-0000 WATERLOO, IA 50701 WATERLOO, IA 50701-0000 1938 KAMILLE CT 1921 KAMILLE CT 3834 TRENT LN 1925 WESTCHESTER RD #114 1925 WESTCHESTER RD #218 1925 WESTCHESTER RD #320 WATERLOO, IA 50704 2623 FALLS AV 1925 WESTCHESTER RD #310 WATERLOO, IA 50701-0000 108 WHISTLING STRAITS LANE WATERLOO, IA 50701-0000 1925 WESTCHESTER RD #206 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 1920 KAMILLE CT 1937 KAMILLE CT WATERLOO, IA 50702-0000 1857 WESTCHESTER DR 1866 WESTCHESTER RD 1723 PINEHURST LN 1974 KAMILLE CT WATERLOO, IA 50701-0000 3857 TRENT LN C/O PHILIP SHERBURNE taxmailto2 MC CADAM,BEVERLY L MC ELLIGOTT,MARILYN A MEINDERS,PATRICIA M MILLER,RETA M PO BOX 2817 1963 KAMILLE CT 1409 OLYMPIC DR 1409 OLYMPIC DR MONTGOMERY,MARY NEUWOHNER,MARY L 0 BRYON,PAULA ORUM,NORMA J TRUST DAVIS PHILLIPS,SHIRLEYA QUARNSTROM,JANET LLOT X08 Od RAMSEY,MARGARET T HANSEN,BETH E 1925 WESTCHESTER RD #102 REINERTSEN,CYNTHIA 1924 KAMILLE CT ROBERT,IRENE R 1939 KAMILLE CT 1929 KAMILLE CT SAUL,NANCY JO SCHAEFER,CAROL J 3825 W 9TH ST SCHEPPELE,MIANN K SCHMIDT,JEANNE D SCHUCHMANN,AMBER J SCHUMAN,JAN M 1925 WESTCHESTER RD #106 REINARD,MARY E 1925 WESTCHESTER RD taxmailtol MC CADAM,STANLEY 1 MC ELLIGOTT,ROBERT P MEINDERS,MICHAEL A MILLER,JIM D MILLER,VAN G TRUST MISENHEIMER,ETHELYN M LE MOLINARO,MARY ELLEN MOLINARO,MARY ELLEN MONTGOMERY,LOUIS E NEUWOHNER,THOMAS B J = z 0 >m 0 ORUM,A MANLEY TRUST PHILLIPS,DAN J TRUST QUARNSTROM,KEVIN R2KTOO L L C RAMSEY,WILLIAM E RANNEY,PEGGYA LE REGENCY NORTH WATERLOO OWNERS AS REINERTSEN,PETER E RITTER,HOLLEY ROBERT,WILLIAM J ROOT,ELINOR E TRUST ROOT,STEVEN A SAUL,DONALD L SCHAEFER,MICHAEL A SCHALL,FLO SCHEPPELE,JAMES E SCHMIDT,ROBERT D SCHUCHMANN,MICHAEL P SCHUMAN,JAMES E SCHWEERTMAN,SHIRLEY A SCULLY,GEORGE D SHERBURNE,JEAN S TRUST Page 126 of 486 Tract 1 - Page 3 Page 127 of 486 Tract 1 - Page 4 OFFER TO BUY I herewith submit an offer of $ to the City of Waterloo (hereinafter known as City) for the purchase of the following land: Tract 1 That part of the Southwest Quarter of Section 5, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Commencing at the Southwest corner of said Southwest Quarter; thence N89°49'35" E 1166.63 feet along the South line of said Southwest Quarter to the point of beginning; thence N2°21'21" W 21.34 feet to the former North right-of- way line of West San Marnan Drive (formerly Primary Road No. 412); thence N87°38'39'E 1487.92 feet along said former right-of-way to the East line of said Southwest Quarter; thence SO°09'45" E 77.99 feet to the Southeast corner of said Southwest Quarter; thence S89°49'35" W 1486.01 feet along the South line of said Southwest Quarter to the point of beginning, containing 1.695 acres. I herewith enclose a CERTIFIED CHECK or MONEY ORDER (the City will NOT accept CASH or personal check) for the full amount of the offer made payable to the City of Waterloo. Should the City not accept the offer, the amount will be returned by mail. I accept title by Quit Claim Deed. I agree to accept the Quit Claim Deed without an Abstract of Title, and am aware that the land is being sold in accord with the provisions of and subject to the limitations of Chapter 306 of the Code of Iowa. "Any sale of land as authorized therein shall be upon the condition that the tract, parcel or piece of land so sold shall not be used in any manner so as to interfere with the use of the highway, or to the material damage of the adjacent owner, and shall be subject to the right of all utility associations, companies, or corporations to continue in possession of a right of way in use at the time of such sale." This offer is subject to the following conditions: Bidders are cautioned that any conditions may cause their bid to be rejected. No additional conditions shall be allowed after submittal of a bid. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. I certify that I have inspected the property to my complete and total satisfaction and that I am fully aware of all conditions of the property and the terms and conditions under which it is being offered for sale. I understand that the property is being sold as is with no warranties of any nature either expressed or implied. I therefore submit an offer, as shown above, for the property. 1 Page 128 of 486 Appraised value: $318,248 Offers Due: Thursday, July 13, 2017 at 1:00 p.m. If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on this form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 1 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. If my offer is accepted by the City, please issue the Quit Claim Deed to: (PLEASE PRINT OR TYPE) * The exact name or names the bidder wishes to appear on Patent. Address Signed: Date Telephone Number 2 Page 129 of 486 NOTICE May 10, 2017 VIA CERTIFIED LETTER TO: See attached Exhibit "A" Ladies and Gentlemen: This letter is sent to you to comply with the provisions of Section 306.23, Iowa Code. These provisions require the City of Waterloo to notify you as the present owner of the adjacent land from which certain lands were originally acquired, or as an owner of certain lands when originally purchased or condemned for highway purposes, that we are selling the tract of land described below: Tract 2 That part of the Southeast Quarter of Section 5, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Beginning at the Southwest corner of said Southeast Quarter; thence N0°09'06"W 77.99 feet to the former North right-of-way line of West San Marnan Drive (formerly Primary Road No. 412); thence N87°27' 11"E 1641.43 feet along said former right-of-way; thence S2°32'49"E 100.76 feet; thence Southwesterly 37.81 feet along a 570.00 foot radius curve, concave Southerly, said curve having a chord of 37.81 feet and bearing S67°34'44"W; thence Southwesterly 99.21 feet along a 510.00 foot radius curve, concave Northerly, said curve having a chord of 99.05 feet and bearing S71"15'04"W, to the South line of said Southeast Quarter; thence S89°50'54"W 1515.34 feet along the South line of said Southeast Quarter to the point of beginning, containing 4.175 acres. You and all other persons qualified under these provisions are provided a period of 60 days from the date of this letter to be heard and make offers for this tract. The names and addresses of others receiving this notice, if any, are shown on attached Exhibit "A". Offers received from persons qualified under these provisions that equal or exceed other offers, and equal or exceed fair market value, shall be given preference. Fair market value for the tract has been established at $783,886. If you are interested in submitting an offer, please complete and return the enclosed Offer to Buy form, along with your payment. If no offers are received by 1:00 p.m. on July 13, 2017, or no offer equals or exceeds the fair market value, the property will be disposed of by the City of Waterloo by other means. 1 Page 132 of 486 If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on the appropriate form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 2 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. The City Council will provide a hearing for an opportunity to be heard and comment at its meeting of July 10, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. The City Council will provide a hearing authorizing the sale and conveyance of said property and will consider all offers received and accept comment at its meeting of July 17, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. You have a right to be heard at these meetings in regard to this matter. The City reserves the right to reject all offers. "e22ey 7e€c€ree Kelley Felchle, City Clerk, City of Waterloo 2 Page 133 of 486 taxmailto4 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50703 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 CEDAR FALLS, IA 50613 WATERLOO, IA 50701 WATERLOO, IA 50701 taxmailto3 1321 OLYMPIC DR 1421 OLYMPIC DR CEDAR FALLS, IA 50613 ATTN: FINANCE DEPARTMENT 1333 OLYMPIC DR WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 1447 OLYMPIC DR 1347 OLYMPIC DR WATERLOO, IA 50701 923 ELMRIDGE DR WATERLOO, IA 50701 1525 OLYMPIC DR 1537 OLYMPIC DR Waterloo, IA 50701 taxmailto2 ADAMS,JOLAN K ANFINSON,GAYLE A Ni X m 0 a 715 MULBERRY ST FISHER,LORI S 1513 OLYMPIC DR 1547 OLYMPIC DR 1409 OLYMPIC DR PETRIDES,FEDON RICHARDSON,KARYN M cc 0 z a z cc a 2 z a STEGALL,JILL 1600 OLYMPIC DR VICH,TROYCE WILSON,TERRI R 4629 W 4th St. taxmailtol ADAMS,JOHN M ANFINSON,LARRY L CEDAR VALLEY REAL ESTATE L L C CITY OF WATERLOO FISHER,MARK D HILL,JAMES E KNEELAND,BRADLEY L MOLINARO,MARY ELLEN PETRIDES,PATRICIA RICHARDSON,PAUL E L SAN MARNAN MANAGEMENT INC STEGALL,BRIAN SUNNYSIDE COUNTRY CLUB INC VICH,JOSEF M WILSON,DEXTER E James and Annabelle Trent Page 134 of 486 Tract 2 - Page 1 OFFER TO BUY I herewith submit an offer of $ to the City of Waterloo (hereinafter known as City) for the purchase of the following land: Tract 2 That part of the Southeast Quarter of Section 5, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Beginning at the Southwest corner of said Southeast Quarter; thence N0°09'06"W 77.99 feet to the former North right-of-way line of West San Marnan Drive (formerly Primary Road No. 412); thence N87°27' 11"E 1641.43 feet along said former right-of-way; thence S2°32'49"E 100.76 feet; thence Southwesterly 37.81 feet along a 570.00 foot radius curve, concave Southerly, said curve having a chord of 37.81 feet and bearing S67°34'44"W; thence Southwesterly 99.21 feet along a 510.00 foot radius curve, concave Northerly, said curve having a chord of 99.05 feet and bearing S71"15'04"W, to the South line of said Southeast Quarter; thence S89°50'54"W 1515.34 feet along the South line of said Southeast Quarter to the point of beginning, containing 4.175 acres. I herewith enclose a CERTIFIED CHECK or MONEY ORDER (the City will NOT accept CASH or personal check) for the full amount of the offer made payable to the City of Waterloo. Should the City not accept the offer, the amount will be returned by mail. I accept title by Quit Claim Deed. I agree to accept the Quit Claim Deed without an Abstract of Title, and am aware that the land is being sold in accord with the provisions of and subject to the limitations of Chapter 306 of the Code of Iowa. "Any sale of land as authorized therein shall be upon the condition that the tract, parcel or piece of land so sold shall not be used in any manner so as to interfere with the use of the highway, or to the material damage of the adjacent owner, and shall be subject to the right of all utility associations, companies, or corporations to continue in possession of a right of way in use at the time of such sale." This offer is subject to the following conditions: Bidders are cautioned that any conditions may cause their bid to be rejected. No additional conditions shall be allowed after submittal of a bid. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. I certify that I have inspected the property to my complete and total satisfaction and that I am fully aware of all conditions of the property and the terms and conditions under which it is being 1 Page 135 of 486 offered for sale. I understand that the property is being sold as is with no warranties of any nature either expressed or implied. I therefore submit an offer, as shown above, for the property. Appraised value: $783,886 Offers Due: Thursday, July 13, 2017 at 1:00 p.m. If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on this form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 2 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. If my offer is accepted by the City, please issue the Quit Claim Deed to: (PLEASE PRINT OR TYPE) * The exact name or names the bidder wishes to appear on Patent. Address Signed: Date Telephone Number 2 Page 136 of 486 N 15 L 1- L 0 i L E cac to AN W -)rig coV NOTICE May 10, 2017 VIA CERTIFIED LETTER TO: See attached Exhibit "A" Ladies and Gentlemen: This letter is sent to you to comply with the provisions of Section 306.23, Iowa Code. These provisions require the City of Waterloo to notify you as the present owner of the adjacent land from which certain lands were originally acquired, or as an owner of certain lands when originally purchased or condemned for highway purposes, that we are selling the tract of land described below: Tract 3 That part of the Northwest Quarter of Section 8, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Commencing at the Northwest corner of said Northwest Quarter; thence N89°49'35"E 1166.63 feet along the North line of said Northwest Quarter to the point of beginning; thence N89°49'35"E 1486.01 feet along the North line of said Northwest Quarter to the Northeast corner of said Northwest Quarter; thence S0°09'45"E 52.11 feet; thence S87°38'39"W 1268.30 feet; thence Westerly 135.88 feet along a 480 foot radius curve, concave Northerly, said curve having a chord of 135.43 feet and bearing N84°14'46"W; thence Westerly 82.40 feet along a 540.00 foot radius curve, concave Southerly, said curve having a chord of 82.32 feet and bearing N80°30'28"W; thence N2°21'21"W 72.65 feet to the point of beginning, containing 2.666 acres. You and all other persons qualified under these provisions are provided a period of 60 days from the date of this letter to be heard and make offers for this tract. The names and addresses of others receiving this notice, if any, are shown on attached Exhibit "A". Offers received from persons qualified under these provisions that equal or exceed other offers, and equal or exceed fair market value, shall be given preference. Fair market value for the tract has been established at $500,561. If you are interested in submitting an offer, please complete and return the enclosed Offer to Buy form, along with your payment. If no offers are received by 1:00 p.m. on July 13, 2017, or no offer equals or exceeds the fair market value, the property will be disposed of by the City of Waterloo by other means. 1 Page 139 of 486 If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on the appropriate form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 3 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. The City Council will provide a hearing for an opportunity to be heard and comment at its meeting of July 10, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. The City Council will provide a hearing authorizing the sale and conveyance of said property and will consider all offers received and accept comment at its meeting of July 17, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. You have a right to be heard at these meetings in regard to this matter. The City reserves the right to reject all offers. "e22ey 7e€c€ree Kelley Felchle, City Clerk, City of Waterloo 2 Page 140 of 486 taxmailto4 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50703 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50701 taxmailto3 WATERLOO, IA 50701 1954 RED TAIL DR WATERLOO, IA 50701 WATERLOO, IA 50704 1935 RED TAIL DR ATTN: FINANCE DEPARTMENT 1946 RED TAIL DR 4202 HARBIN DR 1925 RED TAIL DR 1923 RED TAIL DR 1924 RED TAIL DR WATERLOO, IA 50701 WATERLOO, IA 50703 1904 RED TAIL DR 1934 RED TAIL DR 1964 RED TAIL DR WATERLOO, IA 50701 4245 W 4TH ST 1911 RED TAIL DR 1916 RED TAIL DR 1886 RED TAIL DR 1967 RED TAIL DR CEDAR RAPIDS, IA 52401 WATERLOO, IA 50701-0000 WATERLOO, IA 50701-0000 Waterloo, IA 50701 Waterloo, IA 50703 Cedar Falls, IA 50613 Ames, IA 50014 Cedar Falls, IA 50613 Ames, IA 50014 taxmailto2 CC U a N CI_ Nicn BROWN,GREGORY A 1955 RED TAIL DR M 0 N X o CO 0 a CEJVANOVIC,SEJLA 715 MULBERRY ST COOPER,MICHELLE L DAMS,CHRISTY K DIZDARIC,MERIMA DIZDARIC,ZLATA DOLIC,SUADA 1111 W SAN MARNAN DR 1221 FRANKLIN ST KAJTEZOVIC,HAJRA KANTAREVIC,SABIRA KENNETT,BRENTON A 1896 RED TAIL DR KLINGAMAN,DEBRA A KRAPFL,BRENDA CUTUK,MINELA PAULSON,JONNA M SMITH,JULIE K 425 2ND STREET SE, SUITE 900 1945 RED TAIL DR 1947 RED TAIL DR #1B 400 Kingsley 928 Mulberry 1209 W 23rd Street 2160 Country Club Blvd 1209 W 23rd Street 2160 Country Club Blvd O r.. cz E X 4- A S HOLDINGS LLC BROWN,STACI A CAFARO,CRAIG CEDAR VALLEY 4 RENT L L C CEJVANOVIC,ELVIS CITY OF WATERLOO COOPER,ORLANDO DAMS,JUSTIN DIZDARIC,ADNAN DIZDARIC,KADIR DOLIC,IRHAD GALACTIC DEVELOPMENT CORP GARCIA,GUADALUPE KAJTEZOVIC,MUHAMED KANTAREVIC,HAJRUDIN KENNETT,BRIAN M KIRKLAND,KAMI R KLINGAMAN,STEVEN R KRAPFL,KEVIN OBIC,EDIN PAULSON,RYAN D SMITH,HERBERTJ XL COLT FARMS LLC a a > 0 L.= TRUNNELL,ANGENE B Irene Sindlinger Ocea Sindlinger William Wayne Sindlinger Pauline Evelyn Sindlinger McGinnis Joan Sindlinger Dallas V. McGinnis Page 141 of 486 Tract 3 - Page 1 OFFER TO BUY I herewith submit an offer of $ to the City of Waterloo (hereinafter known as City) for the purchase of the following land: Tract 3 That part of the Northwest Quarter of Section 8, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Commencing at the Northwest corner of said Northwest Quarter; thence N89°49'35"E 1166.63 feet along the North line of said Northwest Quarter to the point of beginning; thence N89°49'35"E 1486.01 feet along the North line of said Northwest Quarter to the Northeast corner of said Northwest Quarter; thence S0°09'45"E 52.11 feet; thence S87°38'39"W 1268.30 feet; thence Westerly 135.88 feet along a 480 foot radius curve, concave Northerly, said curve having a chord of 135.43 feet and bearing N84°14'46"W; thence Westerly 82.40 feet along a 540.00 foot radius curve, concave Southerly, said curve having a chord of 82.32 feet and bearing N80°30'28"W; thence N2°21'21"W 72.65 feet to the point of beginning, containing 2.666 acres. I herewith enclose a CERTIFIED CHECK or MONEY ORDER (the City will NOT accept CASH or personal check) for the full amount of the offer made payable to the City of Waterloo. Should the City not accept the offer, the amount will be returned by mail. I accept title by Quit Claim Deed. I agree to accept the Quit Claim Deed without an Abstract of Title, and am aware that the land is being sold in accord with the provisions of and subject to the limitations of Chapter 306 of the Code of Iowa. "Any sale of land as authorized therein shall be upon the condition that the tract, parcel or piece of land so sold shall not be used in any manner so as to interfere with the use of the highway, or to the material damage of the adjacent owner, and shall be subject to the right of all utility associations, companies, or corporations to continue in possession of a right of way in use at the time of such sale." This offer is subject to the following conditions: Bidders are cautioned that any conditions may cause their bid to be rejected. No additional conditions shall be allowed after submittal of a bid. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. I certify that I have inspected the property to my complete and total satisfaction and that I am fully aware of all conditions of the property and the terms and conditions under which it is being 1 Page 142 of 486 offered for sale. I understand that the property is being sold as is with no warranties of any nature either expressed or implied. I therefore submit an offer, as shown above, for the property. Appraised value: $500,561 Offers Due: Thursday, July 13, 2017 at 1:00 p.m. If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on this form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 3 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. If my offer is accepted by the City, please issue the Quit Claim Deed to: (PLEASE PRINT OR TYPE) * The exact name or names the bidder wishes to appear on Patent. Address Signed: Date Telephone Number 2 Page 143 of 486 NOTICE May 10, 2017 VIA CERTIFIED LETTER TO: See attached Exhibit "A" Ladies and Gentlemen: This letter is sent to you to comply with the provisions of Section 306.23, Iowa Code. These provisions require the City of Waterloo to notify you as the present owner of the adjacent land from which certain lands were originally acquired, or as an owner of certain lands when originally purchased or condemned for highway purposes, that we are selling the tract of land described below: Tract 4 That part of the Northeast Quarter of Section 8, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Beginning at the Northwest corner of said Northeast Quarter; thence N89°50' 54"E 1515.34 feet along the North line of said Northeast Quarter; thence Southwesterly 94.61 feet along a 510.00 foot radius curve, concave Northerly, said curve having a chord of 94.48 feet and bearing S82°08' 18"W; thence S87°27' 11"W 477.10 feet; thence S88°39'59"W 945.22 feet; thence N0°09'45"W 52.11 feet to the point of beginning, containing 1.184 acres. You and all other persons qualified under these provisions are provided a period of 60 days from the date of this letter to be heard and make offers for this tract. The names and addresses of others receiving this notice, if any, are shown on attached Exhibit "A". Offers received from persons qualified under these provisions that equal or exceed other offers, and equal or exceed fair market value, shall be given preference. Fair market value for the tract has been established at $222,305. If you are interested in submitting an offer, please complete and return the enclosed Offer to Buy form. If no offers are received by 1:00 p.m. on July 13, 2017, or no offer equals or exceeds the fair market value, the property will be disposed of by the City of Waterloo by other means. 1 Page 146 of 486 If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on the appropriate form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 4 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. The City Council will provide a hearing for an opportunity to be heard and comment at its meeting of July 10, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. The City Council will provide a hearing authorizing the sale and conveyance of said property and will consider all offers received and accept comment at its meeting of July 17, 2017 to be held at 5:30 p.m. in the Harold E. Getty Council Chambers at City Hall, 715 Mulberry Street, Waterloo, Iowa. You have a right to be heard at these meetings in regard to this matter. The City reserves the right to reject all offers. "e22ey 7e€c€ree Kelley Felchle, City Clerk, City of Waterloo 2 Page 147 of 486 taxmailto4 WATERLOO, IA 50703 taxmailto3 ATTN: FINANCE DEPARTMENT WATERLOO, IA 50701 WATERLOO, IA 50701 WATERLOO, IA 50704 WATERLOO, IA 50704 Cedar Falls, IA 50613 Ames, IA 50014 taxmailto2 715 MULBERRY ST CC z a z cc a z a CC z a z cc a z a PO BOX 2817 PO BOX 2817 1209 W 23rd Street 2160 Country Club Blvd taxmailtol CITY OF WATERLOO GALACTIC DEVELOPMENT CORP SAN MARNAN MANAGEMENT INC VGM MANAGEMENT INC VGM MANAGEMENT LTD William Wayne Sindlinger Pauline Evelyn Sindlinger McGinnis Page 148 of 486 Tract 4 - Page 1 OFFER TO BUY I herewith submit an offer of $ to the City of Waterloo (hereinafter known as City) for the purchase of the following land: Tract 4 That part of the Northeast Quarter of Section 8, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Beginning at the Northwest corner of said Northeast Quarter; thence N89°50' 54"E 1515.34 feet along the North line of said Northeast Quarter; thence Southwesterly 94.61 feet along a 510.00 foot radius curve, concave Northerly, said curve having a chord of 94.48 feet and bearing S82°08' 18"W; thence S87°27' 11"W 477.10 feet; thence S88°39'59"W 945.22 feet; thence N0°09'45"W 52.11 feet to the point of beginning, containing 1.184 acres. I herewith enclose a CERTIFIED CHECK or MONEY ORDER (the City will NOT accept CASH or personal check) for the full amount of the offer made payable to the City of Waterloo. Should the City not accept the offer, the amount will be returned by mail. I accept title by Quit Claim Deed. I agree to accept the Quit Claim Deed without an Abstract of Title, and am aware that the land is being sold in accord with the provisions of and subject to the limitations of Chapter 306 of the Code of Iowa. "Any sale of land as authorized therein shall be upon the condition that the tract, parcel or piece of land so sold shall not be used in any manner so as to interfere with the use of the highway, or to the material damage of the adjacent owner, and shall be subject to the right of all utility associations, companies, or corporations to continue in possession of a right of way in use at the time of such sale." This offer is subject to the following conditions: Bidders are cautioned that any conditions may cause their bid to be rejected. No additional conditions shall be allowed after submittal of a bid. The City of Waterloo reserves the right to waive any technicalities and to reject any or all offers. I certify that I have inspected the property to my complete and total satisfaction and that I am fully aware of all conditions of the property and the terms and conditions under which it is being offered for sale. I understand that the property is being sold as is with no warranties of any nature either expressed or implied. I therefore submit an offer, as shown above, for the property. 1 Page 149 of 486 Appraised value: $222,305 Offers Due: Thursday, July 13, 2017 at 1:00 p.m. If you have any questions regarding this disposal, please contact the City Clerk, City of Waterloo at the following address or phone number: City Clerk City of Waterloo City Hall, First Floor 715 Mulberry Street Waterloo, Iowa 50703 Telephone: (319) 291-4522 All offers must be in writing on this form and submitted to the above address. All offers must be clearly marked as "SEALED OFFER Tract 4 Former Portion of West San Marnan Drive". Offers must be received by the City Clerk no later than Thursday, July 13, 2017 at 1:00 p.m., at which time offers will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. If my offer is accepted by the City, please issue the Quit Claim Deed to: (PLEASE PRINT OR TYPE) * The exact name or names the bidder wishes to appear on Patent. Address Signed: Date Telephone Number 2 Page 150 of 486 Prepared by Kelley Felchle, City Clerk, City of Waterloo, 715 Mulberry Street, Waterloo, IA 50703, (319) 291-4323 RESOLUTION NO. RESOLUTION DIRECTING PROCESS FOR THE SALE OF CERTAIN TRACTS OF LAND FORMERLY PORTIONS OF WEST SAN MARNAN DRIVE AND FIXING THE TIME AND PLACE OF HEARING AND NOTICE TO BE GIVEN ON AN OPPORTUNITY TO BE HEARD AS JULY 10, 2017 AT 5:30 P.M. IN HAROLD E GETTY COUNCIL CHAMBERS, CITY HALL, WATERLOO, IOWA, FIXING THE TIME AND PLACE OF BID OPENING AS JULY 13, 2017 AT 1:00 P.M. IN THE FIRST FLOOR CONFERENCE ROOM, CITY HALL, WATERLOO, IOWA AND FIXING THE TIME AND PLACE OF HEARING AND NOTICE TO BE GIVEN ON THE SALE AND TAKING OF BIDS FOR SAID PROPERTY, AS JULY 17, 2017, AT 5:30 P.M. IN HAROLD E GETTY COUNCIL CHAMBERS, CITY HALL, WATERLOO, IOWA, AND INSTRUCTING THE CITY CLERK TO PUBLISH AND MAIL NOTICE OF SAID HEARINGS AND TAKING OF BIDS WHEREAS, the City has previously attempted to sell and convey certain portions of right of way formerly being portions of West San Marnan Drive; and WHEREAS, the Iowa Supreme Court has declared that the City did not use the proper procedure in conveying said property; and WHEREAS, on July 7, 2014, the Iowa District Court enjoined the City "from selling or transferring" the portions of land which were formerly part of West San Marnan Drive "without following the procedures prescribed in Iowa Code Section 306.23;" and WHEREAS, the City now wishes to sell the following described tracts (which are subject to the injunction) in accord with Iowa Code Section 306.23; Tract 1: -1- Page 153 of 486 That part of the Southwest Quarter of Section 5, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Commencing at the Southwest corner of said Southwest Quarter; thence N89°49'35" E 1166.63 feet along the South line of said Southwest Quarter to the point of beginning; thence N2°21'21" W 21.34 feet to the former North right-of- way line of West San Marnan Drive (formerly Primary Road No. 412); thence N87°38'39'E 1487.92 feet along said former right-of-way to the East line of said Southwest Quarter; thence S0°09'45" E 77.99 feet to the Southeast corner of said Southwest Quarter; thence S89°49'35" W 1486.01 feet along the South line of said Southwest Quarter to the point of beginning, containing 1.695 acres. Tract 2: That part of the Southeast Quarter of Section 5, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Beginning at the Southwest corner of said Southeast Quarter; thence N0°09'06"W 77.99 feet to the former North right-of-way line of West San Marnan Drive (formerly Primary Road No. 412); thence N87°27' 11"E 1641.43 feet along said former right-of-way; thence S2°32'49"E 100.76 feet; thence Southwesterly 37.81 feet along a 570.00 foot radius curve, concave Southerly, said curve having a chord of 37.81 feet and bearing S67°34'44"W; thence Southwesterly 99.21 feet along a 510.00 foot radius curve, concave Northerly, said curve having a chord of 99.05 feet and bearing S71"15'04"W, to the South line of said Southeast Quarter; thence S89°50'54"W 1515.34 feet along the South line of said Southeast Quarter to the point of beginning, containing 4.175 acres. Tract 3: That part of the Northwest Quarter of Section 8, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Commencing at the Northwest corner of said Northwest Quarter; thence N89°49'35"E 1166.63 feet along the North line of said Northwest Quarter to the point of beginning; thence N89°49'35"E 1486.01 feet along the North line of said Northwest Quarter to the Northeast corner of said Northwest Quarter; thence S0°09'45"E 52.11 feet; thence S87°38'39"W 1268.30 feet; thence Westerly 135.88 feet along a 480 foot radius curve, concave Northerly, said curve having a -2- Page 154 of 486 chord of 135.43 feet and bearing N84°14'46"W; thence Westerly 82.40 feet along a 540.00 foot radius curve, concave Southerly, said curve having a chord of 82.32 feet and bearing N80°30'28"W; thence N2°21'21"W 72.65 feet to the point of beginning, containing 2.666 acres. Tract 4: That part of the Northeast Quarter of Section 8, Township 88 North, Range 13 West of the Fifth P.M., Black Hawk County, Iowa, described as follows: Beginning at the Northwest corner of said Northeast Quarter; thence N89°50'54"E 1515.34 feet along the North line of said Northeast Quarter; thence Southwesterly 94.61 feet along a 510.00 foot radius curve, concave Northerly, said curve having a chord of 94.48 feet and bearing S82°08' 18"W; thence S87°27' 11"W 477.10 feet; thence S88°39'59"W 945.22 feet; thence N0°09'45"W 52.11 feet to the point of beginning, containing 1.184 acres. and WHEREAS, the City has now obtained an independent appraisal of each tract from Rally Appraisal, L.L.C. as follows: Tract 1. $318,248 Tract 2. $783,886 Tract 3. $500,561 Tract 4. $222,305 and WHEREAS, present owners and original owners (excluding those who are deceased) have been identified by staff, NOW THEREFORE BE IT RESOLVED by the City Council of the City of Waterloo, Iowa, that: Section 1. It is directed that the above-described tracts of land be offered for sale in accord with Iowa Code Section 306.23. Section 2. City staff is directed to prepare in accord with Iowa Code Section 306.23 notices to be mailed by certified mail to such persons as are entitled to notice, and to publish such notices, staff shall also prepare a sealed Offer to Buy form. -3- Page 155 of 486 All bids shall be due on July 13, 2017 at 1:00 p.m. in the offices of the City Clerk upon such sealed bid form as staff shall prepare, at which time bids will be opened in the First Floor Conference Room at City Hall, 715 Mulberry Street. Section 3. In accord with Iowa Code Section 306.23 the notice to such persons as are entitled to notice shall provide for an opportunity to be heard by the Council at a hearing at its regular meeting of July 10, 2017. All bids received shall be considered by the Council at a hearing at its regular meeting of July 17, 2017. The City Clerk is instructed to publish notice of these hearings in compliance with Iowa Code Section 364.7 prior to the regular Council meeting of July 10, 2017 and July 17, 2017. Section 4. That the Council of the City of Waterloo, Iowa, shall meet in the Harold E. Getty Council Chambers, City Hall, in the City of Waterloo, Iowa, at 5:30 p.m. on the 10th day of July, 2017, for the purpose of holding a public hearing on an opportunity to be heard, and the Council of the City of Waterloo, Iowa, shall meet in the Harold E. Getty Council Chambers, City Hall, in the City of Waterloo, Iowa, at 5:30 p.m. on the 17th day of July, 2017, for the purpose of holding a public hearing on the sale of certain tracts of land formerly portions of West San Marnan Drive, in the City of Waterloo, with the taking of bids therefore. PASSED AND ADOPTED this day of , 2017. ATTEST: Kelley Felchle, City Clerk -4- Quentin Hart, Mayor Page 156 of 486 CITY OF WATERLOO Council Communication Resolution approving preliminary plans, specifications, form of contract, etc. and setting date of bid opening as May 18, 2017 and date of public hearing as May 22, 2017 for salvaged asphalt crushing. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Traffic Operations Even, LeAnn Approved 5/3/2017 - 2:03 PM SUBJECT: Resolution approving preliminary plans, specifications, form of contract, etc. and setting date of bid opening as May 18, 2017 and date of public hearing as May 22, 2017 for salvaged asphalt crushing. Submitted by: Submitted By:Sandie Greco, Interim Public Works Director Recommended Action: Recommend Approval The City has salvaged and stockpiled asphalt from various streets and Summary Statement: project in the local area. The crushed asphalt will be used in alleys, shoulders and parking lots. Expenditure Required: $59,000.00 Source of Funds: 266-19-7100-1511 Background Information: The City has salvaged and stockpiled asphalt from various streets and projects in the local area. Approximately every 2 years asphalt grinding is necessary. Page 157 of 486 CITY OF WATERLOO Council Communication Resolution setting date of public hearing as May 22, 2017 for an amendment to the FYE2017 Budget and instruct the City Clerk to publish notice. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 1:08 PM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:55 PM ATTACHMENTS: Description Type ❑ Budget Amendment Nmber 2 Hearing Req May 2017 Cover Memo SUBJECT: Submitted by: Resolution setting date of public hearing as May 22, 2017 for an amendment to the FYE2017 Budget and instruct the City Clerk to publish notice. Submitted By: Michelle Weidner, Chief Financial Officer Approve a resolution to set the date of hearing for an amendment to the Recommended Action: FYE2017 Budget as May 22, 2017, and instruct the City Clerk to publish notice. The City is required under state law to amend the budget prior to exceeding expenditures in any one of the nine program areas; public safety, public Summary Statement: works, health and social services, culture and recreation, community and economic development, general government, debt service, capital projects and the proprietary funds (sewer and sanitation). Policy Issue: Compliance with state law regarding budgeted expenditures. Background Information: We are required to publish the estimated budget amendment no more than twenty and no fewer than ten days (excluding holidays) prior to the hearing, which means the budget estimate must be provided to the Waterloo Courier by May 11. It is expected to be published by May 12. Page 158 of 486 Maya' QUENTIN HART COUNCIL MEMBERS TOM POWERS Ward 1 BRUCE JACOBS Ward 2 PATRICK MORRISSEY Word 3 JEROME AMOS, JR. Ward 4 RON YELPER Ward S TOM LIND Al -Large STEVE E SCHMITT At -Large J L1 \\Ii OF WATER!iO4, UOWA City Clerk and Finance Department 715 Mulberry St. • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571 KELLEY FELCHLE • City Clerk MICHELLE WEIDNER, CPA • Chief Financial Officer Council Communication City Council Meeting: Prepared: Dept. Head Signature: Number of Attachments: SUBJECT: May 8, 2017 May 3, 2017 UJ tc1 GJ.catte",) None FYE2017 Budget Amendment Hearing Number 2 Submitted by: Michelle Weidner, Chief Financial Officer Recommended City Council Action: Approve a resolution to set the date of hearing for amendments to the FYE2017 Budget as May 22, 2017. Summary Statement: The City is required under state law to amend the budget prior to exceeding expenditures in any one of the nine program areas; public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt service, capital projects and the proprietary funds (sewer and sanitation). Additional information will be provided prior to the hearing date. Expenditure Required: N/A Source of Funds: Various Policy Issue: Compliance with state law regarding budgeted expenditures. Alternative: None Background Information: We are required to publish the estimated budget amendment no more than twenty and no fewer than ten days (excluding holidays) prior to the hearing, which means the budget estimate must be provided to the Waterloo Courier by May 11. It is expected to be published by May 12. WE'RE WORKING FOR YOU! An Equal Opportunity/Affirmative Action Employer Page 159 of 486 CITY OF WATERLOO Council Communication Bonds. City Council Meeting: 5/8/2017 Prepared: REVIEWERS: Department Reviewer Action Date Engineering Higby, Nancy Approved 5/4/2017 - 5:08 PM ATTACHMENTS: Description Type D Bonds for council approval 5.8.17 Backup Material SUBJECT: Bonds. Page 160 of 486 BONDS FOR COUNCIL APPROVAL May 8, 2017 RIGHT OF WAY CONSTRUCTION BOND AMOUNT $15,000.00 7900370807 RLI10513265 63186131 2255027 IA 596207 7900414955 IA 601585 IA 596146 14989862 7900433961 RLI0461917 7900368632 55-212203 95BMJ0316F 63184256 ANTHONY FISCHELS B.C. CONSTRUCTION, INC. BARKER TONY dba TONY BARKER CONSTRUCTION BAKER ENTERPRISES, INC. dba BAKER CONCRETE & EXCAVATING BRAD TAYLOR ENVISION CONCRETE & LANDSCAPE CONSTRUCTION LLC MARK REITZ dba REITZ CONSTRUCTION INC. MATTHEW MCROBERS dba MCROBERTS CONSTRUCTION MICHAEL D. ALBERS REX CONCRETE INC. RICK KITE dba KITE CONSTRUCTION LTD ROGER SMITH CONSTRUCTION TRUEG CUSTOM CONCRETE LLC WESLEY GARDNER dba GARDNER PLUMBING WILLIE GREER dba GREER'S WORKS GILBERVILLE, IA CEDAR FALLS, IA WATERLOO, IA WAVERLY, IA WATERLOO, IA WATERLOO, IA BLUE GRASS, IA CEDAR FALLS, IA DIKE, IA CEDAR RAPIDS, IA JESUP, IA CEDAR FALLS, IA JESUP, IA LAPORT CITY, IA WATERLOO, IA Page 161 of 486 CITY OF WATERLOO Council Communication Sale and conveyance of public alley right-of-way located adjacent to and north of 1118 Ansborough Avenue to Village Properties, LLC in the amount of $1.00 and approve development agreement. City Council Meeting: 5/8/2017 Prepared: 4/18/2017 REVIEWERS: Department Reviewer Action Date P lanning & Z oning Schroeder, Aric Rejected 5/2/2017 - 11:51 AM Planning & Zoning Dornoff, John Approved 5/2/2017 - 3:50 PM Planning & Zoning Schroeder, Aric Approved 5/3/2017 - 11:03 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 12:49 PM ATTACHMENTS: Description Type D Aerial Map Cover Memo D Overview Map Cover Memo D Staff Report Cover Memo D Site Plan Cover Memo D Narrative Cover Memo ❑ Pictures Cover Memo ❑ Contractor Estimate Cover Memo ❑ Development Agreement Cover Memo SUBJECT: Motion to receive and file proof of publication of notice of public hearing. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments and recommendation of approval of the Planning, Programming and Zoning Commission. Motion to receive, file and consider and pass for the first time an Ordinance vacating a portion of public alley right-of-way located adjacent to and north of 1118 Ansborough Avenue, subject to retention of an easement over the northerly 10' of the vacate area. Motion to suspend the rules. Motion to consider and pass for second and third times and adopt the ordinance. Resolution authorizing sale and conveyance of platted alley, located adjacent to and north of 1118 Ansborough Avenue, to Village Properties, LLC for $1.00 plus costs, subject to the retention of an easement over the north 10 feet of the area to be conveyed, and authorize City Attorney to prepare and deliver deed accordingly and authorize Mayor and City Clerk to execute said documents. Resolution approving Development Agreement and authorize Mayor and City Clerk to execute said agreement. Page 162 of 486 Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Policy Issue: Alternative: Background Information: Legal Descriptions: Submitted By: Noel Anderson, Community Planning & Development Director Approval Transmitted is a request by Village Properties LLC to enter into a development agreement to vacate, sell and convey a portion of alley right-of- way for $1.00 located adjacent and north of 1118 Ansborough, and instruct City Clerk to publish pertinent notice. The applicant is requesting to vacate a rectangular portion of public alley directly north of 1118 Ansborough Avenue right-of-way that will be approximately 2,016 square feet, and 16' by 126', in size. The alley is a "T" alley and the portion of the alley that would not be vacated would still allow thru traffic. The applicant does not want to close off the alley or existing parking lot and will still allow thru traffic. The other adjoining property owners to the portion of the alley to be vacated do not use the alley for access and have indicated that they do not wish to purchase any portion of the alley. N/A N/A Right-of-way N/A N/A All that part of the East-West alley in Block No. 17, "Downing Place", City of Waterloo, Black Hawk County, Iowa, described as follows: bounded on the North by the South lines of Lot Nos. 1, 2 and 3 in said Block No. 17; bounded on the East by the East line of said Block No. 17 bounded on the South by the North line of Lot No. 20 in said Block No. 17; bounded on the West by the North extension of the West line of Lot No. 20 in said Block No. 17. Containing 2,020 sq. ft. more or less. Subject to the retention of an easement for public utilities over the North 10 feet of the above described area. Page 163 of 486 City of Waterloo Planning, Programming and Zoning Commission August 2, 2016 North of 1118 Ansborough Avenue Vacate Platted Alley Village Creek Rentals, LLC Page 164 of 486 N. E �+ -�.-�'y /_ f1� ✓` r_ Ttr 75 37.5 075 �rerloo No IFeet City of Waterloo Planning, Programming and Zoning Commission August 2, 2016 ' igAMr >IMM =rill MI • f 1111�1111■ '1 11 11111.1.■ FaMr-- -■■ __ R=2 W N AVE NI1111111411 _■ ■■■■■1111 4I:WO1:\:bLV1 i 11111 -. --:.I'I'I' _�__ `- )�1■11 11■111111111■11 '— 1111■■■111111 - Illla��r.lII IIIII■IIIIN 91:7a\17.7:7.1e\.,� MOTION . ■ --^-- ME MN -- -- 1111111'= 1111111■ MN C, CI minims ----i in -- MMM R=3. C-2: c -z r� RSR-4, R -P IV •- • ma :►1 i a - - MN ■ 11 ■1100 ■,1 111111 1111 1111 11111111 I11m 1�1 11■": _:sem "=-L'E _F__— 111111211111 In ¶f3 III�II '_MM 111111111111■111 1111111 11111111 R-3 • Cedar River 11 u �1AV= 111 ••. 1 0 0 !! Z m 111 MMMMM MMMMM MMMMIMn MMMMM m - = N MMAW M-2 O L -J/ MDT A-1 C-1 1 = II Ir i1N` -- -- .� R-2,C-Z=Timm; Mr ,o 1111.1111 1111 ■� �1 , II =2;C=Z MH 111 C-2;C'Z- R=3 in1111111111111111111111 C-1 R-3 di 1 111111'-1■i11111111111111111111111i`�7�� !IlluiiJ R11111 ItHwArw'y -4 - 111111111 1■11111 1111 11 C-2- C-2 C=Z =lc C=2 R-4 R4, MN 1 /(J Black Hawk Creek East Singing Bird Lake West Singing Bird Lake A 1L z _Jr o. -1 W. 3rd,;,,-; 1 141 7 JANNE C -1;C -Z UNIVERSITYAVE. II • 11111111 11111111 -ad 111 R=4 -`C -Z 1/1111 111111111 111111111 / i 111111[ 1W11dr11 . 3 North of 1118 Ansborough Avenue Vacate Platted Alley Village Creek Rentals, LLC Page 165 of 486 REQUEST: APPLICANT: GENERAL DESCRIPTION: IMPACT ON NEIGHBORHOOD & SURROUNDING LAND USE: VEHICULAR & PEDESTRIAN TRAFFIC CONDITIONS: RELATIONSHIP TO RECREATIONAL TRAIL PLAN: ZONING HISTORY FOR SITE AND IMMEDIATE VICINITY: DEVELOPMENT HISTORY: BUFFERS/ SCREENING REQUIRED: DRAINAGE: August 2, 2016 Request to vacate a portion of public alley directly north of 1118 Ansborough Avenue, located between Ansborough Avenue and Chalmers Avenue. Village Creek Rentals, LLC, 1118 Ansborough Avenue, Waterloo, IA, 50701. The proposed vacate area is approximately 2,016 square feet, and 16' x 126', and it is intended to improve the alley condition by paving it. It would not appear that vacation of right-of-way would have a negative impact upon the surrounding area or other surrounding land uses. The surrounding neighbors do not wish to purchase any portion of the right-of-way in question. The proposed vacate would not appear to have a negative impact on pedestrian or vehicular traffic conditions in the area. Roads in the general area in question are Ansborough Avenue, which is classified as a minor arterial, University Avenue, which is classified as a principal arterial, University Avenue Frontage Road, which is classified as a local road, and Chalmers Avenue, which is classified as a local road. The closet recreational trail is located approximately 0.5 miles to the south along Ansborough Avenue. The area in question is zoned "C-2", Commercial District. The surrounding land uses and their zoning are as follows: North — Existing single-family housing and professional offices, zoned "C-2" Commercial District. South — Existing commercial businesses, zoned "C-2" Commercial District. East — Existing commercial businesses, zoned "C-2" Commercial District. West —Existing single-family housing and professional offices, zoned "C-2" Commercial District. The surrounding area is primarily commercial development with some single-family residences. There would be no buffers or screening required for this request. Vacating the right-of-way would not appear to have a negative impact upon drainage in the area. There is a 4" drainage sewer that travels adjacent to the area in question, and this area should be maintained after the area is vacated to still facilitate proper drainage in the area. Due to the applicant paving the alley after it is vacated, a storm water management plan will need to be submitted to the Village Creek Rentals, LLC — Vacate portion of public alleyway Page 1 of 2 Page 166 of 486 FLOODPLAIN: PUBLIC /OPEN SPACES/ SCHOOLS: UTILITIES: WATER, SANITARY SEWER, STORM SEWER, ETC. RELATIONSHIP TO COMPREHENSIVE LAND USE PLAN: STAFF ANALYSIS — ZONING ORDINANCE: STAFF ANALYSIS — SUBDIVISION ORDINANCE: STAFF RECOMMENDATION: August 2, 2016 Engineering Department. No portion of the area in question is located within a Special Flood Hazard Area as indicated by the Federal Insurance Administration's Flood Insurance Rate Map, Community Number 19013 and Panel Number 0282F, dated July 18, 2011. Galloway Park is located 0.7 miles northwest of the area in question directly adjacent to Ansborough Avenue. Fred Becker Elementary School is approximately 0.5 miles southwest of the area in question at the intersection of Downing Avenue and Sheldon Street. There is one 72" storm sewer that is located to the east of the alley in question in Ansborough Avenue. There is also one 18" sanitary sewer located to the east of the alley in question in Ansborough Avenue. MidAmerican Energy has requested that an easement be retained over the north 10' of the vacated alley. The Future Land Use Map designates this area as Commercial. This request is in conformance with the Future Land Use Map and Comprehensive Plan for this area. The applicant is requesting to vacate a rectangular portion of public alley directly north of 1118 Ansborough Avenue right-of-way that will be approximately 2,016 square feet, and 16' by 126', in size. The alley is a "T" alley and the portion of the alley that would not be vacated would still allow thru traffic. The applicant does not want to close off the alley or existing parking lot and will still allow thru traffic. The other adjoining property owners to the portion of the alley to be vacated do not use the alley for access and have indicated that they do not wish to purchase any portion of the alley. There is no platting required as a part of this request. Therefore, staff recommends that the request to vacate the alleyway directly north of 1118 Ansborough Avenue be approved for the following reasons: 1. The request to vacate the right-of-way would not appear to have a negative impact upon the surrounding area. 2. The request to vacate the right-of-way would not appear to have a negative impact upon pedestrian or traffic conditions in the area. 3. It would appear that there is no need for the excess right-of- way for any current or future roadway purposes. And subject to the following condition(s): 1. That a utility easement is retained over the north 10' of the vacated alley. Village Creek Rentals, LLC — Vacate portion of public alleyway Page 2 of 2 Page 167 of 486 OHO I XO co OHO u. OH SHO co CO CO O' \ OI X OI CO u -I Di o MN (T XO\I \.O I ,. °a a Cb° O> a P N O ,-- 00 ° °° CO MIOI � p x u ° { a� ° a o ° Lf) 4 o° u .-I ao° CJ OI co OI OI ° C`'2 051 OI ° O> ,y a\ ° ( O▪ I a OD° 9 ° (3 + - + + co co OI O� OI OI O▪ I Q Lf) O xcA X cA (U 0 CID M OI Qi X 1 + + +QM I + +- + + - +�. 1 OO OT + OI+ + °pi + +con-, ‘,Qlpp + + + y. + + crN- + +'‘,44,, + + + + + + X+ + + + ,�� + + + + °+ +X+ + + X u ° °.c,°° 11- —1 °l0 I o N OI u OI ODaa 1:1 <° OI (7 0 o - rr X OHO – -z 1- X U_ 0 w 0, 4 ° ° U a4 °� A 7° 0 4 x 4 U oP 4 H 4 4 0� 0\ 0V ° Ob Oa X J 4 4 a ° 4 ZS— a 4 ° Ln co Og ° D1 D1 a q 4 4° 4 1°4 cu LO 4 c) o 4 4 a 4 nj° a CO n ° 4 c c ° /IOUS AREA: 0.079 Acres % A377b' :, 4 4 GAS METER APPROXIMATE PROPER1 coQ\ '_--- o.co ` m m x RVIOUS AREA: 0.133 Acres EXISTING ROCK ALLEY o op m • x• op o m June 22, 2016 To Whom: Planning & Zoning Regarding: Vacating Alley 1118 Ansborough Ave. Commitee Members, I am asking to have this alley vacated (See Attachment for Aerial View) so that we can make it a hard surface. We have invested over $400,000 into our building at 1118 Ansborough Ave. and with clients coming into our building we really need to address this issue as the alley is in poor condition and this would be a great improvement. Thanks, Jason '<. Strelow President / Berkshire Hathaway Horne Services One Realty Centre 1 Page 170 of 486 INTENT TO VACATE City of Waterloo Planning and Zoning 715 Mulberry Street Waterloo, IA 50703 We the undersigned, as adjacent property owners of right-of-way requested to be vacated and generally described as (address or general location): Alley Along 1118 Ansborouqh Ave. , have no objection to the right-of-way being vacated and have been offered the opportunity to buy a portion of the right of way, We wish to make the following known (check which applies): We/I wish to purchase from the City the one-half of the right-of-way that adjoins our/my property (sign and date below and complete items 1-3). We/I wish to purchase from the City the entire portion of the right-of-way that adjoins our/my property. This is contingent upon the property owner opposite ours/mine choosing not to purchase their/his or her half (sign and date below and complete items 1-3). X We/I do not wish to purchase from the City any portion of the right-of-way (sign and date below and leave items 1-3 blank). Signa a of adjacent property owner 1115 Janney Ave. Waterloo, Iowa 50701 Address kVA •R h Date Phone 1. Offer Price [Note: If the offer price meets the Sale of Property Policy (see attached) the request will not be required to be reviewed by the Building & Grounds Committee.] • Asking price (see attached Sale of Property Policy for how calculated): • Deductions • May decrease price by 50% for area located within an easement: • May decrease price for the City tax that will be collected on the land within 5 yrs (8 yrs inside of the CURA): • Costs (surveying & misc., demolition, remove of curbs, etc): Asking price -- Deductions = Value of Property: Offer Price for Portion of Alley You Intend to Purchase: 2. Transfer of Ownership: In what name(s), company or corporation shall the property be assigned to? (Give special attention to spelling as these names will be verified and transposed as submitted onto the deed.) Village Creek Rentals, LLC. 3. Deed: At the time of the buyer's final payment, the sellers shall convey the premises to the buyers by quitclaim deed. Please indicate the legal form you wish to be transferred in (i.e., as tenants-in- common, joint tenancy with full rights of survivorship, or as individual ownership.) Page 171 of 486 INTENT TO VACATE City of Waterloo Planning and Zoning 715 Mulberry Street Waterloo, IA 50703 We the undersigned, as adjacent property owners of right-of-way requested to be vacated and generally described as (address or general location): Alley Along 1118 Ansborough Ave. , have no objection to the right-of-way being vacated and have been offered the opportunity to buy a portion of the right of way. We wish to make the following known (check which applies): We/1 wish to purchase from the City the one-half of the right-of-way that adjoins our/my property (sign and date below and complete items 1-3). We/1 wish to purchase from the City the entire portion of the right-of-way that adjoins our/my property. This is contingent upon the property owner opposite ours/mine choosing not to purchase their/his or her half (sign and date below and complete items 1-3). X We/I do not wish to purchase from the City any portion of the right-of-way (sign and date below and leave items 1-3 blank). lira Y'fit Signature of djacent property owner Date March 10, 2016 1104 Ansborough Ave. Waterloo, Iowa 319-830-2435 Address Phone I . Offer Price [Note: If the offer price meets the Sale of Property Policy (see attached) the request will not be required to be reviewed by the Building & Grounds Committee.] • Asking price (see attached Sale of Property Policy for how calculated): • Deductions • May decrease price by 50% for area Iocated within an easement: • May decrease price for the City tax that will be collected on the land within 5 yrs (8 yrs inside of the CURA): • Costs (surveying & mise., demolition, remove of curbs, etc): Asking price — Deductions = Value of Property: Offer Price for Portion of Allev You Intend to Purchase: 2. Transfer of Ownership: In what name(s), company or corporation shall the property be assigned to? (Give special attention to spelling as these names will be verified and transposed as submitted onto the deed.) Village Creek Rentals, LLC. 3. Deed: At the time of the buyer's final payment, the sellers shall convey the premises to the buyers by quitclaim deed. Please indicate the legal form you wish to be transferred in (Le., as tenants-in- common, joint tenancy with full rights of survivorship, or as individual ownership.) Page 172 of 486 INTENT TO VACATE City of Waterloo Planning and Zoning 715 Mulberry Street Waterloo, IA 50703 We the undersigned, as adjacent property owners of right-of-way requested to be vacated and generally described as (address or general location): Alley Along 1118 Ansborough Ave. , have no objection to the right-of-way being vacated and have been offered the opportunity to buy a portion of the right of way. We wish to make the following known (check which applies): We/I wish to purchase from the City the one-half of the right-of-way that adjoins our/my property (sign and date below and complete items 1-3). X We/I wish to purchase from the City the entire portion of the right-of-way that adjoins our/my property. This is contingent upon the property owner opposite ours/mine choosing not to purchase their/his or her half (sign and date below and complete items 1-3). We/1 do not wish to purchase from the City any portion of the right-of-way (sign and date below and leave items 1-3 blank). Igpature o cent property owner 1118 Ansborough Ave. Waterloo, Iowa Address March 10, 2016 Date 319-61-3000 Phone 1. Offer Price [Note: If the offer price meets the Sale of Property Policy (see attached) the request will not be required to be reviewed by the Building & Grounds Committee.] • Asking price (see attached Sale of Property Policy for how calculated): • Deductions • May decrease price by 50% for area located within an easement: • May decrease price for the City tax that will be collected on the land within 5 yrs (8 yrs inside of the CUBA): • Costs (surveying & misc., demolition, remove of curbs, etc): Asking price — Deductions = Value of Property: Offer Price for Portion of Alley You Intend to Purchase: 2. Transfer of Ownership: In what name(s), company or corporation shall the property be assigned to? (Give special attention to spelling as these names will be verified and transposed as submitted onto the deed.) Village Creek Rentals, LLC. 3. Deed: At the time of the buyer's final payment, the sellers shall convey the premises to the buyers by quitclaim deed. Please indicate the legal form you wish to be transferred in (i.e., as tenants-in- common, joint tenancy with full rights of survivorship, or as individual ownership.) Page 173 of 486 Vacate Request — North of 1118 Ansborough Avenue Looking west from Ansborough Avenue at the alley in question. Looking west from the alley in question at the remainder of the alley that will still remain as a public alley. Looking at a north/south segment of an alley west of 1118 Ansborough Avenue that intersects with the alley to be vacated. This will still remain a public alley. Looking east down the alley in question towards Ansborough Avenue. Page 174 of 486 Roger Smith Construction Inc 5704 W Cedar Wapsie Road Cedar Falls, Iowa 50613 Office 319-266-8912 CeII 319-269-5434 Fax 319-987-3419 rscis4u@aol.com For: Jason Strelow 1118 Ansborough Ave Waterloo la, f)c1cicriptiun Esti mate` Estimate No: 504 Date: 09 -Mar -2017 Work to be done at 1118 ansborough ave. Waterloo. Pour alley 20'x164' Pour 6" with c-4 mix. Replace approach and city sidewalk. Make sidewalk 20'wide. Pour approach to width of new sidewalk. Permits included. II cleaned u Amount Excavate for retention pond to engineers specs. Plumb into storm sewer. $19,600.00 $13,575.00 Quality Work Is Our Concrete Evidence All material is guaranteed to be specified. All work to be completed in a workmanlike manner according to standard practices. Any alteration from above specifications involving extra costs will become an extra charge over and above estimate. AH contingent upon strikes, accidents or delays beyond our control. Owner to carry fire, tornado, and other necessary insurance. Our workers are fully covered by Workman's Compensation Insurance. Rage 1 of 1 Subtotal $33,175.00 TAX (0.00%) $0.00 Total $33,175.00 25 % down required upon approval Extra 3% for credit card payments over $500.00 Page 175 of 486 Prepared by: John Dornoff, City of Waterloo, 715 Mulberry Street, Waterloo, IA 50703 (319) 291-4366 DEVELOPMENT AGREEMENT This Agreement is made and entered into this day of , 2017, by and between Village Creek Rentals LLC, hereafter called "Developer", and the City of Waterloo, Iowa, hereinafter called "City". WHEREAS, City considers development within the City a benefit to the community and is willing for the total good and welfare of the community to sell city -owned property not needed for current or future public purposes so as to encourage that goal, and WHEREAS, Developer is willing to purchase vacated City right-of-way in the amount of $1.00, and legally described on attached Exhibit "A", located adjacent to 1118 Ansborough (hereinafter the "Property"). NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, Developer and City agree as follows: 1. The City agrees to convey the Property to Developer for $1.00, plus costs. The City shall convey the Property to Developer by Quit Claim Deed. The Property has a full assessed value of $4282.00, but the City agreed to grant Developer a credit of $4281.00 against the full assessed value for the Developer's costs ($33175.00) to improve the alley which is permitted by the City of Waterloo Sale of Property Policy. 2. Developer shall construct hard surfacing improvements and bring vehicular use areas into compliance with the City of Waterloo Zoning Ordinance,(hereinafter "Improvements"), and take out necessary permits within twelve months of the date of this agreement. The Improvements shall be constructed in accordance with all applicable City, State, and Federal building codes and be in compliance with all applicable city ordinances. 3. The parties agree that Company's commitment to undertake Project and construct the improvements in a timely manner constitutes a material inducement for the City convey the Property, or to cause Property to be conveyed, to the Company and that without said commitment City would not do so. Company must obtain proper City Approval and begin construction by June 30, 2017 and substantially complete construction within (12) months. If developer does not complete Improvements as described in #2 above, developer shall pay the $4,281 assessed value to City within two weeks of stated deadline. If improvements are delayed by weather but construction of the Project is imminent, the 1 Page 176 of 486 City Council may, but shall not be required to, consent to an extension of time for the construction of Improvements, and if an extension is granted by construction of the Improvements has not begun within such extended period, developer shall pay the $4281 assessed value to the City within two weeks of stated deadline. If Company determines at any time that the Project is not economically feasible, then after giving thirty (30 days) notice to the City, Company may convey the Property to City by Quit Claim Deed, and thereupon neither party shall have any further obligation under this Agreement except as expressly provided. If development has commenced within the required period or any extended period and is stopped and/or delayed as a result of an act of God, war, civil disturbance, court order, labor dispute, fire, or other cause beyond the reasonable control of the Company, the requirement that construction of the Project shall be tolled for a period of time equal to the period of such stoppage or delay, and thereafter if construction is not completed within the allowed period of extension then developer shall pay the $4281 assessed value to City within two weeks of stated deadline. 4. City will deed the property within 3 weeks of approval of the Development Agreement by Quit Claim Deed. 5. NOTICE: All notices, request, and other communication permitted or required herein shall be in writing and shall be effective when delivered to the addressee in person or when sent to such address by United States registered or certified mail, return receipt requited, postage prepaid, or by hand delivery, addressed as follows: For the City: Mayor Quentin Hart City Hall 715 Mulberry Street Waterloo, Iowa 50703 With copy to City Planner For Developer: Village Creek Rentals LLC 1118 Ansborough Avenue Waterloo, IA 50701 6. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon the successors and assigns of Developer. 7. IN WITNESS WHEREOF, the parties have executed this Agreement the date and year written above. By: ViY For Village -C Rentals LLC Date By: ry R Its: 2 Page 177 of 486 CITY OF WATERLOO, IOWA By: Quentin Hart, Mayor Date ATTEST: Kelley Felchle, City Clerk Date 3 Page 178 of 486 Exhibit "A" Legal Description — Alley to Be Vacated All that part of the East-West alley in Block No. 17, "Downing Place", City of Waterloo, Black Hawk County, Iowa, described as follows: bounded on the North by the South lines of Lot Nos. 1, 2 and 3 in said Block No. 17; bounded on the East by the East line of said Block No. 17 bounded on the South by the North line of Lot No. 20 in said Block No. 17; bounded on the West by the North extension of the West line of Lot No. 20 in said Block No. 17. Containing 2,020 sq. ft. more or Tess. 4 Page 179 of 486 CITY OF WATERLOO Council Communication General Obligation Bonds - ECP -2 - The issuance of not to exceed $200,000 General Obligation Bonds for essential corporate purposes. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 11:28 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:40 AM ATTACHMENTS: Description Type ❑ Council Comm Bond Hearings 2-7 May 2017 Cover Memo ❑ CIP 2017 Bond Issue Cover Memo SUBJECT: Submitted by: Recommended Action: Summary Statement: General Obligation Bonds - ECP -2 - The issuance of not to exceed $200,000 General Obligation Bonds for essential corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of ECP -2 - Not to exceed $200,000 General Obligation Bonds for essential corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer ECP -2 - Not to exceed $200,000 General Obligation Bonds (ECP - 2) for essential corporate purposes of said City, the proceeds of which bonds will be used to provide funds to pay the costs of the acquisition and installation of emergency services communication equipment and systems including early warning sirens; and the acquisition of vehicles and equipment for the Street Department. Please refer to the council communication attached to the ECP -2 hearing for additional information. Page 180 of 486 QUENTIN HART COUNCIL MEMBERS TOM POWERS Ward I BRUCE JACOBS Ward PATRICK MORRISSEY Ward 3 JEROME AMOS, JR. lrVard 4 RON WELPER Ward 5 TOM LINt) At -Large STEVE SCHMITT At -Lenge CH u'Y O WATERLOO, IOWA City Clerk and Finance Department 715 Mulberry St. • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571 KELLEY FELCHLE • City Clerk MICHELLE WEIDNER. CPA • Chief Financial Officer Council Communication City Council Meeting: May 8, 2017 Prepared: May 3, 2017 Dept. Head Signature:Ptcati.etc.)6iter-oQiwv Number of Attachments: Project Listing SUBJECT: FYE2017 Bond Issue Hearings Submitted by: Michelle Weidner, Chief Financial Officer Recommended City Council Actions: Adopt resolutions to set the date of hearing as May 8, 2017 on the proposed issuance of the following bonds for the project classifications just approved, as follows; 1. ECP -2 - Not to exceed $200,000 General Obligation Bonds (ECP -2) for essential corporate purposes of said City, the proceeds of which bonds will be used to provide funds to pay the costs of the acquisition and installation of emergency services communication equipment and systems including early warning sirens; and the acquisition of vehicles and equipment for the Street Department, 2. GCP-3 -- Not to exceed $700,000 General Obligation Bonds (GCP-3) for general corporate purposes, the proceeds of which bonds will be used to pay the costs of Cultural and Art projects, including improvements and repairs at the Center for the Arts; the acquisition of vehicles for various city departments, including engineering and leisure services; equipping various city departments, including parks and leisure services; building and infrastructure improvements for public works, including the traffic control center; reconstruction, renovation, remodeling, improvement, equipping and repairing of various City buildings and facilities, including projects at new city facilities, costs of the structural and mechanical audit of city buildings, various ADA compliance improvements, golf course, public library, and swimming pool renovations and shall bear interest at a rate not exceeding the maximum specified in the attached notice. 3. GCP-4 — Not to exceed $700,000 General Obligation Bonds (GCP-4) for general corporate purposes„ the proceeds of which bonds will be used to pay the costs of comprehensive plan updates; acquisition of City WE'RE WORKING FOR YOU! An Equal Opportunity/Affirmative Action Employer Page 181 of 486 Council Communication FYE2017 Bond Hearings Page 2 of 3 wide Information Services mapping equipment and software; and acquisition and installation of computers and related technology and business continuity programming and software for offsite backup disaster relief; website redevelopment; reconstruction, renovation and improvements to Sports Facility Improvement Fund; reconstruction renovation and improvements to public buildings and facilities, including chemical storage building improvements, police department vehicle impound storage building; acquisition of off-road maintenance equipment for the parks and golf course departments; and the construction, renovation and improvement of the airport parking lot and related equipment and shall bear interest at a rate not exceeding the maximum specified in the attached notice. 4. GCP-5 — Not to exceed $500,000 General Obligation Bonds (GCP-5) for general corporate purposes, the proceeds of which bonds will be used to provide funds to pay the costs of improvements to Young Arena, Riverfront Stadium, and reconstruction, renovation, remodeling, improvement, equipping and repairing of Downtown Parking Garages and shall bear interest at a rate not exceeding the maximum specified in the attached notice. 5. GCP-6 — Not to exceed $700,000 General Obligation Bonds (GCP-6) for general corporate purposes, the proceeds of which bonds will be used to pay the costs of the reconstruction, renovation, remodeling, improvement and equipping of the 5 Sullivan Brothers Convention Center and shall bear interest at a rate not exceeding the maximum specified in the attached notice. 6. ECP/UR-7 -- Not to exceed $3,000,000 General Obligation Bonds (ECP/UR -7) for essential corporate purposes, the proceeds of which bonds will be used to provide funds to pay the costs of aiding in the planning, undertaking and carrying out of urban renewal projects under the authority of Chapter 403 and the Urban Renewal Plans for the Martin Road Development Area, the Rath Area Redevelopment Area, and the East Waterloo Unified Urban Renewal and Redevelopment Area, such as those costs associated with the Chamberlain Project, land acquisitions, public infrastructure projects including streets, streetscape, and utility improvements, the downtown development plan, downtown acquisitions and demolition costs. Summary Statement: We are planning to sell $9,000,000 in general obligation bonds for a number of general purposes, $1000,000 for sewer purposes, $8,100,000 in general obligation bonds for the TechWorks Campus Reinvestment District project and approximately $2,845,000 in refunding bonds to reduce interest costs on the 2009A bond issue. Please note that the hearing amounts indicated are being set higher than the actual amounts to be issued to provide flexibility in the project allocations, which Page 182 of 486 Council Communication FYE2017 Bond Hearings Page 3 of 3 reduces future administrative costs. One essential corporate purpose bond hearing (ECP -1) was held and approved at the March 9, 2017 council meeting. Expenditure Required: The principal amount plus interest will be required to be repaid in the future. Source of Funds: Repayment will be made from various sources, including general property taxes and tax increment revenue. Policy Issue: repayment. The issuance of bonds commits the city to future Alternative: The City could choose not to sell bonds and not proceed with the projects. This would reduce future debt service costs. However, other costs would increase. For example, a number of the planned projects are government mandates that could have financial ramifications if they are not completed. Background Information: A general listing of projects planned to be completed using bond proceeds authorized by these hearings is attached. Page 183 of 486 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Current Year Bond Issue Sumn ty9/2017 12:24 6'484 of 486 [ 11 AAI' TX to ted A»l t w c7 "ixa tle i b> ..,.., . _..._... � .._.,.,�s n. '!8 .,.., ,.: �l�i ait Cal Equipment to q pment and Vehicles 751,700 2,547,000 329,000 0 ,..; 0 Public Works 170,000 750,000 20,000 0 0 City Facility Management 1,760,000 2,845,000 1,406,000 0 0 Clerks Department 0 0 0 0 0 Community Planning and Development 1,107,500 10,879,500 10,649,500 2,272,000 10,197,000 Cultural and Arts Center 110,000 0 0 0 0 Engineering 2,112,250 4,850,000 2,880,000 0 0 Finance 125,000 125,000 125,000 0 83,000 Fire Rescue 535,000 415,000 95,000 0 0 Information Services 105,000 206,000 81,000 0 0 Leisure Services 636,000 2,020,500 645,000 0 100,000 Police 285,550 505,000 280,000 0 0 Code Enforcment 0 26,000 0 0 0 Airport 0 250,000 220,000 0 220,000 Library 0 60,000 0 Sign and Traffic 302,000 1,080,400 269,500 0 0 :..... tt a 'r Q Debt tetl ._,,.1 I F, l ,41t OU 5 ,Q 1.all,6ftb, ltil;Q T_ Waste Management - GO/State RevolvingLoan Fund 0 1,000,000 1,p000, 0 [� I000 �y n n n01 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Current Year Bond Issue Sumn ty9/2017 12:24 6'484 of 486 Prn1, Priorit CA T �vW. � E IICTyE 'tRequested ro' e TIF Taxable 33:o1 S'- 110 110 1-1 High (11) Police - Replace 7 patrol vehicle per year. 169,700 218,000 150,000 110 H High (17) Animal Control - Replace '05 Former Facilities Maintenance VE 0 35,000 0 110 L Low (09) MIS 0 0 0 110 L Low (11) Police Laboratory Vehicle Replacement 0 0 0 110 L Low (23) Parking Maintenance 0 0 0 110 L Low (26) Center for the Arts 0 0 0 110 L Low (27) Human Rights 0 0 0 110 L Low (30) Housing Authority 0 0 0 110 L Low (32) Community Development 0 0 0 110 L Low (33) Library 0 0 0 110 L Low City Clerk 0 0 0 110 L Low (11) Police Equipment 10,000 35,000 35,000 110 L Low (51) Code Enforcement 0 24,000 0 110 M Med (07) Engineering - Replace 2005 pickups (4) 24,000 24,000 24,000 110 M Med (08) Planning & Zoning - Replace Sedans '05 &'08 0 24,000 0 110 M Med (11) Police Investigation Vehicles. - Replace Sedans '06 (2), '07 (2) 0 25,000 0 110 M Med (12) Fire Rescue - Replace '03 (3) Pick-ups &'06 Utility Vehicle 0 35,000 0 110 M Med (17) Sign & Traffic - Replace '95 '04 Bucket Trucks, '03 &'06 Pick- 100,000 345,000 0 110 M Med (19) Street - Rept. '72 snow blower, loaders, trucks, graders, sweeper 250,000 1,250,000 120,000 110 M Med (22) Building Inspections - Replace Sedans '03 &'05, Replace Pick- 25,000 24,000 0 110 M Med (37) Leisure - Replace multiple pickups, tree spade, lift truck, chippc 50,000 275,000 0 110 M Med (98) Facilities Maintenance - Replace '04 Bucket Truck 25,000 135,000 0 110 M Med (99) Motor Pool - Replace Sedans (2) & Vans (2) 25,000 25,000 0 110 M Med (18) Public Works -Replace '08 &'11 Service Trucks, Replace '051 73,000 73,000 0 .4 ........ iota, Caj ts' yuxp c: -,70th 54'7,0 3�9,1iO4 ,. .... 0. Ninth Revision - 2018-2022 CIP Requests April 6 2017 Cap Equip 4/19/201712:tIage'1 5 of 486 Prnj . Prlo. -T+ aApproved TIF Taxable Rtk E 6 e 231 M Med Exterior Painting of Public Works Bldg 0 25,000 0 233 M Med Construction of Storage Building 170,000 250,000 0 46 M Med Vehicle Automated Wash System 0 270,000 0 229 H High Public Works Fuel Distribution Site 0 75,000 0 H High Wireless Vehicle Lifts 0 110,000 0 H High Traffic Control Center Upgrade 0 20,000 20,000 164 H High Central Garage Overhead Crane 0 0 0 �Ql u11taeVor i'IU0110:.. �aia__#I�UD II! Ninth Revision - 2018-2022 CIP Requests April 6 2017 Pubic Works 4/19/2017 1 12:0PMENE86 of 486 Prod itgy Project 117:CI1 u o ilApproved Rink 121 H High - 2 City Facility New Construction/Remodeling Fund 80,000 130,000 176,000 101 H High - 3 5 Sullivan Bros Convention Cntr Improvements 500,000 750,000 700,000 37 L Low - 1 Swimming Pool Renovations 10,000 80,000 20,000 106 H High - 4 ADA Compliance 50,000 50,000 20,000 36 M Med - 2 Library Improvements - Mtg. Rooms, Park. Lot 50,000 50,000 0 H High Library Improvements - Outside Bldg. Maint. 0 60,000 10,000 23 M Med Fire Station Improvements 20,000 24,000 0 M Med Fire Rescue - HAZMAT Center 0 51,000 0 127 H High - 1 Downtown Parking Garages 300,000 500,000 200,000 47 M Med Center For The Arts - General Maintenance 50,000 20,000 20,000 M Med Center For The Arts - Restroom Expansions 0 200,000 110,000 H High Center For The Arts - Fire Alarm 0 50,000 0 41 M Med - 1 Art Center Parking Lot 700,000 700,000 0 M Med - 2 Sportplex 0 30,000 0 H High Structural & Mechanical Audit - City Bldgs 0 150,000 150,000 43 L Low - 2 Public Market Facility Maint. Program 0 0 0 Tobi „ Eiy icy; ag i t - - 1 O Ofd s4 I 6 Q f: .,....:Q ..., . Ninth Revision - 2018-2022 CIP Requests April 6 2017 Current Year Bond Issue Fac M /2017 12:21PegeP107 of 486 P %vx "TY'ME.- ested Approved I >� Taxable 121 H High - 2 City Facility New Construction/Remodeling Fund 80,000 130,000 176,000 101 H High - 3 5 Sullivan Bros Convention Cntr Improvements 500,000 750,000 700,000 37 L Low - 1 Swimming Pool Renovations 10,000 80,000 20,000 106 H High - 4 ADA Compliance 50,000 50,000 20,000 36 M Med - 2 Library Improvements - Mtg. Rooms, Park. Lot 50,000 50,000 0 H High Library Improvements - Outside Bldg. Maint. 0 60,000 10,000 23 M Med Fire Station Improvements 20,000 24,000 0 M Med Fire Rescue - HAZMAT Center 0 51,000 0 127 H High - 1 Downtown Parking Garages 300,000 500,000 275,000 47 M Med Center For The Arts - General Maintenance 50,000 20,000 20,000 M Med Center For The Arts - Restroom Expansions 0 200,000 110,000 H High Center For The Arts - Fire Alarm 0 50,000 0 41 M Med - 1 Art Center Parking Lot 700,000 700,000 0 M Med - 2 Sportplex 0 30,000 0 H High Structural & Mechanical Audit - City Bldgs 0 150,000 150,000 43 L Low - 2 Public Market Facility Maint. Program 0 0 0 . _,... ' #.. £y: ac Ma ae-iso . �i '�. .....,: 1 r. �"f�����U0 45 {� ., �r�YJ3��l!;�.., Q 7�V�f�1��o n ....:..... ........11 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Fac Mgmt 4/19/201712:0 EP 8 of 486 1roj Prior y CLARKS FYI C N$ std Loye,:.„, ' sib H High None 0 0 0 Total Cle ks Ninth Revision - 2018-2022 CIP Requests April 6 2017 Clerks 4/19/2017 12:O f of 486 P 6 Prrox� y CQMMUNEL PMENT[�7G 1� `� IPIi I� l id CIP e u s# .per©� 1 TIII+' Taxa b e .......: Ranh �_._...�_ Proect .. ...._:: ..r,.,..,3,�.._..,�„ �..,,,,�. �XB,:, WF� ��, 107 H High - 5 Downtown Development Plan 80,000 80,000 75,000 75,000 79 H High -1 Downtown Acquisitions 500,000 200,000 0 125 L Low - 2 MidPort 0 0 0 54 L Low - 8 Bikeway Development 0 30,000 0 55 H High - 4 Rath Tax Increment 300,000 225,000 397,000 397,000 397,000 152 L Low - 1 Logan Tax Increment 0 0 0 58 M Med - 1 GIS/GPS Mapping 5,000 0 0 33 L Low - 4 San Martian Drive Economic Development 0 0 0 34 H High - 2 Demolition Projects/Housing Incentives 100,000 200,000 300,000 90 L Low - 3 Chamberlain Demolition & Redevelopment 0 30,000 15,000 172 H High - 3 Martin Road Tax Increment 30,000 1,800,000 1,800,000 1,800,000 1,800,000 112 L Low - 5 Housing Development - Ray Tiller Sewer 50,000 50,000 0 185 L Low - 7 Northeast Industrial Park 0 0 0 248 M Med - 3 Complete Streets 0 222,000 20,000 H High Tech Works - Green Hotel/Corp. Training Cntr. 8,000,000 8,000,000 8,000,000 8,000,000 225 H High - 6 Comprehensive Plan Update 42,500 42,500 42,500 226 M Med - 2 Northeast Arterial Plan 0 0 0 w, #ai P a ga i1I D ,e Ai tt m ..._ 7 a%IO Q 9 ' 1Oi .04 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Planning 4119/201712:op EP O of 486 ProfPriority r - %d X17 (I P queste A proved T ax'ble a pJ' 0 p H High - 1 Street Rehab - Livingston Ln & Betsworth Dr. 0 0 H Med - 2 Replace Vehicles - Airport Admin. 0 0 0 H High - 2 Replace Fuel Mgt. System for Aiport Vehicles 0 0 0 H High - 1 Replace Parking Lot Equipment 0 250,000 220,000 220,000 H High - 1 Rehab FBO Swieter, ARFF Parking Lots 0 0 H High - 1 Rehab Terminal Area Parking Lots 0 0 0 H High - 1 Street Rehab - Airport Blvd. 0 0 0 ir ...m. AQ �l9 . D`Ofl04. Ninth Revision - 2018-2022 CIP Requests April 6 2017 Page 1 Page 191 of 486 roj. Prix-=. - NCINE 7 -ti,, FY17 CR,QIquested API -roved `. ,r `a' nbk 81 H High - 5 Flood Control Improvements 450,000 650,000 90,000 H High - 6 Flood Control (2016 Flood Issues) 0 380,000 90,000 83 L Low Cloverdale Acres Storm Water - North 0 0 0 52 H High -2 Sidewalk Repair/ADA Ramp Compliance 257,250 450,000 300,000 167 L Low Clark Street Drainage Improvements 0 0 0 75 L Low Lower Sink Creek Improvements 0 0 0 16 H High - 8 Bikeway Maintenance 25,000 50,000 10,000 80 L Low Allen Hospital Area Storm Water Improvements 0 0 0 124 H High - 10 4th St Bridge Walkway Canopy Repairs & Painting 0 100,000 40,000 193 L Low Bridge Inspections 0 0 0 69 L Low Hammond Ave Paving 0 0 0 61 H High - 4 Virden Creek Levee 0 1,800,000 1,650,000 62 H High - 3 Levee Clear Zone Tree Removal 350,000 300,000 200,000 91 L Low Delane Avenue Drainage Project - Phase II 100,000 0 0 26 H High - 1 US Hwy 63 (South Segment) - Match 500,000 500,000 500,000 82 L Low Downtown Brick Repairs 0 0 0 175 H High -7 Bridge Repairs - Various Locations 200,000 300,000 0 74 L Low Park Avenue Bridge Replacement 80,000 0 0 20 H High - 9 Entertainment Area Parking Lot (Dental Lab) 100,000 40,000 0 53 L Low Hammond Ave Bridge Replacement 0 0 0 57 L Low Sergeant Rd Bike Trail Bridge Replacement 0 0 0 27 L Low Virden Creek Dam Repairs 0 0 0 251 M Med - 1 Sidewalk Infill 0 140,000 0 22 M Med -2 Storm Sewer improvements 50,000 140,000 0 nta n tii : V ff 1: 4,8Si ,e ._ 2, Sf i },p,,,' 0 ~ 0 Ninth Revision - 2018-2022 Clip Requests April 6 2017 Eng 4/191201712:0p 2 of 486 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Cult & Arts 4/19/2017 12:0'3 of 486 f.'� �_....,.;. 1\iii _.,..,, _ ..� - At W,,.,.:✓, r "" 60,000 4 0 . �O i_... 40 H High Center for the Arts 76 H High Youth Pavillion 30,000 0 25 H High Amphitheatre 20,000 0 13Q $ � Q 0: Ninth Revision - 2018-2022 CIP Requests April 6 2017 Cult & Arts 4/19/2017 12:0'3 of 486 45: Priori FY17G'l<ti l slueApproved tic l„e.... of is "_ Raskeject Y tl ,.. 1S $ 109 H High- 1 G.O. Bond Costs 125,000 125,000 125,000 83,000 Total + na a ,0 ,.. 12S a Ninth Revision - 2018-2022 CIP Requests April 6 2017 Finance 419/2017 12:0'4 of 486 Ftp .. _:, Frio rid .,, r: )r� JRI E XJ cl p MX 4 zab)a, Prbect....XII.,... ;,:.T 1X'18_....'. ,.n H High Command Vehicle Replacement 0 100,000 75,000 M Med Replace Unit #329 0 90,000 0 161 H High Replace Engine #303 0 0 0 156 H High Equipment and Uniforms 30,000 80,000 20,000 108 H High New Aerial Truck (Ladder) 450,000 0 0 30 H High Brush Truck Replacement 55,000 145,000 0 236 H High Ambulance Replacement 0 ,... -. :"'- :,.. ...... :� © 1' 1[, „ ',-, �a4t 1V1�+.:.: ....... .: . ... r... .....,.::....... .: cll0 ...... ;y�!� € �r -:: �1 7i �L AA0 ,ono ... '` Ninth Revision - 2018-2022 CIP Requests April 6 2017 Fire 4/19/2017 12:1P eP1635 of 486 Froj. P o M*�N It G 1?Y17 uApproved TI Tuiraisle ink Proje � _,. FYI8 ds.__ 58 H High Geographical Information Systems (GIS) 0 50,000 50,000 138 M Med Communications Medium Modernization 25,000 25,000 0 234 H High CATV Stuido Upgrades 0 91,000 45 M Med Computer/Technology Replacement Program 40,000 40,000 10,000 238 H High Business Continuity (Offsite Backup/Disaster Re 40,000 0 21,000 'xi ta foxM,to i rtes . .. ,,,... Q ,$(� 1 ,- 0 1 ....,.. 1 Ninth Revision - 2018-2022 CIP Requests April 6 2017 IT 4/19/2017 12:0pti ef1O6 of 486 to i. Priorly T PTBIII IEI SSI ' � Irl este Sp0,oved TTE #xa le 1'roYe, 0..., , 15 H High - 4 Golf Course Improvement Fund 70,000 150,000 60,000 14 H High - 2 Park Improvement Fund 50,000 100,000 60,000 122 M Med - 2 Riverview Park Improvements 0 15,000 0 18 H High - 12 Riverfront Stadium Improvement Fund 25,000 100,000 40,000 40,000 148 H High - 6 Sports Facilities Improvement Fund 30,000 100,000 20,000 H High - 12 Downtown Area Maintenance Bldg. 0 250,000 0 L Low Sportsplex Improvement Fund 0 30,000 0 19 L Low - 1 Tennis Improvements 0 7,500 0 184 H High - 8 Off Road Maintenance Equipment - Parks 100,000 265,000 40,000 113 H High - 9 Off Road Maintenance Equipment - Golf 78,000 238,000 50,000 115 H High - 11 Off Road Maintenance Equipment - DT 25,000 40,000 0 120 H High - 10 Off Road Maintenance Equip. Young Arena 0 25,000 0 39 H High - 5 Young Arena Improvements 40,000 100,000 60,000 60,000 119 H High - 3 Chemical Storage Building 0 35,000 15,000 111 H High - 7 DT Area Maint. Infrastructure Imp. & Rep. 10,000 35,000 0 38 L Low - 3 Equipment Storage Building 0 100,000 0 131 M Med - 1 Katoski Greenbelt Maintenance 5,000 5,000 0 29 H High-1 Ash Replacement Program 200,000 300,000 300,000 77 M Med - 4 Playground/Park Inspection and Software 3,000 25,000 0 L Low - 2 Security System for 1101 Campbell Ave 0 40,000 0 249 M Med - 3 Riverview Park Jetty Stabilization 0 60,000 0 i t>1 2O ST1 A r W.,. .Q,O lO Ninth Revision - 2018-2022 CIP Requests April 6 2017 Leis Ser 4/19/2017 12:0! EPQ7 of 486 1)." o Y - , riori .. !r , , G 1' q S CL A droved T. Taxable H High RFID Security Gates 0 0 0 H High DVDBIu Ray Theft Reduction 0 660,000 0 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Libr 4/19/2017 12:0PMIEP108 of 486 Projf ' 'riority 1'©>l>CG1 I Y O>I1' I2 u tie Approved `PIfF Taxable 114 H High - 7 LED Emergency Lightbars & Vehicle Equipment 50,000 25,000 20,000 116 H High - 2 Body Armor Replacement 10,000 15,000 10,000 117 M Med - 11 Weapon Replacement Program 10,000 15,000 0 H High - 8 Crowd Control Equipment 0 5,000 0 118 M Med - 10 Office Equipment and Furniture Replacement 0 10,000 0 158 H High - 4 Police Information System Program 142,550 145,500 100,000 159 H High - 5 In Car AudioNideo Cameras 35,000 25,000 20,000 160 M Med - 6 Radar Units 5,000 0 0 M Med - 12 Gas Masks 0 12,000 0 L Low - 13 Speed Trailer 0 7,500 0 129 L Low - 7 Police Training Center Upgrades 5,000 0 0 149 H High - 1 Tasers 10,000 25,000 20,000 140 M Med - 9 Police Department Improvements 8,000 15,000 0 H High - 6 Digital Evidence Mgt. System 0 50,000 30,000 195 L Low - 14 Body Cameras 5,000 5,000 0 241 H High - 3 Police Vehicle Impound Storage Bldg 5,000 150,000 80,000 :.W ...n.. , T tai Pnhce.....: 28s UI ..: , Q5,011� ,... $Oiifl . Ninth Revision - 2018-2022 CIP Requests April 6 2017 Police 4/19/2017 12:1 'al$3c9 of 486 >l�rv� Frio SIC '?� ' 1 � gWei ed prov d axahie R k , , 'rn �c ...: J 18 ands;..,,.. 56 H High -6 Traffic Signal Improvements 20,000 0 0 H High - 2 Traffic Signal Imp. - Adv. Traffic Mgt. System 0 40,000 40,000 130 H High -9 Street Light Improvements 10,000 30,000 25,000 163 H High - 7 LED Replacement Program 20,000 20,000 15,000 181 H High -5 Traffic Safety Improvement Projects 10,000 40,000 10,000 21 H High -12 Thermoplastic Pavement Markings 12,000 12,000 10,000 102 H High -10 Street Sign Fabrication Equipment & Software 15,000 25,000 10,000 212 H High - 15 Tower Park Street Light Improvements 0 60,000 0 213 H High - 8 Franklin Street Signal Replacement/Upgrades 30,000 60,000 0 214 H High Osage Rd & Dubuque Rd Traffic Safety Impr. 0 0 0 215 H High -6 Video Detection Cameras 20,000 60,000 20,000 217 M Med - 20 Lafayette St & Rhey St Signal Project 0 20,000 0 218 M Med - 19 W 6th St & Williston Ave Signal Project 0 20,000 0 219 M Med - 16 Conger/River Rd/Westfield Ave Signal Project 75,000 0 0 65 M Med - 21 Downing Ave & Wren Rd Signal Project 20,000 20,000 0 H High - 3 Traffic Signal Imp. - Ansborough & Downing Ave. 0 69,400 69,400 222 H High -1 Greenhill Rd & Progress Ave Traffic Signalization 0 260,000 40,000 242 M Med - 18 W 4th St & Hubbard Ave. Signal Project 0 20,000 0 244 H High - 4 Upgrading Controllers and Cabinets to Fiber Optics 20,000 80,000 20,000 H High - 11 Battery Back -Up Project 0 4,000 0 246 M Med - 17 Traffic Safety Improvement - Fletcher & Hwy 63 50,000 0 0 243 H High Traffic Safety Improvement - 5th & 6th St. Project 0 0 0 H High - 14 Traffic Safety Improvement - Utica & Harrison 0 200,000 0 245 H High - 13 Early Warning Sirens 0 40,000 10,100 m. : ... ,._ .. I tC , fey ..._ I iOOO 1nO 4 II a ; ..: ,., 4 Ninth Revision - 2018-2022 CIP Requests April 6 2017 Traffic 4/19/2017 12:1PageN0 of 486 Pi o� Prtonty ode- 0 ti: mexr FY 7 C [P Res kes ,pprove d .. ,.. Taxable,,; Burn s H High New Color Laser Printer 0 1,000 0 H High Vehicle Replacement -'08 Pick-Up 0 25,000 0 T©talCodi E 02e ►en , t ...: Al : ,w, ,p , �. Ninth Revision - 2018-2022 CIP Requests April 6 2017 Code Ent 4/19/2017 12:1PilteP2C41 of 486 Prof P`riork waste it anaear ,p fed IF Taxable H High Wing Dike/Diffuser 0 1,000,000 1,000,000 0 0 . » ....; .. , .,... , Tota3.,._.' o e EW.0144nik: 0 ,009,0 i0. , 0',,,.. f , . _. ..... 1`. Ninth Revision - 2018-2022 CIP Requests April 6 2017 Current Year Bond Issue Waste Mgr+3t1 7 12:2p A• EPaig2 of 486 CITY OF WATERLOO Council Communication General Obligation Bonds - GCP-3 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 11:30 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:40 AM SUBJECT: General Obligation Bonds - GCP-3 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-3 - Not to exceed $700,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted by: Submitted By: Michelle Weidner, Chief Financial Officer Recommended Action: Summary Statement: GCP-3 — Not to exceed $700,000 General Obligation Bonds (GCP-3) for general corporate purposes, the proceeds of which bonds will be used to pay the costs of Cultural and Art projects, including improvements and repairs at the Center for the Arts; the acquisition of vehicles for various city departments, including engineering and leisure services; equipping various city departments, including parks and leisure services; building and infrastructure improvements for public works, including the traffic control center; reconstruction, renovation, remodeling, improvement, equipping and repairing of various City buildings and facilities, including projects at new city facilities, costs of the structural and mechanical audit of city buildings, various ADA compliance improvements, golf course, public library, and swimming pool renovations and shall bear interest at a rate not exceeding the maximum specified in the attached notice. Please refer to the council communication attached to the ECP -2 hearing for additional information. Page 203 of 486 CITY OF WATERLOO Council Communication General Obligation Bonds - GCP-4 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 11:29 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:40 AM SUBJECT: General Obligation Bonds - GCP-4 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-4 - Not to exceed $700,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted by: Submitted By: Michelle Weidner, Chief Financial Officer Recommended Action: Summary Statement: GCP-4 — Not to exceed $700,000 General Obligation Bonds (GCP-4) for general corporate purposes, the proceeds of which bonds will be used to pay the costs of comprehensive plan updates; acquisition of City wide Information Services mapping equipment and software; and acquisition and installation of computers and related technology and business continuity programming and software for offsite backup disaster relief; website redevelopment; reconstruction, renovation and improvements to Sports Facility Improvement Fund; reconstruction renovation and improvements to public buildings and facilities, including chemical storage building improvements, police department vehicle impound storage building; acquisition of off-road maintenance equipment for the parks and golf course departments; and the construction, renovation and improvement of the airport parking lot and related equipment and shall bear interest at a rate not exceeding the maximum specified in the attached notice. Please refer to the council communication attached to the ECP -2 hearing for additional information. Page 204 of 486 CITY OF WATERLOO Council Communication General Obligation Bonds - GCP-5 - The issuance of not to exceed $500,000 General Obligation Bonds for general corporate purposes. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 11:30 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:41 AM SUBJECT: Submitted by: Recommended Action: Summary Statement: General Obligation Bonds - GCP-5 - The issuance of not to exceed $500,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-5 - Not to exceed $500,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer GCP-5 — Not to exceed $500,000 General Obligation Bonds (GCP-5) for general corporate purposes, the proceeds of which bonds will be used to provide funds to pay the costs of improvements to Young Arena, Riverfront Stadium, and reconstruction, renovation, remodeling, improvement, equipping and repairing of Downtown Parking Garages and shall bear interest at a rate not exceeding the maximum specified in the attached notice. Please refer to the council communication attached to the ECP -2 hearing for additional information. Page 205 of 486 CITY OF WATERLOO Council Communication General Obligation Bonds - GCP-6 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 11:29 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:41 AM SUBJECT: Submitted by: Recommended Action: Summary Statement: General Obligation Bonds - GCP-6 - The issuance of not to exceed $700,000 General Obligation Bonds for general corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of GCP-6 - Not to exceed $700,000 General Obligation Bonds for general corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted By: Michelle Weidner, Chief Financial Officer GCP-6 — Not to exceed $700,000 General Obligation Bonds (GCP-6) for general corporate purposes, the proceeds of which bonds will be used to pay the costs of the reconstruction, renovation, remodeling, improvement and equipping of the 5 Sullivan Brothers Convention Center and shall bear interest at a rate not exceeding the maximum specified in the attached notice. Please refer to the council communication attached to the ECP -2 hearing for additional information. Page 206 of 486 CITY OF WATERLOO Council Communication General Obligation Bonds - ECP/UR-7 - The issuance of not to exceed $3,000,000 General Obligation Bonds for essential corporate purposes. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 11:31 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 11:39 AM SUBJECT: General Obligation Bonds - ECP/UR-7 - The issuance of not to exceed $3,000,000 General Obligation Bonds for essential corporate purposes. Motion to receive and file proof of publication of notice of public hearing on the issuance of ECP/UR-7 - Not to exceed $3,000,000 General Obligation Bonds for essential corporate purposes. HOLD HEARING - No comments on file. Motion to close hearing and receive and file oral and written comments. Resolution to institute proceedings to take additional action of issuance of said bonds. Submitted by: Submitted By: Michelle Weidner, Chief Financial Officer ECP/UR-7 — Not to exceed $3,000,000 General Obligation Bonds (ECP/UR -7) for essential corporate purposes, the proceeds of which bonds will be used to provide funds to pay the costs of aiding in the planning, undertaking and carrying out of urban renewal projects under the authority of Chapter 403 and the Urban Renewal Plans for the Martin Road Recommended Action: Development Area, the Rath Area Redevelopment Area, and the East Waterloo Unified Urban Renewal and Redevelopment Area, such as those costs associated with the Chamberlain Project, land acquisitions, public infrastructure projects including streets, streetscape, and utility improvements, the downtown development plan, downtown acquisitions and demolition costs. Summary Statement: Please refer to the council communication attached to the ECP -2 hearing for additional information. Page 207 of 486 CITY OF WATERLOO Council Communication Resolution awarding bid in the amount of $119,016.50 to Pritchard Auto Company of Britt, Iowa for the purchase of one (1) 2017 service truck for the Sewer Department. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Traffic Operations Clerk Office SUBJECT: Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Background Information: Reviewer Even, LeAnn Even, LeAnn Action Approved Approved D ate 5/3/2017 - 1:58 PM 5/3/2017 - 1:59 PM Resolution awarding bid in the amount of $119,016.50 to Pritchard Auto Company of Britt, Iowa for the purchase of one (1) 2017 service truck for the Sewer Department. Submitted By: Sandie Greco, Interim Public Works Director Recommend Approval Service vehicle to provide mobile applications for maintenance operations both inside the plant operations as well as on -street requirements. Vehicle will provide full maintenance capability, with on -board systems including welding, crane, generator, air compressor as well as basic tool storage. $117,794.65 520-14-5200-2117 Department has been in need of a mobile maintenance vehicle to handle maintenance requirements within plant and on -road applications such as lift stations, etc. This expense was identified and budgeted for in the current Department Operations Budget. Page 208 of 486 CITY OF WATERLOO Council Communication Resolution awarding bid in the amount of $29,802 to Bill Colwell Ford of Hudson, Iowa for one (1) 2017 cargo van for the Traffic Operations Department. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Traffic Operations SUBJECT: Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Background Information: Reviewer Even, LeAnn Action Approved D ate 5/3/2017 - 2:01 PM Resolution awarding bid in the amount of $29,802 to Bill Colwell Ford of Hudson, Iowa for one (1) 2017 cargo van for the Traffic Operations Department. Submitted By: Sandie Greco, Interim Public Works Director Recommend Approval The purchase of one new cargo van for the Traffic Operations Department is a replacement for the 1995 cargo van presently being used for on -street traffic control configuration and programming Replacement of this van was programmed in the 2017 Capital Improvement Plan. $29,802.00 GO Bond Due to overall condition, age, mileage and corrosion issues, recommend replacement as per the equipment replacement plan. Page 209 of 486 CITY OF WATERLOO Council Communication Resolution awarding bid in the amount of $231,250 to Cedar Rapids Truck Center, Inc. of Cedar Rapids, Iowa for the purchase of one (1) automated side load garbage truck. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Traffic Operations SUBJECT: Submitted by: Recommended Action: Expenditure Required: Source of Funds: Policy Issue: Reviewer Even, LeAnn Action Approved D ate 5/3/2017 - 2:00 PM Resolution awarding bid in the amount of $231,250 to Cedar Rapids Truck Center, Inc. of Cedar Rapids, Iowa for the purchase of one (1) automated side load garbage truck. Submitted By: Sandie Greco, Interim Public Works Director Recommend Approval $231,250.00 Operating Budget: 525-15-5400-2117 The Sanitation Department purchase one (1) automated truck annually (20%) of route fleet. Life expectancy of a route truck is 5 - 7 years. Route trucks, once replaced, continue to be utilized (up to 5 additional years) to perform curbside recycle, curbside yard waste and extended yard waste pickup. Page 210 of 486 CITY OF WATERLOO Council Communication Motion approving final quantity adjustment for a net decrease of $90 for the FY 2017 Tree Clearing - City Composting Site, Contract No. 927 and authorize the Mayor and City Clerk to execute said document. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Engineering Thorson, Eric Approved 5/3/2017 - 9:53 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:56 PM SUBJECT: Submitted by: Summary Statement: Source of Funds: Motion approving final quantity adjustment for a net decrease of $90 for the FY 2017 Tree Clearing - City Composting Site, Contract No. 927 and authorize the Mayor and City Clerk to execute said document. Submitted By: Dennis Gentz, PE, Assistant City Engineer This is the accumulated amount of adjustments from original to final quantities that were determined necessary during the construction of the project, which results in a decrease to the total project cost. Sanitation Funds Page 211 of 486 CITY OF WATERLOO Council Communication Resolution approving Completion of Project and Recommendation of Acceptance of Work performed by AIA Sandblasting, Marion, Iowa, at a total cost of $63,929.50 in conjunction with the FY 2017 Byrnes and Gates Pool Painting Project, Contract No. 923. City Council Meeting: 5/8/2017 Prepared: 5/2/2017 REVIEWERS: Department Leisure Services Clerk Office SUBJECT: Submitted by: Recommended Action: Summary Statement: Reviewer Huting, Paul Even, LeAnn Action Approved Approved D ate 5/2/2017 - 3:20 PM 5/3/2017 - 9:54 AM Resolution approving Completion of Project and Recommendation of Acceptance of Work performed by AIA Sandblasting, Marion, Iowa, at a total cost of $63,929.50 in conjunction with the FY 2017 Byrnes and Gates Pool Painting Project, Contract No. 923. Submitted By: Travis Nichols, Facilities/Project Manager, Leisure Services It is recommended that the project be accepted and that Council approve the "Statement of Completion and Final Acceptance of Work". I report that AlA Sandblasting of Marion, Iowa has completed the above referenced project in accordance with the plans and specifications. Page 212 of 486 CITY OF WATERLOO Council Communication Resolution approving Completion of Project and Recommendation of Acceptance of Work for work performed by Wapsi Pines Lawn Care & Landscaping, of Cedar Falls, Iowa, at a total cost of $17,060 for the FY 2017 Tree Clearing - City Composting Site, Contract No. 927. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Engineering Engineering Engineering Clerk Office SUBJECT: Submitted by: Summary Statement: Source of Funds: Reviewer Gentz, Dennis Ross, Tracia Thorson, Eric Even, LeAnn Action Rej ected Approved Approved Approved D ate 5/3/2017 - 9:24 AM 5/3/2017 - 9:28 AM 5/3/2017 - 9:55 AM 5/3/2017 - 10:00 AM Resolution approving Completion of Project and Recommendation of Acceptance of Work for work performed by Wapsi Pines Lawn Care & Landscaping, of Cedar Falls, Iowa, at a total cost of $17,060 for the FY 2017 Tree Clearing - City Composting Site, Contract No. 927. Submitted By: Eric Thorson, PE, City Engineer Wapsi Pines Lawn Care & Landscaping has completed the above referenced project in accordance with the plans and specifications. Sanitation Funds Page 213 of 486 CITY OF WATERLOO Council Communication Resolution approving contract with the Cedar Valley Jaycees for the 84th Annual Greater Cedar Valley Jaycees Waterloo Open Golf Classic, with a rental payment to the City in the amount of $3,000, and authorize Mayor and City Clerk to execute said documents. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Leisure Services Huting, Paul Approved 5/3/2017 - 9:16 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 9:51 AM ATTACHMENTS: Description Type D 2017 Waterloo Open Contract Cover Memo SUBJECT: Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Policy Issue: Alternative: Background Information: Resolution approving contract with the Cedar Valley Jaycees for the 84th Annual Greater Cedar Valley Jaycees Waterloo Open Golf Classic, with a rental payment to the City in the amount of $3,000, and authorize Mayor and City Clerk to execute said documents. Submitted By: JB Bolger, Golf & Downtown Area Maintenance Manager Request Council approve contract with the Cedar Valley Jaycees including full and partial day golf course rental from July 19, 2017 to July 23, 2017 with rental payment to the City in the amount of $3,000.00. The Waterloo Open is the largest and longest running professional golf tournament in the state of Iowa. This is the 84th annual tournament. N/A N/A N/A N/A Details of the contract including rental payment has remained the same for a number of years. The Greater Cedar Valley Jaycees are excellent partners to work with and support a number of charitable causes in the Cedar Valley including youth golf initiatives. Page 214 of 486 LEISURE SERVICES CONTRACTED GOLF COURSE RENTAL CONTRACT This Agreement is made and entered into this, day of , 2017, by and between the City of Waterloo, by and through the Waterloo Leisure Services Commission (hereinafter "Lessor"), and Cedar Valley Jaycees (hereinafter "Lessee") for and in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledge. The terms of this Agreement are as follows: 1. TERMS AND PREMISES. Lessor agrees to permit Lessee to use Iry Warren, Gates Park & South Hills beginning on the 19th day of July, 2017, and ending on the 23rd day of July, 2017. 2. RATES AND OTHER NEEDS. The Lessee agrees to pay Lessor and facilities within ten (10) working days of being billed according to the following rates: RENTING OF THE GOLF COURSE: $3,000.00 for the following times: South Hills July 19, 6:OOpm— 8:30pm (Driving Range, Putting Green Only- Youth Clinic) Iry Warren July 20, All Day Gates/South Hills July 21, 7:00 AM — 2:00 PM Iry Warren July 21, All Day Gates/South Hills July 22, 7:00 AM — 2:00 PM Iry Warren July 22, All Day Iry Warren July 23, All Day Contact Person: Jim Miller- Chairman Phone Number: 319-486-0688 3. MOTORIZED GOLF CARTS The lessee shall have the right to restrict the use of motorized golf carts on the golf courses during the hours of the tournament. 4. SCHEDULING A. It is further agreed that any dates, times, and rates, in addition to the above, must be negotiated with Lessor and reduced to writing prior to its effectiveness B. If for any reason Lessor deems it necessary to close any or all of the City Courses, either temporarily or permanently, Lessor will not assume nor be responsible for any Page 215 of 486 loss, financial or otherwise, incurred by any organization including Lessee, utilizing City Courses on a regular, contractual, or other basis resulting from said closure of the facility. This disclaimer shall further notify all Lessees, users, and/or parties' agreement that Lessor shall not be liable for any consequential damages resulting from the closure of City Courses for any reason. 5. INSURANCE AND BONDS A. The Cedar Valley Jaycees, at their own expense, procure and maintain casualty and liability insurance with a responsible company/companies who is/are authorized to do business in the State of Iowa in the amounts not less than One Million Dollars ($1,000,000.00). At the beginning of the Waterloo Open, the Cedar Valley Jaycees shall provide the Leisure Services Director and City's Insurance Coordinator with proof of such insurance coverage. B. The Leisure Services Commission and City shall be listed as additional named insureds on the insurance policies the Jaycees is required to maintain. Furthermore, Cedar Valley Jaycees agrees to indemnify and hold harmless the Leisure Services Commission and City from any and all bodily injury to or death of any person or persons, or any damage to any property occasioned by any act, omission, neglect, or wrong -doing of Cedar Valley Jaycees under this Agreement. Cedar Valley Jaycees further agrees to defend and protect the Leisure Services Commission and City against any and all claims and demands occasioned by this Agreement. The foregoing insurance policies shall not be canceled or otherwise altered in any way without at least thirty (30) days written notice, which is either hand delivered or mailed to the Leisure Services Director by registered mail, return receipt requested. IN WITNESS WHEREOF, we have hereunto set our hands this, day of STATE OF IOWA ) BLACK HAWK COUNTY ) ss. LESSEE By: By: On this day of , 2017, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared , to me known to be the identical persons named in and who executed the Page 216 of 486 foregoing instrument and acknowledged that they executed the same as their voluntary act and deed. ATTEST: Kelley Felchle, City Clerk STATE OF IOWA ) BLACK HAWK COUNTY ) ss. Notary Public in and for the State of Iowa CITY OF WATERLOO, IOWA By: Quentin M. Hart, Mayor On this day of , 2017 , before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Quentin M. Hart and Kelley Felchle, to me personally known, and who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Waterloo, Iowa; that the seal affixed to the foregoing instrument is the corporate seal of the corporation, and that the instrument was signed and sealed on behalf of the corporation by authority of its City Council and that Quentin M. Hart and Kelley Felchle acknowledged the execution of the instrument to be their voluntary act deed and the voluntary act and deed of the corporation, by it voluntary executed. Notary Public in and for the State of Iowa Page 217 of 486 CITY OF WATERLOO Council Communication Resolution approving Special Construction Proposal with CenturyLink in the amount of $27,511.77 for relocating cross box to alleviate conflict with reconfigured driveway access to Center for the Arts parking lot and to accommodate truck traffic for the Single Speed Brewery.? City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Engineering Thorson, Eric Approved 5/3/2017 - 11:42 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:48 PM SUBJECT: Submitted by: Summary Statement: Expenditure Required: Resolution approving Special Construction agreement with CenturyLink in the amount of $27,511.77 for relocating a cross box to alleviate conflict with reconfigured driveway access to Center for the Arts parking lot and to accommodate truck traffic for the Single Speed Brewery. Submitted By: Eric Thorson, PE, City Engineer This cross box needs to be relocated to alleviate conflict with reconfigured driveway access to Center for the Arts parking lot to accommodate truck movements for Single Speed Brewery. $27,511.77 Source of Funds: GO Bonds Page 218 of 486 CITY OF WATERLOO Council Communication Resolution directing the advertisement for sale of $9,245,000 General Obligation Bonds, Series 2017A; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 12:39 PM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:49 PM ATTACHMENTS: Description Type ❑ Council Comm Direct Sale 2017A Cover Memo ❑ 17ABC Waterloo GO TE TAX UR DRAFT OS Backup Material SUBJECT: Resolution directing the advertisement for sale of $9,245,000 General Obligation Bonds, Series 2017A; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Submitted by: Submitted By: Michelle Weidner, Chief Financial Officer Summary Statement: We are planning to sell $6,400,000 in general obligation bonds for a number of general purposes and $2,845,000 in general obligation bonds to refund the Series 2009A issue. Series 2017A will be federally tax-exempt for bondholders. The par amounts for each series are subject to adjustment according to the terms of the offerings. Final sale amounts may be different depending on the bid prices received at the sale. Page 219 of 486 Mayor QUENTIN HART COUNCIL MEMBERS TOM POWERS Ward 1 BRUCE JACOBS Ward 2 PATRICK MORRISSEY Ward 3 JEROME AMOS, JR. Ward 4 RON WELPER Ward 5 TOM LIND At -Large STEVE SCHMITT At -Large it;HITY OF WATERLOO, IOWA City Clerk and Finance Department 715 Mulberry St. • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571 KELLEY FELCI ILE", • City Clerk MICHELLE WEIDNER, CPA • Chief financial Officer Council Communication City Council Meeting: Prepared: Dept. Head Signature: Number of Attachments: May 8, 2017 May 3, 2017 ;rr1,44"-aA-- G14 None SUBJECT: FYE2017 Bond Issue - Direction to Advertise Sale of $9,245,000 General Obligation Bonds, Series 2017A Submitted by: Michelle Weidner, Chief Financial Officer Recommended City Council Actions: Adopt a Resolution directing the advertisement for sale of $9,245,000 General Obligation Bonds, Series 2017A; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Summary Statement: We are planning to sell $6,400,000 in general obligation bonds for a number of general purposes and $2,845,000 in refunding general obligation bonds. Series 2017A will be tax-exempt for bondholders. The par amounts for each series are subject to adjustment according to the terms of the offerings. Final sale amounts may be different depending on the bid prices received at the sale. Expenditure Required: Source of Funds: Policy Issue: Alternative: See council communication for hearings. See council communication for hearings. See council communication for hearings. See council communication for hearings. Background Information: See council communication for hearings. WE'RE WORKING FOR YOU! An Equal Opportunity/Affirmative Action Employer Page 220 of 486 New Issue Investment Rating: Date of Sale: Wednesday, May 17, 2017 (Alternative Bid Methods) Moody's Investors Service ... Series 2017A 10:00 - 10:30 A.M., C.D.T. (Internet) 10:30 A.M., C.D.T. (Sealed Bids) (Rating Requested) Series 2017B (Taxable) 10:30 - 11:00 A.M., C.D.T. (Internet) 11:00 A.M., C.D.T. (Sealed Bids) Series 2017C (Taxable) 11:00 — 11:30 A.M., C.D.T. (Internet) 11:30 A.M. C.D.T. (Sealed Bids) Official Statement Assuming compliance by the City with certain covenants, in the opinion of Ahlers & Cooney, P.C., Bond Counsel, under present laws, interest on the Tax - Exempt Bonds is excludable from gross income of the owners thereof for federal income tax purposes; and is not an item of tax preference in computing the federal alternative minimum tax for individuals and corporations; however, with respect to corporations, such interest is included in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. The Tax -Exempt Bonds will be designated "qualified tax exempt obligations" by the City. See "TAX MATTERS — TAX-EXEMPT BONDS (SERIES 2017A)" herein. Interest on the Taxable Bonds is includable in gross income of the owners thereof for purposes of federal income taxation. See "TAXABILITY OF INTEREST — TAXABLE BONDS (SERIES 2017B AND SERIES 2017C)" herein. Interest on the Tax -Exempt Bonds and the Series 2017B Bonds are not exempt from present Iowa income taxes. In the opinion of Bond Counsel, the interest to be paid on the Series 2017C Bonds is excluded from gross income for State of Iowa income tax purposes to the extent discussed under the heading "TAXABILITY OF INTEREST — TAXABLE BONDS (SERIES 2017B AND SERIES 2017C)" herein. CITY OF WATERLOO Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C (State of Iowa Tax -Exempt) Dated Date of Delivery Bank Qualified Tax -Exempt Bonds (Series 2017A) Book -Entry Due as Described Herein The $9,245,000* General Obligation Bonds, Series 2017A (the "Tax -Exempt Bonds" or the "Series 2017A Bonds"); the $3,600,000* Taxable General Obligation Bonds, Series 2017B (the "Series 2017B Bonds"); and the $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C (the "Series 2017C Bonds" and, collectively with the Series 2017B Bonds the "Taxable Bonds") are being issued by the City of Waterloo, Black Hawk County, Iowa (the "City"). The Tax -Exempt Bonds and the Taxable Bonds are collectively referred to herein as the "Bonds". Interest is payable semiannually on June 1 and December 1 of each year, commencing December 1, 2017. Interest is calculated based on a 360 -day year of twelve 30 -day months. The Bonds will be issued using a book -entry system. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature in the years and amounts set forth herein. OPTIONAL REDEMPTION The Bonds due June 1, 2018 - 2025, inclusive, are not subject to optional redemption prior to maturity. The Tax -Exempt Bonds and Series 2017B Bonds due June 1, 2026 - 2032, inclusive, and the Series 2017C Bonds due June 1, 2026 - 2036, inclusive, are subject to optional redemption prior to maturity in whole or in part on any date on or after June 1, 2025 at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in any series and any order of maturity as determined by the City and within any maturity by lot. See "OPTIONAL REDEMPTION" herein. PURPOSE, LEGALITY AND SECURITY The Bond proceeds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements, equipment and vehicle acquisitions; (ii) currently refund the City's outstanding General Obligation Bonds, Series 2009A (Taxable Build America Bonds); (iii) provide funds to pay the costs of aiding in the planning, undertaking and carrying out of urban renewal projects; and (iv) pay the costs of issuance of the Bonds. See "THE PLAN OF FINANCING" herein. In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. This Official Statement is dated May , 2017, and has been prepared under the authority of the City. An electronic copy of this Official Statement is available from the www.speerfinancial.com web site under "Official Statement Sales Calendar". Additional copies may be obtained from Ms. Kelley Felchle, City Clerk, City of Waterloo, 715 Mulberry Street, Waterloo, Iowa, 50703, or from the Registered Municipal Advisors to the City. lijr INDEPENDENT MUNICIPAL ADVISORS • ESTABLISHED 1954 ONE NORTH LASALLE STREET, SUITE 4100 • CHICAGO, ILLINOIS 60602 Telephone: (312)3463700; Facsimile: (312) 346-8833 531 COMMERCIAL STREET, SINGE 608 • WATERLOO, IOWA 50701 Telephone: (319) 291-2077; Peeehwle: (319) 291-8628 w,nw. pew mnud.row Speer Financial, Inc. *Subject to principal adjustment in accordance with the Official Terms of Offering. (1) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth on the cover of this Official Statement. 1s W ELL Il Fd c4O6 For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time (collectively, the "Official Statement"), may be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date hereof (or the date of any such supplement or correction) by the City. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. Any such addendum or addenda shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. Alternatively, such final terms of the Bonds and other information may be included in a separate document entitled "Final Official Statement" rather than through supplementing the Official Statement by an addendum or addenda. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATES THEREOF. References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful. Page 222 of 486 TABLE OF CONTENTS Page BOND ISSUE SUMMARY 1 $9,245,000* GENERAL OBLIGATION BONDS, SERIES 2017A 2 $3,600,000* TAXABLE GENERAL OBLIGATION BONDS, SERIES 2017B 3 $8,100,000* TAXABLE GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2017C 4 BONDHOLDERS' RISKS 5 Secondary Market 5 Ratings Loss 5 Forward -Looking Statements 6 Tax Matters, Bank Qualification and Loss of Tax Exemption 6 DTC -Beneficial Owners 6 Continuing Disclosure 7 Suitability of Investment 7 Bankruptcy 7 Federal Tax Legislation 7 Tax Levy Procedures 8 Other Factors 8 THE CITY 8 City Organization and Services 8 Community Life 9 Education 9 Transportation 9 Recent Economic Development 10 SOCIOECONOMIC INFORMATION 12 Population 12 Employment 13 Building Permits 14 Housing 15 Income 15 Agriculture 16 Local Option Sales Tax 16 Retail Sales 17 PLAN OF FINANCING 18 DEBT INFORMATION 20 PROPERTY ASSESSMENT AND TAX INFORMATION 24 Property Tax Assessment 24 Property Tax Collection 24 Levy Limits 26 Tax Levy Procedures 27 Utility Property Tax Replacement 27 Tax Increment Financing 28 Legislation 28 FINANCIAL INFORMATION 30 Financial Reports 30 No Consent or Updated Information Requested of the Auditor 30 Summary Financial Information 30 EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS 34 Pensions 34 Other Post -Employment Benefits (OPEB) 36 REGISTRATION, TRANSFER AND EXCHANGE 36 TAX MATTERS — TAX-EXEMPT BONDS (SERIES 2017A) 37 Tax Exemption 37 Qualified Tax -Exempt Obligations 37 Page 223 of 486 Tax Accounting Treatment of Discount and Premium on Certain Bonds 38 Other Tax Advice 38 Audits 38 Reporting and Withholding 38 Tax Legislation 39 Enforcement 39 Opinion 39 TAXABILITY OF INTEREST — TAXABLE BONDS (SERIES 2017B AND SERIES 2017C) 40 General 40 Interest Income Taxable 40 State of Iowa Tax Exemption (Series 2017C Bonds Only) 40 Sale, Exchange, or Other Disposition 40 Backup Withholding and Information Reporting 41 Enforcement 41 Opinions 41 CONTINUING DISCLOSURE 42 OPTIONAL REDEMPTION 42 LITIGATION 42 LEGAL MATTERS 43 OFFICIAL STATEMENT AUTHORIZATION 43 INVESTMENT RATING 44 UNDERWRITING 44 MUNICIPAL ADVISOR 45 CERTIFICATION 45 APPENDIX A -FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS APPENDIX B -DESCRIBING BOOK -ENTRY -ONLY ISSUANCE APPENDIX C -DRAFT FORMS OF LEGAL OPINIONS APPENDIX D -DRAFT FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORMS OFFICIAL TERMS OF OFFERINGS Page 224 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Official Statement, including the Official Terms of Offering and the Official Bid Forms, which are provided for the convenience of potential investors and which should be reviewed in their entirety by potential investors. The following descriptions apply equally to the Bonds. Other terms specific to each series are provided separately herein. Issuer: Dated Date: Interest Due: Authorization: Security: Investment Rating: Bond Registrar/Paying Agent: Delivery: Book -Entry Form: Denomination: Municipal Advisor: City of Waterloo, Black Hawk County, Iowa. Date of delivery (expected to be on or about June 20, 2017). Each June 1 and December 1, commencing December 1, 2017. The Bonds are being issued pursuant to authority established in Code of Iowa, Chapters 384 and 403, and all laws amendatory thereof and supplementary thereto, and in conformity with resolutions of the City Council duly passed and approved. The Bonds are valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property therein without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. An investment rating for the Bonds has been requested from Moody's Investors Service, New York, New York. See "INVESTMENT RATING" herein. Bankers Trust Company, Des Moines, Iowa. The Bonds are expected to be delivered on or about June 20, 2017. The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein. $5,000 or integral multiples thereof. Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois. 1 Page 225 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C $9,245,000* GENERAL OBLIGATION BONDS, SERIES 2017A AMOUNTS*, MATURITIES, INTEREST RATES, PRICE OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount June 1 Rate Yield NUMBER(1) Amount June 1 Rate Yield NUMBER(1) $1,090,000 2018 % % $390,000 2026 % % 795,000 2019 % % 405,000 2027 % % 795,000 2020 % % 415,000 2028 % % 810,000 2021 % % 425,000 2029 % % 815,000 2022 % % 440,000 2030 % % 770,000 2023 % % 455,000 2031 % % 785,000 2024 % % 475,000 2032 % % 380,000 2025 % % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Issue: $9,245,000* General Obligation Bonds, Series 2017A. Principal Due: Serially each June 1, commencing June 1, 2018 through 2032, as detailed above. Optional Redemption: The Tax -Exempt Bonds maturing on or after June 1, 2026, are callable at the option of the City on any date on or after June 1, 2025, at a price of par plus accrued interest. See "OPTIONAL REDEMPTION" herein. Purpose: Tax Matters: Bank Qualified: The proceeds of the Tax -Exempt Bonds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements, equipment and vehicle acquisitions, and urban renewal projects in the City; (ii) currently refund the City's outstanding General Obligation Bonds, Series 2009A (Taxable Build America Bonds); and (iii) pay the costs of issuance of the Bonds. See "PLAN OF FINANCING" herein. Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Tax -Exempt Bonds as discussed under "TAX MATTERS — TAX-EXEMPT BONDS" in this Official Statement. Interest on the Tax -Exempt Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Tax -Exempt Bonds. The City intends to designate the Tax -Exempt Bonds as "qualified tax-exempt obligations". *Subject to principal adjustment in accordance with the Official Terms of Offering. (1) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill Financial Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to their con-ectness on the Bonds or as set forth above. 2 Page 226 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C $3,600,000* TAXABLE GENERAL OBLIGATION BONDS, SERIES 2017B AMOUNTS*, MATURITIES, INTEREST RATES, PRICE OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount June 1 Rate Yield NUMBER(1) Amount June 1 Rate Yield NUMBER(1) $210,000 2018 % % $240,000 2026 % % 210,000 2019 % % 245,000 2027 % % 210,000 2020 % % 255,000 2028 % % 215,000 2021 % % 265,000 2029 % % 220,000 2022 % % 270,000 2030 % % 225,000 2023 % % 280,000 2031 % % 230,000 2024 % % 290,000 2032 % % 235,000 2025 % % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Issue: $3,600,000* Taxable General Obligation Bonds, Series 2017B. Principal Due: Serially each June 1, commencing June 1, 2018 through 2032, as detailed above. Optional Redemption: The Series 2017B Bonds maturing on or after June 1, 2026, are callable at the option of the City on any date on or after June 1, 2025, at a price of par plus accrued interest. See "OPTIONAL REDEMPTION" herein. Purpose: Tax Matters: The proceeds of the Series 2017B Bonds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements, equipment and vehicle acquisitions, and urban renewal projects in the City; and (ii) pay the costs of issuance of the Series 2017B Bonds. See "PLAN OF FINANCING" herein. The interest to be paid on the Series 2017B Bonds is subject to federal and Iowa state income taxes as discussed under "TAXABILITY OF INTEREST — TAXABLE BONDS (SERIES 2017B AND 2017C)" in this Official Statement. See APPENDIX C for a draft form of legal opinion for the Series 2017B Bonds. *Subject to principal adjustment in accordance with the Official Terms of Offering. (1) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill Financial Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth above. 3 Page 227 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C $8,100,000* TAXABLE GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2017C (State of Iowa Tax Exempt) AMOUNTS*, MATURITIES, INTEREST RATES, PRICE OR YIELDS AND CUSIP NUMBERS Principal Interest Price or CUSIP Principal Interest Price or CUSIP Amount Due Rate Yield NUMBER(1) Amount Due Rate Yield NUMBER(1) $180,000 12/1/17 % % $165,000 6/1/18 % % 165,000 12/1/18 % % 170,000 6/1/19 % % 170,000 12/1/19 % % 175,000 6/1/20 % % 175,000 12/1/20 % % 175,000 6/1/21 % % 180,000 12/1/21 % % 180,000 6/1/22 % % 185,000 12/1/22 % % 185,000 6/1/23 % % 190,000 12/1/23 % % 195,000 6/1/24 % % 195,000 12/1/24 % % 200,000 6/1/25 % % 205,000 12/1/25 % % 205,000 6/1/26 % % 210,000 12/1/26 % % 215,000 6/1/27 % % 220,000 12/1/27 % % 220,000 6/1/28 % % 225,000 12/1/28 % % 230,000 6/1/29 % % 235,000 12/1/29 % % 240,000 6/1/30 % % 245,000 12/1/30 % % 250,000 6/1/31 % % 255,000 12/1/31 % % 260,000 6/1/32 % % 265,000 12/1/32 % % 275,000 6/1/33 % % 280,000 12/1/33 % % 285,000 6/1/34 % % 290,000 12/1/34 % % 300,000 6/1/35 % % 305,000 12/1/35 % % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Issue: $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C. Principal Due: December 1 and June 1, commencing December 1, 2017 through December 1, 2035, as detailed above. Optional Redemption: Purpose: Tax Matters: The Series 2017C Bonds maturing on or after June 1, 2026, are callable at the option of the City on any date on or after June 1, 2025, at a price of par plus accrued interest. See "OPTIONAL REDEMPTION" herein. The proceeds of the Series 2017C Bonds will be used to: (i) provide funds to pay the costs of aiding in the planning, undertaking and carrying out of urban renewal projects; and (ii) pay the costs of issuance of the Series 2017C Bonds. See "PLAN OF FINANCING" herein. The interest to be paid on the Series 2017C Bonds is subject to federal income taxes as discussed under "TAXABILITY OF INTEREST - TAXABLE BONDS (SERIES 2017B AND SERIES 2017C)" in this Official Statement. In the opinion of Bond Counsel, the interest to be paid on the Series 2017C Bonds is excluded from gross income for State of Iowa income tax purposes to the extent discussed under "TAXABILITY OF INTEREST - TAXABLE BONDS (SERIES 2017B AND SERIES 2017C)" herein. See APPENDIX C for a draft form of legal opinion for the Series 2017C Bonds. *Subject to principal adjustment in accordance with the Official Terms of Offering. (I) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill Financial Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth above. 4 Page 228 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Jerome Amos, Jr. Patrick Morrissey CITY OF WATERLOO Black Hawk County, Iowa Quentin M. Hart Mayor Council Members Bruce Jacobs Tom Powers Ron Welper Officials Tom Lind Steven J. Schmitt Kelley Felchle Michelle Weidner, CPA David R. Zellhoefer, Esq. City Clerk Chief Financial Officer City Attorney BONDHOLDERS' RISKS Secondary Market There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history of economic prospects connected with a particular issue, and secondary marketing practices in connection with a particular bond or note issue are suspended or terminated. Additionally, prices of bond or note issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price of the Bonds. Ratings Loss Moody's Investors Service, Inc. ("Moody's") has assigned a rating of " " to the Bonds. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that the rating will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Moody's, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds. Additional regulation of rating agencies could materially alter the methodology, rating levels, and types of ratings available, and these changes, if ever imposed, could materially affect the market value of the Bonds. 5 Page 229 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Forward -Looking Statements This Official Statement contains statements relating to future results that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When used in this Official Statement, the words "estimate," "forecast," "intend," "expect" and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and the actual results. These differences could be material and could impact the availability of funds of the City to pay debt service when due on the Bonds. Tax Matters, Bank Qualification and Loss of Tax Exemption As discussed under the heading "TAX MATTERS" herein, the interest on the Tax -Exempt Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Tax -Exempt Bonds, as a result of acts or omissions of the City in violation of its covenants in the Resolution. Should such an event of taxability occur, the Tax -Exempt Bonds would not be subject to a special prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Tax -Exempt Bonds, and there is no provision for an adjustment of the interest rate on the Tax -Exempt Bonds. The City intends to designate the Tax -Exempt Bonds as "qualified tax-exempt obligations" under the exception provided in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City has further covenanted to comply with certain other requirements, which affords banks and certain other financial institutions more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2) of the Code. Actions, or inactions, by the City in violation of its covenants could affect the designation, which could also affect the pricing and marketability of the Tax -Exempt Bonds. It is possible that legislation will be proposed or introduced that could result in changes in the way that tax exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchasers should consult with their own tax advisors regarding any pending or proposed federal income tax legislation. The likelihood of any pending or future legislation being enacted or whether the currently proposed terms of any pending legislation will be altered or removed during the legislative process cannot be reliably predicted. It is also possible that actions of the City after the closing of the Tax -Exempt Bonds will alter the tax status of the Tax -Exempt Bonds, and, in the extreme, remove the tax exempt status from the Tax -Exempt Bonds. In that instance, the Tax -Exempt Bonds are not subject to mandatory prepayment, and the interest rate on the Tax -Exempt Bonds does not increase or otherwise reset. A determination of taxability on the Tax -Exempt Bonds, after closing of the Tax -Exempt Bonds, could materially adversely affect the value and marketability of the Tax -Exempt Bonds. DTC -Beneficial Owners Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the City nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. 6 Page 230 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See APPENDIX B — Describing Book -Entry Only Issuance. Continuing Disclosure A failure by the City to comply with the continuing disclosure (see "CONTINUING DISCLOSURE" herein) will not constitute an event of default on the Bonds. Any such failure must be reported in accordance with Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and may adversely affect the transferability and liquidity of the Bonds and their market price. Suitability of Investment The interest rate borne by the Bonds is intended to compensate the investor for assuming the risk of investing in the Bonds. Each prospective investor should carefully examine this Official Statement and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Bonds are an appropriate investment for such investor. Bankruptcy The rights and remedies of the Bondholders may be limited by and are subject to the provisions of federal bankruptcy laws, to other laws or equitable principles that may affect the enforcement of creditors' rights, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against local governments. The various opinions of counsel to be delivered with respect to the Bonds will be similarly qualified. Federal Tax Legislation From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals pending in Congress that could, if enacted, alter or amend one or more of the federal tax matters described herein in certain respects or would adversely affect the market value of the Tax -Exempt Bonds or otherwise prevent holders of the Tax -Exempt Bonds from realizing the full benefit of the tax exemption of interest on the Tax -Exempt Bonds. Further such proposals may impact the marketability or market value of the Tax -Exempt Bonds simply by being proposed. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted and there can be no assurance that such proposals will not apply to the Tax -Exempt Bonds. In addition regulatory actions are from time to time announced or proposed, and litigation threatened or commenced, which if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Tax -Exempt Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Tax -Exempt Bonds would be impacted thereby. 7 Page 231 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Tax Levy Procedures The Bonds are general obligations of the City, payable from and secured by a continuing ad valorem tax levied against all of the taxable property valuation within the City. See "PROPERTY TAX INFORMATION" herein for more details. As part of the budgetary process each fiscal year, the City will have an obligation to request a debt service levy to be applied against all of the taxable property within the City. A failure on the part of the City to make a timely levy request or a levy request by the City that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. Other Factors An investment in the Bonds involves an element of risk. The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investment decision, potential investors should become thoroughly familiar with this entire Official Statement and the Appendices hereto. THE CITY The City of Waterloo, Iowa (the "City") is located in Northeastern Iowa. The City is the fifth largest city in the State of Iowa (the "State") according to the 2010 U.S. Census population. The City and the neighboring City of Cedar Falls are the primary urban centers in the region and in Black Hawk County (the "County"). The current land area of the City is almost 66 square miles. As of the 2010 Census, the City represented approximately 52% and Cedar Falls 30% of the County's population. According to the 2010 U.S. Census, the population of the City was 68,406. City Organization and Services The City was incorporated in 1868 and is the County Seat of Black Hawk County. The City is governed by a Mayor and a seven -member Council, of which five members are elected from five wards and two members are elected at large. City Council members are elected to staggered four-year terms. The Mayor is elected to a two-year term. The City Clerk is appointed by the City Council for a two-year term. The City employs approximately 534 full-time equivalent employees, including 125 sworn police officers and 110 firefighters. Various City employees are members of seven collective bargaining units. The Communications Workers of America represents City library staff, Teamsters Local 238A represents secretarial and clerical employees, the Police Protective Association represents police officers, the International Association of Fire Fighters Local 66 represents the fire department, and the Laborers International Union Local No. 353 represents street, sewer and technician/inspection positions. The AFSCME represents two groups; police lieutenants and code enforcement officers and certain professional positions including engineers and planners. New contracts for all seven units were signed in the winter of 2015 for a three year term that will expire June 30, 2019. The Fire Department has 30 fire trucks and special vehicles and operates out of six stations. City government and services are administered from City Hall. The City owns and operates the water works system and the sewage collection and secondary treatment system. The Water Works is organized as a separate entity, managed by a board of trustees appointed by the Mayor and the City Council. 8 Page 232 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Community Life The City's 53 neighborhood parks provide a diversified recreation program. Other recreation facilities include two Olympic sized swimming pools, one baseball stadium, one softball complex, 23 softball diamonds, eight baseball diamonds, 27 tennis courts and an Olympic size ice arena, as well as a 115 acre soccer complex, a skatepark and a dog park. There are five 18 -hole golf courses, three of which are owned and operated by the City. The Waterloo Symphony Orchestra and local professional baseball and hockey teams provide cultural and sports entertainment in the City. The Cedar Valley Sportsplex, a 130,000 square foot recreation facility, opened in January 2014. Features include a 30,000 square foot field house, a running track, basketball courts, pool area including lap lanes and a water slide, in addition to weight and cardio exercise areas. The facility is owned by a local development corporation and the City is acquiring it through a lease purchase agreement. It was built with $25 million in private donations. The City is responsible for the operation and maintenance of the facility. Education The Waterloo Community School District is the largest of the three school districts serving the City, and has a total enrollment of approximately 10,835 students. Cedar Falls Community School District and Hudson Community School District have a combined enrollment of approximately 5,815. The public school system is supplemented by eight parochial schools including two high schools. Hawkeye Community College, whose main campus is located in the City, offers more than 45 one-year and two- year programs for credit as well as business and community education classes. Hawkeye Community College has an enrollment of approximately 5,833 full-time equivalent students. College and graduate level degree programs are available from the University of Northern Iowa, located in adjacent Cedar Falls. The University has a fall 2015 enrollment of approximately 11,981 students, and employs approximately 1,740. Other higher education opportunities in the area include Upper Iowa University (Waterloo Campus) which serves approximately 500 students, and Kaplan University with a campus in Cedar Falls, Iowa. Transportation The City is located 267 miles west of Chicago, Illinois and 108 miles northeast of Des Moines, Iowa. It is accessible by U.S. Highways 218, 63, and 20, and State Highways 21, 57, 281 and 412. Interstate 380 links the City with the southeastern area of the State and connects with Interstate 80. The Union Pacific Railroad, the Iowa Northern Railroad Company, and the Illinois Central Gulf Railroad (Canadian National) provide rail service. Many motor freight carriers operate out of the City with service to Chicago, Minneapolis, Kansas City, Omaha and other urban centers. Intercity bus transportation is available on five lines, and the City subsidizes the local transit service in order to provide frequent service. Waterloo Regional Airport is a non -hub, primary commercial service airport offering commercial, corporate, and general aviation services. 9 Page 233 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Recent Economic Development Crossroads/San Marnan Commercial Corridor. One of the City's largest commercial districts is located in the southeast part of the City near the junction of Highways 20 and 218. This area serves as a regional commercial shopping area and is located near the Isle Casino Hotel in Waterloo. The Crossroads Center has been recently acquired, and the new owner is already working to create new out lots for development. There have been many smaller developments in this area, with multi -tenant buildings and out lots being created in front of the larger Power Centers. The former Bonanza restaurant has been redeveloped into a multi -tenant Hurricane Grill restaurant, mattress company, hair/sports clip shop, and cellular store. The former Pizza Hut and Godfather's Pizza sites have been developed into a Chipotle/Caribou Coffee and Dupaco Credit Union, respectively. The Crossroads Mall has seen a new At Home furniture store replace the former JC Penney's space. Aldi's Grocery Store is planning to demolish and rebuild on their same site, a $1.2 million reinvestment. The recently opened Bamboo Ridge Convenience Store and Campground has been finished and offers a variety of amenities for visitors to the area including small cabin rentals, RV parking, canoe and paddle boat rentals. The Bertch family (developers of The Isle Casino Hotel and Lost Island Water Park) continues to own land in this area and the City looks forward to continued growth for these attractions. The $10 million renovation of the former Kmart Plaza building to the Crossing Point Plaza helped to transform this area and has helped create new out lot development, including a new $1.3 million Tokyo Restaurant, a new $800,000 Freddy's Restaurant, a new $1.2 million strip mall, and a new $1.8 million Kwik Star convenience store/food market. The City may also see more out lot development on the abutting Target site, as they look at property optimization of their site. Construction is complete on the new Fairfield Inn Hotel ($3 5 million) along La Porte Road, just south of the Candlewood Hotel. The City has approved $750,000 in federal road funds for the study of traffic improvements along the La Porte Road corridor in order to create traffic efficiencies and economic development opportunities in the area. This study should start in October 2017. In addition to commercial and office developments, several residential projects have recently been completed in this area. The Hummingbird Circle area, a residential development just south of Crossroads, has seen over 60 new homes built in the last three years with75 new housing units under construction, and plans for 76 additional unit lots. This residential construction will accelerate the revitalization and new construction of commercial space in this area. Downtown. The City has completed its Riverfront Renaissance Plan, which includes the river walk loop trail and amphitheater plaza, a renovated Cedar River dam to add depth to the river for boating, a youth pavilion addition to the Center for the Arts, a new boat house, public market, and Iowa Veteran's museum. The City is seeing private investment along the riverfront following the public investment made in the Riverfront Renaissance program. Construction will begin soon on a new 7 story, 70 -unit multistory housing project next to the Amphiteatre. This space will include commercial space on the plaza level. A 4 story, 48 unit multi -family housing project will begin this summer as well, located along the River Loop trail system. The historic rehabilitation of multiple downtown buildings continues, with 24 upper floor units under construction and the historic Masonic Temple will start rehabilitation for 27 new condominium units this summer The Deere Museum is open and drawing over 10,000 visitors per year. Construction of a 68 -unit residential development is nearing completion on the former Grand Hotel site, with Phase II (48 units and first floor commercial with Jimmy John's already dedicated to the space). Phase III land being cleared for development as a former brownfield (railroad yard) site. Across the street from the Grand Crossing, Hawkeye Community College is starting construction on a $13 million urban campus building, which will bring a new educational and student population and traffic to Downtown Waterloo. The new Singlespeed Micro Brewery and Pub is now open, having historically renovated ($5.2 million) the vacant Wonderbread Bakery Building. This project will bring a new eating and drinking establishment to Downtown Waterloo, as well as a tourism draw for the downtown area. Renovation of the historic Hotel President building is now complete, with an $8.4 million investment. A local developer has built "brownstone" row dwelling condominiums along the Lafayette corridor on both sides of Downtown Waterloo - 6 units at Lafayette and East 3rd Street which are now complete and occupied and plans to begin the East 7th side of Downtown Waterloo this year. Rehabilitation of the historic Deere twin towers on the Tech Works campus are underway — with the Tech II $30 million building renovation being redeveloped as a Marriott Courtyard Hotel. The Tech I building is now home to the offices of the Greater Cedar Valley Alliance and Chamber, and there are several out lots for further development of the area. Plans are beginning for a Marina location in the immediate vicinity as a part of the Iowa Reinvestment District program. 10 Page 234 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Logan Plaza Urban Renewal District. The Logan Plaza Urban Renewal District is located on the north side of the City and follows Highway 63 to Downtown Waterloo. The City of Waterloo has entered into a development agreement and construction has begun on a to $9.5 million project for medical offices and retail development on the site. The medical offices are a tie-in with Allen Hospital (Unity Point) and represent their continued investment in Waterloo. The City has already seen a new $2 7 million medical office and additional land has been purchased for future medical and other development. A new $7.5 million Parkview specialty care center is now open just north of the Logan Hy -Vee. KWWL, our local television station for all of northeast Iowa, is in the midst of a $10 million renovation of their historic office building located on the northern edge of Downtown Waterloo. This redevelopment project has spanned a 1.5 block area and will return the building to its historic view. Also along the Franklin Street corridor, the site next to the $1.5 million CVS Pharmacy on the corner of Franklin and Highway 63 is generating interest for new construction in the near future. The City has also entered into a Memorandum of Understanding with several community leaders and investors in the Walnut Neighborhood (located just north of Downtown Waterloo), has identified to put together a neighborhood reinvestment plan. This plan will begin with a $1.2 million investment to renovate four historic buildings. The City hopes this partnership will work in this location, and provide a model for further neighborhood reinvestment in the future. The northern portion of the $30 million Highway 63 redevelopment project through Waterloo, being funded by State and Federal funds, is complete and construction is underway on the Downtown section from Franklin to Highway 218. Martin Road Industrial Park. The City's Martin Road Industrial Park is located in the southwest part of the City, near the junction of Highways 20 and 63. The construction of a new 15,000 square foot retail center has relocated the Golf Headquarters to this area, and created several new restaurant spaces and retail business locations. A second $2.0 million retail center is now planned, with a new multi -tenant $1.2 million, 18,000 sq. ft. office and retail strip center will start construction soon. A new $3.5 million Love's Travel Center will begin construction in May 2017, a new $600,000 expansion and relocation for Gubbels Heating and Air is nearing completion, and a new $1 2 million Hawkeye Stages relocation and expansion is now complete, and several others being planned. The City continues meetings with the owners of the former Greyhound Park dog track site, with plans for the demolition of the building to allow for redevelopment of the 40 acre parcel located at the Highway 20/Highway 63 interchange. MidPort America Industrial Park. The City's MidPort America Industrial Park is located in the northwest part of the City, partially surrounding the Waterloo Regional Airport. The City has over 240 contiguous acres of land for development, and over 350 acres overall. Con -Agra Foods continues as anchor tenant and has added over 375,000 square feet of manufacturing space. The City has added a second entrance to the Waterloo Regional Airport, and has added 30 additional acres for future industrial development, with 15 acres being released by the FAA for development now. The City has also built Phase III of Geraldine Road, which has another $1.5 million 50,000 speculative warehouse nearing completion, the recent expansion and relocation of the $1.0 million, 30,000 square foot Johnstone Supply building now open, along with the previous $4.5 million in 150,000 square foot of industrial buildings developed in the last 5 years. Hydrite Chemical Company has also started their third expansion in the last 12 years with a $2 million building expansion. The City is also working to prepare several new industrial sites for development. As a part of the Control 0 Fax rehabilitation project, the City was able to partner with Accurate Gear and Criterion to help them expand their facilities and employment at their Burton Road sites (80,000 square foot), occupy a previously vacant building in the Control 0 Fax building (70,000 sq. ft. building), and the City has gained 6 acres for industrial development along West Airline Highway. The City also acquired 18 acres of land on Wagner Road at the northeast portion of the Airport area. The City is developing a new rail served industrial park to accommodate the creation of a rail yard for Standard Distribution's expansion, and planning new industrial lots with rail capability on the City's 310 acres of land on the western side of the Airport. Northeast Industrial Park area. The City is developing this area with platting, grading, and water and sewer utilities, 11 Page 235 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Rath Urban Renewal District. The City continues to redevelop the former Rath Packing Plant area.. New developments include a $4.5 million facility for Operation Threshold, a $6 million women's residential facility built by the State of Iowa Department of Corrections, and a $5.5 million facility for the Northeast Iowa Food Bank. The City has opened a $8 million Public Works Building on a former Brownfield site, previously remediated by the City with State and Federal Brownfield grants. The City has also acquired 6 dilapidated homes in this area and they are being replaced with 7 new $100,000 - $180,000 commercial buildings. The City continues to work with Crystal Distribution in the area, having previously acquired land for their expansion. Their next planned project would include a 40,000 sq. ft. cold storage expansion to the area. Tower Technology Park. The City's Tower Technology Park is located in the south part of the City along Highway 20, consisting of office buildings and commercial development. VGM Company is finalizing their $19 million 70,000 square foot office building expansion which is designed to accommodate an additional 300 employees. As a part of their project, the City partnered with VGM to provide additional traffic access and open up 20 acres of new land development. Green Acres has constructed a new $3.0 million, 100,000 square feet multi-level indoor storage facility and The University of Iowa Credit Union has completed a new office building. Kwik Star has recently taken out permits for a new $1 5 million convenience store and $500,000 car wash at the interchange of Ansborough and Highway 20. The City has recently purchased over 87 acres of land for additional development in the area, with a multi-year option on a total of 180 acres for larger project development. The City was also granted the status of a State of Iowa Certified Site for the South Waterloo Business Park, this joins 15 other sites within the State of Iowa with this certification, and puts us on a "shovel -ready high priority site list" with the State of Iowa. Housing. The City is seeing housing development throughout the community. Several new subdivisions have opened or are under construction, filling as rapidly as lots are developed. The City experienced the highest total in single family home permits in a month in March 2016, our highest single family home total (99) for a single year, and out second highest overall residential unit total (205) in City history. Housing permits and subdivision construction continue at a good pace in 2017. There are over 300 lots being planned or built in the City for single family homes, and over 100 new infill units going into existing subdivisions or older, developed areas of the City. The City is further working extensively with Hawkeye Community College to expand their construction educational program to help students build new homes on infill lots acquired by the City of Waterloo. By this project the City hope to not only grow our available and trained workforce for the construction industry, but inject a new construction investment, excitement, and use of infill lots owned by the City to create new housing, new taxable value, and less maintenance for the City. SOCIOECONOMIC INFORMATION The following demographic information is for the City. Additional comparisons are made with the County and the State. Population The following table reflects population trends for the City, the County and the State. Population Comparison(]) The Percent The Percent The Percent Year City Change County Change State Change 1970 75,533 n/a 132,916 n/a 2,824,376 n/a 1980 75,985 0.60% 137,961 3.80% 2,913,808 3.17% 1990 66,467 (12.53%) 123,798 (10.27%) 2,776,755 (4.70%) 2000 68,747 3.43% 128,012 3.40% 2,926,324 5.39% 2010 68,406 (0.50)% 131,090 2.40% 3,046,355 4.10% Note: (1) Source: U.S. Bureau of the Census. 12 Page 236 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Employment Following are lists of certain large employers located in the City and Cedar Falls area. Major Area Employers(]) Approximate Location Name Business or Product Employment(2) Waterloo/Cedar Falls John Deere Manufacturing 5,100 Waterloo Wheaton Franciscan Healthcare Health Care Services 2,895 Waterloo Tyson Fresh Meats Food Processing 2,700 Waterloo Unity Point Health Care Health Care Services 2,520 Cedar Falls University of Northern Iowa Higher Education 1,820 Waterloo/Cedar Falls Hy -Vee Grocery Stores 1,720 Waterloo Waterloo Community Schools Public Education 1,605 Waterloo Omega Cabinetry Ltd. Manufacturing 950 Cedar Falls Target Regional Distribution Warehouse/Distribution 950 Waterloo CBE Companies, Inc Financial 900 Waterloo Bertch Cabinet Manufacturing Manufacturing 775 Waterloo/Cedar Falls Walmart Retail Stores 750 Cedar Falls Cedar Falls Community Schools Public Education 750 Waterloo Black Hawk County Government 715 Waterloo Hawkeye Community College Higher Education 700 Notes: (1) Source: Greater Cedar Valley Alliance, 2017 Manufacturers' News Inc. and a selected telephone survey. (2) Includes part-time employees. The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau 2011 - 2015 American Community Survey 5 -year estimated values. Employment By Industry(]) The City The County The State Classification Number Percent Number Percent Number Percent Agriculture, forestry, fishing and hunting, and mining 294 0.9% 1,089 1.6% 61,617 3.9% Construction 1,590 4.9% 3,481 5.2% 97,457 6.2% Manufacturing 7,021 21.8% 12,009 17.9% 239,613 15.2% Wholesale trade 921 2.9% 1,813 2.7% 44,824 2.8% Retail trade 4,026 12.5% 8,287 12.3% 184,108 11.7% Transportation and warehousing, and utilities 1,587 4.9% 2,767 4.1% 72,148 4.6% Information 382 1.2% 889 1.3% 27,694 1.8% Finance and insurance, and real estate and rental and leasing 1,793 5.6% 3,839 5.7% 117,133 7.4% Professional, scientific, and management, and administrative and waste management services 2,502 7.8% 4,818 7.2% 112,752 7.2% Educational services, and health care and social assistance 7,414 23.0% 17,502 26.1% 382,209 24.3% Arts, entertainment, and recreation, and accommodation and food services.. 2,728 8.5% 6,339 9.4% 117,422 7.5% Other services, except public administration 1,395 4.3% 3,019 4.5% 66,559 4.2% Public administration 617 1.9% 1,289 1.9% 49,974 3.2% Total 32,270 100.0% 67,141 100.0% 1,573,510 100.0% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2011 - 2015. 13 Page 237 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Employment By Occupation(]) The City The County The State Classification Number Percent Number Percent Number Percent Management, business, science, and arts occupations 8,496 26.3% 21,468 32.0% 542,576 34.5% Service occupations 6,095 18.9% 12,363 18.4% 261,689 16.6% Sales and office occupations 7,610 23.6% 16,247 24.2% 367,136 23.3% Natural resources, construction, and maintenance occupations 2,426 7.5% 4,986 7.4% 147,292 9.4% Production, transportation, and material moving occupations 7,643 23.7% 12,077 18.0% 254,817 16.2% Total 32,270 100.0% 67,141 100.0% 1,573,510 100.0% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2011 - 2015. The following shows the annual average unemployment rates for the County, the State and the United States. Annual Average Unemployment Rates(]) Calendar The The United Year County State States 2007 3.8% 3.8% 4.6% 2008 4.1% 4.4% 5.8% 2009 5.9% 6.0% 9.3% 2010 6.2% 6.7% 9.6% 2011 5.9% 5.6% 8.9% 2012 5.4% 5.0% 8.1% 2013 4.7% 4.8% 7.4% 2014 4.8% 4.4% 6.2% 2015 4.5% 3.8% 5.3% 2016 4.7% 3.5% 4.9% 2017(2) 4.2% 3.6% 4.7% Notes: (1) Source: Iowa Workforce Development and U.S. Bureau of Labor Statistics. (2) Preliminary rates for the month of February 2017. Building Permits Shown below is the trend of building permits issued by the City. City Building Permits(]) Fiscal Residential Total Total Year Permits Permits Value 2007 84 9,124 $181,082,614 2008 76 8,961 119,894,709 2009 78 8,143 74,920,243 2010 58 8,657 82,650,598 2011 68 9,386 103,199,063 2012 58 8,012 124,803,841 2013 110 8,682 91,192,766 2014 216 9,969 101,677,108 2015 129 10,327 100,224,478 2016 205 10,620 127,513,038 2017(2) 85 7,355 49,615,698 Notes: (1) Source: the City. (2) Through March 31, 2017. 14 Page 238 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Housing The U.S. Census Bureau 5 -year estimated values reported that the median value of the City's owner -occupied homes was $104,200. This compares to $130,200 for the County and $129,200 for the State. The following table represents the five year average market value of specified owner -occupied units for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Home Values(]) The City The County The State Value Number Percent Number Percent Number Percent Less than $50,000 2,157 11.8% 3,359 9.5% 99,287 11.2% $50,000 to $99,999 6,492 35.6% 8,508 24.1% 216,328 24.5% $100,000 to $149,999 4,979 27.3% 9,088 25.7% 201,698 22.8% $150,000 to $199,999 2,674 14.7% 7,000 19.8% 151,787 17.2% $200,000 to $299,999 1,438 7.9% 5,052 14.3% 135,180 15.3% $300,000 to $499,999 403 2.2% 1,784 5.0% 59,446 6.7% $500,000 to $999,999 47 0.3% 472 1.3% 15,485 1.8% $1,000,000 or more 47 0.3% 95 0.3% 4,597 0.5% Total 18,237 100.0% 35,358 100.0% 883,808 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. Mortgage Status(]) The City The County The State Mortgage Status Number Percent Number Percent Number Percent Housing units with a mortgage 11,466 62.9% 22,140 62.6% 541,161 61.2% Housing units without a mortgage 6,771 37.1% 13,218 37.4% 342,647 38.8% Total 18,237 100.0% 35,358 100.0% 883,808 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. Income The U.S. Census Bureau 5 -year estimated values reported that the City had a median family income of $52,366. This compares to $63,011 for the County and $67,466 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Family Income(]) The City The County The State Income Number Percent Number Percent Number Percent Less than $10,000 1,085 6.6% 1,376 4.4% 26,913 3.4% $10,000 to $14,999 492 3.0% 680 2.2% 18,627 2.3% $15,000 to $24,999 1,548 9.4% 2,236 7.2% 51,011 6.4% $25,000 to $34,999 1,962 11.9% 2,835 9.1% 66,927 8.4% $35,000 to $49,999 2,528 15.4% 4,490 14.5% 107,269 13.5% $50,000 to $74,999 4,251 25.9% 7,263 23.4% 177,374 22.2% $75,000 to $99,999 2,097 12.8% 4,834 15.6% 137,743 17.3% $100,000 to $149,999 1,724 10.5% 4,934 15.9% 135,257 17.0% $150,000 to $199,999 392 2.4% 1,402 4.5% 41,758 5.2% $200,000 or more 353 2.1% 934 3.0% 34,602 4.3% Total 16,432 100.0% 30,984 100.0% 797,481 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 to 2015. 15 Page 239 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C The U.S. Census Bureau 5 -year estimated values reported that the City had a median household income of $41,933. This compares to $48,369 for the County and $53,183 for the State. The following table represents the distribution of household incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Household Income(]) The City The County The State Income Number Percent Number Percent Number Percent Less than $10,000 2,752 9.7% 4,153 7.9% 76,474 6.2% $10,000 to $14,999 1,654 5.8% 2,659 5.1% 63,657 5.1% $15,000 to $24,999 3,409 12.0% 5,708 10.9% 129,499 10.5% $25,000 to $34,999 3,927 13.8% 6,270 12.0% 131,466 10.6% $35,000 to $49,999 4,595 16.2% 8,128 15.5% 178,302 14.4% $50,000 to $74,999 6,132 21.6% 10,661 20.3% 247,858 20.0% $75,000 to $99,999 2,826 9.9% 6,169 11.8% 168,910 13.7% $100,000 to $149,999 2,246 7.9% 6,017 11.5% 154,870 12.5% $150,000 to $199,999 465 1.6% 1,524 2.9% 46,153 3.7% $200,000 or more 424 1.5% 1,121 2.1% 39,220 3.2% Total 28,430 100.0% 52,410 100.0% 1,236,409 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. Agriculture Shown below is information on the agricultural value of the County and the statewide average. Average Value Per Acre(]) 2012 2013 2014 2015 2016 Average Value Per Acre: Black Hawk County $10,511 $11,239 $9,982 $9,198 $8,599 State of Iowa 8,296 8,716 7,943 7,633 7,183 Note: (1) Source: Cooperative Extension Service - Iowa State University. Local Option Sales Tax On January 22, 1991, a metropolitan area -wide referendum for a one percent local option sales tax passed with 8,114 votes in favor and 6,940 against, an approval ratio of approximately 54%. The sales tax became effective on April 1, 1991, in the City and in the seven cities contiguous to the City. On November 5, 2013, the referendum was renewed again with an approval rate of approximately 72%. The City's option sales tax receipts are wholly dedicated to street repair and reconstruction, as mandated in the referendum. The City currently is authorized to collect this tax through December 31, 2025. The State of Iowa Department of Revenue (the "Department") administers collection and disbursement of all local option sales and services taxes in conjunction with administration of the State-wide sales, services and use tax presently assessed at 6%. The Department is required by statute to remit at least 95% of the estimated tax receipts to a county board of supervisors (for taxes imposed in unincorporated areas) and to each incorporated city. Such remittances are on a monthly basis. Once a year the Department reconciles its monthly estimated payments and makes an adjustment payment or debit at the November 10 payment date. Remittance of collections within a county are based upon the following statutory formula for county -wide collections: 16 Page 240 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C 75 percent: 25 percent: Based on a pro rata share of population (the most recent certified federal census) of those incorporated or unincorporated areas in a county which have approved a Local Option Tax. Based on a pro rata share of total property tax dollars levied during the three year period beginning July 1, 1982, through June 30, 1985, for those incorporated or unincorporated areas of a county which have approved a Local Option Tax. The following table shows the trend of City Local Option tax receipts. Local Option Tax Receipts(]) Local Option Sales Tax Percent Fiscal Year Receipts(2) Change +(-) 2007-08 $9,237,791 n/a 2008-09 9,607,630 4.00% 2009-10 9,208,056 (4.16%) 2010-11 9,661,356 4.92% 2011-12 9,735,945 0.77% 2012-13 9,942,321 2.12% 2013-14 9,771,002 (1.72%) 2014-15 9,661,573 (1.12%) 2015-16 9,760,807 1.03%) 2016-17 9,575,230(3) (1.90%) Notes: (1) Source: the Iowa Department of Revenue. (2) Includes a makeup payment in November attributable to the previous fiscal year. (3) Collections received or expected to be received but not including any allowance for the reconciliation payment. Retail Sales The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending June 30. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the City. The following amounts exclude the City's Local Option Tax. Retail Taxable Sales(]) Fiscal Year Taxable Annual Percent Ending June 30 Sales Change + (-) 2007(2) $1,049,984,735 n/a 2008(2) 1,100,280,532 4.79% 2009 1,137,714,045 3.40% 2010 1,105,713,906 (2.81%) 2011 1,112,230,001 0.59% 2012 1,129,249,855 1.53% 2013 1,124,405,223 (0.43%) 2014 1,117,415,085 (0.62%) 2015 1,119,986,316 0.23% 2016 1,147,128,289 2.42% Growth from 2007 to 2016 9.25% Notes: (1) Source: the Iowa Department of Revenue. (2) Fiscal years 2007 and 2008 amounts reflect a year ending March 31st. 17 Page 241 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C PLAN OF FINANCING Approximately $2,845,000 in proceeds of the Tax -Exempt Bonds will be used to currently refund certain outstanding general obligation bonds of the City (the "Refunded Bonds"). The Refunded Bonds are described below. General Obligation Bonds, Series 2009A (Taxable Build America Bonds) (Originally dated June 24, 2009) Refunded Outstanding Amount Redemption Redemption Maturities Amount Refunded Price Date 6/1/18 $370,000 $370,000 100% 06/21/17 6/1/19 375,000 375,000 100% 06/21/17 6/1/20 385,000 385,000 100% 06/21/17 6/1/21 405,000 405,000 100% 06/21/17 6/1/22 420,000 420,000 100% 06/21/17 6/1/23 435,000 435,000 100% 06/21/17 6/1/24 455,000 455,000 100% 06/21/17 Remaining Bond proceeds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements; (ii) finance the costs of aiding in the planning, undertaking and carrying out of urban renewal projects; and (iii) pay the costs of issuance of the Bonds. More specifically, the proceeds of the Series 2017A Bonds will be used to pay costs of: the acquisition, improvement and installation of traffic control devices, signage, fixtures, equipment and improvements, including but not limited to traffic signal, pavement markings, traffic safety, fiber optics installation, and street light fixtures, connections, and facility improvements; costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with the Midland lift station and force main construction, anaerobic lagoon cover replacement, and final clarifier upgrades; the acquisition of vehicles and equipment for the Police and Fire Rescue Departments; the rehabilitation and improvement of City parks and the acquisition, repair and replacement of facilities, equipment and improvements commonly found in City parks; the removal, replacement and planting of trees in parks and public grounds; the construction, reconstruction and repairing of street, sidewalk, alley, public ground, marketplace, bridge, pedestrian underpass and overpass repairs and reconstruction, and intersection improvements; the acquisition, construction and improvement of real and personal property useful for the protection of property from floods or high waters, including flood control, levees, embankments, waterway, storm water and drainage improvements; the removal or replacement of dead or diseased trees; refunding or refinancing outstanding debt, including General Obligation Bonds, Series 2009A (Taxable Build America Bonds) dated June 24, 2009; the acquisition and installation of emergency services communication equipment and systems including early warning sirens; and the acquisition of vehicles and equipment for the Street Department; Cultural and Art projects, including improvements and repairs at the Center for the Arts; the acquisition of vehicles for various city departments, including engineering and leisure services; equipping various city departments, including parks and leisure services; building and infrastructure improvements for public works, including the traffic control center; reconstruction, renovation, remodeling, improvement, equipping and repairing of various City buildings and facilities, including projects at new city facilities, costs of the structural and mechanical audit of city buildings, various ADA compliance improvements, golf course, public library, and swimming pool renovations; comprehensive plan updates; acquisition of City wide Information Services mapping equipment and software; and acquisition and installation of computers and related technology and business continuity programming and software for offsite backup disaster relief; website redevelopment; reconstruction, renovation and improvements to Sports Facility Improvement Fund; reconstruction renovation and improvements to public buildings and facilities, including chemical storage building improvements, police department vehicle impound storage building; acquisition of off-road maintenance equipment for the parks and golf course departments; reconstruction, renovation, remodeling, improvement, equipping and repairing of Downtown Parking Garages; aiding in the planning, undertaking and carrying out of urban renewal projects under the authority of Chapter 403 and the Urban Renewal Plans for the Martin Road Development Area, the Rath Area Redevelopment Area, and the East Waterloo Unified Urban Renewal and Redevelopment Area, such as those costs associated with the Chamberlain Project, land acquisitions, public infrastructure projects including streets, streetscape, and utility improvements, and the downtown development plan. 18 Page 242 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C The proceeds of Series 2017B Bonds will be used to pay costs of: the acquisition and demolition of dangerous or dilapidated buildings, structures or properties, or funding multi -family housing assistance; the construction, renovation and improvement of the airport parking lot and related equipment; improvements to Young Arena and Riverfront Stadium; reconstruction, renovation, remodeling, improvement and equipping of the 5 Sullivan Brothers Convention Center; aiding in the planning, undertaking and carrying out of urban renewal projects under the authority of Chapter 403 and the Urban Renewal Plans for the Martin Road Development Area, the Rath Area Redevelopment Area, and the East Waterloo Unified Urban Renewal and Redevelopment Area, such as those costs associated with, land acquisitions, public infrastructure projects including streets, streetscape, and utility improvements, and downtown acquisitions and demolition. The proceeds of the Series 2017C Bonds will be used to pay costs of aiding in the planning, undertaking and carrying out of urban renewal projects under the authority of Iowa Code Chapter 403 and the Downtown Waterloo Urban Renewal and Redevelopment Plan, as amended, including infrastructure, improvements and financial assistance for the Tech Works Campus project and the Cedar River Marina. The remainder of this page was left blank intentionally. 19 Page 243 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C DEBT INFORMATION After issuance of the Bonds and refunding of the Refunded Bonds, the City will have outstanding $116,280,000* principal amount of bonded general obligation debt paid from ad valorem taxes. An aggregate principal amount of $56,492,646* of the City's total bonded debt is expected to be paid from hotel tax, tax increment finance and sewer revenues. The City also currently has approximately $1,934,063 outstanding in nonbonded general obligation debt. In addition, the City has outstanding approximately $140,000 principal amount of sewer revenue debt. The City has a general obligation legal debt limit equal to 5% of Actual Valuation. For the January 1, 2015 Actual Valuation of $3,800,626,605 (including tax increment valuation and excluding military exemption valuation) applied to fiscal year 2016/17, the total limit is $190,031,330. Including the Bonds and excluding the Refunded Bonds, the estimated principal amount of bonded and non -bonded debt applicable to this limit is $118,214,063, resulting in a legal debt margin of $71,817,267. The City does not expect to issue any additional general obligation debt in calendar year 2017. Summary of Outstanding General Obligation Bonded Debt(]) (Principal Only - By Series) Taxable Series 2007C $ 150,000 Taxable Series 20086 705,000 Series 2009A 3,205,000 Taxable Series 2009C 400,000 Series 2010A 4,490,000 Series 20106 935,000 Taxable Series 2010C 945,000 Series 2011A 6,380,000 Taxable Series 2011 B 5,925,000 Series 2012A 5,950,000 Series 20126 2,410,000 Taxable Series 2012C 3,980,000 Series 2013A 4,850,000 Taxable Series 20136 5,795,000 Taxable Series 2013D 910,000 Series 2014A 8,030,000 Taxable Series 20146 4,455,000 Series 2014C 5,850,000 Series 2015A 11,695,000 Taxable Series 20156 1,455,000 Series 2016A Bonds 8,605,000 Series 20166 Bonds 1,810,000 Series 2016C Bonds 9,250,000 The Tax -Exempt Bonds(2) 9,245,000 The Series 20176(2) 3,600,000 The Series 2017C(2) 8,100,000 Less: Refunded Bonds(2) (2,845,000) Less: Debt Paid from Non Property Tax Sources(2) (56,492,646) Total Property Tax Supported Bonded Debt(2) $59,787,354 Notes: (1) Source: the City. (2) Subject to change. *Subject to change. 20 Page 244 of 486 N C O W N 0 fl . 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Page 246 of 486 N N City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Summary of City's General Obligation Bonded Debt Service(]) Fiscal Less: Year Total Annual The Ending Outstanding Series Series Series Refunded June 30 Debt Service 2017A(2) 20176(2) 2017C(2) Bonds(2) 2017 $ 14,821,031 $ 0 $ 0 $ 0 $ (0) 2018 13,565,976 1,294,754 300,329 624,866 (524,500) 2019 12,370,581 996,448 302,528 623,395 (511,000) 2020 10,177,932 984,920 299,483 625,800 (501,781) 2021 9,016,803 986,802 301,018 622,285 (501,569) 2022 8,398,486 976,818 302,040 622,985 (494,800) 2023 7,799,257 915,518 302,640 622,785 (486,175) 2024 7,404,879 913,193 302,578 626,420 (481,163) 2025 6,901,728 488,960 301,943 623,825 (0) 2026 6,349,611 488,890 300,715 625,123 (0) 2027 5,299,317 493,165 299,115 625,370 (0) 2028 4,415,199 490,813 301,643 623,975 (0) 2029 3,426,175 487,948 303,738 621,770 (0) 2030 2,403,520 489,135 300,125 623,253 (0) 2031 1,281,780 488,955 300,810 623,450 (0) 2032 646,105 492,575 300,730 622,323 (0) 2033 649,605 0 0 624,830 (0) 2034 656,935 0 0 625,600 (0) 2035 667,895 0 0 624,805 (0) 2036 677,270 0 0 312,168 (0) Total $116,930,085 $10,988,891 $4,519,432 $11,545,026 $(3,500,988) Notes: (1) Source: the City. (2) Subject to change. Less: General Obligation Debt Paid From Other Sources(2) $ (6,787,517) (7,074,029) (6,706,218) (5,728,144) (5,214,502) (5,014,334) (4,642,760) (4,342,859) (3,995,788) (3,576,100) (2,940,498) (2,572,136) (2,239,027) (1,823,420) (1,340,440) (1,351,388) (1,274,435) (1,282,535) (1,292,700) (989,438) $(70,188,268) Statement of Bonded Indebtedness(])(2) Total Net Property Tax Supported Debt Service(2) $ 8,033,513 8,187,397 7,075,733 5,858,210 5,210,836 4,791,195 4,511,264 4,423,048 4,320,667 4,188, 239 3,776,469 3,259,493 2,600,603 1,992,613 1,354,555 710,345 0 0 0 0 $70,294,178 City Actual Value, January 1, 2015 $3,798,337,954 City Taxable Value, January 1, 2015 $2,495,312,803 Total Direct Bonded Debt(3) $116,280,000 Less: Direct Debt Paid From Non -Property Tax Sources(3) (56,492,646) Net Direct Debt(3) $ 59,787,354 Per Capita Applicable Ratio to City Ratio to City Percent Amount Actual Value Taxable Value 100.00% $116,280,000 3.06% 4.66% 100.00% (56,492,646) (1.49%) (2.26%) $ 59,787,354 1.57% 2.40% Overlapping Debt: Hawkeye Community College(4) $ 3,680,000 25.51% $ 938,768 0.02% 0.04% Black Hawk County 37,940,000 44.07% 16,720,158 0.44% 0.67% Total Overlapping Bonded Debt(4) $17,658,926 0.46% 0.71% Total Direct and Overlapping Bonded Debt(3) $77,446,280 2.03% 3.11% (2010 Pop. 68,406) $1,699.85 (825.84) $ 874.01 $ 13.72 244.43 $ 258.15 $1,132.16 Per Capita Actual Value $55,526.39 Per Capita Taxable Value $36,477.98 Notes: (1) (2) (3) (4) Source: the City, Audited Financial Statements and EMMA for the County and Community College. As of the date of sale for the Direct Bonded Debt and March 20, 2017 for Overlapping Debt. Subject to change. Excludes $13,755,000 in Industrial New Jobs Training Certificates, which are retired by proceeds from withholding taxes. 23 anticipated job credits from Page 247 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C PROPERTY ASSESSMENT AND TAX INFORMATION Property Tax Assessment In compliance with Section 441.21 of the Code of Iowa, as amended, the State Director of Revenue annually directs all county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The final values, called Actual Valuation, are then adjusted by the County Auditor. Taxable Valuation subject to tax levy is then determined by the application of State determined rollback percentages, principally to residential property. Beginning in 1978, the State required a reduction in Actual Valuation to reduce the impact of inflation on its residents. The resulting value is defined as the Taxable Valuation. Such rollback percentages may be changed in future years. Certain historical rollback percentages for residential, multi -residential, agricultural and commercial valuations are as follows: Percentages for Taxable Valuation After Rollbacks(1) Multi- Ag Land Fiscal Year Residential Residential(2) & Buildings Commercial 2008/09 44.0803% N/A 90.1023% 99.7312% 2009/10 45.5893% N/A 93.8568% 100.0000% 2010/11 46.9094% N/A 66.2715% 100.0000% 2011/12 48.5299% N/A 69.0152% 100.0000% 2012/13 50.7518% N/A 57.5411% 100.0000% 2013/14 52.8166% N/A 59.9334% 100.0000% 2014/15 54.4002% N/A 43.3997% 95.0000% 2015/16 55.7335% N/A 44.7021% 90.0000% 2016/17 55.6259% 86.2500% 46.1068% 90.0000% 2017/18 56.9391% 82.5000% 47.4996% 90.0000% Notes: (1) Source: the Iowa Department of Revenue. (2) New category beginning with fiscal year 2017. Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2015, are used to calculate tax liability for the tax year starting July 1, 2016 through June 30, 2017. Property Tax Collection Each county is required by State law to collect all tax levies within its jurisdiction and remit, before the fifteenth of each month, the amount collected through the last day of the preceding month to underlying units of government, including the City. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 and March 31, pursuant to the Code of Iowa, Sections 445.36 and 445.37. Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes and special assessments are subject to a penalty at the rate of one and one-half percent per month, to a maximum of eighteen percent per annum. If taxes are not paid when due, the property may be offered at the regular tax sale on the third Tuesday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property, and funds so received are applied to the payment of taxes. A property owner may redeem from the regular tax sale, but failing redemption within two years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of all liens except future installments of taxes. 24 Page 248 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Actual (100%) Valuations for the City(/)(2) Fiscal Years: 2013/14 Property Class Levy Year: 2012 Residential $2,517,125,923 Agricultural 21,297,890 Commercial 933,167,377 Industrial 173, 515,115 Multi-residential(3) 0 Railroads 4,557,294 Utilities without Gas and Electric 15,033,053 Gas and Electric Utility 141,420,729 Other(4) 1,289,500 Less Military Exception (6,944,824) Total $3,800,462,057 Percentage Change 1.01%(5) 2014/15 2013 $2,414,658,580 30,280,510 908,231,770 173,111,510 0 5,170, 933 13,134,390 121,808,506 1,787,420 (6,753,054) $3,661,430,565 (3.66%) Notes: (1) Source: the Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations in the following amounts: (3) (4) (5) January 1: 2012 TIF Valuation $185,258,502 2013 $213,653,234 2015/16 2014 $2,439,527,890 29,253,289 901,460,490 176, 399, 010 0 5,725,293 11,306,494 140,471,386 2,500,611 (6,457,558) $3,700,186,905 1.06% 2014 $227,009,316 2016/17 2015 $2,512,825,020 28,195,789 857, 739, 072 175,431,510 63,098,138 6,334,677 10,185,077 150, 715, 830 2,288,651 (6,187,159) $3,800,626,605 2.71% 2015 $243,670,024 New Class as of January 1, 2015, previously reported as Commercial Property. Includes any City Annexation Taxation Exempt Valuation and any City Agricultural Valuation in TIF Increments. Based on 2011 Actual Valuation of $3,762,278,361. Preliminary 2017/18 2016 $2,529,420,070 27,867,579 863, 667, 266 179,114, 950 60,886,464 7,078,785 9,268,178 154,141,200 2,666,521 (5,985,371) $3,828,125,642 0.72% 2016 $242,246,094 For the January 1, 2016 levy year, the City's Taxable Valuation was comprised of approximately 57% residential, 31% commercial, 6% industrial, 4% utilities, 2% multi -residential and less than 1% agriculture and military exemption. Fiscal Years: Property Class Levy Year: Residential Agricultural Commercial Industrial Multi-Residential(3) Railroads Utilities without Gas and Electric Gas and Electric Utility Military Exemption Total Percentage Change Taxable ("Rollback") Valuations for the City(/)(2) 2013/14 2012 $1,329,451,258 12,239,366 933,167, 377 173, 515,115 0 4,557,294 15,033,053 91,621,292 (6,944,824) $2,552,639,931 2.86%(4) 2014/15 2013 $1,313,579,627 12,734,095 862,821,139 164,456,002 0 4,912,386 13,134,390 93,980,956 (6,753,054) $2,458,865,541 (3.15%) Notes: (1) Source: Black Hawk County. (2) Includes tax increment finance (TIF) valuations in the following amounts: (3) January 1: TIF Valuation 2012 $183,333,664 2013 $207,637,570 2015/16 2014 $1,359,634,123 12,372,578 811,314,441 158, 759,109 0 5,152, 763 11,306,494 94,068,178 (6,457,558) $2,446,150,128 (0.52%) 2014 $214,993,747 New Class as of January 1, 2015, previously reported as Commercial Property. (4) Based on 2011 Taxable Valuation of $2,481,606,260. 25 2016/17 2015 $1,397,781,925 12,328,802 771,965,170 157, 888, 359 54,422,196 5,701,209 10,185,077 91,277,224 (6,187,159) $2,495,312,803 2.01% 2015 $229,899,157 Preliminary 2017/18 2016 $1,440,228,467 12,521,362 777,300,545 161,203,455 50,231,385 6,370,907 9,268,178 84,504,298 (5,985,371) $2,535,643,226 1.62% 2016 $230,753,488 Page 249 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C The following shows the trend in the City's tax extensions and collections. Tax Extensions and Collections(]) Levy Fiscal Amount Amount Percent Year Year Levied Collected(2) Collected 2006 2007-08 $33,302,685 $33,314,834 100.04% 2007 2008-09 35,238,473 35,132,824 99.70% 2008 2009-10 36,645,462 36,636,201 99.97% 2009 2010-11 37,312,210 37,221,633 99.76% 2010 2011-12 38,703,447 38,490,811 99.45% 2011 2012-13 40,620,062 40,294,370 99.20% 2012 2013-14 39,993,210 39,690,828 99.24% 2013 2014-15 39,200,603 38,539,187 99.31% 2014 2015-16 38,480,720 38,228,881 99.35% 2015 2016-17 38,823,734 - -In Collection - - Notes: (1) Source: the City. (2) Includes delinquent taxes. Principal Taxpayers(]) January 1, 2015 Taxpayer Name Business/Service Taxable Valuation (2) Deere and Company Manufacturing $ 49,961,776 IOC Black Hawk County, Inc Casino and Hotel 48,937,500 Waterloo Owner LLC Shopping Center/Retail Stores 31,363,821 Con Agra Food Processing 19,951,236 Ferguson Enterprises, Inc Warehouse 18,636,903 Tyson Fresh Meats Pork Processing 15,499,193 Bertch Cabinet Manufacturing, Inc Cabinet Manufacturer 14,746,095 Walmart Retail Store 12,011,454 VGM Management, Inc Commercial Property 10,641,484 Menard, Inc. Home Improvement Center 10,433,542 Total $232,183,004 Principal Taxpayers as Percent of City's 01/01/15 Taxable Valuation of $2,495,312,803 9.30% Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. Levy Limits Normal municipal operations and maintenance costs are generally funded through the corporate property tax levy. Iowa State Code does not allow the municipal general fund to be taxed above $8.10 per thousand dollars of taxable value in any one year. In addition to the General Fund, there are several other tax funds that the City can create and use for specific purposes. The property tax rates for the City from levy year 2011 through levy year 2015 are shown below. 26 Page 250 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Property Tax Rates: Levy Years 2011- 2015(1)(2) (Per $1,000 Actual Valuation) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Levy Year: 2011 2012 2013 2014 2015 City: General Fund $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 Emergency Levy 0.27000 0.27000 0.27000 0.27000 0.27000 Debt Service Fund 3.17159 3.10043 3.20239 3.25937 3.16104 Employee Benefits 5.42835 4.74592 5.02630 4.61951 4.25797 Capital Improvement 0.00000 0.00000 0.00000 0.00000 0.00000 Others 1.23511 1.27684 1.35290 1.51482 1.81621 Total City Rate $18.20505 $17.49319 $17.95159 $17.76370 $17.60522 Others: Black Hawk County $ 6.23993 $ 6.02116 $ 6.11919 $ 6.74817 $ 6.44577 Waterloo Community School District 15.80265 15.72818 15.97526 15.62432 15.40000 Hawkeye Community College 0.96069 0.95205 0.95088 0.95088 0.95088 Other 0.37701 0.41745 0.40763 0.39900 0.38227 Total Tax Rate $41.58533 $40.61203 $41.40455 $41.48607 $40.78414 Notes: (1) Source: the Iowa Department of Management. (2) Does not include tax rate for agriculture. Tax Levy Procedures The Bonds are general obligations of the City, payable from and secured by a continuing ad valorem tax levied against all of the property valuation within the City. As part of the budgetary process each fiscal year, the City will have an obligation to request a debt service levy to be applied against all of the taxable property within the City. A failure on the part of the City to make a timely levy request or a levy request by the City that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bond holders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. Notwithstanding the foregoing, Iowa Code section 76.2 provides when an Iowa political subdivision issues bonds, "the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditor(s) to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." Utility Property Tax Replacement Property owned by entities involved primarily in the production, delivery, service and sale of electricity and natural gas ("Utilities") pay a replacement tax based upon the delivery of energy by Utilities in lieu of property taxes. All replacement taxes are allocated among local taxing bodies by the State Department of Revenue and the Department of Management. This allocation is made in accordance with a general allocation formula developed by the Department of Management on the basis of general property tax equivalents. Utility properties paying the replacement tax are exempt from the levy of property tax by political subdivisions. In addition to the replacement tax, Utility property will continue to be valued by a special method as provided in the statute and taxed at the rate of three cents per one thousand dollars for the general fund of the State. 27 Page 251 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C By statute, the replacement tax collected by the State and allocated among local taxing bodies (including the City) shall be treated as property tax when received and shall be disposed of by the county treasurer as taxes on real estate. It is possible that the general obligation debt capacity of the City could be adjudicated to be proportionately reduced in future years if Utility property were determined to be other than "taxable property" for purposes of computing the City's debt limit under Article XI of the Constitution of the State of Iowa. There can be no assurance that future legislation will not (i) operate to reduce the amount of debt the City can issue or (ii) adversely affect the City's ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Bonds. Approximately 4% of the City's levy year 2016 taxable valuation currently is utility property. Tax Increment Financing The Code of Iowa currently authorizes the use of two types of tax increment financing by local taxing districts in the State of Iowa. The first type allows local governments to establish TIF districts to be established for the purposes of financing designated urban renewal projects which contribute to the urban redevelopment and economic development of the immediate area. The taxable valuation for this type of TIF district in the City for levy year 2016 was $230,753,488. The second type of tax increment financing was authorized by state legislative action in the mid -1980's. The area community colleges can establish TIF districts by contract with specific local businesses and industries to provide jobs training programming for new employees of existing expanding businesses or employees of new businesses. The revenues from these job training TIF districts then retires the debt incurred from the issuance of jobs training certificates which finance the cost of jobs training programming over a maximum of ten years. Upon payment of all jobs training certificates, the district dissolves and the incremental value from the new or expanded business reverts to the general tax base. There is no current valuation for this second type of TIF district. Legislation From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the City or have an adverse impact on the future tax collections of the City. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the "Act"), which the Governor signed into law on June 12, 2013. Among other things, the Act (i) reduces the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property to 3%, (ii) assigns a "rollback" (the percentage of a property's value that is subject to tax) to commercial, industrial and railroad property of 90%, (iii) creates a new property tax classification for multi -residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) and assigns a declining rollback percentage to such properties for each year until the residential rollback percentage is reached in the 2022 assessment year, after which the rollback percentage for such properties will be equal to the residential rollback percentage each assessment year, and (iv) exempts a specified portion of the assessed value of telecommunication properties. 28 Page 252 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C The Act includes a standing appropriation to replace some of the tax revenues lost by local governments, including tax increment districts, resulting from the new rollback for commercial and industrial property. Beginning in fiscal year 2018 the standing appropriation cannot exceed the actual 2017 appropriation amount. The appropriation does not replace losses to local governments resulting from the Act's provisions that reduce the annual revaluation growth limit for residential and agricultural properties to 3%, the gradual transition for multi -residential properties to the residential rollback percentage (currently 53% of market value), or the reduction in the percentage of telecommunications property that is subject to taxation. Given the wide scope of the statutory changes, and the State's discretion in establishing the annual replacement amount that is appropriated each year commencing in fiscal 2018, the impact of the Act on the City's future property tax collections is uncertain and the City has not attempted to quantify the financial impact of the Act's provisions on the City's future operations. It has been projected by Moody's Investor Service that local governments in Iowa are likely to experience sizeable reductions in tax revenues collected starting in fiscal 20181. According to Moody's, local governments that may experience disproportionately higher revenue losses include regions that have a substantial commercial base, a large share of multi -residential developments (such as college towns), or significant amounts of telecommunications property. Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues bonds, "[t]he governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described in this Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the City. 1 US Public Finance Weekly Credit Outlook, May 30, 2013, Moody's Investors Service. 29 Page 253 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C FINANCIAL INFORMATION Financial Reports The City's financial statements are audited annually by certified public accountants. 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. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governments. See APPENDIX A for more detail. No Consent or Updated Information Requested of the Auditor The tables and excerpts (collectively, the "Excerpted Financial Information") contained in this "FINANCIAL INFORMATION" section are from the audited financial statements of the City, including the audited financial statements for the fiscal year ended June 30, 2016 (the "2016 Audit"). The 2016 Audit has been prepared by RSM US LLP, Certified Public Accountants, Davenport, Iowa, (the "Auditor"), and received by the City Council. The City has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2016 Audit; nor has the City requested that the Auditor consent to the use of the Excerpted Financial Information and the 2016 Audit in this Official Statement. The inclusion of the Excerpted Financial Information and the 2016 Audit in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the City since the date of the 2016 Audit. Questions or inquiries relating to financial information of the City since the date of the 2016 Audit should be directed to the City. Summary Financial Information The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX A for the City's 2016 Audit. The City's expects its unassigned General Fund balance for the fiscal year ending June 30, 2017 to be approximately $10,086,000. The City has approved a budget for fiscal year 2018 with a planned use of general fund reserves in the approximate amount of $500,000. 30 Page 254 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Statement of Net Position Governmental Activities(]) Audited as of June 30 2012 2013 2014 2015 2016 ASSETS: Current Assets: Cash and Cash Equivalents $ 44,662,344 $ 49,056,222 $ 50,456,370 $ 43,718,657 $ 55,193,931 Restricted Cash and Cash Equivalents 1,370,659 0 0 0 1,117,473 Investments 502,638 0 0 0 0 Receivables Customer Accounts (net) 2,687,798 2,516,679 2,751,895 2,895,965 1,356,101 Property Taxes: Delinquent 356,963 408,384 370,394 444,766 238,057 Succeeding Year 45,820,209 45,278,635 44,313,058 44,531,570 45,205,033 Internal Accounts 117,496 (35,519) (38,704) (38,704) (38,704) Due From Other Governments 13,872,678 9,677,238 9,356,429 13,309,192 10,170,145 Miscellaneous 0 0 2,800 55,750 0 Accrued Interest 5 4 507 12 9,182 Special Assessments 91,358 96,042 88,327 105,165 212,133 Assets Held for Sale 0 0 391,935 96,867 0 Inventories and Prepaids 623,792 555,269 858,906 622,661 557,530 Total Current Assets $110,105,940 $107,552,954 $108,551,917 $105,741,901 $114,020,881 Noncurrent Assets: Restricted Assets: Cash and Cash Equivalents $ 8,064,241 $ 11,298,309 $ 13,589,888 $ 14,072,477 $14,483,713 Receivables 18,570 17,570 16,591 15,690 14,743 Loans and Notes (net) 27,500 27,500 22,500 52,000 31,900 Special Assessments Receivable 286,374 284,668 241,627 239,882 115,301 Assets Held for Sale 0 0 0 0 21,137 Debt Issue Cost (net) 278,578 0 0 0 0 Capital Assets (net) 248,462,728 243,193,263 261,597,031 287,232,481 303,044,905 Capital Assets Not Being Depreciated 57,262,184 70,235,253 62,405,450 70,660,786 62,157,003 Total Noncurrent Assets $314,400,175 $325,056,563 $337,873,087 $372,273,316 $379,847,565 Total Assets $424,506,115 $432,609,517 $446,425,004 $478,015,217 $493,868,446 DEFERRED OUTFLOWS OF RESOURCES: Pension Related Amounts Deferred Charge on Refunding Total Deferred Outflows of Resources LIABILITIES: Current Liabilities: Accounts and Retainages Payable Accrued Liabilities and Other Due to Component Unit Noncurrent Liabilities Due and Payable Within One Year Unearned Revenues Current Liabilities Payable From Restricted Assets Total Current Liabilities Noncurrent Liabilities: Customer Deposits Worker's Compensation Claims General Obligation Bonds and Notes (net) Other Loans and Notes Other Post Employment Benefits Obligation Compensated Absences and Deferred Compensation Net Pension Liability Total Noncurrent Liabilities Total Liabilities $ 0 $ 0 $ 0 $ 7,713,428 $ 14,935,009 0 75,536 247,277 0 0 $ 0 $ 75,536 $ 247,277 $ 7,713,428 $ 14,935,009 $ 5,180,723 895,540 312,830 11,868,054 46,549,635 1,370,659 $ 66,177,441 $ 4,111,495 1,078,044 330,297 11,168,183 346,688 1,552,090 $ 18,586,797 $ 5,575,612 1,196, 339 297,013 12,342,133 433,198 1,222,027 $ 21,066,322 $ 5,254,601 $ 3,828,499 1,261,759 1,464,495 303,436 325,221 12, 222, 838 12,474, 569 472,849 184,350 1,241,519 1,530,067 $ 20,757,002 $ 19,807,201 $ 101,693 $ 80,305 $ 77,282 $ 91,439 $ 77,947 0 244,000 384,000 333,000 447,500 59,718,570 57,327,720 59,787,720 58,604,111 66,344,519 1,786,352 2,200,407 2,060,954 1,828,437 1,745,017 3,896,661 4,172,270 4,278,930 4,368,084 4,443,299 759,395 1,680,560 1,255,029 1,280,489 1,515,181 0 0 0 34,408,967 46,062,744 $ 66,262,671 $ 65,705,262 $ 67,843,915 $100,914,527 $120,636,207 $132,440,112 $ 84,292,059 $ 88,910,237 $121,671,529 $140,443,408 DEFERRED INFLOWS OF RESOURCES Property Taxes $ Pension Related Amounts Total Deferred Inflows of Resources $ NET POSITION: Net Invested in Capital Assets Restricted Unrestricted Total Net Position 0 $ 45,659,345 $ 44,313,058 $ 44,531,570 $ 45,205,033 0 0 0 13,353,358 10,104,448 0 $ 45,659,345 $ 44,313,058 $ 57,884,928 $ 55,309,481 $250,819,314 $264,695,106 31,552,558 30,823,956 9,694,131 7,214,587 $292,066,003 $302,733,649 $273,871,470 30,579,471 8,998,045 $313,448,986 Note: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012 through 2016. 31 $307,415,275 $316,701,068 30,438, 501 20, 032, 995 (31,681,588) (23,683,497) $306,172,188 $313,050,566 Page 255 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Statement of Activities Governmental Activities(]) PROGRAMS/FUNCTIONS Governmental Activities: Public Safety Public Works Health and Social Services Culture and Recreation Community and Economic Development General Government Interest and Issuance Costs on Long -Term Debt Total Governmental Activities GENERAL REVENUES Taxes: Property Taxes Levied for General Purposes Property Taxes Levied for Debt Services Other Taxes: Local Option Sales Utility Excise Gaming Hotel/Motel Gas and Electric Cable Television Mobile Home Investment Earnings Miscellaneous Transfers Gain on Sale of Capital Assets Total General Revenues CHANGE IN NET POSITION NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR Audited Fiscal Years Ended June 30 2012 2013 2014 2015 2016 $ (24,633,401) $ (26,962,511) $ (27,045,782) $ (21,310,992) $ (29,103,221) (7,366,499) (7,355,202) (12,460,959) (6,854,877) (11,148,577) (235,832) (230,408) (241,453) (228,764) (316,702) (7,393,402) (7,469,905) (8,245,044) 13,744,928 (7,966,138) (4,523,048) (6,593,919) (1,963,742) (5,113,191) (3,836,136) (3,322,205) (2,685,498) (1,175,961) (3,860,911) (4,994,843) (2,459,710) (2,680,614) (2,349,054) (2,208,744) (2,048,517) $ (49,934,097) $ (53,978,057) $ (53,481,995) $ (25,832,551) $ (59,414,134) $ 29,825,135 $ 31,586,154 $ 30,834,085 $ 30,647,230 $ 30,794,803 12,997,545 13,950,496 13,751,830 14,867,749 15,533,194 9,697,321 9,981,245 1,661,363 1,625,172 1,253,433 1,290,747 1,246,022 1,227,557 0 0 917,690 943,803 68,493 73,773 54,485 45,578 3,315,471 3,925,918 (44,167) (4,740) 0 0 $ 60,992,791 $ 64,645,703 $ 11,058,694 $ 10,667,646 281,007,309 292,066,003 $292,066,003 $302,733,649 9,771,003 9,661,301 1,533,986 1,601,291 1,275,760 1,332,801 1,192,180 1,205,767 2,029,106 2,798,330 871,459 802,557 71,940 69,674 117,515 180,123 2,748,468 1,108, 633 0 (2,035) 0 0 $ 64,197,332 $ 64,273,421 $ 10,715,337 $ 38,440,870 302,733,649 267,731,318(2)5306,172,188 $313,448,986 $306,172,188 $313,050,566 9,853,274 1,577,775 1,343,753 1,281,311 2,652,450 775,606 69,910 187,046 2,034,957 0 188,433 $ 66,292,512 $ 6,878,378 Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012 through 2016. (2) Restated. The remainder of this page was left blank intentionally. 32 Page 256 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C ASSETS: Cash and Cash Equivalents Receivables: Customer Accounts, Net Property Tax: Delinquent Succeeding Year Special Assessments Loans and Notes Due from Other Funds Due from Other Governments Inventories and Prepaids Restricted Assets Total Assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND Liabilities: Accounts Payable Retainage Payable Accrued Liabilities Due to Other Funds Deferred Revenue Unearned Revenue Compensated Absences Due to Waterloo Convention & Visitors Bureau, Inc. Payable from Restricted Assets Advances from Other Funds Total Liabilities Deferred Inflows Of Resources: Unavailable Revenue: Property Tax Special Assessment Intergovernmental Total Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Undesignated Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances Balance Sheet General Fund(]) Audited as of June 30 2012 2013 2014 2015 2016 $ 6,715,450 $ 9,751,773 $ 9,421,413 $ 7,416,289 $ 9,673,606 864,121 724,877 1,099,695 1,277,964 1,219,742 170,484 19,249,397 377,732 27,500 7,101, 605 1,347,917 326,276 5,000,553 $41,181,035 193,870 187,386 231,932 119,780 19,817,434 18,692,084 19,111,523 20,117,362 380,710 329,954 345,047 327,434 27,500 22,500 52,000 31,900 4,993,029 5,627,443 7,949,466 5,772,389 943,914 657,469 678,807 690,196 322,077 392,741 323,781 267,413 6,985,898 9,735,395 10,183,800 11,637,110 $44,141 092 $46,166,080 $47,570,609 $49,856,932 FUND BALANCES: $ 447,916 0 519,105 0 20,185,396 0 132,925 312,830 1,370,659 0 $22,968,831 $ 3,549,211 $ 398,735 0 661,763 247,879 (2) 51,108 139,023 330,297 1,552,090 168,316 (2) $20,011,304 (2) 380,710 (2) 154,336 (2) $20,546,350 $ 467,941 2,201 752,901 0 (2) 158,544 151,238 297,013 1,222,027 168,316 $ 3,220,181 $ 320,982 2,207 918,749 0 (2) 198,192 155,434 303,436 1,241,519 168,316 $ 3,308,835 $ 349,429 0 1,103, 423 30,104 (2) 184,350 177,436 325,221 1,378,475 168,316 $ 3,716,754 $18,879,470 $19,343,455 $20,237,142 329,954 345,047 327,434 24,304 66,878 74,590 $19,233,728 $19,755,380 $20,639,166 $ 326,276 $ 322,077 $ 392,741 $ 323,781 $ 267,413 3,438,392 5,497,065 8,667,499 9,109,347 10,390,434 0 0 36,595 0 0 4,802,837 5,318,721 4,430,460 4,848,307 5,007,033 9,644,699 8,907,668 10,184,876 10,224,959 9,836,132 9,644,699 0 0 0 0 $18,212,204 $20,045,531 $23,712,171 $24,506,394 $25,501,012 $41 181 035 $44 141 092 $46 166 080 $47 570 609 $49 856 932 Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012 through 2016. (2) Format change. The remainder of this page was left blank intentionally. 33 Page 257 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Statement of Revenues, Expenditures and Changes in Fund Balances General Fund(]) REVENUES: Property Taxes Other Taxes Licenses and Permits Investment Income Rent Intergovernmental Changes for Service Interfund Charges for Service Special Assessments Miscellaneous Total Revenue Audited Fiscal Years Ended June 30 2012 2013 2014 2015 $17,897,588 $19,141,481 4,571,228 4,305,358 1,102,104 1,117, 773 19,751 15,808 859,563 936,215 1,925,231 1,794,721 6,426,802 6,230,678 1,885,000 1,885,000 93,870 124,467 2,267,944 2,073,791 $37,049,081 $37,625,292 EXPENDITURES: Current Operating: Public Safety $25,727,841 Public Works 2,762,123 Health and Social Services 346,952 Culture and Recreation 8,639,283 Community and Economic Development 1,761,904 General Government 4,670,933 Total Expenditures $43,909,036 Excess (Deficiency) of Revenue Over Expenditures $ (6,859,955) Other Financing Sources (Uses) 7,200,144 Net Change in Fund Balances $ 340,189 Fund Balance - Beginning of the Year 17,872,015 Fund Balance - End of the Year $18,212,204 Note: (1) Source: Audited financial statements for the City for the fiscal Pensions 2016 $19,702,253 $19,181,066 $19,969,442 6,203,201 6,991,109 6,917,710 1,334,705 1,387,340 1,455,620 51,809 72,596 80,633 1,004,877 1,037,693 976,204 1,225,512 1,208,120 1,040,156 6,595,480 7,116,773 7,824,098 1,885,000 1,885,000 1,885,000 139,408 127,266 138,434 1,973,383 1,463,565 1,454,500 $40,115,628 $40,470,528 $41,741,797 $26,704,290 $26,409,010 $26,155,655 $26,938,184 2,787,926 2,725,660 2,709,274 3,146,095 370,275 365,847 407,060 375,769 8,419,246 9,205,629 10,025,008 10,008,068 1,778,707 1,836,966 1,784,437 1,925,673 3,939,303 2,441,336 5,449,376 5,648,846 $43,999,747 $42,984,448 $46,530,810 $48,042,635 $ (6,374,455) $ (2,868,820) $ (6,060,282) $ (6,300,838) 8,207,782 6,535,460 6,854,505 7,295,456 $ 1,833,327 $ 3,666,640 $ 794,223 $ 994,618 18,212,204 20,045,531 23,712,171 24,506,394 $20,045,531 $23,712,171 $24,506,394 $25,501,012 years ended June 30, 2012 through 2016. EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS The City contributes to the Municipal Fire and Police Retirement System of Iowa Plan ("MFPRSI"). Membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa 50266 or at www.mfprsi.org. See APPENDIX A - Note 11 for more information. At June 30, 2015, the City reported a liability of $5,658,798 for its proportionate share of the net pension liability. The City also contributes 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. Employees who retire at age 65 (or anytime after age 55 with 30 or more years of service) are entitled to full monthly benefits. IPERS offers six options for distribution of retirement benefits. Benefits become fully vested after completing seven years of service or after attaining age 65. IPERS plan members are required to contribute a percentage of their annual salary, in addition to the City being required to make annual contributions to IPERS. Contribution amounts are set by State statute. The City's share is payable from the applicable funds of the City. All contributions are on a current basis. See APPENDIX A — Note 11 for additional information on IPERS. 34 Page 258 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C The following table sets forth the contributions made by the City and employees to IPERS for the period indicated. The City has always made their full statutorily required contributions to IPERS. The City cannot predict the levels of funding that will be required in the future. % of Payroll % of Payroll Fiscal Year Paid by the CitV Paid by Employee 2014 8.93% 5.95% 2015 8.93% 5.95% 2016 8.93% 5.95% 2017 8.93% 5.95% 2018 8.93% 5.95% The IPERS fund is administered by the IPERS Board with administration costs paid from income derived from invested funds. IPERS has an unfunded actuarial liability and unrecognized actuarial loss. The following table sets forth certain information about the funding status of IPERS that has been extracted from the Actuarial Valuation Report of IPERS for fiscal years noted below (the "IPERS Reports"). A complete copy of the Reports can be obtained by visiting IPERS website at: http://ww.ipers.org/ or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa 50306-9117. Fiscal Year Ending Actuarial Value June 30 of Assets [a] 2012 $23,530,094,461 2013 24,711,096,187 2014 26,460,428,085 2015 27,915,379,103 2016 29,033,696,587 Source: IPERS Reports. Actuarial Accrued Liability [b] $29,446,197,486 30,498,342,320 32,004,456,088 33,370,318,731 34,619,749,147 Unfunded Actuarial Accrued Liability (Actuarial Value) [b] -[a] $5,916,103,025 5, 787, 246,133 5,544,028,003 5,454,939,628 5, 586, 052, 560 Funded Ratio (Actuarial Value) 79.91% 81.02% 82.68%' 83.65% 83.86% Covered Payroll [c] $6,786,158,720 6,880,131,134 7, 099, 277, 280 7, 326, 348,141 7, 556, 515, 720 According to IPERS, the market value investment return on program assets is as follows: Fiscal Year Ended June 30 2012 Investment Return % 3.73% 2013 10.12% 2014 15.88% 2015 3.96% 2016 2.15% Source: IPERS Reports UAAL as a Percentage of Covered Payroll (Actuarial Value) ffb-a]/fc]} 87.18% 84.12% 78.09% 74.46% 73.92% Bond Counsel, the City and the Municipal Advisor undertake no responsibility for and make no representations as to the accuracy or completeness of the information available from the IPERS or MFPRSI discussed above or included on the IPERS or MFPRSI website, including, but not limited to, updates of such information on the State Auditor's website or links to other Internet sites accessed through the IPERS or MFPRSI website. Pursuant to GASB Statement No. 68, the City reported a liability of $12,117,384 as of June 30, 2016 for its proportionate share of the net pension liability for ("IPERS"). The net pension liability is the amount by which the total actuarial liability exceeds the pension plan's net assets or fiduciary net position (essentially the market value) available for paying benefits. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all IPERS participating employers. As of June 30, 2015, the City's proportion was 0.24526715%. For additional information, see the City's Audited Financial Statements for Fiscal Year Ending June 30, 2016 in APPENDIX A. 35 Page 259 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Other Post -Employment Benefits (OPEB) In June 2004, the Governmental Accounting Standards Board ("GASB") issued GASB 45, which address how state and local governments are required to account for and report their costs and obligations related to other post -employment benefits ("OPEB"), defined to include post-retirement healthcare benefits. GASB 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pension establishes financial reporting standards designed to measure, recognize and display OPEB costs. OPEB costs would become measurable on an accrual basis of accounting, and contribution rates (actuarially determined) would be prescribed for funding such costs. The provisions of GASB 45 do not require governments to fund their OPEBs. The City may establish its OPEB liability at zero as of the beginning of the initial year of implementation; however the unfunded actuarial liability is required to be amortized over future periods. As of July 1, 2015, the most recent valuation date, the actuarial accrued liability was $20,596,000, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $20,596,000. The covered payroll (annual payroll of active employees covered by the plan) was $33,862,392 and the ratio of the UAAL to covered payroll was 60.8%. As of June 30, 2015, there were no trust fund assets. As of the July 1, 2015 actuarial valuation date, projected unit credit method was used. See APPENDIX A — Notes (11) and (14) herein for further discussion of the City's employee retirement benefit obligations. REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX B - BOOK -ENTRY SYSTEM for information on registration, transfer and exchange of book -entry bonds. The Bonds will be initially issued as book -entry bonds. The City shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in Des Moines, Iowa. The City will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the City for use in the transfer and exchange of Bonds. Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner's attorney duly authorized in writing, the City shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount. The execution by the City of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month next preceding an interest payment date on such (known as the record date), nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. 36 Page 260 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C No service charge shall be made for any transfer or exchange of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a bond surrendered for redemption. TAX MATTERS — TAX-EXEMPT BONDS (SERIES 2017A) Tax Exemption Federal tax law contains a number of requirements and restrictions that apply to the Tax -Exempt Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Tax -Exempt Bond proceeds and facilities financed with Tax -Exempt Bond proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Tax -Exempt Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Tax -Exempt Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Tax -Exempt Bonds. Subject to the City's compliance with the above -referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Tax -Exempt Bonds is excludable from gross income for federal income tax purposes and interest on the Tax -Exempt Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Prospective purchasers of the Tax -Exempt Bonds should be aware that ownership of the Tax -Exempt Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Tax -Exempt Bonds should consult their tax advisors as to collateral federal income tax consequences. The interest on the Tax -Exempt Bonds is not exempt from present Iowa income taxes. Ownership of the Tax - Exempt Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Tax -Exempt Bonds. Prospective purchasers of the Tax -Exempt Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Qualified Tax -Exempt Obligations The City does not reasonably expect to issue more than $10,000,000 in tax-exempt obligations in calendar year 2017 which must be taken into account and accordingly, will designate the Tax -Exempt Bonds as "qualified tax-exempt obligations" under the exception provided in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), which affords banks and certain other financial institutions more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2) of the Code. 37 Page 261 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Tax Accounting Treatment of Discount and Premium on Certain Bonds The initial public offering price of certain Tax -Exempt Bonds may be less than the amount payable on such Tax - Exempt Bonds at maturity ("Discount Bonds"). An amount equal to the difference between the initial public offering price of Discount Bonds (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bonds. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Bonds may be greater than the amount of such Bonds at maturity ("Premium Bonds"). An amount equal to the difference between the initial public offering price of Premium bonds (assuming that a substantial amount of the Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes a premium to the initial purchaser of such Premium Bonds. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. Other Tax Advice In addition to the income tax consequences described above, potential investors should consider the additional tax consequences of the acquisition, ownership, and disposition of the Tax -Exempt Bonds. For instance, state income tax law may differ substantially from state to state, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to federal tax issues herein covered by the opinion and with respect to the various state tax consequences of an investment in Tax -Exempt Bonds. Audits The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Tax -Exempt Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the Tax -Exempt Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Tax -Exempt Bonds until the audit is concluded, regardless of the ultimate outcome. Reporting and Withholding Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Tax -Exempt Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Tax -Exempt Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Tax -Exempt Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. 38 Page 262 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Tax Legislation Current and future legislative proposals, including some that carry retroactive effective dates, if enacted into law, or clarification of the Code may cause interest on the Tax -Exempt Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent owners of the Tax -Exempt Bonds from realizing the full current benefit of the tax status of such interest. From time to time, proposals have been are made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Tax -Exempt Bonds. The introduction or enactment of any such legislative proposals or clarification of the Code may also affect, perhaps significantly, the market price for, or marketability of, the Tax -Exempt Bonds. Prospective purchasers of the Tax -Exempt Bonds should consult their own tax advisors regarding any pending or proposed tax legislation, as to which Bond Counsel expresses no opinion. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Tax -Exempt Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation. Enforcement Owners of the Tax -Exempt Bonds shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa and of the United States of America for the enforcement of payment of the Tax -Exempt Bonds, including, but not limited to, the right to a proceeding in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required by Iowa law and the Resolution authorizing issuance of the Tax -Exempt Bonds (the "Tax -Exempt Bond Resolution"). The obligation to pay general ad valorem property taxes is secured by a statutory lien upon the taxed property, but is not an obligation for which a property owner may be held personally liable in the event of a deficiency. The owners of the Tax -Exempt Bonds cannot foreclose on property within the boundaries of the Issuer or sell such property in order to pay the debt service on the Tax -Exempt Bonds. In addition, the enforceability of the rights and remedies of owners of the Tax -Exempt Bonds may be subject to limitation as set forth in Bond Counsel's opinion. The opinion to be delivered concurrently with the delivery of the Tax -Exempt Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and to the exercise of judicial discretion in appropriate cases. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Tax -Exempt Bond Resolution, including principal of and interest on the Tax -Exempt Bonds. Opinion Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. See APPENDIX C for a draft form of legal opinion for the Tax -Exempt Bonds. ALL POTENTIAL PURCHASERS OF THE TAX-EXEMPT BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE TAX-EXEMPT BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). 39 Page 263 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C TAXABILITY OF INTEREST — TAXABLE BONDS (SERIES 2017B AND SERIES 2017C) General The following discussion is a summary of certain Federal income tax consequences relating to the purchase, ownership, and disposition of the Taxable Bonds. This discussion does not purport to deal with all aspects of Federal income taxation that may affect particular investors in light of their individual circumstances, and is limited to investors who hold the Taxable Bonds as capital assets under Section 1221 of the Code, which generally means property held for investment. Prospective investors, particularly those subject to special rules, should consult their tax advisors regarding the consequences of purchasing, owning, and disposing of the Taxable Bonds for Federal income tax purposes, and for State and local tax purposes. Interest Income Taxable In general, interest on the Taxable Bonds is includable in the gross income of the owners thereof as ordinary interest income for Federal income tax purposes. Except for original issue discount, which accrues under special rules, interest income on the Taxable Bonds is so included in the gross income of the owners when accrued or received in accordance with the owner's regular method of Federal tax accounting. State of Iowa Tax Exemption (Series 2017C Bonds Only) In the opinion of Bond Counsel, under existing law, the interest on the Series 2017C Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, 2015, as amended (the "Iowa Code"); it should be noted, however that interest on the Series 2017C Bonds is required to be included in adjusted current earnings to be used in computing the "state alternative minimum taxable income" of corporations and financial institutions for purposes of Sections 422.33 and 422.60 of the Iowa Code. Interest on the Series 2017C Bonds is also subject to the taxes imposed by Division V (Taxation of Financial Institutions) of Chapter 422 of the Iowa Code. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Taxable Bonds. Prospective purchasers of the Taxable Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Sale, Exchange, or Other Disposition In general, upon the sale, exchange, or redemption of a Taxable Bond, an owner will recognize taxable gain or loss in an amount equal to the difference between the amount realized and the owner's adjusted tax basis in the Taxable Bond. An owner's adjusted tax basis in a Taxable Bond generally will equal the owner's initial cost of the Taxable Bond, plus any accrued original issue discount and accrued market discount previously included in the owner's taxable income. Such gain or loss generally will be capital gain or loss. Such gain or loss generally will be long-term capital gain or loss if the owner has held the Taxable Bond for more than one year. Subject to various special rules, the Code currently provides preferential treatment for certain net long-term capital gains realized by individuals and generally limits the use by any taxpayer of capital losses to reduce ordinary income. 40 Page 264 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Backup Withholding and Information Reporting In general, information reporting requirements will apply to non -corporate owners of Taxable Bonds with respect to payments of the principal of and interest on the Taxable Bonds and proceeds of sale of such Taxable Bonds before maturity. Backup withholding at a rate of 28% generally will apply to such payments unless the owner: (i) is a corporation or other exempt recipient and, when required, demonstrates that fact, or (ii) provides a correct taxpayer identification number, certifies under penalties of perjury when required that such owner is not subject to backup withholding, and has not been notified by the IRS that it has failed to report all interest and dividends required to be shown on its Federal income tax returns. Purchasers of the Taxable Bonds should consult their own tax advisors with respect to impacts of the taxability of interest. Enforcement Holders of the Taxable Bonds shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa and of the United States of America for the enforcement of payment of the Taxable Bonds, including, but not limited to, the right to a proceeding in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required by Iowa law and the resolutions authorizing issuance of the Taxable Bonds (the "Taxable Bond Resolutions".) The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Taxable Bond Resolutions. The remedies available to the owners of the Taxable Bonds upon an event of default under the Taxable Bond Resolutions, in certain respects, may require judicial action, which is often subject to discretion and delay. Under existing law, including specifically the federal bankruptcy code, certain of the remedies specified in the Taxable Bond Resolutions may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in these documents. The legal opinions to be delivered concurrently with the delivery of the Taxable Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Taxable Bond Resolutions, including principal of and interest on the Taxable Bonds. Opinions Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. See "APPENDIX C" for forms of Bond Counsel opinions for the Taxable Bonds. ALL POTENTIAL PURCHASERS OF THE TAXABLE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE TAXABLE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). 41 Page 265 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C CONTINUING DISCLOSURE For the purpose of complying with Rule 15c2-12 of the Securities Exchange Commission, as amended and interpreted from time to time (the "Rule"), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds to provide reports of specified information and notice of the occurrence of certain events, as hereinafter described (the "Disclosure Covenants"). The information to be provided on an annual basis, and the events as to which notice is to be given, is set forth in "APPENDIX D — Draft Continuing Disclosure Certificate". This covenant is being made by the City to assist the Underwriter(s) in complying with the Rule. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or Resolution, respectively. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. Pursuant to the Rule, in the last five years, the City believes it has complied in all material respects with regard to its prior Disclosure Covenants. Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. OPTIONAL REDEMPTION The Tax -Exempt Bonds and Series 2017B Bonds due June 1, 2018 - 2025, inclusive, are not subject to optional redemption prior to maturity. The Tax -Exempt Bonds and Series 2017B Bonds due June 1, 2026 - 2032, inclusive, are subject to optional redemption prior to maturity in whole or in part on any date on or after June 1, 2025 at a price of par and accrued interest. The Series 2017C Bonds due June 1, 2018 - 2025, inclusive, are not subject to optional redemption prior to maturity. The Series 2017C Bonds due June 1, 2026 - 2036, inclusive, are subject to optional redemption prior to maturity in whole or in part on any date on or after June 1, 2025 at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in any series and any order of maturity as determined by the City and within any maturity by lot. Thirty days' written notice of redemption shall be given to the registered owner of the Bond. Failure to give written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Written notice will be deemed completed upon transmission to the owner of record. All prepayments shall be at a price of par plus accrued interest. LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the issuance or sale thereof. There is no litigation now pending, or to the knowledge of the City, threatened against the City that is expected to materially impact the financial condition of the City. 42 Page 266 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C LEGAL MATTERS The Bonds are subject to approval as to certain legal matters by Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the sections regarding "TAX MATTERS — TAX-EXEMPT BONDS (SERIES 2017A)" and "TAXABILITY OF INTEREST — TAXABLE BONDS (SERIES 2017B AND SERIES 2017C"), and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the fmancial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. The "FORMS OF LEGAL OPINIONS" as set out in APPENDIX C to this Official Statement will be delivered at closing. The legal opinions to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. There is no bond trustee or similar person to monitor or enforce the provisions of the resolutions for the Bonds. The owners of the Bonds should, therefore, be prepared to enforce such provisions themselves if the need to do so arises. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolutions for the Bonds) may have to be enforced from year to year. The obligation to pay general ad valorem property taxes is secured by a statutory lien upon the taxed property, but is not an obligation for which a property owner may be held personally liable in the event of a deficiency. The owners of the Bonds cannot foreclose on property within the boundaries of the City or sell such property in order to pay the debt service on the Bonds. See "PROPERTY ASSESSMENT AND TAX INFORMATION" herein, for a description of property tax collection and enforcement. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel's opinion. The opinion will state, in part, that the obligation of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and to the exercise of judicial discretion in appropriate cases. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel's opinion. The opinion will state, in part, that the obligation of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and to the exercise of judicial discretion in appropriate cases. OFFICIAL STATEMENT AUTHORIZATION This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the City, and all expressions of opinion, whether or not so stated, are intended only as such. The auditors have not performed any additional review and have not consented to the inclusion of the excerpts from the financial statements and the 2016 Audit shown in APPENDIX A. 43 Page 267 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C This Official Statement is not to be construed as a contract or agreement amongst the City, the Underwriter, or the holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Official Statement or the sale of the Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The information contained in this Official Statement is not guaranteed. INVESTMENT RATING The City has supplied certain information and material concerning the Bonds and the City to the rating service shown on the cover page, including certain information and materials which may not have been included in this Official Statement, as part of its application for an investment rating on the Bonds. A rating reflects only the views of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from such rating agency. Generally, such rating service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating may be obtained from the rating agency: Moody's Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, telephone 212- 553-1658. UNDERWRITING The Tax -Exempt Bonds were offered for sale by the City at a public, competitive sale on May 17, 2017. The best bid submitted at the sale was submitted by (the "Tax -Exempt Bonds Underwriter"). The City awarded the contract for sale of the Tax -Exempt Bonds to the Tax -Exempt Bonds Underwriter at a price of $ (reflecting the par amount of $ , plus a reoffering premium of $ , and less an Underwriter's discount of $ ). The Tax -Exempt Bonds Underwriter has represented to the City that the Tax -Exempt Bonds have been subsequently re- offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. The Series 2017B Bonds were offered for sale by the City at a public, competitive sale on May 17, 2017. The best bid submitted at the sale was submitted by (the "Series 2017B Bonds Underwriter"). The City awarded the contract for sale of the Series 2017B Bonds to the Series 2017B Bonds Underwriter at a price of $ (reflecting the par amount of $ , plus a reoffering premium of $ , and less an Underwriter's discount of $ ). The Series 2017B Bonds Underwriter has represented to the City that the Series 2017B Bonds have been subsequently re- offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. The Series 2017C Bonds were offered for sale by the City at a public, competitive sale on May 17, 2017. The best bid submitted at the sale was submitted by (the " Series 2017C Bonds Underwriter"). The City awarded the contract for sale of the Series 2017C Bonds to the Series 2017C Bonds Underwriter at a price of $ (reflecting the par amount of $ , plus a reoffering premium of $ , and less an Underwriter's discount of $ ). The Series 2017C Bonds Underwriter has represented to the City that the Series 2017C Bonds have been subsequently re- offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. 44 Page 268 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C MUNICIPAL ADVISOR The City has engaged Speer Financial, Inc. as municipal advisor (the "Municipal Advisor") in connection with the issuance and sale of the Bonds. The Municipal Advisor is a Registered Municipal Advisor in accordance with the rules of the MSRB. The Municipal Advisor will not participate in the underwriting of the Bonds. The financial information included in the Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Municipal Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Municipal Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, nor is the Municipal Advisor obligated by the City's continuing disclosure undertaking. CERTIFICATION We have examined this Official Statement dated May 9, 2017, for the $9,245,000* General Obligation Bonds, Series 2017A, the $3,600,000* Taxable General Obligation Bonds, Series 2017B, and the $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C, believe it to be true and correct and will provide to the purchaser(s) of the Bonds at the time of delivery a certificate confirming to the purchaser that to the best of our knowledge and belief, information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. /s/ KELLEY FELCHLE City Clerk CITY OF WATERLOO Black Hawk County, Iowa *Subject to change. 45 /s/ QUENTIN M. HART Mayor CITY OF WATERLOO Black Hawk County, Iowa Page 269 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C APPENDIX A CITY OF WATERLOO BLACK HAWK COUNTY, IOWA FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS Page 270 of 486 Page 271 of 486 CITY OF WATERLOO, IOWA COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended June 30, 2016 Prepared by: City of Waterloo Finance Department Michelle C. Weidner, CPA, Chief Financial Officer Joyce Schroeder, Financial Analyst Emily Graham, Financial Analyst Brent Bohlen, Financial Analyst Page 272 of 486 Contents Introductory Section Table of contents i — ii Transmittal letter iii — x Officials xi Organizational structure xii GFOA Certificate xiii Financial Section Independent auditor's report 1 — 2 Management's discussion and analysis 3 — 14 Basic financial statements: Government -wide financial statements: Statement of net position 15 — 16 Statement of activities 17 — 18 Fund financial statements: Balance sheet - governmental funds 19 — 22 Reconciliation of governmental funds balance sheet to the statement of net position 23 Statement of revenues, expenditures and changes in fund balances - governmental funds 24 — 25 Reconciliation of the statement of revenues, expenditures and changes in fund balances of governmental funds to the statement of activities 26 Statement of net position — enterprise funds 27 — 28 Statement of revenues, expenses and changes in net position — enterprise funds 29 Statement of cash flows — enterprise funds 30 — 31 Notes to basic financial statements 32 — 76 Required supplementary information: Other postemployment benefit plan 77 Iowa Public Employees' Retirement System: Schedule of the City's proportionate share of the net pension liability 78 Schedule of City contributions 79 Notes to required supplementary information — IPERS pension liability 80 Municipal Fire and Police Retirement System of Iowa: Schedule of the City's proportionate share of the net pension liability 81 Schedule of City contributions 82 Notes to required supplementary information — MFPRSI pension liability 83 Budgetary comparison schedule — budget and actual (modified cash basis) — all governmental funds and proprietary funds 84 — 85 Note to required supplementary information - budgetary reporting 86 Schedule of comparison — funds statements (GAAP basis) to budgetary (modified cash) basis 87 — 90 Schedule of employer contributions for Waterloo Water Works pension plan 91 — 92 Schedule of changes in net pension liability and related ratios for Waterloo Water Works pension plan 93 Notes to required supplementary information for Waterloo Water Works pension plan 94 IPERS schedule of the Waterloo Water Works proportionate share of the net pension liability 95 IPERS schedule of Waterloo Water Works contribution 96 — 97 i Page 273 of 486 Contents Financial Section (continued) Supplementary information: Schedule of revenues, expenditures and changes in fund balances — General Fund Nonmajor governmental funds: Combining balance sheet Combining statement of revenues, expenditures and changes in fund balances Nonmajor special revenue funds: Fund descriptions Combining balance sheet Combining statement of revenues, expenditures and changes in fund balances (deficit) Capital projects funds: Fund descriptions Combining balance sheet Combining statement of revenues, expenditures and changes in fund balances (deficit) Fiduciary funds, fund descriptions Agency Fund, statement of changes in assets and liabilities 98 — 108 109 110 111 112 — 113 114 — 115 116 117 — 118 119 - 120 121 122 Statistical Section (Unaudited) Statistical section contents Net position by component Changes in net position Fund balances, governmental funds Changes in fund balances, governmental funds Assessed and taxable value of property Property tax rates Principal taxpayers Property tax levies and collections Ratios of outstanding debt by type Ratios of general bonded debt outstanding Direct and overlapping governmental activities debt Legal debt margin information Sewer revenue bond coverage Demographic and economic statistics Principal area employers Full-time equivalent city government employees by function/program Operating indicators by function/program Capital asset statistics by function/program 123 124 125 — 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 — 142 143 Financial Assistance Section Schedule of expenditures of federal awards Notes to schedule of expenditures of federal awards Summary schedule of prior audit findings Report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards Report on compliance for the major federal program and report on internal control over compliance required by Uniform Guidance Schedule of findings and questioned costs Corrective action plan 144 — 145 146 147 148 — 149 150 — 151 152 — 154 155 ii Page 274 of 486 CITY OF WATERLOO, IOWA 715 Mulberry St. • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571 QUENTIN HART • .May. or MICHELLE WEIDNER, CPA • Chief Financial Officer Mayor QUENTIN HART January 30, 2017 COUNCIL Members of the City Council MEMBERS and Citizens of the City of Waterloo, Iowa TOM POWERS Ward 1 BRUCE JACOBS Ward 2 PATRICK MORRISSEY Ward 3 JEROME AMOS, JR. Ward 4 RON WELPER Ward 5 TOM LIND At -Large STEVE SCHMITT At -Large We are pleased to present the Comprehensive Annual Financial Report of the City of Waterloo, Iowa (the "City") for the fiscal year ended June 30, 2016 in accordance with the provisions of Chapter 11 of the Code of Iowa. This report represents the 13th consecutive year that the financial statements are presented in conformity with Governmental Accounting Standards Board Statement # 34 and the 19th consecutive time that it has been presented in accordance with generally accepted accounting principles. It has also been audited by an independent certified public accounting firm in accordance with generally accepted auditing standards and the single audit act requirements and Subpart F of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). RSM US LLP issued an unmodified ("clean") opinion on the financial statements for the year ended June 30, 2016. This report is published to provide the City Council, financial institutions and citizens detailed information concerning the financial condition of the City of Waterloo. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. Management assumes this responsibility based on a comprehensive framework of internal control established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Management therefore believes the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. Management is required to provide a narrative introduction, overview and analysis of the basic financial statements, known as Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A, found at pages 3 through 14 and should be read in conjunction with it. The information presented in the Statistical Section contains information that management believes that readers of the financial statements will find useful for understanding City operations. WE'RE WORKING FOR YOU! An Equal Opportunity/Affirmative Action Employer Page 275 of 486 THE CITY'S BACKGROUND AND SERVICES Waterloo is the sixth largest and historically one of the most diverse cities in the state of Iowa, with a 2010 total census of 68,406. The City was incorporated in 1868 and is the county seat of Black Hawk County. Waterloo and the neighboring City of Cedar Falls are the primary urban centers in the region, serving as a retail and healthcare hub for the region. The City operates under a Mayor — Council form of government, with the mayor as the elected chief executive. The City Council is comprised of seven members, five of whom are elected from separate wards and two who are elected at -large. The Mayor is elected to two-year terms, and the City Council members are elected to four-year staggered terms. The City of Waterloo provides a full range of municipal services to its citizens and is organized into 20 operating departments, the activities of which are directed by the Mayor. The public services provided by the employees of the City include police and fire protection, building inspections and animal control, a regional airport, construction and maintenance of highways, streets and other infrastructure, and recreational and cultural and arts services. The City also provides solid waste collection and wastewater treatment services. Various other human services are provided through the community development, housing and human rights departments. In addition, the central garage provides vehicle maintenance services, while the human resources and management information systems departments, city attorney, city clerk and chief financial officer and their respective departments perform various administrative functions. Funds, agencies, boards, commissions, trusts and authorities involved in the provision of municipal services must be included in the City's financial reporting as component units if the City is financially accountable for them. Although the Waterloo Water Works and the Waterloo Convention & Visitors Bureau, Inc. are operated as independent entities, they do meet the requirements to be considered component units of the City, and therefore, transactions of these entities are required to be included in this report. The Waterloo Community School District and the Metropolitan Transit Authority do not meet the established criteria for component entities of the City and are therefore not included in this report. MAJOR INITIATIVES AND PROJECTS The City has undertaken a number of major improvement initiatives as described in the following paragraphs. Downtown redevelopment and the creation of economic corridors, districts of similar uses, and opportunities for other compatible development have been development priorities. The City acquired more than 4 blocks of land in the downtown core area, creating sites for development. ➢ Cedar Valley SportsPlex The Cedar Valley SportsPlex, a 125,000 square -foot recreational facility includes such things as indoor soccer fields, gyms, a leisure pool and slide, fitness facility, running track and multi-purpose activity spaces, opened in January 2014. Construction of this $23 million building was completed using private donations and gaming grants. It was built on a 1.5 -block area downtown. Several vacant and flood -damaged buildings were acquired and demolished by the City to redevelop this site. This venue is spurring activity in the downtown area. The facility continues to set membership records. iv Page 276 of 486 ➢ Cedar Valley Riverfront Renaissance The Riverfront Renaissance project was a major project that utilized state "Vision Iowa" funds, as well as private funds, local funds, and partnerships with other businesses to create three major objectives: o The RiverWalk Loop — a walking and recreational trail system along the banks of Cedar River from 1st Street to 18th Street in Downtown Waterloo. This "loop" interconnects with the overall trail system of the Cedar Valley (over 100 miles total) and is a part of the American Discovery Trail system through Iowa. o The Cedar River Dam improvements — an inflatable bladder dam system that improved boatable recreational water depth upstream of the dam at 4th Street. It was designed to allow for a potential kayak course in the future, which is now under preliminary design. o The Riverfront Amphitheater — hosting former President Barack Obama, various concerts, Friday Loo celebrations, and the local municipal band, this space has become a popular destination for many activities, and is bringing more residents and visitors to downtown Waterloo and the riverfront. Additionally, the Center for the Arts Youth Pavilion, the Veterans addition to the Grout Museum and the construction of the East Side Ministerial Alliance Community Center were all leveraged by this project. ➢ Cedar Valley TechWorks Campus Area At the other end of the Riverwalk Loop, the $52 million Cedar Valley Tech Works Campus Project is transforming two former Deere and Company 6 -story industrial buildings into a Marriott Hotel, Deere Training center and a multi -tenant green technology and advanced manufacturing innovation center. To help in the implementation of this project, the City of Waterloo became the State of Iowa's first project approved under a new State program called the Iowa Reinvestment District. The overall development will also include the creation of a Marina along the Cedar River and lots available for additional commercial development. Other development that has been created in the downtown area includes the $15 million Grand Crossing private development. Phase I is 90% complete creating 68 condominium units, Phase II has just begun construction which will have 40 condominium units and first floor retail and commercial space, and Phase III is in planning stages for over 40 additional units and commercial space. In addition, Hawkeye Community College has begun work on an $8 million urban campus downtown between these sites which will bring additional educational and student services populations downtown. ➢ Significant Brownfields Redevelopment A new 160,000 square -foot City Public Works building is open on the site of a former manufacturing company. The City received several grants to redevelop the former Construction Machinery Company site (CMC) and utilized those funds to demolish unsafe buildings, remove underground rail cars previously used for environmental dumping, and acquire one 25,000 square -foot building for redevelopment. The site is enrolled in the Iowa Department of Natural Resources Land Recycling Program. In addition to redeveloping a Brownfield site, the facility consolidated many public works functions and provides more efficient and effective operations for the City. The City was awarded $5 million in state I -Jobs funding and $1 million in funds from the Black Hawk Gaming Association for this $9 million project. v Page 277 of 486 The City also completed the demolition of more than ten acres of buildings on the former Chamberlain Manufacturing complex site. Chamberlain, the company that formerly operated Chamberlain Manufacturing, is working with the EPA to address potential pollution remediation needs at the site as well. As the work on environmental testing continues to show evidence of progress, the City will continue to work towards additional cleanup and redevelopment activities. > Street Improvements The street system continues to be maintained using a substantial program of reconstruction, overlays and long-term repairs funded with approximately $9.5 million in annual local option sales tax collections. The one -cent local option tax was renewed in November 2013 by the taxpayers for another ten years, continuing to be required to be used for street repairs and improvements. Other major construction initiatives that are primarily funded with grants include the reconstruction of Highway 63 through the northern part of the city. The first segment of Highway 63 is open and design continues for other segments. Additionally, $7 million has been invested in traffic flow improvements to Kimball Avenue, which is now open. The initial paving and construction of Shaulis Road in the southern part of the city and the reconstruction of East Donald Street on the north side of the city have also been completed. > Recreational Facilities The City is also continuing to develop its extensive system of bike trails, which are being connected to countywide and regional trail networks, creating a system of more than 117 miles of trails. The Riverwalk Loop trail in downtown Waterloo has been completed and a new trail has been constructed along the newly constructed Shaulis Road connection from Highway 21 to Highway 63. A recreational area for all -terrain vehicle trails has been developed in the Riverview neighborhood, along with new picnic shelters, fishing jetties and walking trails. A new trail around Getty Lake is complete. Many improvements have been made to Riverfront Municipal Stadium, the city's baseball facility, over the past several years, including a new video board/scoreboard for the stadium. Riverfront Sports Park has been developed next to the baseball stadium with improvements including irrigation, field renovations, and electronic scoreboards, new and improved field lighting and new dugouts. Similar improvements are being made to baseball facilities at Tibbitts and Danes baseball complexes. The River Loop Amphitheatre and Mark's Park children's splash park are drawing crowds to the downtown riverfront. An LED video board and sound system have been installed at Young Arena, in addition to other facility improvements made to the facility by the Black Hawks Hockey team, a member of the United States Hockey League. Sans Souci Island, a FEMA flood buyout site on the banks of the Cedar River has been opened to the public for hiking, fishing and picnicking. > Storm Water Pump Stations As a result of the severe flooding that occurred in 2008, the City procured $17 million in funding to construct eight storm water pump stations. Construction of all eight of the pump stations is now complete. The pump stations were effective in protecting both private and public property during flooding that occurred in the fall of 2016. vi Page 278 of 486 ECONOMIC OUTLOOK The economy of Waterloo and the Cedar Valley area remains positive with continued commercial and industrial activity The City has a significant number of national and international businesses including Tyson, ConAgra, Omega/Master Brand Cabinetry, Bertch Cabinets, and Deere Waterloo Works Drivetrain Operations, Engine Works, Foundry, Product Engineering and Assembly facilities. Our regional economic development corporation, the Greater Cedar Valley Alliance & Chamber, continues to work to spur development in Waterloo as well as the entire metropolitan area. Building permit valuation reached the second highest level at $127.5 million compared to $100.2 million during the fiscal year ended June 30, 2015. There was a substantial increase in residential construction activity during the past year, with permits for 205 total new units, well above the 129 total that were taken out during the fiscal year 2015. This included Waterloo's highest total single family home construction of 99 for the year. Waterloo is a regional retail center for Black Hawk and surrounding counties. Retail sales have increased steadily by an annual average rate of approximately 1.5% in Waterloo during the ten years ended June 30, 2015 (the most recent period for which statistics are available). Retail sales in 2005 totaled $734 million and increased to $1.2 billion for the fiscal year ended June 30, 2015 (the most recent information available). The 2010 census reflected a slight population decline of 0.4% from 2000. Although Waterloo has not returned to the population levels of the 1970's (prior to the major disruption in the farm economy), the population has remained relatively stable during the past decade. The overall city tax base has also remained stable, reflecting an average annual growth level of approximately 1% for the last five years. The City has developed a more diverse employment base since the mid -seventies, although John Deere and Company continues to play a major role in the local economy. Deere (a Fortune 100 company) remains the city's largest employer and one of the larger taxpayers, currently accounting for about 6.5% of total county employment and 2% of total property values. Deere has invested $915 million in its Waterloo area facilities since 2010, including the Westfield advanced manufacturing facility and the Waterloo Foundry, now the largest electric foundry in the state. Deere's staff levels in Waterloo have grown by 34% over the past several years and reflect net growth even with the lay-off of nearly 1,000 employees during the past year. The Company has continued to experience record-setting performance years recently. The city's average unemployment level of 5.6% (at September 30, 2016) compared to the state level of 4.2%, and the national level of 5.0%. The Isle Casino Hotel Waterloo continues to provide a stable, strong revenue source for the City. The Isle employs nearly 600 Iowans and generates approximately $860,000 in annual City property taxes. The City receives a host city fee of 0.5% of weekly adjusted gross receipts in addition to an annual development fee of 1% of weekly adjusted gross receipts from the Isle. The City also continues to benefit from the one -cent local option tax for school construction. Nearly all school buildings in the city have been replaced with new construction or renovated to better address students' learning needs. The City of Waterloo and the Waterloo Community Schools have been working in partnership to utilize former school buildings and sites to be used as infill residential development. This helps the City to reinvigorate existing neighborhoods with new construction, adding new tax base to the community without the expense of additional infrastructure, and utilizing land for its highest and best use. The City and School District have demolished six dilapidated former school buildings in recent years. The sites are being vii Page 279 of 486 redeveloped into residential neighborhoods, with 26 new single family homes now completed, 2 under construction, and approximately 20 more planned. The Waterloo Community Schools have also launched a new Career Interest Academy format for many students to offer courses with a career them such as construction, business and finance, performing arts, healthcare, marketing, or engineering. East and West High Schools also offer the International Baccalaureate World Schools program. These schools share a common philosophy—a commitment to high quality, challenging, international education that both schools believe is important for our students. The TechWorks Campus is a 30 -acre advanced manufacturing, research & development, innovation, education, commercial and manufacturing center. Located in downtown Waterloo, the campus is comprised of 20 acres of development sites and 300,000 square feet of flex space and is a place for innovation and development. The 300,000 square feet of existing flex space is divided among two historic John Deere manufacturing buildings: Tech 1 and Tech 2. The Tech 1 building is home to the University of Northern Iowa Metal Casting Additive Manufacturing Center and Design Lab, Hawkeye Community College Design Lab, and is home to the largest 3D printer in North America that uses a variety of 3D printing formats, creating a well-equipped applied research center with a national reputation for innovative additive manufacturing assistance. The Cedar Valley Makerspace is also located in Techl. The campus includes parcels suitable for larger scale manufacturing facilities and two retail lots. TechWorks is the first technology park of its kind in Iowa to combine world-class business amenities within a Brownfield industrial redevelopment project. This will help leverage the region's existing advanced manufacturing base. The TechWorks has received several grants to develop the site. The construction of a new extension to West Commercial Street has opened a new route to the TechWorks Campus and Downtown Waterloo. Storm water improvements were also made to aid in the development of the TechWorks complex. The John Deere Engine and Tractor Museum opened to the public in December 2014 on the TechWorks campus and is expected to bring many visitors to downtown annually. A marina development is planned along the riverfront portion of the campus. The City and the Iowa Department of Transportation have undertaken a project to reconstruct Highway 63 through downtown Waterloo, which has resulted in the appropriation of $11,500,000 in federal funds and over $25 million in State funds to complete the design and initiate construction. The primary goals of this project are to correct the highway's current negative impact on adjacent low income and minority -populated communities, improve traffic operations and capacity and encourage private sector development along this corridor. Construction of the first segment is now complete, with two more phases to follow in the next few years. The Avenue of the Saints provides access north through Minneapolis and south through St. Louis, while Highway 20 provides access east through Chicago and west through Sioux City. The City will use over $8.7 million in federal roads funds allocated to the local urban area by the Metropolitan Planning Organization to make additional improvements, including trails and pedestrian accommodations, along the newly renovated highway system. viii Page 280 of 486 The City continues to see healthy private investment in the community. Major projects underway include the following: ➢ A $60 million expansion by Con Agra Foods, adding a David's Sunflower Seeds product line to the existing Snack Pack pudding product line, bringing an additional 52 high - paying jobs to the community. Several additional buildings are also under construction in this area, located on the newly constructed Geraldine Road extension. ➢ More than 500 lots are being planned, platted, and constructed for continued and future residential development. ➢ Commercial development exceeding $15 million is being planned near the Highway 63 and Highway 20 Interchange area, including a Love's Travel Stop, an expansion by Hawkeye Stages, an existing local business, and a multi -use commercial building. ➢ Commercial and office development along the San Marnan corridor near the Ansborough Interchange continues with over $7.5 million in projects now open, underway, or planning to start construction in the spring. This activity brings more retail components to the business park area with a new convenience store, car wash, as well as medical office and new 100,000 sq. ft. of a new modern, interior storage facility. This area also marks Farmers State Bank acquiring the Tower Park office complex and adding another 20 employees to its work force of 100 in the area. ➢ The VGM Group, which currently employs more than 800 people in the area, is currently constructing a 74,000 square -foot professional office building designed to provide space for another 250-300 employees. This expansion will also provide additional lots for further office campus development through the extension of two roads. ➢ The South Waterloo Business Park was recently named an Iowa Economic Development Authority (IEDA) certified economic development site. The site totals 181 acres and is located immediately south of Highway 20 and generally bounded by Ansborough Avenue, Shaulis Road, and Kimball Avenue. Waterloo is one of only 17 sites certified in Iowa. FINANCIAL MANAGEMENT INFORMATION Internal Controls - City management is responsible for establishing and maintaining internal controls designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. Internal control is designed to provide reasonable, but not absolute assurance that those 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. Budgetary Controls - The City's management staff is responsible and is actively involved in the financial planning and management of the City for both short-term daily operations and long- range strategic planning. The objective of established budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council, as well as the budget control procedures mandated by the State of Iowa for the prevention of spending that would lead to negative fund balance. Budgetary control is exercised at two levels in compliance with both the requirements of the Code of Iowa and the City Council's adopted policies. Management control polices adopted by the City Council require that departmental and activity budgets comply with line -item ix Page 281 of 486 appropriations. Amendments exceeding de minimus guidelines require the specific approval of the City Council Finance Committee. The adopted policies also require most expenditures exceeding $1,000 to be pre -authorized by the City Council Finance Committee, which reviews those items for budget availability and compliance with procurement procedures. Long-term financial and capital improvement planning are crucial strategic functions of the City. The City's management staff, coordinated by the Planning Department, prepares and presents the five-year Capital Improvement Program (CIP) to the Mayor and City Council for their review and approval annually. The CIP outlines the City's planned schedule of capital project construction over the next five-year cycle. The CIP provides an analysis of the financial funding impact and capital debt impact of the planned construction project program. 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 Waterloo, Iowa for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2015. This is the twelfth year that the City received this award, which is a prestigious national award, recognizing conformance with the highest standards for the preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. The CAFR must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. Management believes that the current report continues to meet the Certificate of Achievement program requirements and we are submitting it to GFOA to determine its eligibility for another certificate. ACKNOWLEDGMENTS This report could not have been completed without the dedicated service of the entire Finance department and other City staff in addition to the RSM US LLP audit team. We want to express our appreciation to everyone who was involved in the completion of the audit process and the preparation of this report including the administrative staff of all City departments, and especially to Joyce Schroeder, Emily Graham and Brent Bohlen in the Finance Department and the City Clerk's staff as well. Each of you has our appreciation and respect for your contributions to this report. We also want to thank the City Council for their participation in the planning and oversight processes of the City of Waterloo financial operations. Sincerely, Quentin M. Hart Mayor x Michelle C. Weidner, CPA Chief Financial Officer • Page 282 of 486 City of Waterloo, Iowa Officials June 30, 2016 Name Title Term Expires Ernest G. Clark David Jones Carolyn Cole Patrick Morrissey Quentin Hart Ron Welper Tom Lind Steven Schmitt Quentin Hart David Jones Bruce Jacobs Patrick Morrissey Jerome Amos Ron Welper Tom Lind Steven Schmitt Michelle Weidner, CPA Suzy Schares, CMC Eric Thorson, PE David Zellhoefer Daniel Trelka Elected (Before January, 2016) Mayor Council Member- 1st Ward Council Member - 2nd Ward Council Member - 3rd Ward Council Member - 4th Ward Council Member - 5th Ward Council Member - At -Large Council Member - At -Large (After December 31, 2015) Mayor Council Member- 1st Ward Council Member - 2nd Ward Council Member - 3rd Ward Council Member - 4th Ward Council Member - 5th Ward Council Member - At -Large Council Member - At -Large Appointed Chief Financial Officer City Clerk City Engineer City Attorney Director of Safety Services xi January 2016 January 2018 January 2016 January 2018 January 2016 January 2018 January 2018 January 2016 January 2018 January 2018 January 2020 January 2018 January 2020 January 2018 January 2018 January 2020 Indefinite Indefinite Indefinite Indefinite Indefinite Page 283 of 486 CITY OF WATERLOO, 10WA - ORGANIZATIONAL STRI'CT l' 6 ƒ\ a xii 6 ƒm- =\! § )±333 §2 )3{ƒ °47.A A 6 2 f Page 284 of 486 Govcsnifent Finance Officers Aswciation Certificate of Achievement for Excellence in Financial Reporting Pre,,anted tc' City of Waterloo Iowa for its Comprehensive Annual 1'i[',arlcial Report For ilk f r; . ai Year Ended June 30, 2015 Ey_ sc ttive Di ctor!CEC) Page 285 of 486 ■� RSM Independent Auditor's Report RSM US LLP To the Honorable Mayor and Members of the City Council City of Waterloo, Iowa Waterloo, Iowa Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Waterloo, Iowa (the City) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the discretely presented component units, Waterloo Water Works and Waterloo Convention & Visitors Bureau, Inc., which collectively represent 100 percent of the assets, net position and revenues of the aggregate discretely presented component units. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the discretely presented component units, is based solely upon the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of Waterloo Convention & Visitors Bureau, Inc. were not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. THE POWER OF BEING UNDERSTOOD AUDIT I TAX [ CONSULTING 1 RSM US LLP is the as. member firm of RSM International. a global network of independent audit tax, and consulting firms. Visit rsmus.cam/aboutus for more information regarcuI g ..286 of 486 RSM international. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Waterloo, Iowa as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As explained in Note 22 to the basic financial statements, the Waterloo Water Works adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Rate, which restated beginning net position, net pension liability and deferred outflows of resources of the aggregate discretely presented component units. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, schedule of funding progress for other postemployment benefit information, the schedule of the city's proportionate share of the net pension liability and schedule of city contributions for the Iowa Public Employees' Retirement System, the schedule of the city's proportionate share of the net pension liability and schedule of city contributions for the Municipal Fire and Police Retirement System of Iowa, and budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We and other auditors have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying combining individual and nonmajor fund financial statements and other schedules and statements, listed in the table of contents as supplementary information, and the schedule of expenditures of federal awards, as required by the Single Audit Act and Subpart F of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us. In our opinion, based on our audit and the procedures performed as described above, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The accompanying introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audits of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 30, 2017 on our consideration of the City's internal control over financial reporting and 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. s141 PS 12P Davenport, Iowa January 30, 2017 2 Page 287 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 As management of the City of Waterloo, we offer readers of the City of Waterloo's financial statements this narrative overview and analysis of the financial activities of the City of Waterloo for the fiscal year ended June 30, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found at pages - x of this report. Financial Highlights • The assets and deferred outflows of resources of the City of Waterloo exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $405,271,154 (net position). Of this amount, the City's unrestricted net position ($11,182,107) is negative, due to recording the City's share of pension liabilities as required due to the implementation of GASB Statement No. 68, an accounting standard applicable for the city's participation in pension plans. • The City's total net position increased by $8,462,871 compared to the 2015 ending net position of $396,808,283. • As of the close of this current fiscal year, the City of Waterloo's governmental funds reported combined ending fund balances of $71,394,597, an increase of $11,017,473 in comparison with the prior year. Approximately 7.5 percent of this total amount, $5,341,107, is available for spending at the City's discretion (unassigned fund balance), although some funds are legally limited for specified purposes. • At the end of the current fiscal year, unassigned fund balance for the General Fund was $9,836,132, or 20.5 percent of total General Fund expenditures. • The City of Waterloo's total long-term debt increased by $17,165,550 or 12.6 percent during the current fiscal year, due primarily to the issuance of general obligation bonds to finance various capital improvements and also for economic development projects. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Waterloo's basic financial statements. The City of Waterloo's basic financial statements are comprised of three components: (1) government -wide financial statements, (2) fund financial statements and (3) notes to the 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 of Waterloo's finances in a manner similar to a private - sector business. The statement of net position presents information about all of the City of Waterloo's assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Waterloo is improving or deteriorating. The statement of activities presents information illustrating how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 3 Page 288 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 Both of the government -wide financial statements distinguish functions of the City of Waterloo that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Waterloo include public safety, public works, health and social services, culture and recreation, community and economic development and general government. In addition, the convention bureau provides marketing services for tourism operated as a separate discretely presented component unit of the City. The business -type activities of the City of Waterloo include the sanitary sewer system and the solid waste system. The water utility is operated as a separate discretely presented component unit of the City. For detailed information about the Waterloo Convention & Visitors Bureau, Inc. or the Waterloo Water Works, please see their separate audited financial statements. The government -wide financial statements include only the City of Waterloo itself (known as the primary government) and its discretely presented component units, the Waterloo Water Works and Waterloo Convention and Visitors Bureau, Inc. The Waterloo Community School District and the Metropolitan Transit Authority provide services to the citizens of Waterloo but do not meet established criteria as component units of the City and thus are not included in this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Waterloo, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. All of the funds of the City of Waterloo can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Waterloo maintains 20 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Trust and Agency Fund, Tax Increment Financing Fund, General Obligation Debt Service Fund, and the June 2016 GO Bonds Fund, all of which are considered to be major funds. Data from the other 15 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary funds. The City of Waterloo maintains two proprietary funds, which are used to report the same functions presented as business -type activities in the government -wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the sanitary sewer fund and the sanitation fund. The sanitary sewer fund is considered to be a major fund of the City of Waterloo. 4 Page 289 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of Waterloo's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has one type of fiduciary fund, an agency fund. There were no assets held in the fiduciary fund as of June 30, 2016. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. Other information. The City's budgetary comparison schedule and the other postemployment benefit plan schedule of funding progress are presented as required supplementary information immediately following the notes to the financial statements. The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Waterloo, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $405,271,154 at the close of the fiscal year ended June 30, 2016. By far the largest portion of the City of Waterloo's net position (98 percent) reflects its investment in capital assets (e.g., land, buildings and improvements, infrastructure and vehicles and equipment), less any related debt used to acquire those assets that is still outstanding. The City of Waterloo uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Waterloo's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Statement of Net Position A condensed version of the Statement of Net Position as of June 30, 2016 and 2015 follows: City of Waterloo's Net Position Governmental Activities Business -Type Activities Total 2016 2015 2016 2015 2016 2015 Assets Current and other assets $ 128,687,675 $ 120,121,950 $ 22,481,940 $ 29,940,346 $ 151,169,615 $ 150,062,296 Capital assets 365,180,771 357,893,267 97,981,444 92,799,424 463,162,215 450,692,691 Total assets 493,868,446 478,015,217 120,463,384 122,739,770 614,331,830 600,754,987 Deferred outflows of resources 14,935,009 7,713,428 889,137 461,614 15,824,146 8,175,042 Liabilities Current liabilities 19,807,201 20,757,002 4,222,849 5,485,528 24,030,050 26,242,530 Long-term liabilities 120,636,207 100,914,527 24,297,384 26,287,667 144,933,591 127,202,194 Total liabilities 140,443,408 121,671,529 28,520,233 31,773,195 168,963,641 153,444,724 Deferred inflows of resources 55,309,481 57,884,928 611,700 792,094 55,921,181 58,677,022 Net position Net investment in capital assets 316,701,068 307,415,275 79,522,665 78,270,214 396,223,733 385,685,489 Restricted 20,032,995 30,438,501 672,515 727,235 20,705,510 31,165,736 Unrestricted (23,683,497) (31,681,588) 12,025,408 11,638,646 (11,658,089) (20,042,942) Total net position $ 313,050,566 $ 306,172,188 $ 92,220,588 $ 90,636,095 $ 405,271,154 $ 396,808,283 5 Page 290 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 $20,229,528 of the City of Waterloo's net position (5.0 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($11,182,107) is a negative position, due to the net pension liabilities for the city's share of liabilities in the (PERS and MFPRSI pension plans. The separate governmental activities had positive balances in the net investment in capital assets and fund balances restricted for specific purposes. Business -type activities also reported positive balances in all categories. The same situation held true for the prior fiscal year. The City's total net position increased by $8,462,871 during the current fiscal year from the 2015 net position of $396,808,283. Governmental -type activities' net position increased by $6,878,378 from the 2015 net position of $306,172,188. This increase was largely related to the net effect of capital asset transactions. See page 26 for a reconciliation of this increase. The total business -type activities' net position increased by $1,584,493 from the 2015 net position of $90,636,095. This increase was due primarily to capital asset and related debt transactions. Statement of Activities A condensed version of the Statement of Activities as of June 30, 2016 and 2015 follows: City of Waterloo's Changes in Net Position Governmental Activities Business -Type Activities Total 2016 2015 2016 2015 2016 2015 Revenues: Program revenues: Charges for services $ 10,025,626 $ 11,545,698 $ 17,928,023 $ 16,246,872 $ 27,953,649 $ 27,792,570 Operating grants and contributions 18,581,010 11,335,064 275,516 298,560 18,856,526 11,633,624 Capital grants and contributions 9,065,137 39,116,737 1,271,776 - 10,336,913 39,116,737 General revenues: Property taxes 46,327,997 45,514,979 - 46,327,997 45,514,979 Other taxes 17,554,079 17,471,721 - 17,554,079 17,471,721 Other 2,410,436 1,288,756 49,277 41,425 2,459,713 1,330,181 Total revenues 103,964,285 126,272,955 19,524,592 16,586,857 123,488,877 142,859,812 Expenses: Public safety Public works Health and social services Culture and recreation Community and economic development General government Interest on long-term debt Sanitary sewer Sanitation Total expenses 34,120,160 29,670,192 295,088 11,950,688 13,753,669 5,247,593 2,048,517 25, 988, 767 29, 570, 277 325,607 11,676,287 13,190, 672 4,869,696 2,208,744 14, 018, 836 12, 518, 569 3,921,263 3,612,307 34,120,160 29, 670,192 295,088 11,950,688 13,753,669 5,247,593 2,048,517 14,018,836 3,921,263 25, 988, 767 29, 570, 277 325,607 11,676,287 13,190, 672 4,869,696 2,208,744 12, 518, 569 3,612,307 97,085,907 87,830,050 17,940,099 16,130, 876 115,026,006 103, 960, 926 Increase in net position before transfers 6,878,378 38,442,905 1,584,493 455,981 8,462,871 38,898,886 Transfers (2,035) 2,035 Change in net position 6,878,378 38,440,870 1,584,493 458,016 8,462,871 38,898,886 Net position, beginning 306,172,188 267,731,318 90,636,095 90,178,079 396,808,283 357,909,397 Net position, ending $ 313,050,566 $ 306,172,188 $ 92,220,588 $ 90,636,095 $ 405,271,154 $ 396,808,283 6 Page 291 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 Total governmental activities' revenue for the current fiscal year was $103,964,285. The largest single revenue source for the City was property taxes of $46,327,997. Property taxes increased by $813,018 (1.8 percent) during the year. This increase is a result of a combination of factors, including an increase in the assessed value of property of 0.7 percent, a reduction of 0.5 percent in the taxable value of property and a reduction of 1.1 percent in the levy rate. Certain revenues are generated that are specific to governmental program activities. These totaled $37,671,773 during the fiscal year ended June 30, 2016. The graph below illustrates the comparison between the expenses by governmental activity type and the revenues generated that are specific to those activities. Expenses and Program Revenues—Governmental Activities $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- $(5,000,000) Public safety Public works lk Health and Culture and Community General Interest and social recreation and government issuance services economic costs on development long-term debt •Expenses ■Revenues The graph below shows the percentage of the total governmental revenues allocated by each revenue type. Revenues by Source - Governmental Activities Other Charges for 2% services Other Taxes 17% Roperty Taxes 44% 7 Operating Grants and Contributions 18% Capital Grants and Contributions 9% Page 292 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 Total business -type activities' revenue for the fiscal year was $19,524,592. $19,475,315 of this revenue was generated for specific business -type activity expenses. The graph below shows a comparison between the business -type activity expenses and program revenues. Expenses and Program Revenues - Business -Type Activities $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- Sanitary Sewer San Ration • Expenses • Revenues The graph below shows the breakdown of revenues by source for the business -type activities. Revenues by Source - Business -Type Activities Capital Grants and Contributions 7% Operating Grants and Contributions 1% Charges i 01 services 92% Business -type activities. Business -type activities increased the City of Waterloo's net position by $1,584,493 from the 2015 net position of $90,636,095, accounting for 18.7 percent of the growth in the City's net position. This increase was due primarily to the generation of operating revenue that was used for the construction of mandated sewer system improvements and to repay related debt. 8 Page 293 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 Financial Analysis of the Government's Funds As noted earlier, the City of Waterloo uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the City of Waterloo'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 of Waterloo's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Waterloo's governmental funds reported combined ending fund balances of $71,394,597, an increase of $11,017,473 in comparison with the prior year. Fund balance in the amount of $66,053,490 is not available for new spending because it represents amounts previously paid for items that were not exhausted at year-end (nonspendable) or has already been restricted, committed or assigned to be used for a variety of purposes.. Approximately 7.5 percent of total fund balance or $5,341,107, constitutes unassigned fund balance. The General Fund is the chief operating fund of the City of Waterloo. At the end of the current fiscal year, unassigned fund balance of the General Fund was $9,836,132, while total fund balance was $25,501,012. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 20.5 percent of total General Fund expenditures, while total fund balance represents 53.1 percent of that same amount. Net general fund operations resulted in an increase in total general fund balance of $994,617, and a decrease in unassigned fund balance of $388,827 for the year. Several items contributed to these results. The City continued to realize savings in health care costs during the year ended June 30, 2016. Net claims expense was $1 million less than expected. While most operating activities came in under budget for the year, those savings were primarily due the health care cost savings that are restricted and not available for general use. Additional savings resulted from positions that were vacant for portions of the year. Overall general fund revenue was $180,111 less than budgeted. Utility franchise fee revenue was the largest underperforming revenue source, $347,000 less than expected, due to milder weather and less customer use than predicted. This was offset by other revenue sources outperforming expectations, including proceeds from the sale of city owned property of $135,000. The City originally budgeted for no change in unassigned fund balance for operations for the budget year ended June 30, 2016. However, $500,000 was budgeted to be used for operations for the budget year ending June 30, 2017.This amount was included in assigned fund balance at June 30, 2016, resulting in less unassigned fund balance at June 30, 2016. Overall performance was better than expected by $111,173 for the year. Trust & Agency Fund— The net decrease in fund balance during the current year was $144,370, resulting from a variety of factors, including revenue less than originally budgeted due to the settlement of several property tax appeal cases and additional pension expense incurred due to payments required for employees returning from military leave. 9 Page 294 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 The General Obligation Debt Service Fund—The net decrease in fund balance of $140,062 during the current year is largely due to the planned use of refunding savings received in prior years to reduce property taxes levied. Property tax protest settlements were also a factor. TIF Fund—The total fund balance of $2,440,140 is restricted for the payment of debt service related to tax increment financing district projects. The net increase in fund balance during the current year was $2,726,228 and is the result of timing differences between revenue collections and the payment of TIF obligations. June 2016 GO Bonds Fund – The net increase in fund balance of $17,231,233 is due to the issuance of general obligation bonds in the current year. Proprietary funds. The City of Waterloo's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Total net position of the sanitary sewer fund at the end of the year was $87,384,526, an increase of $1,573,310 from the 2015 net position of $85,811,216. This increase was due primarily to the continued investment in the construction of mandated sewer system improvements using bond funds sold in prior years. Other factors concerning the finances of the sanitary sewer fund have already been addressed in the discussion of the City of Waterloo's business -type activities. Budgetary Highlights In accordance with the Code of Iowa, the City Council annually adopts a budget on the modified cash basis following required public notice and hearing for all funds. The annual budget may be amended during the year utilizing similar statutorily prescribed procedures. Formal and legal budgetary control is based upon ten major classes of disbursements known as functions, not by fund or fund type. These ten functions are: public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt service, capital projects, business -type and non -program. Function disbursements required to be budgeted include disbursements for the general fund, special revenue funds, debt service fund, capital projects funds and permanent funds. Although the budget document presents function disbursements by fund, the legal level of control is at the aggregated function level, not at the fund or fund type level. These budget amendments are reflected in the final budgeted amounts. Differences between the original budget and the final amended budget for the City of Waterloo are summarized below. The total original expenditure budget including transfers out of $179,785,714 was increased to $200,031,131 (an increase of $20,245,417). • The City added project budgets for several Public Safety department grants and expenses funded with other miscellaneous revenue that were approved after the original budget certification date as well as increased expenditures for the animal control activity ($0.4 million). • The City amended the budget to add air service development and pavement management projects at the airport as well as increased expenditures for the sidewalk repair assessment program and two traffic signal projects ($0.4 million). • Expenditures were increased for the SportsPlex due to revenues exceeding original budget expectations as well as for Leisure Services and the Library due to additional grants and donations that were received ($0.4 million). 10 Page 295 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 • The City amended the budget to reflect disaster recovery grant funds for a multi -family new housing project that were awarded after the original budget certification date ($3.8 million). • The City increased expenditures for medical claims funded by stop loss insurance refunds received ($0.4 million). • The City amended the debt service budget to provide for an anticipated refunding bond issue in June 2016 ($2.4 million). • Expenditures were increased for capital projects approved for design and construction after the original budget certification date and also to reflect work completed during the current year on capital projects that were originally included in the prior year budget ($7.2 million). • The City increased the budget to fund sanitary sewer operations ($0.6 million). • Transfers out were increased to reflect the sewer portion of the refunding bond issue as well as an increased transfer from the tax increment financing fund to the capital projects fund ($4.6 million). The total original revenue budget, including other financing sources of $174,069,831 was increased to $189,346,527 (an increase of $15,276,696). • State and federal grant revenue was increased to reflect several additional grants awarded after the original budget certification for such things as public safety projects, airport improvements, parks improvements, storm water lift stations and a multi -family housing project, as well as others ($6.5 million). • Amendments were made to various miscellaneous charges for services to reflect higher revenues than originally anticipated with the certified budget ($0.5 million). • Miscellaneous revenue was increased to reflect additional donations received from Black Hawk Gaming and other entities for various City projects and for insurance and other refunds received that exceeded original budget projections ($1.3 million). • The City amended the original budget for debt proceeds to reflect bond proceeds from anticipated general obligation and sewer bond refunding issues ($2.4 million). • Transfers in were increased to reflect the sewer portion of the refunding bond issue as well as an increased transfer to the capital projects fund from the tax increment financing fund ($4.6 million) See pages 84 through 90 for the Budgetary Comparison Schedule - Budget and Actual (Modified Cash Basis) — All Governmental Funds and Proprietary Funds. Capital Asset and Debt Administration Capital Assets. The City of Waterloo's investment in capital assets for its governmental and business - type activities as of June 30, 2016, amounts to $463,162,215 (net of accumulated depreciation) as reflected in the following table. The total increase in the City of Waterloo's investment in capital assets for the current fiscal year was 2.8 percent (a 2.0 percent increase for governmental activities and a 5.6 percent increase for business -type activities). 11 Page 296 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 This investment in capital assets includes land, buildings and improvements, park facilities, vehicles and equipment, and roads, highways and bridges (also referred to as infrastructure assets) placed in service since July 1, 1980. City of Waterloo's Capital Assets at Fiscal Year End (Net of Depreciation) Governmental Activities Business -Type Activities Total 2016 2015 2016 2015 2016 2015 Land $ 44,331,630 $ 43,387,370 $ 348,055 $ 348,055 $ 44,679,685 $ 43,735,425 Land held for redevelopment 10,672,268 7,778,851 - 10,672,268 7,778,851 Buildings and improvements 71,510,780 73,455,495 47,720,172 49,108,792 119,230,952 122,564,287 Other improvements - 38,836,964 34,767,577 38,836,964 34,767,577 Software 305,913 393,569 3,988 305,913 397,557 Infrastructure 220,540,159 202,119,561 - 220,540,159 202,119,561 Furniture, vehicles, machinery and equipment 10,666,916 11,263,856 6,236,960 4,371,629 16,903,876 15,635,485 Construction -in -progress 7,153,105 19,494,565 4,839,293 4,199,383 11,992,398 23,693,948 $ 365,180,771 $ 357,893,267 $ 97,981,444 $ 92,799,424 $ 463,162,215 $ 450,692,691 Major capital assets events during the current fiscal year included the following: • The City continued to acquire land and buildings in the Downtown Master Plan Redevelopment Area as well the San Marnan, Northeast Site and Midport TIF Districts for continued economic development ($3.0 million). • Buildings and improvements completed ($2.0 million) included a new video display board at Riverfront Stadium, playground equipment at Upper Gates Park, field lighting and Riverfront Sports Park and the overlay of Taxiway A (East) at the Waterloo Regional Airport. • The city invested $1.6 million into new vehicles, equipment, computers and software for various city departments. The most significant of these included a new fire truck, ambulance, street sweeper and replacement of various mowing and maintenance equipment for the city's parks and golf courses. • Significant investments in street construction, reconstruction and overlay programs funded with local option taxes and grants were completed ($18.8 million) and transferred to infrastructure assets. Another $7.7 million in storm water and flood protection improvements were completed and transferred to infrastructure assets, including new lift stations at Hollywood Street, Cedar Bend Street, and Fletcher Avenue. An additional $5.8 million was invested in new street construction, repair of existing streets and construction of storm water improvements still in progress at June 30, 2016. • The City invested $2.6 million in new vehicles and equipment for the sewer and sanitation departments as well as added $4.9 million in sanitary sewer and storm sewer infrastructure. An additional $3.7 million was invested in sanitary sewer construction still in progress at June 30, 2016. Additional information about the City of Waterloo's capital assets can be found in Note 6 of this report. Long-term liabilities. At the end of the current fiscal year, the City of Waterloo had total bonded debt outstanding of $98,320,000. Of this amount, $98,180,000 is comprised of debt backed by the full faith and credit of the government. The remainder of the City of Waterloo's bonded debt ($140,000) represents bonds secured solely by specified revenue sources (i.e., revenue bonds). 12 Page 297 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 The City has incurred other debt to construct Ridgeway Towers, purchase land in the City's industrial parks and complete projects, as well as purchase equipment. The City has obligations to employees for benefit time not used at fiscal year-end. During the current fiscal year the balance due on these obligations increased by $12,300,550. City of Waterloo Long-term Outstanding Debt Governmental Activities Business -Type Activities Total 2016 2015 2016 2015 2016 2015 Bonded Debt: General obligation bonds $ 75,117,200 $ 67,066,200 $ 23,062,800 $ 25,673,800 $ 98,180,000 $ 92,740,000 Revenue bonds 140,000 715,000 140,000 715,000 Total bonded debt 75,117,200 67,066,200 23,202,800 26,388,800 98,320,000 93,455,000 Unamortized discounts (174,914) (132,062) (79,221) (87,525) (254,135) (219,587) Bond premium 955,433 898,973 217,849 222,357 1,173,282 1,121,330 Total bonded debt, net 75,897,719 67,833,111 23,341,428 26,523,632 99,239,147 94,356,743 Other Debt: Loans and notes 1,934,063 2,061,316 - 1,934,063 2,061,316 Deferred compensation 238 6,441 - 238 6,441 Compensated absences 4,247,266 4,035,007 347,388 294,799 4,594,654 4,329,806 Net pension liability - IPERS 9,653,901 7,631,561 2,463,483 1,948,102 12,117,384 9,579,663 Net pension liability - MFPRSI 36,408,843 26,777,406 36,408,843 26,777,406 Total other debt 52,244,311 40,511,731 2,810,871 2,242,901 55,055,182 42,754,632 Total long-term debt outstanding $ 128,142,030 $ 108,344,842 $ 26,152,299 $ 28,766,533 $ 154,294,329 $ 137,111,375 The City of Waterloo's total long-term liabilities increased by $17,165,550 (12.6 percent) during the current fiscal year, due to an increased debt issuance for economic development purposes and an increase in the net pension liabilities due for the IPERS and MFPRSI retirement plans. The government issued general obligation bonds in the amount of $19,665,000 during the current fiscal year; $17,315,000 for general purposes and $1,825,000 in general use refunding bonds and $525,000 in refunding bonds for previously financed sewer projects. The City of Waterloo maintains an Aa2 rating from Moody's Investor Services, Inc. for general obligation debt and an Aa3 rating for sewer revenue debt. State statutes limit the amount of general obligation debt a governmental entity may issue to 5 percent of its total assessed valuation. The current debt limitation for the City of Waterloo is $182,820,872, which is significantly greater than the City of Waterloo's outstanding general obligation debt ($98,180,000) and other debt subject to debt limitation ($1,934,301). The total debt subject to this limitation is $101,030,605, resulting in available debt margin of $81,790,267. Additional information about the City of Waterloo's long-term liabilities can be found in Note 9 of this report. 13 Page 298 of 486 City of Waterloo, Iowa Management's Discussion and Analysis For Fiscal Year Ended June 30, 2016 Economic Factors and Next Year's Budgets and Rates Property taxes provide 45 percent of General Fund revenues. Over the past five years, citywide assessed valuations have risen an average of 0.6 percent annually, while property tax regulations imposed by the State of Iowa resulted in taxable values increasing by an average of 1.7 percent over that same time period. The fiscal 2016 budget reflects total property tax and utility excise tax revenue to decline by 1.8 percent. State property tax reform added a provision that the state would replace property tax revenue lost due to the implementation of a new reduction in taxable value of commercial and industrial properties. The City budgeted to receive $1.8 million in property tax replacement payments. The franchise fee of 2 percent for gas and electric utilities that was implemented effective July 1, 2013 to diversify revenue sources was increased to 3 percent effective July 1, 2014. This revenue source is expected to generate approximately $3 million in revenue for the year ending June 30, 2016. As discussed elsewhere in this report, the City budgeted to use $500,000 in general fund reserves for general operations for the year ended June 30, 2016. Personnel costs make up a significant portion of City operating costs. Wage increases identified in contractual bargaining agreements are 3 percent for fiscal year 2016. The employer contribution rate required for the Municipal Fire and Police Retirement System decreased by 8.7 percent, while the contribution rate for the Iowa Public Employees Retirement System remained at the same rate as the prior year. After many years of increases in health care costs, the anticipated health care costs for the year ending June 30, 2016 are expected to decline. Federal and state mandates for clean water continue to result in additional costs both for sewer system users and property taxpayers. The current national economic environment continues to have an impact on the local economy, although to a lesser degree through the date of this report. Sales tax revenue is expected to be stable. Residential property values remain at a stable level. These factors were considered in preparing the City of Waterloo's budget for fiscal year 2016. Requests for Information This financial report is designed to provide a general overview of the City of Waterloo'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: Michelle C. Weidner, CPA, Chief Financial Officer, City of Waterloo, 715 Mulberry Street, Waterloo, Iowa 50703. 14 Page 299 of 486 City of Waterloo, Iowa Statement of Net Position June 30, 2016 Primary Government Governmental Business -Type Activities Activities Total Waterloo Convention Waterloo & Visitors Water Works Bureau, Inc. Assets Current assets: Cash and cash equivalents $ 55,193,931 $ 10,775,915 $ 65,969,846 $ 6,668,998 $ 125,285 Restricted cash and cash equivalents 1,117,473 - 1,117,473 - - Investments - 417,179 379,420 Receivables: Customer accounts, net of allowance for uncollectible accounts 1,356,101 3,768,817 5,124,918 1,805,442 Property taxes: Delinquent 238,057 238,057 Succeeding year 45,205,033 - 45,205,033 Internal accounts (38,704) 38,704 Due from other governments: Component unit 1,074,153 1,074,153 Primary government - - 325,221 Other 10,170,145 13,405 10,183,550 Miscellaneous - - - Accrued interest 9,182 - 9,182 6,515 1,573 Special assessments 212,133 353,386 565,519 - - Inventories and prepaids 557,530 23,215 580,745 510,126 12,430 Total current assets 114,020,881 16,047,595 130,068,476 9,408,260 843,929 Noncurrent assets: Restricted assets: Cash and cash equivalents 14,483,713 6,434,345 20,918,058 Investments - - 162,821 407,909 Receivables 14,743 14,743 Loans and notes, net of allowance for uncollectible amounts 31,900 31,900 Special assessments receivable 115,301 115,301 257,325 Assets held for sale 21,137 - 21,137 - - Capital assets, net of accumulated depreciation 303,023,768 92,778,746 395,802,514 25,375,947 49,196 Capital assets not being depreciated 62,157,003 5,202,698 67,359,701 710,201 - Total noncurrent assets 379,847,565 104,415,789 484,263,354 26,506,294 457,105 Total assets 493,868,446 Deferred Outflows of Resources Pension related amounts Deferred charge on refunding Total deferred outflows of resources See notes to basic financial statements. 120,463,384 614,331,830 35,914,554 1,301,034 14,935,009 860,424 15,795,433 669,216 28,713 28,713 14,935,009 889,137 15,824,146 669,216 15 Page 300 of 486 Primary Government Governmental Business -Type Activities Activities Total Waterloo Convention Waterloo & Visitors Water Works Bureau, Inc. Liabilities Current: Accounts and retainages payable $ 3,828,499 $ 1,101,204 $ 4,929,703 $ 304,669 $ 3,796 Accrued liabilities and other 1,464,495 160,731 1,625,226 128,785 9,064 Due to primary government - 962,736 Due to component unit 325,221 325,221 Due to other governments - - 54,815 Noncurrent liabilities due and payable within one year 12,474,569 2,900,603 15,375,172 67,508 Unearned revenues 184,350 - 184,350 Current liabilities payable from restricted assets: Health claims 1,117,473 1,117,473 Other 261,002 - 261,002 Accrued interest 151,592 60,311 211,903 Total current liabilities 19,807,201 4,222,849 24,030,050 1,518,513 12,860 Noncurrent: Customer deposits 77,947 380,027 457,974 162,821 Worker's compensation claims 447,500 - 447,500 General obligation bonds and notes, net of bond discounts and premium 66,344,519 20,699,628 87,044,147 Other loans and notes 1,745,017 1,745,017 Other postemployment benefits obligation 4,443,299 665,661 5,108,960 Compensated absences and deferred compensation 1,515,181 88,585 1,603,766 Net pension liability 46,062,744 2,463,483 48,526,227 3,529,032 Total noncurrent liabilities 120,636,207 24,297,384 144,933,591 3,691,853 Total liabilities Deferred Inflows of Resources 140,443,408 28,520,233 168,963,641 5,210,366 12,860 Property taxes 45,205,033 - 45,205,033 Pension related amounts 10,104,448 611,700 10,716,148 77,528 Total deferred inflows of resources 55,309,481 611,700 55,921,181 77,528 Net Position Net investment in capital assets 316,701,068 79,522,665 396,223,733 Restricted for: Debt service 2,550,845 196,533 2,747,378 Tourism promotion 1,162,298 - 1,162,298 Public access television 127,615 127,615 Civil rights enforcement 61,014 61,014 Housing 4,342,698 4,342,698 Donor specified 617,022 617,022 Library 149,585 149,585 Street and right-of-way maintenance 6,577,194 - 6,577,194 Improvements 4,444,724 475,982 4,920,706 Unrestricted (deficit) (23,683,497) 12,025,408 (11,658,089) 26,086,148 49,196 5,209,728 1,238,978 Total net position $ 313,050,566 $ 92,220,588 $ 405,271,154 $ 31,295,876 $ 1,288,174 16 Page 301 of 486 City of Waterloo, Iowa Statement of Activities Year Ended June 30, 2016 Program Revenues Operating Capital Direct Indirect Charges for Grants and Grants and Expenses Allocations Services Contributions Contributions Programs/Functions Governmental activities: Public safety Public works Health and social services Culture and recreation Community and economic development General government Interest and issuance costs on long-term debt Total governmental activities Business -type activities: Sanitary Sewer Sanitation Total business -type activities Total primary government Component unit, Waterloo Water Works Component unit, Waterloo Convention & Visitors Bureau, Inc. See notes to basic financial statements. $ 34,120,160 $ $ 4,325,957 $ 690,982 $ 30,050,192 (380,000) 1,284,289 8,763,604 370,088 (75,000) (74,627) 53,013 12,000,688 (50,000) 3,645,647 323,916 13,753,669 636,414 8,704,691 5,886,093 (638,500) 207,946 44,804 2,048,517 - - - 8,473,722 14,987 576,428 98,229,407 (1,143,500) 10,025,626 18,581,010 9,065,137 13,326,836 692,000 14,277,752 3,469,763 451,500 1,892 1,271,776 3,650,271 273,624 16,796,599 1,143,500 17,928,023 275,516 1,271,776 $ 115,026,006 $ $ 27,953,649 $ 18,856,526 $ 10,336,913 $ 6,251,495 $ $ 8,293,396 $ - $ 9,023 $ 577,834 $ $ $ 641,085 $ General Revenues Taxes: Property taxes levied for general purposes Property taxes levied for debt service Other taxes: Local option sales Utility excise Gaming Hotel/motel Gas and electric Cable television Mobile home Investment earnings Miscellaneous Gain on sale of capital assets Total general revenues Changes in net position Net position, beginning of year, as restated Net position, end of year 17 Page 302 of 486 Net (Expense) Revenue and Changes in Net Position Component Units Governmental Business -Type Activities Activities Total Waterloo Convention & Waterloo Visitors Water Works Bureau, Inc. $ (29,103,221) $ $ (29,103,221) $ $ (11,148,577) (11,148,577) (316,702) (316,702) (7,966,138) (7,966,138) (3,836,136) (3,836,136) (4,994,843) (4,994,843) (2,048,517) (2,048,517) (59,414,134) (59,414,134) 1,532,584 1,532,584 2,632 2,632 1,535,216 1,535,216 (59,414,134) 1,535,216 (57,878,918) 30,794,803 15,533,194 30,794,803 15,533,194 2,050,924 63,251 9,853,274 9,853,274 1,577,775 1,577,775 1,343,753 1,343,753 1,281,311 1,281,311 2,652,450 2,652,450 775,606 775,606 69,910 - 69,910 - 187,046 49,277 236,323 35,172 7,350 2,034,957 - 2,034,957 755,397 7,499 188,433 188,433 - - 66,292,512 49,277 66,341,789 6,878,378 306,172,188 1,584,493 90,636,095 8,462,871 396,808,283 790,569 14,849 2,841,493 78,100 28,454,383 1,210,074 $ 313,050,566 $ 92,220,588 $ 405,271,154 $ 31,295,876 $ 1,288,174 18 Page 303 of 486 City of Waterloo, Iowa Balance Sheet Governmental Funds June 30, 2016 General Trust and Agency Assets Cash and cash equivalents $ 9,673,606 $ 312,263 Receivables: Customer accounts, net 1,219,742 Property tax: Delinquent 119,780 51,433 Succeeding year 20,117,362 9,205,125 Special assessments 327,434 Accrued interest - Loans and notes 31,900 Due from other funds 5,772,389 Due from other governments: Federal 93,966 Iowa 383,829 Other 212,401 100,537 Inventories and prepaids 267,413 Restricted assets: Cash and cash equivalents 11,622,367 1,844,107 Receivables 14,743 Advances to other funds - Total assets (Continued) 19 $ 49,856,932 $ 11,513,465 Page 304 of 486 Tax Increment General Obligation June 2016 Other Financing Debt Service GO Bonds Governmental Total $ 4,105,608 $ 588,210 $ 17,373,523 $ 23,140,721 $ 55,193,931 - 136,359 1,356,101 23,224 40,359 - 3,261 238,057 7,738,405 7,560,439 - 583,702 45,205,033 - - - 327,434 - - 9,182 9,182 - 31,900 - 30,104 - 1,650 5,804,143 156,175 85,874 658,094 752,060 8,059,136 8,442,965 420,133 975,120 290,117 557,530 - 43,333 - 2,091,379 15,601,186 - 14,743 - - 129,612 129,612 $ 12,023,412 $ 8,348,319 $ 17,373,523 $ 35,523,346 $ 134,638,997 20 Page 305 of 486 City of Waterloo, Iowa Balance Sheet (Continued) Governmental Funds June 30, 2016 General Trust and Agency Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable $ 349,429 $ 2,058 Retainages payable - - Accrued liabilities 1,103,423 152,299 Due to other funds 30,104 Unearned revenue 184,350 Compensated absences 177,436 Due to Waterloo Convention & Visitors Bureau, Inc. 325,221 Payables from restricted assets 1,378,475 Advances from other funds 168,316 Total liabilities 3,716,754 154,357 Deferred Inflows of Resources Unavailable revenue - property tax Unavailable revenue - local option sales tax Unavailable revenue - special assessments Unavailable revenue - intergovernmental Total deferred inflows of resources Fund balances Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances See notes to basic financial statements. 21 20, 237,142 327,434 74,590 9,256,558 20,639,166 9,256,558 267,413 10, 390, 434 5,007,033 9,836,132 2,102, 550 25,501,012 2,102,550 $ 49,856,932 $ 11,513,465 Page 306 of 486 Tax Increment Financing General Obligation Debt Service June 2016 Other GO Bonds Governmental Total $ 147,688 $ 14,292 $ 91,379 $ 2,487,378 $ 3,092,224 - 50,911 685,364 736,275 - - 208,773 1,464,495 1,673,955 - 4,100, 084 5,804,143 - - - 184,350 - - 29,221 206,657 - - - 325,221 - - 77,947 1,456,422 - - - 168,316 1,821,643 14,292 142,290 7,588,767 13,438,103 7,761,629 7,600,798 - 586,963 45,443,090 - - 375,000 375,000 - - - 327,434 - - 3,586,183 3,660,773 7,761,629 7,600,798 4,548,146 49,806,297 1,969,208 470,932 - 290,117 557,530 733,229 17,231,233 25,637,672 58,064,326 - 1,953,669 7,431,634 - (4,495,025) 5,341,107 2,440,140 733,229 17, 231, 233 23, 386, 433 71, 394, 597 $ 12,023,412 $ 8,348,319 $ 17,373,523 $ 35,523,346 $ 134,638,997 22 Page 307 of 486 City of Waterloo, Iowa Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2016 Total governmental fund balances Amounts reported for governmental activities in the statement of net position are different because: $ 71,394,597 Capital assets net of accumulated depreciation used in governmental activities are not financial resources and, therefore, are not reported as assets in the governmental funds 365,180,771 Assets held for resale 21,137 Certain revenues are not available to pay for current period expenditures and, therefore, are reported as deferred inflows of resources in the funds 4,601,264 Pension related deferred outflows of resources and deferred inflows of resources are not due and payable in the current year and, therefore, are not reported in the governmental funds, as follows: Deferred outflows of resources - IPERS Deferred outflows of resources - MFPRSI Deferred inflows of resources - IPERS Deferred inflows of resources - MFPRSI Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds: General obligation bonds Other loans and notes Bond discount Bond premium Other post employment benefits obligation Worker's compensation claims payable Compensated absences and deferred compensation Net pension liability - IPERS Net pension liability - MFPRSI Accrued interest payable 3,343,316 11,591,693 (2,395,107) (7,709,341) 4,830,561 $ (75,117, 200) (1,934,063) 174,914 (955, 433) (4,443,299) (447, 500) (4,040,847) (9,653,901) (36,408,843) (151,592) (132,977,764) Net position of governmental activities $ 313,050,566 See notes to basic financial statements. 23 Page 308 of 486 City of Waterloo, Iowa Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended June 30, 2016 General Trust and Agency Revenues: Property taxes $ 19,969,442 $ 10,162,678 Other taxes 6,917,710 443,559 Licenses and permits 1,455,620 Investment income 80,633 10,735 Rent 976,204 Intergovernmental 1,040,156 Charges for services 7,824,098 Interfund charges for services 1,885,000 Special assessments 138,434 Miscellaneous 1,454,500 Total revenues 41,741,797 10,616,972 Expenditures: Current operating: Public safety Public works Health and social services Culture and recreation Community and economic development General government Debt service: Principal Interest and fees Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 26,938,184 3,146,095 375,769 10,008,068 1,925,673 5,648,846 4,424,221 22,794 48,042,635 4,447,015 (6,300,838) 6,169,957 Other financing sources (uses): Transfers in 6,453,326 - Transfers out (138,478) (6,314,327) Insurance proceeds 766,470 - Bond discount Bond premium Proceeds from sale of capital assets 214,138 Issuance of long-term debt - Total other financing sources (uses) 7,295,456 (6,314,327) Net changes in fund balances 994,618 (144,370) Fund balances, beginning of year 24,506,394 2,246,920 Fund balances, end of year $ 25,501,012 $ 2,102,550 See notes to basic financial statements. 24 Page 309 of 486 Tax Increment General Obligation Financing Debt Service June 2016 Other GO Bonds Governmental Total $ 7,622,740 $ 7,910,454 $ 313,560 16,807 7,396 64,296 166,591 215 $ 594,097 $ 46,259,411 9,634,250 17,309,079 35,511 1,491,131 71,261 187,047 195,025 1,235,525 25,463,875 26,670,622 318,609 8,142,707 50,000 1,935,000 - 138,434 578,229 2,032,729 7,639,547 8,462,297 215 36,940,857 105,401,685 1,842,087 144,486 11,170,017 81,798 1,971,903 500 - 18,583 31,380,988 23,518,475 26,664,570 - 375,769 829,915 10,837,983 9,715,687 13,483,447 5,671,640 88,836 27,460 53,470 12,781,239 11,314,503 2,169,997 12,835,209 2,068,871 13,141,920 142,306 46,891,359 114, 734,106 5,570,676 (4,679,623) (142,091) (9,950,502) (9,332,421) 89,000 2,665,079 (8,385,904) - 49,482 1,825,000 (61,455) 119,779 17,315,000 5,675,022 (43,718) 121,480 14,882,427 (14,882,427) 766,470 (61,455) 169,261 335,618 19,140,000 (8,296,904) 4,539,561 17,373,324 5,752,784 20,349,894 (2,726,228) (140,062) 17,231,233 5,166,368 873,291 (4,197,718) 11,017,473 27,584,151 60,377,124 $ 2,440,140 $ 733,229 $ 17,231,233 $ 23,386,433 $ 71,394,597 25 Page 310 of 486 City of Waterloo, Iowa Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2016 Net change in fund balances - governmental funds Amounts reported for governmental activities in the statement of activities are different because: Capital outlays to purchase or construct capital assets are reported in the governmental funds as expenditures. However, those costs are reported in the statement of net position and are allocated over their estimated useful lives as depreciation expense in the statement of activities. The amounts of capital outlay and depreciation expense for the year are as follows: Capital outlay $ 22,580,873 Depreciation (15,146,184) The net effect of various miscellaneous transactions involving capital assets is to increase/ decrease net position: Proceeds from sale of capital assets Net gain on disposal of capital assets $ 11,017,473 7,434,689 (335,618) 188,433 (147,185) Change in assets held for resale (75,730) The issuance of long-term debt provides current financial resources to governmental funds while repayment of the principal of long-term debt consumes current financial resources. These transactions have no effect on the change in net position in the statement of activities. Also, governmental funds report the effect of premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. In addition, interest is accrued on outstanding debt in the statement of net position whereas in the governmental funds an interest expenditure is reported only when due. The following is a detail of the net effect on these differences in the treatment of long-term debt and related items: General obligation bonds issued for governmental purposes Repayment of general obligation bond principal Issuance of loans and notes Repayment of other long-term debt principal Bond discount Bond premium Amortization of bond discounts and premiums Change in accrued interest (19,140,000) 11,089,000 (98,250) 225,503 61,455 (169,261) 94,198 27,282 (7,910,073) Revenue in the statement of activities that does not provide current financial resources is not reported as revenue in the governmental funds: Current year 4,601,264 Prior year (6,483,567) Some expenses 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: Change in other post employment benefits obligation (75,215) Change in worker's compensation claims payable (114,500) Change in compensated absences and deferred compensation liabilities (185,492) Pension expense - PERS 413,332 Pension expense - MFPRSI (1,596,618) Change in net position of governmental activities See notes to basic financial statements. 26 $ 6,878,378 Page 311 of 486 City of Waterloo, Iowa Statement of Net Position Enterprise Funds June 30, 2016 Sanitary Sewer Nonmajor - Sanitation Total Assets Current assets: Cash and cash equivalents Customer accounts receivable Special assessments receivable Due from other governments: Waterloo Water Works Other Inventories Total current assets Noncurrent assets: Advances to other funds Restricted cash and cash equivalents Capital assets, net of accumulated depreciation Capital assets not being depreciated Net capital assets Total noncurrent assets Total assets Deferred Outflows of Resources Pension related amounts Deferred charge on refunding Total deferred outflows of resources See notes to basic financial statements. 7,601,102 $ 3,174,813 $ 10,775,915 3,034,695 734,122 3,768,817 108,528 244,858 353,386 763,599 310,554 1,074,153 4,963 8,442 13,405 23,215 - 23,215 11,536,102 4,472,789 16,008,891 27,003 6,316,586 91,305,045 5,187,348 11,701 117,759 1,473,701 15,350 38,704 6,434,345 92,778,746 5,202,698 96,492,393 1,489,051 97,981,444 102,835,982 1,618,511 104,454,493 114,372,084 6,091,300 120,463,384 618,292 242,132 860,424 28,713 - 28,713 647,005 242,132 889,137 27 Page 312 of 486 Sanitary Sewer Nonmajor - Sanitation Total Liabilities, Deferred Inflows of Resources, and Net Position Liabilities: Current: Accounts payable Retainages payable Accrued liabilities Current maturities of general obligation and revenue bonds Compensated absences and deferred compensation Accrued interest Total current liabilities Noncurrent: Security deposits General obligation bonds, net bond discount and premium Other postemployment benefits obligation Compensated absences and deferred compensation Net pension liability Total noncurrent liabilities 767,968 $ 205,158 110,355 2,641,800 186,968 60,311 128,078 $ 896,046 205,158 50,376 160,731 2,641,800 71,835 258,803 60,311 3,972,560 250,289 4,222,849 262,268 20,699,628 413,044 67,796 1,775,540 117,759 252,617 20,789 687,943 380,027 20,699,628 665,661 88,585 2,463,483 23,218,276 1,079,108 24,297,384 Total liabilities 27,190,836 1,329,397 28,520,233 Deferred Inflows of Resources, pension related amounts 443,727 Net position: Net investment in capital assets Restricted for: Debt service Improvements Unrestricted Total net position 167,973 611,700 78,033,614 196,533 475,982 8,678,397 1,489,051 79,522,665 3,347,011 196,533 475,982 12,025,408 $ 87,384,526 $ 4,836,062 $ 92,220,588 28 Page 313 of 486 City of Waterloo, Iowa Statement of Revenues, Expenses and Changes in Net Position Enterprise Funds Year Ended June 30, 2016 Sanitary Sewer Nonmajor - Sanitation Total Operating revenues: Charges for sales and service $ 14,221,349 $ 3,641,773 $ 17,863,122 Miscellaneous 56,403 8,498 64,901 Total operating revenues 14,277,752 3,650,271 17,928,023 Operating expenses: Salaries and benefits Contractual services Intra -city reimbursements Commodities Depreciation Total operating expenses 3,917,024 3,168, 035 692,000 2,848,008 2,683,502 1,561,399 994,742 451,500 495,488 313,134 5,478,423 4,162,777 1,143,500 3,343,496 2,996,636 13, 308, 569 3,816,263 17,124,832 Operating income (loss) 969,183 (165,992) 803,191 Nonoperating revenues (expenses): Interest income 40,726 8,551 49,277 Intergovernmental 1,892 273,624 275,516 Interest expense (697,846) - (697,846) Amortization (12,421) - (12,421) (Loss) on disposal of capital assets (105,000) (105,000) Total nonoperating revenues (expenses) (667,649) 177,175 (490,474) Income prior to capital contributions 301,534 11,183 312,717 Capital contributions 1,271,776 - 1,271,776 Change in net position 1,573,310 11,183 1,584,493 Net position, beginning of year 85,811,216 4,824,879 90,636,095 Net position, end of year $ 87,384,526 $ 4,836,062 $ 92,220,588 See notes to basic financial statements. 29 Page 314 of 486 City of Waterloo, Iowa Statement of Cash Flows Enterprise Funds Year Ended June 30, 2016 Sanitary Sewer Nonmajor - Sanitation Total Cash flows from operating activities: Receipts from customers and users $ 13,913,670 $ 3,564,161 $ 17,477,831 Payments to suppliers (7,190,120) (1,474,975) (8,665,095) Payments to or on behalf of employees (3,899,064) (1,527,620) (5,426,684) Payment for interfund services used (692,000) (451,500) (1,143,500) Net cash provided by operating activities 2,132,486 110,066 2,242,552 Cash flows from noncapital financing activities, intergovernmental proceeds 6,324 286,372 292,696 Cash flows from capital and related financing activities: Purchase and construction of capital assets (6,059,441) (442,522) (6,501,963) Proceeds from bonds, loans and notes, net bond premiums 539,677 - 539,677 Principal paid on debt (3,711,000) - (3,711,000) Interest paid on debt (804,976) - (804,976) Net cash (used in) capital and related financing activities (10,035,740) (442,522) (10,478,262) Cash flows from investing activities, interest received 40,726 8,551 49,277 (Decrease) in cash and cash equivalents (7,856,204) (37,533) (7,893,737) Cash and cash equivalents, beginning of year 21,773,892 Cash and cash equivalents, end of year 3,330,105 25,103, 997 $ 13,917,688 $ 3,292,572 $ 17,210,260 Reconciliation of cash and cash equivalents to statement of net position: Unrestricted cash and cash equivalents $ 7,601,102 $ 3,174,813 $ 10,775,915 Restricted cash and cash equivalents 6,316,586 117,759 6,434,345 $ 13,917,688 $ 3,292,572 $ 17,210,260 (Continued) 30 Page 315 of 486 City of Waterloo, Iowa Statement of Cash Flows (Continued) Enterprise Funds Year Ended June 30, 2016 Sanitary Sewer Nonmajor - Sanitation Total Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 969,183 $ (165,992) $ 803,191 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 2,683,502 313,134 2,996,636 (Increase) in accounts receivable (353,681) (119,293) (472,974) (Increase) decrease in due from Waterloo Water Works (10,401) 33,183 22,782 (Increase) in inventories and prepaids (2,319) - (2,319) Increase (decrease) in accounts payable (1,184,101) 9,146 (1,174,955) Increase in security deposits 12,343 6,109 18,452 Increase in accrued liabilities 22,814 13,573 36,387 Increase in other post employment benefits obligation 40,547 35,768 76,315 Increase in compensated absences and deferred compensation 39,054 13,535 52,589 Increase in net pension liability 367,693 147,688 515,381 (Increase) in deferred outflows of resources (323,448) (125,091) (448,539) (Decrease) in deferred inflows of resources (128,700) (51,694) (180,394) Net cash provided byoperating activities $ 2,132,486 $ 110,066 $ 2,242,552 Schedule of noncash capital and related financing activities: Payables for acquisition of capital assets $ 413,104 $ - $ 413,104 Capital assets contributed 1,271,776 - 1,271,776 Capitalized interest 96,813 - 96,813 See notes to basic financial statements. 31 Page 316 of 486 City of Waterloo, Iowa Index to the Notes to Basic Financial Statements Note Number Title Page Number 1 Nature of Operations, Reporting Entity, Basis of Presentation, 33 - 43 Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies 2 Cash and Investments 43 - 44 3 Leasing Activities 44 - 45 4 Loans and Notes 45 5 Interfund Activity 46 - 47 6 Capital Assets 47 - 50 7 Deferred Compensation Plans 50 8 Compensated Absences 51 9 Long -Term Liabilities 52 - 56 10 Operating Leases 56 11 Retirement Systems 57 - 69 12 Deficit Fund Balances 70 13 Commitments 70 14 Other Postemployment Benefits 70 - 72 15 Employee Health Care Plan 72 16 Worker's Compensation Plan 73 17 Joint Ventures and Jointly Governed Organizations 73 18 Industrial Development Revenue Bonds 73 19 Risk Management 74 20 Fund Balances 74 21 New GASB Statements and Pending Pronouncements 75 - 76 22 Prior Period Adjustment 76 23 Subsequent Event 76 32 Page 317 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies Nature of operations: The City of Waterloo, Iowa (City) is a political subdivision of the state of Iowa located in Black Hawk County. It was incorporated in 1868 and operates under the Home Rule provisions of the Constitution of Iowa. The City operates under the Mayor -Council form of government with the full-time Mayor and seven part-time City Council members elected on a nonpartisan basis. The Mayor is elected for a two- year term. City Council members from five wards plus two at -large are elected for staggered four-year terms. The City provides numerous services to citizens including public safety, public works, health and social services, culture and recreation, community and economic development and general government services. The City also provides sanitary sewer and sanitation (garbage pickup) utilities for its citizens. Through its component unit, Waterloo Water Works, water utility services are also provided. Reporting entity: In accordance with Governmental Accounting and Financial Reporting Standards, the basic financial statements include all funds, organizations, agencies, boards, commissions, authorities and material component units and have been prepared in conformity with accounting principles generally accepted in the United States of America, as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The City has considered all potential component units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The GASB has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on, the City. These financial statements present the City of Waterloo (the primary government) and its discretely presented component units, the Waterloo Water Works and Waterloo Convention & Visitors Bureau, Inc. Complete financial statements of the Waterloo Water Works component unit can be obtained from the Waterloo Water Works administrative office, 325 Sycamore Street, Waterloo, Iowa. Complete financial statements of the Waterloo Convention & Visitors Bureau, Inc. can be obtained from their office at 500 Jefferson Street, Waterloo, Iowa. Blended component unit: The Waterloo Housing Authority (Authority) is governed by a board that includes all seven members of the City Council plus two members appointed by the Mayor, subject to approval of a majority of the City Council, for a total of nine members. Although the Authority is considered legally separate from the City, it receives administrative support from the various departments within the City's General Fund. Due to the nature of its relationship with the City, the Authority is considered part of the primary government. The Authority is reported as a special revenue fund. 33 Page 318 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Discretely presented component units: Waterloo Water Works: The Waterloo Water Works is a component unit that is legally separate from the City, but is financially accountable to the City. The Waterloo Water Works is governed by a three-member board appointed by the City Council and its operating budget is subject to the review of the City Council. The Waterloo Water Works operates on a calendar year-end and prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Due to the different year-end, the amount reported by the Waterloo Water Works as due to the primary government and the primary government's due from the Waterloo Water Works do not agree by $111,417. Waterloo Convention & Visitors Bureau, Inc.: The Waterloo Convention & Visitors Bureau, Inc. is a nonprofit corporation and a component unit of the City whose purpose is to strengthen the local economy by competitively marketing the area as a destination for conventions, tour groups, sporting events and individual travelers. The Organization's operations are funded primarily by an allocation of the local hotel/motel tax from the City's local transient guest tax. By ordinance, the City allocates 50 percent of the tax to the Organization. The Organization is governed by a 15 -member Board of Directors. Five members are appointed by the City, and the other ten are elected by other members of the Organization's Board. Although the City does not appoint the voting majority of the Organization's Board of Directors, the Organization has been determined to be fiscally dependent on the City. Basis of presentation: Government -wide financial statements: The statement of net position and the statement of activities report information on all the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. However, interfund services provided and used are not eliminated in the process of consolidation. Governmental activities, which normally are supported by tax and intergovernmental revenue, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate Waterloo Water Works and Waterloo Convention & Visitors Bureau, Inc. component units. The statement of net position presents the City's nonfiduciary assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. The statement of activities demonstrates the degree to which the direct and indirect expenses of a given program or function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific program or function. Program/function revenue includes: (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given program/function and (2) grants, contributions and other resources that are restricted to meeting the operational or capital requirements of a particular program/function. Taxes and other items not properly included among program revenue are reported instead as general revenue. 34 Page 319 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Fund financial statements: Separate financial statements are provided for governmental and proprietary funds. The focus of fund financial statements is on major funds. Major individual governmental funds and the major enterprise fund are reported as separate columns in the fund financial statements. All remaining governmental funds are aggregated and reported as other nonmajor governmental funds. The other enterprise fund is reported in a separate column on the enterprise funds financial statements as a nonmajor fund. Description of funds: The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance/net position, revenue and expenditures or expenses, and other financing sources and uses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into categories as follows: Governmental Fund Types: Governmental fund types are those funds through which most governmental functions typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used; current liabilities are assigned to the fund from which they are paid; and the difference between governmental fund assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, the fund equity, is referred to as "fund balance." The measurement focus is upon determination of changes in financial position, rather than upon net income determination. The following are the City's governmental fund types: General fund is used to account for and report all financial resources not accounted for and reported in another fund. Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Debt service funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest on long-term debt. Capital projects funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. The City had the following major governmental funds: General Fund is used to account for and report all financial resources not accounted for and reported in another fund. Trust and Agency (Employee Benefits) Special Revenue Fund is required by the Code of Iowa to account for property taxes levied for employee benefits. This fund either pays benefits as expenditures (primarily police and fire pension costs) or transfers cash to the General Fund to reimburse allowable benefits paid from that fund. 35 Page 320 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Tax Increment Financing Fund is a special revenue fund used to account for the accumulation of resources from tax increment financing projects, payment of contracted rebates and other obligations related to the projects and transfers to the GO Debt Service Fund and/or other funds to reimburse the other funds for expenditures on the projects. General Obligation Debt Service Fund is required by the Code of Iowa to account for the accumulation of resources for, and payment of, debt service on general obligation long-term debt. June 2016 GO Bonds Fund is a capital project fund used to account for proceeds from the 2016 general obligation bond sale until expended for the restricted purpose. Proprietary Fund Type: Proprietary fund types are used to account for a government's ongoing organizations and activities which are similar to those often found in the private sector. The measurement focus is upon income determination, financial position and cash flows. Enterprise funds are used to account for operations (a) that are financed and operated in a manner similar to that of a private business enterprise where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenue earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The City had the following major proprietary fund: Sanitary Sewer Fund: Operates the sewage collection system and wastewater treatment plant. Fiduciary Fund Type: To account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. Agency Fund: This is an Agency Fund used to account for property taxes collected on behalf of the Metropolitan Transit Agency, Water Works kill water assessments, and building permits passed through to Black Hawk County. Measurement focus and basis of accounting: 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. Agency funds follow accrual basis of accounting but do not have a measurement focus as they report only assets and liabilities. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied and budgeted for. Grants and similar items are recognized as revenue at the same time the related asset is recorded. For reimbursable grants, the asset is recorded as soon as all eligibility requirements imposed by the provider have been met. 36 Page 321 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as it is both measurable and available. Revenue is considered to be available when it is collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenue to be available if it is collected within 60 days of the end of the fiscal year. Property taxes when levied for, other taxes, charges for services, intergovernmental revenue (shared revenue, grants and reimbursements from other governments) and interest are considered to be measurable and are recognized as revenue, if available. All other revenue items are considered to be measurable and available only when cash is received by the City. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, principal and interest on long-term debt, claims and judgments, pension benefits and compensated absences are recorded as expenditures only when payment is due. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt, premiums and discounts on the issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. Under terms of grant agreements, the City funds certain programs by a combination of specific cost - reimbursement grants and general revenue. It is the City's policy to first apply cost -reimbursement grant resources to such programs and then by general revenue. Proprietary funds distinguish operating revenue and expenses from nonoperating items. Operating revenue and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the City's enterprise funds are charges to customers for services. Operating expenses include the costs of services and administrative expenses. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses. Budgets and budgetary accounting: The budgetary comparison and related disclosures are reported as required supplementary information. Summary of significant accounting policies: The significant accounting policies followed by the City include the following: Cash and cash equivalents: The cash balances of most City funds are pooled and deposited into interest-bearing demand deposit accounts. Interest earned on investments is allocated among funds in the ratio of cash provided by the fund unless otherwise provided by law. Interest earned by the Road Use Tax Fund is allocated to the General Fund. Investments consist of nonnegotiable certificates of deposit and deposits in Iowa Public Agency Investment Trust money market accounts which are stated at amortized cost. For purposes of the statement of cash flows, all short-term cash investments that are highly liquid (including restricted assets) are considered to be cash equivalents. Cash equivalents are readily convertible to known amounts of cash and, at the day of purchase, have a maturity date no longer than three months. Receivables and payables: Receivables are reported net of any allowance for uncollectible accounts. As of June 30, 2016, the General Fund had allowances for uncollectible customer accounts totaling $953,432. 37 Page 322 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Property taxes receivable are recognized on the levy or lien date, which is the date that the tax asking is certified by the City to the County Board of Supervisors. Current year delinquent property taxes receivable represent unpaid taxes from the current year. The succeeding year property taxes receivable represent taxes certified by the City to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by March 15 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property taxes receivable have been recorded, the related revenue is reported as a deferred inflow of resources (unavailable revenue) and will not be recognized as revenue until the year for which it is levied and budgeted for. Property tax revenue which became due and collectible in September and March of the fiscal year with a 11/2 percent per month penalty for delinquent payments; was based on January 1, 2014 assessed property valuations; was for the tax accrual period July 1, 2015 through June 30, 2016; and reflected the tax asking contained in the budget certified to the County Board of Supervisors in March 2015. Special assessments are levied against certain property owners and become liens against the property benefited by the improvement. Special assessments receivable consist of current assessments which are due within one year, delinquent assessments remaining unpaid after the due date, uncollected assessments which have been levied, but are not due within one year. Customer accounts receivable consist of amounts owed from private individuals or organizations for goods and services. Loans and notes consist of amounts advanced to private individuals or organizations. Collections of principal and interest from loans and notes made from federal funds are program income of the federal program when received in cash. Due from other governments consists of grants, shared revenue and amounts collected by other governments on behalf of the City. Inventories and prepaids: Inventories are valued at cost using the first-in/first-out (FIFO) method. The cost of governmental fund -type inventories are recorded as expenditures when purchased. Inventories and prepaids recorded in the governmental fund types do not reflect current available resources; therefore, an equivalent portion of fund balance is nonspendable. Prepaids consist primarily of a deposit for insurance deductibles and premiums paid in advance. Assets held for sale: Land and buildings acquired for rehabilitation and held for sale by the City is recorded at the lower of cost or fair value (specific identification basis). The cost of land acquired and construction costs incurred by the City at year-end amounted to $21,137. The cost associated with these assets are reported as expenditures in the governmental funds as they do not represent a current financial resource and are reported as assets on the government -wide statement of net position. Restricted assets: Certain assets of the governmental funds are classified as restricted assets because their use is completely restricted by donors, bond indentures, contracts or grant agreements. 38 Page 323 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants. The "revenue, operations and maintenance" account is used to report resources set aside to subsidize potential deficiencies from the City's operation that could adversely affect debt service payments. The "revenue bond debt sinking" account is used to segregate resources accumulated for debt service payments over the next 12 months. The "revenue bond debt reserve" account is used to segregate 10 percent of the original face value of bond issues which are still outstanding to provide payments due if the "debt sinking" balance is not adequate. The "revenue bond improvements" account is used to report resources set aside to meet unexpected contingencies or to fund asset renewals and replacements. The "project" account is used to report those proceeds of bond issuances that are restricted for use in construction. Bond discounts, premiums and issuance costs: In the government -wide financial statements and proprietary fund types in the fund financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as an expense in the year the costs are incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Bond issuance costs are reported as an expenditure in the year the costs are incurred. Interest capitalized: Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. $96,813 of interest expense in the Sanitary Sewer Fund was capitalized during the year ended June 30, 2016. Capital assets: Capital assets are reported in the applicable governmental or business -type activities columns in the government -wide statement of net position and in the fund financial statements for proprietary funds. Capital assets are recorded at historical cost. Donated capital assets are recorded at estimated acquisition value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset useful lives are not capitalized. Capital assets, other than infrastructure, are defined by the City as assets with an initial, individual cost in excess of $5,000 and estimated useful lives in excess of one year. Infrastructure is defined by the City as assets available for public use, other than buildings, and having a cost of $50,000 or more. 39 Page 324 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Depreciation is computed using the straight-line method over the estimated useful life of the asset. Estimated useful lives are as follows: Years Governmental activities: Buildings and improvements 10 - 40 Infrastructure 15 - 100 Furniture and equipment 3 - 20 Vehicles, machinery and equipment 3 - 25 Software 5 Assets under capital lease 10 - 15 Business -type activities: Buildings 15 - 50 Improvements other than buildings 50 Furniture and equipment 5 - 20 Vehicles, machinery and equipment 5 -10 Software 5 Discretely presented component units: Buildings and improvements Water supply and distribution systems Meters and equipment Machinery and equipment Leasehold improvements 8-40 10-99 5-63 5-26 5-39 The City's collection of works of art, library books and other similar assets are not capitalized. These collections are unencumbered, held for public exhibition and education, protected, cared for and preserved and subject to City policy that requires proceeds from the sale of these items to be used to acquire other collection items. Deferred outflows of resources: In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. The first is a deferred charge on refunding reported in the government -wide and enterprise funds statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The second item is a pension related deferred outflow, which consists of unrecognized items not yet charged to pension expense and contributions from the City after the measurement date but before the end of the City's reporting period. Deferred inflows of resources: In addition to liabilities, the statement of net position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The governmental funds report unavailable revenues from four sources: property taxes, local option sales taxes, special assessments and intergovernmental revenue. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 40 Page 325 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) In the City's government -wide statements, the property tax revenues are reported as a deferred inflow of resources and will become an inflow in the year for which they are levied and budgeted for. The City's government -wide statements also include unrecognized pension related amounts as deferred inflows. Pensions: The net pension liability, deferred inflows and outflows of resources related to pensions, pension expense, information about the fiduciary net position of the Iowa Public Employees' Retirement System (IPERS) and the Municipal Fire and Police Retirement System of Iowa (MFPRSI) and additions to/deductions from (PERS' and MFPRSI's fiduciary net position have been determined on the same basis as they are reported by (PERS and MFPRSI. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Interfund transactions: Transactions among City funds that would be treated as revenues and expenditures or expenses if they involved organizations external to City government are accounted for as revenues and expenditures or expenses in the funds involved. Transactions which constitute reimbursements to a fund for expenditures initially made from it which are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the reimbursed fund. Transactions, which constitute the transfer of resources from a fund receiving revenues to a fund through which the revenues are to be expended, are separately reported in the respective fund's operating statements. Activity between funds that are representative of lending/borrowing arrangements at the end of the fiscal year are referred to as "due to/from other funds" in the fund financial statements. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Noncurrent portions of long-term interfund loan receivables and payables are reported as advances within the governmental and enterprise funds. Compensated absences: City ordinances and labor contracts with the City call for the accumulation of vacation, compensatory time and sick leave for subsequent use or for payment upon termination or retirement. During 2001, the City began offering an early sick leave payout option for certain employees. Qualifying employees can elect to receive 60 percent of the time in their frozen sick leave bank over a five-year period prior to their retirement or termination of employment. Vacation, compensatory time and sick pay are accrued when incurred in the government -wide and the proprietary funds statements and reported as a liability. Matured compensated absences, for example, as a result of employee retirements and resignations, are considered due and expected to be liquidated with expendable available financial resources and are reported as an expenditure and a fund liability of the respective governmental fund. Governmental fund liabilities for unmatured compensated absences are not reported in the fund financial statements. 41 Page 326 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Long-term liabilities: In the government -wide financial statements and the proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities. In the governmental fund financial statements, the face amount of long-term debt issued is reported as an other financing source. Fund balance: In the governmental fund financial statements, fund balances are classified as follows: Nonspendable: Amounts which cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. Restricted: Amounts restricted to specific purposes when constraints placed on the use of the resources are either externally imposed by creditors, grantors or state or federal laws or imposed by law through constitutional provisions or enabling legislation. Committed: Amounts which can be used only for specific purposes pursuant to constraints formally imposed by the City Council through resolution approved prior to year-end. Those committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same action it employed to commit those amounts. Assigned: Amounts constrained by the City's intent to use them for a specific purpose. The authority to assign fund balance has been delegated by the City Council to the Chief Financial Officer in accordance with the City's Fund Balance and Reserve Policy. Unassigned: All amounts not included in other spendable classifications. The General Fund is the only fund that would report a positive amount in unassigned fund balance. Residual deficit amounts of other governmental funds would also be reported as unassigned. When an expenditure is incurred in governmental funds which can be paid using either restricted or unrestricted resources, the City's policy is to pay the expenditure from restricted fund balance and then from less -restrictive classifications — committed, assigned and then unassigned fund balances. Net position: Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources. Amounts reported as net investment in capital assets consist of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net investment in capital assets excludes unspent debt proceeds. Unspent debt proceeds for the various capital project GO Bonds Funds are $27,418,016 and the Sanitary Sewer enterprise fund is $4,853,936. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The government -wide statement of net position reports $30,494,718 of restricted net position of which $14,452,066 is restricted by enabling legislation for debt service, employee benefits, self- funded health insurance, library, tourism promotion and public access television. The City applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available. 42 Page 327 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 1. Nature of Operations, Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies (Continued) Indirect allocations: Operating funds, departments and activities receive services from supporting funds, departments and activities. Annually, management estimates the value of those services and records applicable indirect allocations. Activities related to federal grant programs have not been included in the indirect cost calculations, but are reported within the function the grant serves. Estimates and assumptions: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Note 2. Cash and Investments Interest rate risk: The City's policy allows the operating funds to be invested in instruments authorized by the City's investment policy that mature within 397 days and funds not identified as operating funds to be invested with maturities longer than 397 days. However, all investments of the City shall have maturities that are consistent with the liquidity needs of the City. As of June 30, 2016, the City had investments in the Iowa Public Agency Investment Trust (IPAIT) which were valued at an amortized cost of $14,188,429 pursuant to GASB Statement No. 79. IPAIT is registered with the Securities and Exchange Commission. The City's investment in IPAIT is not subject to interest rate risk. The discretely presented Waterloo Water Works component unit's certificates of deposit are restricted to comply with debt covenants and to secure customer deposits. Credit risk: In accordance with the City's investment policy, the City may invest in interest bearing savings accounts, interest bearing money market accounts, and interest bearing checking accounts at any bank, savings and loan associations or credit union in the state of Iowa, obligations of the United States government, its agencies and instrumentalities, certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions, IPAIT, prime bankers' acceptances that mature within 270 days of purchase and are eligible for purchase by a Federal Reserve Bank, commercial paper or other short-term corporate debt that matures within 270 days of purchase and is rated within the two highest classifications, as established by at least one of the standard rating services, repurchase agreements, open-end management investment company organized in trust form, registered with Securities & Exchanges Commission. The policy does not allow the City to invest in reverse repurchase agreements and futures and options contracts. The investment in the Iowa Public Agency Investment Trust is rated AAAm by Standard & Poors. Concentration of credit risk: The City's investment policy is to diversify its investment portfolio to eliminate the risk of loss resulting from overconcentration of assets in a specific maturity, a specific issuer or a specific class of securities. However, the policy limits the City from investing in prime bankers' acceptances or commercial paper of more than 10 percent of the investment portfolio and more than 5 percent of the investment portfolio with a single issuer at the time of purchase. In addition, no more than 5 percent of all amounts invested in commercial paper and other short-term corporate debt shall be invested in paper and debt rated in the second highest classification at the time of purchase. As of June 30, 2016, the City's investments were not subject to concentration of credit risk. 43 Page 328 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 2. Cash and Investments (Continued) Custodial credit risk: For deposits, this is the risk that in the event of bank failure, the City's deposits may not be returned to it. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City and Waterloo Water Works' deposits as of June 30, 2016 were entirely covered by federal depository insurance, National Credit Union insurance or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments against the depositories to ensure that there will be no loss of public funds. In addition, the City had no investments subject to custodial credit risk since the City does not hold the underlying investments. Note 3. Leasing Activities Airport: The Waterloo Municipal Airport has entered into various operating leases with airlines, fixed base operators, auto lease companies, the airport restaurant and hangar tenants, as well as farm airport land. These agreements range from month-to-month leases to longer-term leases with various specified terms. Some of these lease agreements contain cancellable conditions which eliminate any future guaranteed rentals or are contingent upon income produced by the lessee. The following is a schedule by years of the future minimum lease rentals to be received under these leases as of June 30: During the year ending June 30: 2017 $ 441,197 2018 59,478 2019 49,653 2020 44,867 2021 44,867 2022 - 2024 134,600 Total future minimum lease rentals to be received $ 774,662 Board of Regents, State of Iowa: The City has entered into a lease agreement with the Board of Regents, State of Iowa, for the former Chicago Great Western Depot building. The term of the lease is from August 21, 2001 through August 20, 2016 at a rate of $6,035 per month. The following is a schedule by years of the future minimum lease rentals to be received under the lease as of June 30: During the year ending June 30: 2017 $ 74,421 2018 74,421 2019 74,421 2020 74,421 2021 74,421 2022 12,070 Total future minimum lease rentals to be received 44 $ 384,175 Page 329 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 3. Leasing Activities (Continued) Waterloo Hotel Equities, LLC d/b/a Ramada Waterloo Civic and Convention Center: The City has entered into a lease agreement with the Waterloo Hotel Equities, LLC d/b/a Ramada Waterloo Civic and Convention Center (Hotel) for the use of the Five Sullivan Brothers Convention Center and City parking facilities. The term of the lease is from May 23, 2005 through December 31, 2019. The rental rates are based on the gross income and sales of the Five Sullivan Brothers Convention Center, also known as the Ramada Inn Convention Center (Center) paid on a monthly basis. The amount of revenue recognized for the year ended June 30, 2016 is $28,530. The lease includes a management agreement with the Hotel for the management of the Center. Note 4. Loans and Notes General Fund: Rath/Urban Development Action Grant (UDAG) Loans: In prior years, the City received federal aid in the form of UDAGs to assist local businesses, including Rath Packing Company (Rath). Rath subsequently liquidated and the City received real estate and cash as a result of the liquidation. A portion of the cash has been loaned to local businesses to assist in their economic development: Economic development revolving loans: From time -to -time, the City has made economic development loans with repayment terms of 5 years and interest ranging from 0 to 6.5 percent. These loans were paid off during 2016. Special Revenue Funds: Community Development Block Grant (CDBG) Loans: Low-interest loans: The City has fifteen low-interest rehabilitation and other loans due as of June 30, 2016, with a balance of $62,300. These loans are estimated to be uncollectible. Collections of CDBG loans are grant program income which is reported in the Special Revenue Fund (CDBG) as charges for services as received. Low-income housing loans: The City has provided seven loans for low-income housing projects, five of which have a below-market interest rate. All have minimal payments required each year until maturity. Maturities range from September 2018 to August 2031. The balance of the seven loans at June 30, 2016 was $1,267,769. Maturities range from September 2018 to August 2031. Cash received is program income and considered to be charges for services. Given the nature and collection history of the loans, the City has determined these amounts are uncollectible and has recorded an allowance for the full amount of the loans. Forgivable loans: The City, through its CDBG, HOME program, Economic Development Initiative program, Lead Paint Removal grant, federal and state Jumpstart funds and Iowans Helping Iowans funds, provides forgivable rehabilitation loans to low-income households. The loans are forgiven on a sliding scale over a five-year period, provided the home is not sold or abandoned. If the home is sold or abandoned, the City's lien against the property prevents a clear title transfer unless the unforgiven portion of the note is satisfied. As of June 30, 2016, the City had made 1,685 such loans totaling $31,550,640. The loan balances are considered forgivable and/or uncollectible by the City given the nature and terms of the loans and therefore, have not been recorded as assets on the balance sheet. 45 Page 330 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 5. Interfund Activity The composition of interfund receivables and payables balances as of June 30, 2016 was as follows: Due From Due To Major governmental funds: General $ 5,772,389 $ 30,104 Tax increment financing - 1,673,955 General obligation debt service 30,104 - Nonmajor governmental funds 1,650 4,100,084 $ 5,804,143 $ 5,804,143 Advances to and from other funds as of June 30, 2016, were as follows: Major governmental fund, General Nonmajor governmental funds Major Enterprise Fund, sanitary sewer Advances To Advances From $ - $ 168,316 129,612 - 27,003 - Nonmajor Enterprise Fund, sanitation 11,701 $ 168,316 $ 168,316 Interfund balances result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system and (3) payments between funds are made. The interfund receivables and payables are scheduled to be collected in the subsequent year whereas the interfund advances are not. Due to/from primary government and component units: Due to Enterprise Funds: Sanitary sewer $ 763,599 Sanitation 310,554 Due from Waterloo Water Works 1,074,153 Waterloo Water Works - due to primary government 962,736 Difference $ 111,417 The difference in the above amounts of $111,417 results from the different year ends of the entities as described in Note 1. Due to Waterloo Convention & Visitors Bureau, Inc. from General Fund 46 $ 325,221 Page 331 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 5. Interfund Activity (Continued) The following is a schedule of transfers as included in the basic financial statements of the City: Transfers In Transfers Out Major governmental funds: General $ 6,453,326 $ 138,478 Trust and agency - 6,314,327 Tax increment financing 89,000 8,385,904 General obligation debt service 2,665,079 - Nonmajor governmental funds 5,675,022 43,718 $ 14,882,427 $ 14,882,427 Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them. Note 6. Capital Assets Capital asset activity for the year ended June 30, 2016 was as follows: Beginning Ending Balance Balance June 30, 2015 Additions Deletions Transfers June 30, 2016 Governmental Activities Capital assets, not being depreciated: Land $ 43,387,370 $ 944,260 $ - $ $ 44,331,630 Land held for redevelopment 7,778,851 2,997,273 103,856 10,672,268 Construction -in -progress 19,494,565 16,014,712 (28,356,172) 7,153,105 Total capital assets, not being depreciated 70,660,786 19,956,245 103,856 (28,356,172) 62,157,003 Capital assets, being depreciated: Buildings and improvements Infrastructure Vehicles, machinery, furniture and equipment Software Total capital assets, being depreciated Less accumulated depreciation for: Buildings and improvements Infrastructure Vehicles, machinery, furniture and equipment Software Total accumulated depreciation 128,622,535 329,022,739 29,960,405 746,716 563,864 974,893 1,040,129 45,742 56,039 916,316 40,009 1,426,106 26,423,938 506,128 130,556,466 356,421,570 30,590,346 752,449 488,352,395 2,624,628 1,012,364 28,356,172 518,320,831 55,167,040 126,903,178 18,696,549 353,147 3,934,685 8,978,233 2,099,868 133,398 56,039 872,987 40,009 59,045,686 135,881,411 19,923,430 446,536 201,119,914 15,146,184 969,035 215,297,063 Total capital assets, being depreciated, net 287,232,481 (12,521,556) 43,329 28,356,172 303,023,768 Governmental activities capital assets, net $ 357,893,267 $ 7,434,689 $ 147,185 $ - $ 365,180,771 47 Page 332 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 6. Capital Assets (Continued) Beginning Ending Balance Balance June 30, 2015 Additions Deletions Transfers June 30, 2016 Business -Type Activities Capital assets, not being depreciated: Land $ 348,055 $ - $ $ - $ 348,055 Construction -in -progress 4,199,383 5,610,285 (4,970,375) 4,839,293 Total capital assets, not being depreciated 4,547,438 5,610,285 (4,970,375) 5,187,348 Capital assets, being depreciated: Buildings 71,117,517 15,349 Improvements other than buildings 49,836,068 95,733 Vehicles, machinery, furniture and equipment 10,738,104 2,562,289 Software 19,940 - Total capital assets, being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings Vehicles, machinery, furniture and equipment Software Total accumulated depreciation 4,970,375 319,676 71,132,866 54,902,176 12,980,717 19,940 131,711,629 2,673,371 319,676 4,970,375 139,035,699 22,008,725 15,068,491 6,366,475 15,952 1,403,969 996,721 591,958 3,988 214,676 23,412,694 16,065,212 6,743,757 19,940 43,459,643 2,996,636 214,676 46,241,603 Total capital assets, being depreciated, net 88,251,986 Business -type activities capital assets, net (323,265) 105,000 4,970,375 92,794,096 $ 92,799,424 $ 5,287,020 $ 105,000 $ - $ 97,981,444 48 Page 333 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 6. Capital Assets (Continued) Beginning Ending Balance Balance December 31, December 31, Discretely Presented Component Unit - 2014 Additions Deletions 2015 Waterloo Water Works Capital Assets Capital assets, not being depreciated: Land $ 307,000 $ 7,543 $ - $ 314,543 Construction -in -progress 899,431 1,385,733 (1,889,506) 395,658 Total capital assets, not being depreciated 1,206,431 1,393,276 (1,889,506) 710,201 Capital assets, being depreciated: Buildings and improvements 1,760,202 12,415 1,772,617 Water supply and distribution systems 29,470,327 708,193 30,178,520 Meters and equipment 1,173,594 - 1,173,594 Machinery and equipment 2,081,407 1,232,047 3,313,454 Total capital assets, being depreciated 34,485,530 1,952,655 36,438,185 Less accumulated depreciation for: Buildings and improvements 784,349 28,769 813,118 Water supply and distribution systems 7,581,498 470,361 8,051,859 Meters and equipment 691,199 27,618 718,817 Machinery and equipment 1,343,423 135,021 1,478,444 Total accumulated depreciation 10,400,469 661,769 11,062,238 Total capital assets, being depreciated, net Net discretely presented component unit - Waterloo Water Works capital assets, net 24,085,061 1,290,886 25,375,947 $ 25,291,492 $ 2,684,162 $ (1,889,506) $ 26,086,148 Ending Balance Balance Discretely Presented Component Unit - June 30, 2015 Additions Deletions June 30, 2016 Waterloo Convention & Visitors Bureau, Inc. Capital assets, being depreciated: Equipment $ 67,588 $ $ 786 $ 66,802 Leasehold improvements 125,924 125,924 Total capital assets, being depreciated 193,512 786 192,726 Less accumulated depreciation Total capital assets, being depreciated, net 49 126,105 18,211 786 143,530 $ 67,407 $ (18,211) $ $ 49,196 Page 334 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 6. Capital Assets (Continued) Depreciation expense was charged by the City as follows for the year ended June 30, 2016: Governmental activities: Public safety $ 934,739 Public works 11,702,286 Culture and recreation 2,142,398 Community and economic development 172,165 General government 194,596 Total governmental activities 15,146,184 Business -type activities: Sanitary sewer 2,683,502 Sanitation 313,134 Total business -type activities 2,996,636 Total primary government $ 18,142,820 Component unit - Waterloo Water Works $ 661,769 Component unit - Waterloo Convention & Visitors Bureau, Inc. $ 18,211 Note 7. Deferred Compensation Plans Deferred frozen sick leave payout: Retirees have the option of receiving their frozen sick leave (Note 8) payout immediately or receiving it as an annuity over 60 months. If the annuity option is selected, interest is paid to the retiree at the same rate as the City pays on the general obligation bonds last issued before the retirement date. During 2001, the City began offering an early sick leave payout option. Qualifying employees can elect to receive 60 percent of the balance in their frozen sick leave bank over a 52 -month period prior to their retirement or termination of employment. As of June 30, 2016, one employee was receiving payments, the remaining balance was $238 and is attributable to governmental activities. Deferred compensation is reported in business -type activities as accrued liabilities and in the governmental -type activities as a long-term liability. 50 Page 335 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 8. Compensated Absences City employees accumulate vacation and sick leave hours for subsequent use or for payment upon termination or retirement. A calendar year is primarily used for the calculation of vacation pay benefits while sick leave utilizes the City's fiscal year. Vacation days for most bargaining unit employees must be taken or paid during the calendar year with limited exceptions. Nonbargaining unit employees may carry forward up to 10 days vacation with proper approval. Upon termination, employees receive payment for unused vacation plus a payment for vacation hours accrued from January through the termination date. As of June 30, 2016, there was $2,927,560 accrued for vacation. Prior to July 1, 1984, sick leave was allowed to accumulate to a maximum of 240 days, except for police and fire personnel who could accumulate a maximum of 260 days. Any unused days as of July 1, 1984 were accumulated into a frozen sick leave bank. The days frozen in the bank are paid upon use, termination or retirement (except for library employees who will only be paid upon use). If paid upon retirement, the amount due to employees is computed as the amount equal to 60 percent of the total accumulated hours times the employee's current pay rate paid to employees. Retirees have the option of receiving the payout immediately or receiving it as an annuity over 60 months. As discussed in Note 7, active employees could elect to receive a payout of 60 percent of their frozen sick dollars beginning in July 2001. As of June 30, 2016, there was $137,111 accrued for the frozen sick leave bank. After July 1, 1984, sick leave is allowed to accumulate up to 12 days per year. At the end of the year, 25 percent of any unused sick leave is payable to the employee as a bonus and the balance of 75 percent of the unused sick leave is added to the employee's sick leave storage bank for future use. The days accumulated in the bank after July 1, 1984 are not payable upon termination or retirement. Certain Fire Department employees are eligible to receive pay -outs of 75 percent of their unused sick leave, with the balance of 25 percent of their unused leave added to their sick leave storage bank. As of June 30, 2016, $60,191, equivalent to 25 percent of unused sick leave subject to payout, has been accrued. Certain employees can elect either to be paid overtime compensation or to accrue the hours as compensatory time, defined as additional time off from regular hours. Employees are required to be paid for these services upon termination of employment. Maximum hours eligible to be used later as compensatory time are limited by law and labor contracts. Governmental funds do not recognize these accumulations as expenditures until paid. As of June 30, 2016, there was $1,460,437 accrued for unused compensatory time, which includes unused sick leave and frozen sick leave bank. Employees are also eligible to receive pay -outs of a portion of unused casual leave. The City accrued a total of $53,810 for unused casual leave earned during the fiscal year ended June 30, 2016. The sick leave bonus and accrued casual pay are reported as compensated absences in the applicable fund which includes $206,657 in governmental funds, as the liabilities are considered matured and are expected to be liquidated with expendable available financial resources. Frozen sick leave, vacation pay and compensatory time liabilities are accrued when incurred in the government -wide and proprietary fund statements and reported as a liability. 51 Page 336 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 9. Long -Term Liabilities The following is a summary of the changes in long-term liabilities for the year ended June 30, 2016: Increases Decreases and Due Within June 30, 2015 and Issues Retirements June 30, 2016 One Year Governmental activities: General obligation bonds $ 67,066,200 $ 19,140,000 $ 11,089,000 $ 75,117,200 $ 9,553,200 Loans and notes 2,061,316 98,250 225,503 1,934,063 189,046 Deferred compensation 6,441 6,203 238 238 Compensated absences 4,035,007 3,648,910 3,436,651 4,247,266 2,732,085 Net pension liability - IPERS 7,631,561 2,022,340 - 9,653,901 - Net pension liability - MFPRSI 26,777,406 9,631,437 - 36,408,843 - Subtotal 107,577,931 34,540,937 14,757,357 127,361,511 12,474,569 Unamortized discounts (132,062) (61,455) (18,603) (174,914) - Bond premium 898,973 169,261 112,801 955,433 - Total long-term liabilities, governmental activities $ 108,344,842 $ 34,648,743 $ 14,851,555 $ 128,142,030 $ 12,474,569 Business -type activities: General obligation bonds $ 25,673,800 $ 525,000 $ 3,136,000 $ 23,062,800 $ 2,501,800 Revenue bonds 715,000 575,000 140,000 140,000 Compensated absences 294,799 386,225 333,636 347,388 258,803 Net pension liability 1,948,102 515,381 - 2,463,483 - Subtotal 28,631,701 1,426,606 4,044,636 26,013,671 2,900,603 Unamortized discounts (87,525) (8,304) (79,221) - Bond premium 222,357 14,677 19,185 217,849 - Total long-term liabilities, business - type activities $ 28,766,533 $ 1,441,283 $ 4,055,517 $ 26,152,299 $ 2,900,603 Compensated absences, deferred compensation and the net pension liability attributable to governmental activities are generally liquidated by the General Fund. The City issues bonds and notes primarily to provide funds for the acquisition and construction of major capital facilities. General obligation bonds and notes have been issued for governmental and business - type activities and to refund debt. Revenue bonds have been issued to fund the acquisition and construction of sanitary sewer facilities and to refund prior general obligation and revenue debt. General obligation bonds and notes are direct obligations and pledge the full faith and credit of the City. Revenue bonds are the obligations of the Sanitary Sewer Enterprise Fund and are generally payable solely from the revenue of the Sanitary Sewer Enterprise Fund. Bonds generally are issued as 15- to 20 - year serial bonds. 52 Page 337 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 9. Long -Term Liabilities (Continued) On June 29, 2016, the City issued $8,605,000 in tax-exempt General Obligation Bonds, Series 2016A maturing June 1, 2017 through June 1, 2031 with interest rates ranging from 2.00 percent to 2.25 percent. Of the total balance for the Series 2016A bonds, $2,385,000 currently refunded the balance of the 2008A general bond issue, of which $1,860,000 was for general purpose and $525,000 was for sewer purposes. The net change was a decrease in cash flows related to the current refunding of $223,863. The economic gain resulting from the current refunding was $210,951. On June 29, 2016, the City issued $1,810,000 in taxable General Obligation Bonds, Series 2016B maturing June 1, 2017 through June 1, 2031 with interest rates ranging from 0.80 percent to 3.10 percent. On June 29, 2016, the City issued $9,250,000 in taxable General Obligation Bonds, Series 2016C maturing June 1, 2017 through June 1, 2036 with interest rates ranging from 0.90 percent to 3.40 percent. Reasons for issuance for the Series 2016A and 2016B bonds were to finance a variety of capital improvements, including facility improvements, flood control and bridge improvements, street reconstruction, equipment and technology needs and vehicle acquisitions, as well as to pay the costs of issuance of the Bonds. The Series 2016C bonds were issued to provide an economic development grant for the Tech 11 building at the TechWorks campus. The City's outstanding general obligation long-term debt is as follows: Outstanding Issue Date Purpose Interest Rates June 30, 2016 June 2007 Taxable 5.400 - 5.600 $ 150,000 June 2008 Taxable 5.000 705,000 June 2009 Taxable 1.750 - 5.750 3,605,000 June 2010 Refunding 1.000 - 2.450 935,000 June 2010 Taxable 1.000 - 5.000 5,435,000 June 2011 Refunding 2.000 - 4.000 6,380,000 June 2011 Taxable 0.600 - 4.600 5,925,000 June 2012 Taxable 2.000 - 2.300 5,950,000 June 2012 Refunding 0.350 - 1.350 2,410,000 June 2012 Taxable 2.200 - 3.500 3,980,000 June 2013 Taxable 2.000 - 3.700 10,645,000 June 2013 Refunding 0.500 - 2.500 910,000 June 2014 Taxable 1.000 - 4.000 12,485,000 June 2014 Refunding 2.000 5,850,000 June 2015 Taxable 3.000 - 3.500 11,695,000 June 2015 Taxable 1.500 - 4.000 1,455,000 June 2016 Refunding 2.000 - 2.250 8,605,000 June 2016 Taxable 0.800 - 3.100 1,810,000 June 2016 Taxable 0.900 - 3.400 9,250,000 53 $ 98,180, 000 Page 338 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 9. Long -Term Liabilities (Continued) Annual debt service on general obligation and revenue bonds as of June 30, 2016 are as follows: Year ending June 30: 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 2036 Year ending June 30: 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2030 GO Debt Service General Obligation Bonds Principal Interest $ 9,553,200 8,568,000 7,676,000 6,210,000 5,313,000 22, 366, 000 12, 436, 000 2,995,000 $ 2,041,360 1,842,229 1,630,284 1,429,941 1,273,988 4,267,361 1,380,212 302,810 $ 75,117, 200 $ 14,168,185 Sanitary Sewer Enterprise Sanitary Sewer Enterprise General Obligation Bonds Revenue Bonds Principal Interest Principal Interest $ 2,501,800 2,492,000 2,464,000 2,005,000 1,957,000 8,834,000 2,809,000 $ 724,667 663,748 600,297 532,991 472,817 1,386,603 200,781 $ 140,000 $ 4,200 $ 23, 062, 800 $ 4,581,904 $ 140,000 $ 4,200 The City has pledged future sewer customer revenues, net of specified operating expenses, to repay $21,235,000 in sewer system revenue bonds issued August 2004 and $6,285,000 in sewer system refunding revenue bonds issued July 2011. Proceeds from the bonds issued August 2004 were used to construct improvements to the sewer plant. Proceeds from the bonds issued July 2011 were used to currently refund the 2004 bonds and pay costs of issuance on the 2011 bonds. The bonds are payable solely from sewer customer net revenues and are payable through 2017. Annual principal and interest payments on the bonds are expected to require less than 90 percent of net revenues in any one year of the life of the bond. The total principal and interest remaining to be paid on the bonds is $144,200. Principal and interest paid for the current year and total customer net revenues were $592,413 and $3,695,489, respectively. The resolutions providing for the issuance of revenue bonds include the following covenants: 1. The bonds will only be redeemed from the future earnings of the sewer system and the bondholders hold a lien on the future earnings. 2. Sufficient monthly transfers shall be made to the sewer revenue bond and interest sinking account for the purpose of making the bond principal and interest payments when due. 3. Monthly transfers will be made to establish a sewer revenue debt reserve fund. (The minimum required is currently $172,500). The amounts shall be used solely for the purpose of paying principal or interest on the bonds when insufficient money is available in the sinking fund. Whenever it shall become necessary to use the funds in the debt reserve fund, monthly payments shall be established to restore the funds used within a three-year period. 54 Page 339 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 9. Long -Term Liabilities (Continued) 4. Monthly transfers of $20,000 shall be made to the sewer improvement fund until the fund equals or exceeds $450,000. Amounts in the improvement fund not otherwise specially limited by provisions of the bond resolution shall first be used for the purpose of paying principal or interest on the bonds when there shall be insufficient money in the sinking fund and the reserve fund, to pay the cost of extraordinary maintenance or repairs, renewals and replacements not included in the annual budget of revenue and current expenses, payment of rentals on any part of the system or payments due for any property purchased as a part of the system and for capital improvements to the system. Whenever it becomes necessary to use the improvement fund, the monthly payments required shall be continued or resumed until the fund is restored to the required minimum balance. 5. The City will cause to be kept proper books and accounts adapted to the system and in accordance with accounting principles generally accepted in the United States of America, and will cause the books and accounts to be audited annually not later than 270 days after the end of each fiscal year by an independent auditor. 6. The City will faithfully and punctually perform all duties with reference to the Sewer Enterprise required by the Constitution and laws of the state of Iowa. 7. The City will establish rates to allow net revenue to meet or exceed 125 percent of debt service requirements for the year. For the year ended June 30, 2016, sewer net revenue was 497 percent of sewer revenue bond debt service. Loans and notes: The City, through its blended component unit, Waterloo Housing Authority, was indebted to the Federal Financing Bank (FFB) for $81,017 from the purchase of the Ridgeway Towers housing complex. The debt was paid off in November 2015. The United States Department of Housing and Urban Development pays interest and principal of $86,364, annually, directly to FFB. The City reports the payment transaction in the GO Debt Service Fund. During the years ended June 30, 2013 and 2011, the City had drawn $195,348 and $235,082, respectively, in loans from the Iowa Department of Economic Development, Brownfield Redevelopment Program (Department). The loans are at zero percent with no payments due in years one through five. The loan may be forgiven if planned increases in taxable valuation of property within the redevelopment area have been attained. Repayment of unforgiven loan is to be repaid in 10 equal semiannual payments as determined by the Department at a 6 percent interest rate. As of June 30, 2016, the unpaid principal was $255,430. The City has entered into development agreements including rebates of property taxes paid by other parties to the agreements. Most agreements include a set percentage of taxes paid for a specified number of years. Since payment years and amounts are unknown, they are not included in the schedule of maturities of debt. The following agreements require a guaranteed amount of principal plus interest to be paid to the developer. • Wilbert Burial Vault Co., $14,058 plus interest at 5 percent, compounded annually. The City was to pay all accrued interest by September 30, 2007 after which 90 percent of eligible property taxes will be rebated until interest and principal have been paid. • Young Development, Ltd., $20,796 plus interest at 5 percent, payable semiannually beginning November 2009 until paid in full from 100 percent of property tax payments, subject to annual appropriation. • Deer Creek Development, LLC, $1,643,599 plus interest at 7 percent through March 31, 2011 then at 4.750 percent, compounded semiannually. In fiscal year 2014, there were additions to the agreement of $6,130. Payable at $300,000 in fiscal year 2011 and semiannual payments of $100,000 are due beginning November 2011 until principal plus interest have been paid. 55 Page 340 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 9. Long -Term Liabilities (Continued) Other loans and notes: Other governmental activity loans and notes mature as follows: Governmental Activities Nonmajor Governmental Funds Principal Interest Year ending June 30: 2017 $ 189,046 $ 78,623 2018 182,499 70,600 2019 189,912 63,983 2020 193,658 57,428 2021 200,453 50,633 2022 - 2026 978,495 139,336 $ 1,934,063 $ 460,603 Discretely presented component unit: Balance Balance Due Within December 31, 2014 Additions Deletions December 31, 2015 One Year Capital loan notes $ 416,000 $ - $ 416,000 $ - $ Compensated absences 61,600 120,260 114,352 67,508 67,508 Total long-term debt $ 477,600 $ 120,260 $ 530,352 $ 67,508 $ 67,508 Debt indentures require that certain covenants relating to the maintenance and efficiency of the operating system, the rate structure, restrictions on borrowings, leasing or disposition of assets and minimum insurance coverage be adhered to. Note 10. Operating Leases Effective July 1, 1999, the City's sanitary sewer operations entered into a five-year agreement for the management of biosolid by-products produced at the Wastewater Treatment Facility. The agreement included the lease of a storage facility. This lease was extended August 1, 2014 for another five-year period, at a monthly rental of $4,900. Rental expense for all material operating leases was $114,500 for the year ended June 30, 2016. Cedar Valley SportsPlex: The Cedar Valley SportsPlex, a 125,000 square foot recreational facility that includes indoor soccer fields, gyms, a leisure pool, fitness facility, running track and multi-purpose activity spaces, opened in January 2014. The facility is a joint project of the City and the Waterloo Development Corporation. The Waterloo Development Corporation raised the funds, through a combination of private donations and grants from the Black Hawk County Gaming Association, to construct the $23 million facility. The City acquired the property where the facility is located and signed a lease purchase agreement to operate the facility for $100 per year. The lease purchase agreement gave the City the option to take ownership of the facility at the end of the lease term or to cease operating the facility at that time. In August 2014, the lease agreement was amended to remove that option, so the property will automatically transfer to the City at the end of the lease term. The Waterloo Development Corporation signed an agreement with the City which guarantees that the fundraising for construction will be completed. Because there was an automatic transfer of the assets at the end of the term of the agreement, and that future lease payments to the Waterloo Development Corporation are nominal, the City has no capital contribution to report for the year ended June 30, 2016, and no capital lease liability as of June 30, 2016. The Leisure Services department of the General Fund is operating the facility with a combination of existing and additional staff positions. The intent is for the facility to be self-supporting. 56 Page 341 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems Iowa Public Employees' Retirement System: Plan description: Employees of the City are provided with pensions through the Iowa Public Employees Retirement System (IPERS)—a cost-sharing multiple -employer defined benefit pension plan administered by the State of Iowa. (PERS provides retirement and death benefits which are established by State statute to plan members and beneficiaries. (PERS issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to (PERS, P.O. Box 9117, Des Moines, Iowa, 50306-9117. Benefits provided: (PERS provides retirement, disability and death benefits. Retirement benefits are determined based on the employee's highest five-year average salary and a multiplier based on the years of service. Employees are eligible for full retirement age 65; at age 62 with at least 20 years of covered employment or when the years of service plus the employee's age equals or exceeds 88. Four years of service is required for nonservice-related disability eligibility. Disability benefits are determined in the same manner as retirement benefits but are payable immediately without an actuarial reduction. Death benefits are calculated based on the actuarial present value of the employee's accrued benefit at the time of death or a calculation based on the employee's contributions, highest covered annual wage and years of service. Contributions: Per Iowa Code Section 97B.4(4)(d) the required contribution rate is determined by the (PERS actuary as the rate necessary to fully fund the benefits as defined by Iowa Code Chapter 97B. Employees are required to contribute 5.95 percent of their annual pay. The City contractually required contribution rate for the year ended June 30, 2016, was 8.93 percent of annual payroll, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the pension plan from the City were $1,564,955 for the year ended June 30, 2016. Pension Liabilities, Pension Expense, and Deferred Inflow and Outflows of Resources Related to Pensions At June 30, 2016, the City reported a liability of $12,117,384 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating governments, actuarially determined. At June 30, 2015, the City's proportion was 0.24526715 percent, an increase of 0.00371675 percent from the City's proportion at June 30, 2014. 57 Page 342 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) For the year ended June 30, 2016, the City recognized pension expense of $2,091,839. At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between City contributions and proportionate share of contributions Total deferred amounts to be recognized in pension expense in future periods Deferred Deferred Outflows of Inflows of Resources Resources $ 183,078 $ 333,622 1,813,001 (2,821,484) 309,084 (185,323) 2,638,785 (3,006,807) City contributions subsequent to the measurement date 1,564,955 Total deferred amounts related to pensions $ 4,203,740 $ (3,006,807) $1,564,955 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. The deferred outflows and deferred inflows resulting from the difference between projected and actual earnings on pension plan investments will be recognized as a reduction of pension expense over five years. The other deferred inflows and outflows will be recognized in pension expense using the average expected remaining service lives of all (PERS members. The average is determined by taking the calculated total future service years of the Plan divided by the number of the people in the Plan including retirees. Deferred outflows of resources and deferred inflows of resources will be recognized in pension expense as follows: Year ended June 30: 2017 $ (320,573) 2018 (320,573) 2019 (320,573) 2020 568,679 2021 25,018 $ (368,022) 58 Page 343 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Actuarial assumptions: The total pension liability was determined by an actuarial valuation as of June 30, 2015, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.00 percent Salary increases 4.00 to 17.00 percent, average, including inflation. Investment rate of return 7.50 percent, net of pension plan investment expense, including inflation Mortality rates were based on the RP -2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the four-year period ending June 30, 2014. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Long -Term Asset Expected Real Allocation Rate of Return U.S. equity 24% 6.29% Non U.S. equity 16 6.75 Private equity 11 11.32 Real estate 8 3.48 Core plus fixed income 28 2.04 Credit opportunities 5 3.63 TIPS 5 1.91 Other real assets 2 6.24 Cash 1 (0.71) 100% Discount rate: The discount rate used to measure the total pension liability was 7.50 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from cities will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 59 Page 344 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate: The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50 percent, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.50 percent) or 1 - percentage -point higher (8.50 percent) than the current rate: 1% Decrease (6.50%) Discount Rate (7.50 %) 1% Increase (8.50 %) City's proportionate share of the net pension liability $ 21,215,359 $ 12,117,384 $ 4,438,040 Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in the separately issued (PERS financial report; which can be located at www.ipers.org. As of June 30, 2016 the City owed (PERS $57,123 for legally required employee contributions which had been withheld from employees but not yet remitted to (PERS. Municipal Fire and Police Retirement System of Iowa Plan description: MFPRSI membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa 50266 or at www.mfprsi.org. MFPRSI benefits are established under Chapter 411 of the Code of Iowa and the administrative rules thereunder. Chapter 411 of the Code of Iowa and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension benefits: Members with 4 or more years of service are entitled to pension benefits beginning at age 55. Full service retirement benefits are granted to members with 22 years of service, while partial benefits are available to those members with 4 to 22 years of service based on the ratio of years completed to years required (i.e., 22 years). Members with less than 4 years of service are entitled to a refund of their contribution only, with interest, for the period of employment. Benefits are calculated based upon the member's highest 3 years of compensation. The average of these 3 years becomes the member's average final compensation. The base benefit is 66 percent of the member's average final compensation. Additional benefits are available to members who perform more than 22 years of service (2 percent for each additional year of service, up to a maximum of 8 years). Survivor benefits are available to the beneficiary of a retired member according to the provisions of the benefit option chosen plus an additional benefit for each child. Survivor benefits are subject to a minimum benefit for those members who chose the basic benefit with a 50 percent surviving spouse benefit. Active members, at least 55 years of age, with 22 or more years of service have the option to participate in the Deferred Retirement Option Program (DROP). The DROP is an arrangement whereby a member who is otherwise eligible to retire and commence benefits opts to continue to work. A member can elect a 3, 4, or 5 year DROP period. By electing to participate in DROP the member is signing a contract indicating the member will retire at the end of the selected DROP period. During the DROP period the member's retirement benefit is frozen and a DROP benefit is credited to a DROP account established for the member. Assuming the member completes the DROP period, the DROP benefit is equal to 52 percent of the member's retirement benefit at the member's earliest date eligible and 100 percent if the member delays enrollment for 24 months. At the member's actual date of retirement, the member's DROP account will be distributed to the member in the form of a lump sum or rollover to an eligible plan. 60 Page 345 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Disability and death benefits: Disability coverage is broken down into two types, accidental and ordinary. Accidental disability is defined as permanent disability incurred in the line of duty, with benefits equivalent to the greater of 60 percent of the member's average final compensation or the member's service retirement benefit calculation amount. Ordinary disability occurs outside the call of duty and pays benefits equivalent to the greater of 50 percent of the member's average final compensation, for those with 5 or more years of service, or the member's service retirement benefit calculation amount, and 25 percent of average final compensation for those with less than 5 years of service. Death benefits are similar to disability benefits. Benefits for accidental death are 50 percent of the average final compensation of the member plus an additional amount for each child, or the provisions for ordinary death. Ordinary death benefits consist of a pension equal to 40 percent of the average final compensation of the member plus an additional amount for each child, or a lump -sum distribution to the designated beneficiary equal to 50 percent of the previous year's earnable compensation of the member or equal to the amount of the member's total contributions plus interest. Benefits are increased (escalated) annually in accordance with Chapter 411.6 of the Code of Iowa which states a standard formula for the increases. The surviving spouse or dependents of an active member who dies due to a traumatic personal injury incurred in the line of duty receives a $100,000 lump -sum payment. Contributions: Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa as modified by act of the 1994 General Assembly, to establish compliance with the Federal Older Workers Benefit Protections Act, the contribution rate was 9.4 percent of earnable compensation for the year ended June 30, 2016. Employer contribution rates are based upon an actuarially determined normal contribution rate and set by state statute. The required actuarially determined contributions are calculated on the basis of the entry age normal method as adopted by the Board of Trustees as permitted under Chapter 411 of the Code of Iowa. The normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current plan assets, with such total divided by 1 percent of the actuarially determined present value of prospective future compensation of all members, further reduced by member contributions and state appropriations. Under the Code of Iowa the employer's contribution rate cannot be less than 17 percent of earnable compensation. The City's contribution rate was 30.41 percent for the year ended June 30, 2016. The City's contributions to MFPRSI for the year ended June 30, 2016 were $4,280,766. If approved by the state legislature, state appropriation may further reduce the employer's contribution rate, but not below the minimum statutory contribution rate of 17 percent of earnable compensation. The State of Iowa therefore is considered to be a nonemployer contributing entity in accordance with the provisions of the Governmental Accounting Standards Board Statement No. 67 — Financial Reporting for Pension Plans, (GASB 67). There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2015. 61 Page 346 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Net Pension Liabilities, Pension Expense, and Deferred Inflows and Outflows of Resources Related to Pensions: At June 30, 2016, the City reported a liability of $36,408,843 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all MFPRSI participating employers. At June 30, 2015, the City's proportion was 5.724535 percent, an increase of 0.004015 percent from the City's proportion at June 30, 2014. For the year ended June 30, 2016, the City recognized pension expense of $2,684,148. At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 5,270,594 $ (45,962) Changes of assumptions 2,023,610 Net difference between projected and actual earnings on pension plan investments (7,315,974) Changes in proportion and differences between City contributions and proportionate share of contributions 16,723 (347,405) Total deferred amounts to be recognized in pension expense in future periods 7,310,927 (7,709,341) City contributions subsequent to the measurement date 4,280,766 Total deferred amounts related to pensions $ 11,591,693 $ (7,709,341) $4,280,766 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. The deferred outflows and deferred inflows resulting from the difference between projected and actual earnings on pension plan investments will be recognized as a reduction of pension expense over five years. The other deferred inflows and outflows will be recognized in pension expense using the average expected remaining service lives of all MFPRSI members. The average is determined by taking the calculated total future service years of the Plan divided by the number of the people in the Plan including retirees. Deferred outflows of resources and deferred inflows of resources will be recognized in pension expense as follows: Year ended June 30: 2017 $ (737,818) 2018 (737,818) 2019 (737,818) 2020 1,611,177 2021 203,863 $ (398,414) 62 Page 347 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Actuarial Assumptions: The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.00 percent Salary increases 4.00 to 15.11 percent, average, including inflation. Investment rate of return 7.50 percent, net of pension plan investment expense, including inflation The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period from July 1, 2002 to June 30, 2012. There were no significant changes of benefit terms. Mortality rates used by the plan were based weighting equal to 1/12 of the 1971 GAM table and 11/12 of the 1994 GAM table with no projection of future mortality improvement. The one additional step results in a weighting of 1/12 of the 1971 Group Annuity Mortality Table and 11/12 of the 1994 Group Annuity Mortality Table. The City updated the mortality rates to the RP -2000 Blue Collar mortality with a projected mortality improvement using Scale BB -2D. As a result, the City increased its net pension obligation by approximately $10 million as of June 30, 2016. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Long -Term Asset Expected Real Allocation Rate of Return Core plus fixed income Emerging markets debt Domestic equities Master limited partnerships International equities Tactical asset allocation Private equity Private non-core real estate Private core real estate 7.0% 3.0 12.5 5.0 12.5 35.0 15.0 5.0 5.0 100% 3.80% 6.50 6.00 8.50 7.00 6.00 9.80 9.30 6.80 Discount rate: The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that contributions will be made at 9.40 percent of covered payroll and the City contributions will be made at rates equal to the difference between actuarially determined rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 63 Page 348 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Sensitivity of City's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate: The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50 percent, as well as what the city's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percent lower (6.50 percent) or 1 -percent higher (8.5 percent) than the current rate. 1% Decrease (6.50%) Discount Rate (7.50 %) 1% Increase (8.50 %) City's proportionate share of the net pension liability $ 57,534,391 $ 36,408,843 $ 18,855,985 As of June 30, 2016 the City owed MFPRSI $152,299 for legally required employee contributions that had been withheld from employee wages but not yet remitted to MFPRSI. Component Unit The Water Works contributes to the Waterloo Water Works Pension Plan (WWW Plan) and the Iowa Public Employees' Retirement System (IPERS). Waterloo Water Works Pension Plan: Plan description: The Waterloo Water Works Pension Plan is a single -employer defined benefit plan administered by the Pension Committee of Waterloo Water Works. The WWW Plan provides retirement benefits to plan members and beneficiaries. Cost -of -living adjustments are provided to members and beneficiaries at the discretion of the Committee. The WWW Plan does not issue a stand-alone financial report. The actuarial report on the WWW Plan is held at the Water Works' office. Benefits provided: The WWW Plan provides retirement benefits to plan members and their beneficiaries. Retirement benefits are calculated using the highest three consecutive years of pensionable earnings during the last ten years of employment. The accrued benefit is determined to be 60 percent of average compensation, reduced if years of service is less than thirty years. Normal retirement age is 65. Married members may receive a benefit for life; however, members are required by law to receive a reduced qualified joint and survivor benefit, unless formally elected otherwise. In no event shall pensionable earnings exceed the limitation specified in Section 401(a)(17) of the Internal Revenue Code. As of December 31, the following employees were covered by the WWW Plan: Inactive plan members and beneficiaries currently receiving benefits 32 Inactive plan members entitled to but not yet receiving benefits 4 Active plan members 17 Total members 53 64 Page 349 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Contributions: The contribution requirements of the Plan members (employees) and the Water Works are established and may be amended by the Water Works. Mandatory contributions to the plan are equal to the (PERS rate effective January 1 of the previous year. Prior to 2010, plan members contributions were not required and the Water Works made all the required contributions. Beginning January 1, 2010, plan members were required to contribute one-third of the full contribution rate of 4.1 percent and the Water Works paid the rest of the required contribution. As of January 1, 2011, plan members were required to contribute two-thirds of the full contribution rate of 4 .3 percent and beginning January 1, 2012, plan members were required to contribute all of the mandatory contributions. The vesting period also changed from 12 years to 4 years as of January 1, 2010. Net pension liability: The Water Works' net pension liability was measured as of December 31, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability in the December 31, 2015 was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 2.50% per annum Rates of salary increases 3.00% per annun Long-term investment rate of return 8.00%, compounded annually, net of investment expenses. The actuarial assumptions used in the December 31, 2015 valuation were based on the results of an actuarial experience study for the period January 1, 2015 through December 31, 2015. In addition, mortality rates were based on 2016 IRS Combined Mortality Table as appropriate. The long-term expected rate of return on WWW Plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the WWW Plan's target asset allocation as of December 31, 2015 are summarized in the following table: Long -Term Target Expected Real Allocation Rate of Return Asset Class: Cash and fixed income 7% 2.50% Equity large cap 60 5.50 Equity mid cap 20 6.00 Equity small cap 11 6.00 Real estate 2 5.00 Cash and fixed income Total 100% 65 Page 350 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Discount rate: The discount rate used to measure the total pension liability was 8.00 percent. The projection of cash flows used to determine the discount rate assumed that WWW Plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the differences between actuarially determined contribution rates and the member rate. Based on those assumptions the WWW Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit. Changes in Water Works' net pension liability: Changes in the Water Works' net pension liability for the year ended December 31, 2015 were as follows: Total Plan Net Pension Fiduciary Net Pension Liability Position Liability Balance, beginning of year $ 7,800,622 $ 5,241,322 $ 2,559,300 Changes for the year: Service cost 53,008 53,008 Interest 607,558 607,558 Difference between expected and actual experience (28,037) (28,037) Changes in assumptions 12,600 12,600 Contributions, employer 481,000 (481,000) Contributions, member 59,043 (59,043) Contributions, nonemployer contributing member Net investment income (157,692) 157,692 Benefit payments including refunds of employee contributions (518,306) (518,306) Administrative expense - - Balance, end of year $ 7,927,445 $ 5,105,367 $ 2,822,078 Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liability calculated using the discount rate of 8.00 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percent lower, or 1 percent higher than the current rate: 1% Discount 1% Decrease Rate Increase 7.00% 8.00% 9.00% Net pension liability $ 3,543,475 $ 2,822,078 $ 2,160,852 66 Page 351 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) Net pension liabilities, pension expense and deferred outflows of resources and deferred inflows of resources related to pensions: At December 31, 2015, the Water Works' recognized pension expense of $291,775. At December 31, 2015, the Water Works' reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual experience $ - $ 18,691 Changes in assumptions 8,400 Net difference between projected and actual earnings on pension plan investments 462,294 $ 470,694 $ 18,691 Amounts reported as deferred outflows of resources and deferred inflows or resources will be recognized in pension expense as follows: Pension Expense Amount Year ending December 31: 2017 $ 110,428 2018 110,428 2019 115,573 2020 115,574 Total $ 452,003 IPERS — Waterloo Water Works: In 2015, pursuant to the required rate, Regular members contributed 5.95 percent of covered payroll and the Water Works contributed 8.93 percent of covered payroll for a total rate of 14.88 percent. The Water Works' Contributions to (PERS for the year ended December 31, 2015 were $90,911. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions: At December 31, 2015, the Water Works' liability for its proportionate share of the net pension liability totaled $706,956. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Water Works' proportion of the net pension liability was based on the Water Works' share of contributions to the pension plan relative to the contributions of all (PERS participating employers. At June 30, 2015, the Water Works' collective proportion was .014220 percent, which was an increase of .001423 percent from its proportion measured as of June 30, 2014. 67 Page 352 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) For the year ended December 31, 2015, the Water Works recognized pension expense of $90,305. At December 31, 2015, the Water Works reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between Water Works contributions and proportionate share of contributions Total deferred amounts to be recognized in pension expense in future periods Deferred Deferred Outflows of Inflows of Resources Resources $ 10,681 $ 19,464 (58,837) 113,377 143,522 (58,837) Water Works contributions subsequent to the measurement date 55,000 Total deferred amounts related to pensions $ 198,522 $ (58,837) $55,000 reported as deferred outflows of resources related to pensions resulting from the Water Works contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2015. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2017 $ 11,037 2018 11,037 2019 11,037 2020 47,839 2021 3,735 $ 84,685 There were no non -employer contributing entities at (PERS. Actuarial Assumptions: The total pension liability in the June 30, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurements: Inflation 3.00 percent Salary increases 4.00 to 17.00 percent, average, including inflation. Investment rate of return 7.50 percent, net of pension plan investment expense, including inflation The actuarial assumptions used in the June 30, 2015 valuation were based on the results of actuarial experience. Study for the period from July 1, 2002 to June 30, 2012. There were no significant changes to benefit terms. Mortality rates were based on the RP -2000 Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. 68 Page 353 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 11. Retirement Systems (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Long -Term Asset Expected Real Allocation Rate of Return U.S. equity 24% 6.29% Non U.S. equity 16 6.75 Private equity 11 11.32 Real estate 8 3.48 Core plus fixed income 28 2.04 Credit opportunities 5 3.63 TIPS 5 1.91 Other real assets 2 6.24 Cash 1 (0.71) 100% Discount Rate: The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the contractually required rate and that contributions from the Water Works will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Water Works' Proportionate Share of the Net Pension Liability to Changes in the Discount Rate: The following presents the Water Works' proportionate share of the net pension liability calculated using the discount rate of 7.5 percent, as well as what the Water Works' proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percent lower (6.5 percent) or 1 percent higher (8.5 percent) than the current rate. Water Work's proportionate share of the net pension liability 1% Decrease (6.50%) Discount Rate (7.50%) 1% Increase (8.50%) $ 1,237,753 $ 706,954 $ 258,925 Payables to the Pension Plan: At December 31, 2015, the Water Works reported payables to the defined benefit pension plan of $7,043 for legally required employee contributions which had been withheld from employee wages but not yet remitted to (PERS. 69 Page 354 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 12. Deficit Fund Balances Funds with deficit balances as of June 30, 2016 were as follows: Nonmajor governmental: Special revenue: Community Development Block Grant $ 215,967 Grants 1,882,864 Federal Aviation Agency Projects 380,200 Capital projects, Capital Improvements 1,815,963 The deficit of the above funds are expected to be eliminated through future transfers from other funds, grant proceeds or bond proceeds. Note 13. Commitments Construction: The City is involved in construction of capital assets, mainly streets, riverfront improvements and Brownfields reconstruction. Much of the construction is partially funded through federal, state and local grants and donations. City participation in the programs is generally funded through proceeds of debt issues, local option taxes and distributions from the Black Hawk County Solid Waste Management Commission. As of June 30, 2016, the City was committed to approximately $12.5 million of construction contracts. Property tax rebates: The City has entered into a number of development agreements with various businesses located in City tax increment financing districts. The agreements offer rebates of portions of taxes paid for up to 10 years, depending on each individual agreement. The amount of the rebates are a percentage of the actual taxes paid by the business. Rebates are reported at the time property taxes are received. See Note 9 for additional information. Loan guarantee: The City has guaranteed a bank loan of Cedar Skyline Corporation d/b/a Main Street Waterloo, a not-for-profit corporation. Main Street Waterloo and the City are not part of the same reporting entity. In 1999, Main Street Waterloo entered into a loan agreement with a financial institution, which was amended in 2006, 2010 and 2016. The note matures monthly through August 17, 2020. When the loan was entered into, the City voted to extend a nonexchange financial guarantee on the Main Street Waterloo loan. In the event that Main Street Waterloo is unable to repay the loan, the City would be required to make the payment, with no requirements for Main Street Waterloo to repay the City if the City has to pay any amount on the loan. As of June 30, 2016, the loan balance was $211,676. Based on City management's assessment of the qualitative factors and historical data, the City has not recorded a liability for this nonexchange financial guarantee. Note 14. Other Postemployment Benefits Plan description: The City sponsors a single -employer health care plan that provides self-insured medical, prescription drug, dental and vision benefits to all active and retired employees and their eligible dependents. As required by state law, employees who retire from service with the City prior to age 65 are eligible for coverage in the plan. Police and fire employees must have completed four years of service, be age 55 and vested in the Municipal Fire and Police Retirement System. All other employees must have completed four years of service (seven years of service after July 1, 2012), be age 55 and be vested in (PERS to participate in the plan. Retirees are allowed to be covered by the plan until they are Medicare eligible at age 65. Spouses of retirees are eligible to be covered on the plan for an additional eight years or until they reach age 65, whichever is sooner. Other dependents are allowed to be covered under the plan while an eligible dependent. The plan does not issue a stand-alone financial report. 70 Page 355 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 14. Other Postemployment Benefits (Continued) Funding policy: Management develops the health insurance plan contributions based on expected claims. The current funding policy of the City is to pay health claims as they occur. Retirees are responsible for the portion of premium rates not covered by the City. The required contribution is based on projected pay-as-you-go financing. For fiscal year 2016, the City contributed $1,429,058. Retiree and active members receiving benefits have required contributions of $623 per month for single health coverage and $1,576 for family coverage. Annual OPEB cost and net OPEB obligation: The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance to the parameters for GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost for the year, the amount actuarially contributed to the plan and changes in the City's annual OPEB obligation: Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions and payments made Increase in net OPEB obligation Net OPEB obligation - July 1, 2015 Net OPEB obligation - June 30, 2016 $ 1,655,000 198,000 (272,412) 1,580,588 1,429,058 151,530 4,957,430 $ 5,108,960 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligations for 2016 and the two preceding years follows. OPEB liability attributable to governmental activities are generally liquated by the General fund. Fiscal Year Ended June 30, 2014 June 30, 2015 June 30, 2016 Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation $ 1,723,884 1,712,953 1,580,588 93.21% 92.97 90.41 $ 4,837,000 4,957,430 5,108,960 Funded status and funding progress: As of July 1, 2015, the most recent valuation date, the plan was zero percent funded. The actuarial accrued liability for benefits was $20,596,000 and the actuarial value of assets is none resulting in an unfunded actuarial accrued liability (UAAL) of $20,596,000. The covered payroll (annual payroll of active employees covered by the plan) was $33,862,392 and the ratio of the UAAL to the covered payroll was 60.8 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 71 Page 356 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 14. Other Postemployment Benefits (Continued) Actuarial methods and assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and included in the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2015 actuarial valuation, projected unit credit method was used. The actuarial assumptions included a 4.0 percent annual discount rate, a healthcare cost trend rate of 8.0 percent on a select basis reducing 0.5 percent each year until reaching the ultimate trend rate of 4.5 percent, an annual salary increase of 3.5 percent, and an inflation rate of 3.5 percent. The UAAL is being amortized as a level percentage of salary on an open basis. The amortization of UAAL is over a period of 20 years for the explicit portion of the subsidy and a period of 30 years for the implicit portion of the subsidy. Note 15. Employee Health Care Plan The City provides health care, including dental, vision and prescription coverages, to its employees and certain former employees through a self-funded health insurance plan. Administration is provided by contracted providers. The City accounts for the plan in the General Fund, City Clerk and Finance Department, Health/Life Insurance Activity. Other funds, departments and activities are assessed for costs based on current and former employees within the activity. General Fund costs of these activities are funded by an employee benefits levy in the Trust and Agency Fund. The City is allowed to levy amounts needed to provide benefits. The City purchases stop -loss insurance, $100,000 specific and 125 percent aggregate of expected claims. The City's estimated unpaid claims as of June 30 and its needed reserves for claim fluctuation were determined by an actuarial study performed as of June 30. All outstanding claims are considered matured and expected to be paid in fiscal year 2015, with current available financial resources, and accordingly, a liability payable from restricted resources is reported within the General Fund. Changes and balances are as follows: Estimated unpaid claims, beginning of year Estimated claims incurred Claims payments Estimated unpaid claims, end of year 72 2016 2015 $ 1,012,196 $ 978,898 8,894,980 8,934,148 (8,789,703) (8,900,850) $ 1,117,473 $ 1,012,196 Page 357 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 16. Worker's Compensation Plan The City provides worker's compensation benefits through a self-funded plan. Administration is provided by a contracted provider. The City accounts for the plan in the General Fund, City Clerk and Finance Department, Self -Funded Worker's Compensation Activity. Costs are funded by an employee benefits levy in the Trust and Agency Fund. The City is allowed to levy amounts needed to provide benefits. The City's estimated unpaid claims as of June 30 are based on projected costs of future payments for injuries incurred prior to June 30, 2016, and is recorded as a liability in the government -wide statement of net position. $46,581 is considered matured and is recorded in the General Fund and governmental activities with accrued liabilities. Changes and balances are as follows: 2016 2015 Estimated unpaid claims, beginning of year $ 399,777 $ 401,986 Estimated claims incurred 600,529 659,700 Claims payments (506,225) (661,909) Estimated unpaid claims, end of year $ 494,081 $ 399,777 Note 17. Joint Ventures and Jointly Governed Organizations The City is a participating member of several organizations including the Black Hawk County Criminal Justice Information System (CJIS), the Consolidated Dispatch Center (Center), the Black Hawk County Solid Waste Management Commission (SWMC) and the Metropolitan Transit Authority (MET). In addition, the City pays its share of costs for CJIS, including debt service, pays its share of costs of the Center, pays landfill fees to SWMC and levies and collects property taxes from Black Hawk County and remits them to MET ($1,484,049 during the year ended June 30, 2016). Also, during the year ended June 30, 2016, the Sanitation Fund received an operating grant of $273,624 from SWMC. This grant was used to offset recycling costs. The Center's financial information is reported within the Black Hawk County annual financial report. CJIS, SWMC and MET issue their own annual reports. Reports are available on the Iowa Auditor of State's website http://auditor.iowa.gov/reports. The City has no equity position in any of the organizations. Note 18. Industrial Development Revenue Bonds The City has issued a total of $160,401,000 of industrial development revenue bonds under the provisions of Chapter 419 of the Code of Iowa. The amount outstanding as of June 30, 2015 is not reported to the City by either the debtors or creditors. Therefore, outstanding balances are unknown. The bonds and related interest are payable solely from revenue of applicable projects. Bond principal and interest do not constitute liabilities of the City. 73 Page 358 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 19. Risk Management The City is exposed to various risks of loss related to torts; theft, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are covered by the purchase of commercial insurance and self-funded worker's compensation. Settled claims from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. The City assumes the risks of loss of both mobile vehicles and equipment, except for certain pieces of equipment, such are fire and forestry equipment, with large per-unit costs which are insured against loss subject to deductibles. As of June 30, 2016, the City has assigned $3,430,545 of its General Fund, fund balance for insurable risks retained. Note 20. Fund Balances GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes criteria for classifying fund balances into specifically defined classifications and clarifies definitions for governmental fund types. The details for the City's fund balances are as follows: Tax General Trust and Increment Obligation June 2016 Nonmajor Fund balances: General Agency Financing Debt Service GO Bonds Governmental Total Nonspendable: Inventories $ 197,040 $ - $ - $ - $ - $ 280,829 $ 477,869 Prepaids 70,373 - - - - 9,288 79,661 Total nonspendable 267,413 - - - - 290,117 557,530 Restricted: Debt service - - 1,969,208 733,229 - - 2,702,437 Self-funded health insurance 8,359,173 1,844,107 - - - - 10,203,280 Tourism promotion 1,162,298 - - - - - 1,162,298 Public access television 127,615 - - - - - 127,615 Civil rights enforcement 61,014 - - - - - 61,014 Housing 63,312 - - - - 4,279,386 4,342,698 Donor specified 617,022 - - - - - 617,022 Employee benefits - 258,443 - - - - 258,443 Library - - - - - 149,585 149,585 Street and right-of-way maintenance - - - - - 6,577,194 6,577,194 Improvements - - - - 17,231,233 14,631,507 31,862,740 Total restricted 10,390,434 2,102,550 1,969,208 733,229 17,231,233 25,637,672 58,064,326 Assigned: Insurance 3,430,545 - - - - - 3,430,545 Other postemploy- ment benefits 1,040,792 - - - - - 1,040,792 Improvements - - - - - 1,872,611 1,872,611 Other 35,696 - 470,932 - - 81,058 587,686 Use of fund balance for future budget 500,000 - - - - - 500,000 Total assigned 5,007,033 - 470,932 - - 1,953,669 7,431,634 Unassigned 9,836,132 - - - - (4,495,025) 5,341,107 Total fund balances $ 25,501,012 $ 2,102,550 $ 2,440,140 $ 733,229 $ 17,231,233 $ 23,386,433 $ 71,394,597 74 Page 359 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 21. New GASB Statements and Pending Pronouncements The GASB has issued several statements not yet implemented by the City. The statements which might impact the City are as follows: GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, issued in June 2015, will be effective for the City beginning with its fiscal year ending June 30, 2018. The Statement replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions and requires governments to report a liability on the face of the financial statements for the OPEB they provide and outlines the reporting requirements by governments for defined benefit OPEB plans administered through a trust, cost-sharing OPEB plans administered through a trust and OPEB not provided through a trust. The Statement also requires governments to present more extensive note disclosures and required supplementary information about their OPEB liabilities. Some governments are legally responsible to make contributions directly to an OPEB plan or make benefit payments directly as OPEB comes due for employees of other governments. In certain circumstances, called special funding situations, the Statement requires these governments to recognize in their financial statements a share of the other government's net OPEB liability. GASB Statement No. 77, Tax Abatement Disclosures, issued August 2015, will be effective for the City beginning with its fiscal year ending June 30, 2017. This statement requires governments to disclose information about their own tax abatements separately from information about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues. The disclosures about the government's own tax abatement agreements includes the purpose of the tax abatement program, the tax being abated, the amount of tax being abated, the provisions of recapturing abated taxes, the types of commitments made by tax abatement recipients, and other commitments made by government in tax abatement agreements. The disclosures about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues includes the name of the government entering into the abatement agreement, the tax being abated, and the amount of the reporting government's tax being abated. GASB Statement No. 80, Blending Requirements for Certain Component Units, issued February 2016, will be effective for the City beginning with its fiscal year ending June 30, 2017. Statement No. 80 clarifies the display requirements in GASB Statement No. 14, The Financial Reporting Entity, by requiring component units incorporated as not-for-profit corporations to be blended into the primary state or local government's financial statements in a manner similar to a department or activity of the primary government. The guidance addresses diversity in practice regarding the presentation of not-for-profit corporations in which the primary government is the sole corporate member. The additional criterion does not apply to component units included in the financial reporting entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations Are Component Units. GASB Statement No. 82, Pension Issues, issued April 2016, will be effective for the City beginning with its fiscal year ending June 30, 2017. Statement No. 82 is designed to improve consistency in the application of the pension standards by clarifying or amending related areas of existing guidance with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll -related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. 75 Page 360 of 486 City of Waterloo, Iowa Notes to Basic Financial Statements Note 21. New GASB Statements and Pending Pronouncements (Continued) GASB Statement No. 83, Certain Asset Retirement Obligations, issued December 2016, will be effective for the City beginning with its fiscal year ending June 30, 2019. Under Statement No. 83, a government that has legal obligations to perform future asset retirement activities related to its tangible capital assets is required to recognize a liability and a corresponding deferred outflow of resources. The guidance also identifies the circumstances that trigger recognition of these transactions. Statement No. 83 requires the measurement of an asset retirement obligation to be based on the best estimate of the current value of outlays expected to be incurred. The deferred outflow of resources associated with an asset retirement obligation will be measured at the amount of the corresponding liability upon initial measurement and generally recognized as an expense during the reporting periods that the asset provides service. Statement No. 83 also requires the disclosure of a general description of the asset retirement obligation and associated tangible capital assets; the source of the obligation to retire the assets; the methods and assumptions used to measure the liability; and other relevant information. The City's management has determined the implementation of GASB Statement No. 75 will have a significant impact on the City's financial statements but has not yet determined the effect of Statement Nos. 77, 80, 82 and 83. Note 22. Prior Period Adjustment During fiscal year ending December 31, 2015, the Waterloo Water Works adopted GASB Statements Nos. 68 and 71. As a result, the Water Works' net position as of December 31, 2014 has been restated to reflect the recognition of the Water Works' proportionate share of the Iowa Public Employees' Retirement System as well as the net pension liability of the Waterloo Water Works Pension Plan. The Water Works is part of the aggregate discretely presented component units opinion unit. Net position - December 31, 2014, as previously reported Cumulative effect of the application of GASB 68, net pension liability Cumulative effect of the application of GASB 71, deferred outflows of resources for the Water Works contributions made to the plan during the first half of the measurement period, from July 1, 2014 to December 31, 2014 Net position - December 31, 2014, as restated $ 31,580,863 (3,074,386) (52,094) $ 28,454,383 Note 23. Subsequent Event The City entered into a development agreement with North Crossing, LLC for the redevelopment of the former Logan Plaza Shopping Center site. The agreement requires new buildings with a minimum assessed value exceeding $9.5 million to be built on the site and also requires the developer to demolish the existing center. The City will pay property tax rebates of 50 percent of taxes paid for ten years. The agreement also includes provisions the City would purchase 50.84 acres of vacant land north of the shopping center, contingent upon the developer acquiring the property. The developer purchased the property in October 2016, committing the City to future payments of $1,000,000 annually with total payments due of $8,000,000. 76 Page 361 of 486 City of Waterloo, Iowa Required Supplementary Information Other Postemployment Benefit Plan SCHEDULE OF FUNDING PROGRESS Unfunded Actuarial (Over UAAL as a Actuarial Accrued funded) Percentage Fiscal Actuarial Value of Liability AAL Funded Covered of Covered Year Valuation Assets (AAL) (UAAL) Ratio Payroll Payroll Ended Date (a) (b) (b -a) (a/b) (c) [(b-a)/c] 2014 7/1/13 $ $ 22,667,000 $ 22,667,000 - % $ 32,617,036 69.49% 2015 7/1/13 22,667,000 22,667,000 31,171,476 72.72 2016 7/1/15 20,596,000 20,596,000 33,862,392 60.82 The information presented in the required supplementary schedule was determined as part of the actuarial valuation date as of July 1, 2015. Additional information follows: a. The actuarial method used to determine the ARC is the projected unit credit method. b. There are no plan assets. c. The actuarial assumptions included: a) 4.0 percent annual discount rate, b) a healthcare cost trend rate of 8.0 percent initially, decreasing 0.5 percent each year until reaching the ultimate trend rate of 4.5 percent, c) an annual salary increase of 3.5 percent, and d) an inflation rate of 3.5 percent. d. The amortization method is level percentage of pay on an open basis over 30 years. 77 Page 362 of 486 City of Waterloo, Iowa Required Supplementary Information Schedule of the City's Proportionate Share of the Net Pension Liability Iowa Public Employees' Retirement System 2016 2015 City's proportion of the net pension liability 0.2452672% 0.2415504% City's proportionate share of the net pension liability $ 12,117,384 $ 9,579,663 City's covered -employee payroll $ 16,800,363 $ 15,816,626 City's proportionate share of the net pension liability as a percentage of its covered payroll 72.13% 60.57% Plan fiduciary net position as a percentage of the total pension liability 85.19% 87.61% Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. The amounts presented each year are as of the City's measurement date. See notes to required supplementary information. 78 Page 363 of 486 City of Waterloo, Iowa Required Supplementary Information Schedule of City Contributions Iowa Public Employees' Retirement System Statutorily Required Contribution Contributions in Relation to the Statutorily Required Contribution Contributions Deficiency (Excess) City's Covered - Employee Payroll Contributions as a Percentage of Covered Employee Payroll 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 N/A - information was not available $ 1,564,955 1,500,510 1,420,507 1,358,920 1,250,399 1,066,879 991,202 923,462 843,709 743,851 $ 1,564,955 1,500,510 1,420,507 1,358,920 1,250,399 1,066,879 991,202 923,462 843,709 743,851 Note: The amounts reported in this schedule are as of the City's fiscal year-end. See notes to required supplementary information. 79 $ 17,523,333 8.93% 16,800,363 8.93 15,816,626 8.98 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Page 364 of 486 City of Waterloo, Iowa Notes to Required Supplementary Information — !PERS Pension Liability Year Ended June 30, 2016 Note 1. Changes of benefit terms Legislation passed in 2010 modified benefit terms for current Regular members. The definition of final average salary changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four years of service to seven years. The early retirement reduction increased from 3 percent per year measured from the member's first unreduced retirement age to a 6 percent reduction for each year of retirement before age 65. In 2008, legislative action transferred four groups — emergency medical service providers, county jailers, county attorney investigators, and National Guard installation security officers — from Regular membership to the protection occupation group for future service only. Benefit provisions for sheriffs and deputies were changed in the 2004 legislative session. The eligibility for unreduced retirement benefits was lowered from age 55 by one year each July 1 (beginning in 2004) until it reached age 50 on July 1, 2008. The years of service requirement remained at 22 or more. Their contribution rates were also changed to be shared 50-50 by the employee and employer, instead of the previous 40-60 split. Note 2. Changes of assumptions The 2014 valuation implemented the following refinements as a result of a quadrennial experience study: • Decreased the inflation assumption from 3.25 percent to 3.00 percent • Decreased the assumed rate of interest on member accounts from 4.00 percent to 3.75 percent per year. • Adjusted male mortality rates for retirees in the Regular membership group. • Reduced retirement rates for sheriffs and deputies between the ages of 55 and 64. • Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL beginning June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate closed 20 -year period. 80 Page 365 of 486 City of Waterloo, Iowa Required Supplementary Information Schedule of the City's Proportionate Share of the Net Pension Liability Municipal Fire and Police Retirement System of Iowa 2016 2015 City's proportion of the net pension liability 5.724535% 5.720520% City's proportionate share of the net pension liability $ 36,408,843 $ 26,777,406 City's covered -employee payroll $ 15,012,366 $ 14,608,497 City's proportionate share of the net pension liability as a percentage of its covered payroll 242.53% 183.30% Plan fiduciary net position as a percentage of the total pension liability 83.04% 86.27% Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. The amounts presented each year are as of the City's measurement date. See notes to required supplementary information. 81 Page 366 of 486 City of Waterloo, Iowa Required Supplementary Information Schedule of City Contributions Municipal Fire and Police Retirement System of Iowa Statutorily Required Contribution Contributions in Relation to the Statutorily Required Contribution Contributions Deficiency (Excess) City's Cove red - Employee Payroll Contributions as a Percentage of Covered Employee Payroll 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 N/A - information was not available $ 4,280,766 4,565,261 4,418,650 3,844,363 3,522,615 2,731,277 2,249,021 2,417,019 3,074,329 3,319,634 $ 4,280,766 4,565,261 4,418,650 3,844,363 3,522,615 2,731,277 2,249,021 2,417,019 3,074,329 3,319,634 Note: The amounts reported in this schedule are as of the City's fiscal year-end. See notes to required supplementary information. 82 $ 15,365,321 27.86% - 15,012,366 30.41 - 14,608,497 30.25 - N/A N/A - N/A N/A - N/A N/A - N/A N/A - N/A N/A - N/A N/A - N/A N/A Page 367 of 486 City of Waterloo, Iowa Notes to Required Supplementary Information — MFPRSI Pension Liability Year Ended June 30, 2016 Note 1. Changes of Benefit Terms There were no significant changes of benefit terms. Note 2. Changes of Assumptions Effective July 1, 2015, an additional step was taken to phase in the 1994 Group Annuity Mortality Table for post-retirement mortality. The additional step results in a weighting of 1/12 of the 1971 Group Annuity Mortality Table and 11/12 of the 1994 Group Annuity Mortality Table. The City also updated the mortality assumptions to the RP -2000 Blue Collar Mortality table with projected mortality improvement using scale BB -2D for the June 30, 2015 measurement date. 83 Page 368 of 486 City of Waterloo, Iowa Budgetary Comparison Schedule Budget and Actual (Modified Cash Basis) - All Governmental Funds and Proprietary Funds Required Supplementary Information Year Ended June 30, 2016 Budgeted Amounts Original Final Revenues and other financing sources receipts: Receipts: Property taxes $ 38,480,720 $ 38,480,720 Tax increment financing 7,405,250 7,405,250 Other City taxes 17,616,016 17,616,016 Licenses and permits 1,294,660 1,294,660 Use of money and property 1,401,166 1,401,166 Intergovernmental 26,300,597 32,762,217 Charges for services 25,193,701 25,713,557 Special assessments 229,000 229,000 Miscellaneous 5,424,543 6,723,813 Total receipts 123,345,653 131,626,399 Other financing sources: Transfer from other funds Issuance of long-term debt Proceeds from sale of capital assets Total other financing sources Total receipts and other financing sources 15, 709,178 33,250,000 1,765,000 20,284,128 35,665,000 1,771,000 50,724,178 57,720,128 174, 069, 831 189, 346, 527 Disbursements and other financing uses: Governmental -type activities: Public safety 31,758,785 32,156,867 Public works 27,973,803 28,351,514 Health and social services 385,056 430,451 Culture and recreation 10,746,594 11,186,873 Community and economic development 11,848,856 15,601,988 General government 6,444,562 6,860,534 Debt service 15,912,068 18,320,468 Capital projects 36,031,774 43,231,670 Business -type activities 22,975,038 23,606,638 Total disbursements 164,076,536 179,747,003 Other financing uses, transfers to other funds Total disbursements and other financing uses Receipts and other financing sources over (under) disbursements and other financing uses Balances, beginning of year Balances, end of year See note to required supplementary information. 84 15,709,178 20,284,128 179, 785, 714 200, 031,131 (5,715,883) (10,684,604) 80,880,177 83,025,994 $ 75,164,294 $ 72,341,390 Page 369 of 486 Variance Actual Amounts With Final Budgetary Basis Budget $ 39,712,931 $ 1,232,211 7,169,254 (235,996) 17,327,379 (288,637) 1,499,089 204,429 1,465,619 64,453 32,172,296 (589,921) 25, 993, 950 280,393 212,547 (16,453) 5,835,880 (887,933) 131,388,945 (237,454) 19, 370, 317 19, 665, 000 345,618 (913,811) (16,000,000) (1,425,382) 39,380,935 (18,339,193) 170,769,880 (18,576,647) 31,020,799 25, 919, 334 372,697 10, 523, 860 12, 797, 629 5,662,171 17, 051, 941 20, 464,192 22, 647, 250 1,136,068 2,432,180 57,754 663,013 2,804,359 1,198,363 1,268,527 22,767,478 959,388 146,459,873 33,287,130 - 20,284,128 146,459,873 53,571,258 24,310,007 34,994,611 83, 025, 994 $ 107,336,001 $ 34,994,611 85 Page 370 of 486 City of Waterloo, Iowa Note to Required Supplementary Information — Budgetary Reporting Year Ended June 30, 2016 In accordance with the Code of Iowa, the City Council annually adopts a budget on a modified cash basis following required public notice and hearing for all funds. The annual budget may be amended during the year utilizing similar statutorily prescribed procedures. Formal and legal budgetary control is based upon 10 major classes of disbursements known as functions, not by fund or fund type. These 10 functions are: public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt service, capital projects, business -type and nonprogram. Although the budget document presents function disbursements by fund type, the legal level of control is at the aggregated function level, not at the fund or fund type level. During the year, a budget amendment was adopted which increased budgeted expenditures by $20,245,417. The budget amendment is reflected in the final budgeted amount. The City uses the same modified cash basis of accounting for budgetary reporting as is used for its internal financial records. Under this basis, cash transactions are modified by certain receivables and payables and by certain noncash revenue and expenditures. In addition, many transactions which should be recorded in and reported by the Sanitary Sewer Enterprise Fund are recorded in and reported by governmental funds. 86 Page 371 of 486 City of Waterloo, Iowa Schedule of Comparison Funds Statements (GAAP Basis) to Budgetary (Modified Cash) Basis Required Supplementary Information Year Ended June 30, 2016 Governmental Enterprise Fund Fund Types Basis Types Basis Actual Amounts Actual Amounts Total Funds Revenue/Receipts: Property taxes and TIF revenue $ 46,259,411 $ - $ 46,259,411 Other taxes 17,309,079 - 17,309,079 Licenses and permits 1,491,131 - 1,491,131 Use of money and property 1,422,572 49,277 1,471,849 Intergovernmental 26,670,622 275,516 26,946,138 Charges for services 8,142,707 17,863,122 26,005,829 Interfund charges for services 1,935,000 - 1,935,000 Special assessments 138,434 - 138,434 Miscellaneous 2,032,729 1,231,677 3,264,406 Total revenuelreceipts 105,401,685 19,419,592 124,821,277 Expenditures and expenses/disbursements: Public safety Public works Health and social services Culture and recreation Community and economic development General government Debt service Capital projects Business -type activities Total expenditures and expenses/ disbursements 31,380,988 26, 664, 570 375,769 10,837,983 13, 483, 447 5,671,640 13,484,500 12,835,209 17, 835, 099 31,380,988 26,664,570 375,769 10,837,983 13,483,447 5,671,640 13,484,500 12,835,209 17,835,099 114,734,106 17, 835, 099 132, 569, 205 Net (9,332,421) 1,584,493 (7,747,928) (Continued) 87 Page 372 of 486 Property Tax Collected Budgetary for and Other GAAP Basis Rem itted Conversion Budgetary Exceptions to MET Adjustments Basis - $ 1,484,049 $ (861,275) $ 46,882,185 - 18,300 17,327,379 - 7,958 1,499,089 - (6,230) 1,465,619 - 5,226,158 32,172,296 - (11,879) 25,993,950 - (1,935,000) - - 74,113 212,547 - 2,571,474 5,835,880 1,484,049 5,083,619 131,388,945 - (360,189) 31,020,799 - 1,484,049 (2,229,285) 25,919,334 - (3,072) 372,697 - (314,123) 10,523,860 - (685,818) 12,797,629 - (9,469) 5,662,171 - 3,567,441 17,051,941 - 7,628,983 20,464,192 - 4,812,151 22,647,250 1,484,049 12,406,619 146,459,873 (7,323,000) (15,070,928) 88 Page 373 of 486 City of Waterloo, Iowa Schedule of Comparison Funds Statements (GAAP Basis) to Budgetary (Modified Cash) Basis (Continued) Required Supplementary Information Year Ended June 30, 2016 Governmental Enterprise Fund Fund Types Basis Types Basis Actual Amounts Actual Amounts Total Funds Other financing sources (uses): Transfers in $ 14,882,427 $ - $ 14,882,427 Transfers out (14,882,427) - (14,882,427) Insurance proceeds 766,470 - 766,470 Bond discount (61,455) - (61,455) Bond premium 169,261 - 169,261 Proceeds from sales of capital assets 335,618 - 335,618 Issuance of long-term debt 19,140,000 - 19,140,000 Total other financing sources (uses) 20,349,894 - 20,349,894 Change in fund balancelnet position 11,017,473 1,584,493 12,601,966 Balance, beginning of year 60,377,124 90,636,095 151,013,219 Balance, end of year $ 71,394,597 $ 92,220,588 $ 163,615,185 89 Page 374 of 486 Property Tax Collected Budgetary for and Other GAAP Basis Remitted Conversion Budgetary Exceptions to MET Adjustments Basis - $ $ 4,487,890 $ 19,370,317 - 14,882,427 - - (766,470) - - 61,455 - - (169,261) - - 10,000 345,618 - 525,000 19,665,000 19,031,041 39,380,935 11,708,041 24,310,007 (67,987,225) 83,025,994 $ $ (56,279,184) $ 107,336,001 90 Page 375 of 486 City of Waterloo, Iowa Required Supplementary Information Schedule of Employer Contributions for Waterloo Water Works Pension Plan Last Nine Fiscal Years 2015 2014 2013 Actuarially determined contribution Contributions in relation to actuarially determined contribution Contribution deficiency (excess) $ 475,911 $ 481,861 $ 480,199 540,043 570,419 538,658 (64,132) (88,558) (58,459) Covered payroll $ 1,045,603 $ 1,064,651 $ 1,100,185 Contributions as a percentage of covered payroll 51.6% Additional years will be added going forward as information becomes available. 91 53.6% 49.0% Page 376 of 486 2012 2011 2010 2009 2008 2007 $ 423,689 $ 383,404 $ 357,677 $ 379,444 $ 281,460 $ 219,249 473,114 (49,425) 445,212 (61,808) 396,550 (38,873) 379,444 505,000 (223,540) 205,059 14,190 $ 1,105,893 $ 1,248,200 $ 1,306,209 $ 1,374,782 $ 1,356,797 $ 1,263,173 42.8% 35.7% 30.4% 27.6% 92 37.2% 16.2% Page 377 of 486 City of Waterloo, Iowa Required Supplementary Information Schedule of Changes in Net Pension Liability and Related Ratios for Waterloo Water Works Pension Plan Total pension liability Service cost $ 53,008 Interest 607,558 Difference between expected and actual experience (28,037) Changes in assumptions 12,600 Benefit payments including refunds (518,306) Change in total pension liability 126,823 Total pension liability, beginning of year 7,800,622 Total pension liability, end of year 7,927,445 Plan fiduciary net position Contributions, employer 481,000 Contributions, member 59,043 Contributions, nonemployer contributing member Net investment income (157,692) Benefit payments including refunds (518,306) Administrative expense - Change in plan fiduciary net position (135,955) Plan fiduciary net position, beginning of year 5,241,322 Plan fiduciary net position, end of year 5,105,367 Net pension liability, end of year $ 2,822,078 Plan fiduciary net position as a % of total pension liability 64.4% Covered payroll $ 1,045,603 Net pension liability as a % of covered payroll 269.9% Additional years will be added going forward as information becomes available. 93 Page 378 of 486 City of Waterloo, Iowa Notes to Required Supplementary Information for Waterloo Water Works Pension Plan For the Year Ended December 31, 2015 Note 1: Valuation Date: Actuarially determined contributions rates are calculated as of December 31 of the current fiscal year. Note 2: Methods and assumptions used to determine contribution rates Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Annual pay increases Investment rate of return Retirement age Mortality rates 94 Entry age cost method Level dollar 20 years Market value of assets 2.50% 3.00% 8.00% 100% at age 62 2016 IRS combined mortality Page 379 of 486 City of Waterloo, Iowa Required Supplementary Information (PERS Schedule of the Waterloo Water Works' Proportionate Share of the Net Pension Liability Measurement Date June 30, 2015 2014 Water Work's proportion of the net pension liability 0.014220% 0.012797% Water Work's total proportionate share of the net pension liability $ 706,956 $ 524,011 Water Work's covered -employee payroll $ 980,325 $ 864,591 Water Work's proportionate share of the net pension liability as a percentage of its covered -employee payroll 72% 61 (PERS' net position as a percentage of the total pension liability Additional years will be added going forward as information becomes available. 95 85.19% 87.61% Page 380 of 486 City of Waterloo, Iowa Required Supplementary Information (PERS Schedule of Waterloo Water Works Contributions 2015 2014 2013 Statutorily required contribution $ 90,911 $ 79,066 $ 70,659 Contributions in relation to the Statutorily required contribution (90,911) (79,066) (70,659) Contribution deficiency (excess) $ $ $ Water Work's covered -employee payroll $ 1,018,040 $ 885,398 $ 791,254 Contributions as a percentage of covered -employee payroll 8.93% 8.93% 8.93% Additional years will be added going forward as information becomes available. 96 Page 381 of 486 2012 2011 2010 $ 56,189 $ 43,676 $ 35,136 (56,189) (43,676) (35,136) $ $ $ $ 648,085 $ 541,214 $ 505,554 8.67% 8.07% 6.95% 97 Page 382 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances General Fund Year Ended June 30, 2016 Revenues: Property taxes $ 19,969,442 Other taxes 6,917,710 Licenses and permits 1,455,620 Investment income 80,633 Rent 976,204 Intergovernmental 1,040,156 Charges for services 7,824,098 Indirect allocations 1,885,000 Special assessments 138,434 Miscellaneous 1,454,500 Total revenues $ 41,741,797 Expenditures: Public safety function Mayor Black Hawk Emergency Management Agency Contractual services $ 165,487 Total activity and department 165,487 Police department Police operations Compensation and benefits 11,490,314 Contractual services 959,253 Commodities 228,113 Total activity 12,677,680 Police computer services Contractual services Commodities Total activity Police grants Compensation and benefits Contractual services Commodities Total activity 75,055 76,866 151,921 536,969 525 51,031 588,525 Law enforcement programs Compensation and benefits 58,614 Contractual services 149,882 Commodities 231,656 Capital outlay 11,177 Total activity 451,329 Tobacco grant Compensation and benefits Total activity (Continued) 98 2,384 2,384 Page 383 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures (continued): Public safety function (continued) Police department (continued) Public safety administration Compensation and benefits $ 149,549 Contractual services 547 Total activity 150,096 Total department 14,021,935 Fire department Fire protection Compensation and benefits 8,297,795 Contractual services 450,276 Commodities 76,459 Total activity 8,824,530 Fire restricted programs Compensation and benefits 8,174 Commodities 959 Total activity 9,133 Fire ambulance services Compensation and benefits 1,667,242 Contractual services 179,881 Commodities 193,494 Total activity 2,040,617 Fire safety program Compensation and benefits 129,084 Contractual services 25,987 Commodities 1,600 Total activity 156,671 Fire Federal CDC Grant Compensation and benefits Contractual services Total activity Total department 40,890 8,843 49,733 11, 080,684 Traffic operations department Animal Control Compensation and benefits 145,950 Contractual services 65,710 Commodities 22,977 Total activity and department 234,637 Building inspection department Building and housing safety Compensation and benefits 1,117,930 Contractual services 59,356 Commodities 36,170 Total activity and department 1,213,456 (Continued) 99 Page 384 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures: Public safety function (continued) Central garage department Fire - garage parts & service Compensation and benefits $ 84,991 Commodities 99,142 Total activity 184,133 Ambulance - garage parts & service Commodities Total activity Total department 37,852 37,852 221,985 Public safety function totals Current Compensation and benefits 23,729,886 Contractual services 2,140,802 Commodities 1,056,319 Subtotal 26, 927, 007 Capital outlay 11,177 Total public safety function $ 26,938,184 Public works function Clerk Parking administration Compensation and benefits 3,149 Contractual services 1,791 Commodities 28 Total activity 4,968 Sidewalk repair/construction Capital outlay Total activity Total department 214,948 214,948 219,916 Traffic operations Parking maintenance Compensation and benefits 39,475 Contractual services 1,141 Commodities 1,227 Total activity and department 41,843 Central garage Central garage Compensation and benefits 709,607 Contractual services 22,470 Commodities 110,363 Total activity 842,440 Motor pool service Commodities Total activity Total department (Continued) 100 533,452 533,452 1,375,892 Page 385 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures: Public works function (continued) Airport Airport administration Compensation and benefits $ 596,183 Contractual services 240,896 Commodities 82,790 Capital outlay 4,859 Total activity and department 924,728 Building inspection department Parking operations Contractual services Commodities Total activity and department 498,438 85,278 583,716 Public works function totals Current Compensation and benefits 1,348,414 Contractual services 764,736 Commodities 813,138 Subtotal 2,926,288 Capital outlay 219,807 Total public works function $ 3,146,095 Health and social services function Mayor Health and sanitation Contractual services $ 75,000 Total activity and department 75,000 Human rights department Human rights Compensation and benefits 234,566 Contractual services 11,184 Commodities 1,507 Total activity 247,257 EEOC contract Compensation and benefits Contractual services Total activity Housing enforcement Contractual services Commodities Total activity Total department 10,000 27,158 37,158 16,354 16,354 300,769 Health and social services function totals Current Compensation and benefits 244,566 Contractual services 129,696 Commodities 1,507 Total health and social services function $ 375,769 (Continued) 101 Page 386 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures: Culture and recreation function Mayor Fairview cemetery association Contractual services $ 50,000 Total activity and department 50,000 Cultural/arts Center for the arts Compensation and benefits 615,558 Contractual services 77,143 Commodities 26,415 Total activity 719,116 Youth pavilion Compensation and benefits 296,848 Contractual services 44,639 Commodities 23,320 Total activity 364,807 Culture and arts grants and projects Compensation and benefits 3,131 Contractual services 70,589 Commodities 1,647 Total activity 75,367 Total department 1,159,290 Library Library services Compensation and benefits 1,408,545 Contractual services 180,232 Commodities 264,525 Total activity 1,853,302 Library Enrich Iowa Contractual services Commodities Total activity Library access plus Commodities Total activity Library grants Contractual services Commodities Total activity (Continued) 102 12,452 4,829 17,281 2,997 2,997 63,632 30,440 94,072 Page 387 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures (continued): Culture and recreation function (continued): Library (continued): Library gift and trust Contractual services $ 15,993 Commodities 44,379 Total activity 60,372 Library service area Commodities Capital outlay Total activity County library system Compensation and benefits Commodities Total activity Library open access Contractual services Commodities Total activity Total department 4,108 4,108 58,592 991 59,583 2,812 3,647 6,459 2,098,174 Leisure services Leisure services Compensation and benefits 1,940,845 Contractual services 224,718 Commodities 222,607 Capital outlay 5,995 Total activity 2,394,165 Downtown area maintenance Compensation and benefits 188,611 Contractual services 51,602 Commodities 35,000 Total activity 275,213 Leisure services projects Compensation and benefits 1,000 Contractual services 43,725 Commodities 66,208 Capital outlay 13,070 Total activity 124,003 Golf courses Compensation and benefits 940,697 Contractual services 111,841 Commodities 148,007 Total activity 1,200,545 Golf course improvements Contractual services Total activity (Continued) 103 587 587 Page 388 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures (continued): Culture and recreation function (continued): Leisure services (continued) Sports and youth services Compensation and benefits $ 479,853 Contractual services 37,714 Commodities 136,440 Total activity 654,007 Young arena Compensation and benefits 452,913 Contractual services 195,023 Commodities 185,851 Total activity 833,787 Sportsplex Compensation and benefits 757,469 Contractual services 316,770 Commodities 136,022 Capital outlay 8,036 Total activity 1,218,297 Total department 6,700,604 Culture and recreation function totals Current Compensation and benefits 7,144,062 Contractual services 1,499,472 Commodities 1,337,433 Subtotal 9,980,967 Capital outlay 27,101 Total culture and recreation function $ 10,008,068 Community and economic development function Mayor Iowa northland council of governments Contractual services $ 32,151 Total activity 32,151 Tourism promotion Contractual services Total activity Waterloo Convention & Visitors Bureau, Inc. Contractual services Total activity Total department 296,361 296,361 640,655 640,655 969,167 Planning and zoning Planning and zoning Compensation and benefits 509,253 Contractual services 20,225 Commodities 5,276 Capital outlay 35,427 Total activity 570,181 City property management Contractual services Total activity (Continued) 104 120,626 120,626 Page 389 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures (continued): Community and economic development function (continued): Planning and zoning (continued) Economic development Compensation and benefits $ 50,976 Total activity 50,976 Special projects Contractual services Total activity Total department 10,981 10,981 752,764 Building inspection department Five Sullivans Civic Center Compensation and benefits 95,489 Contractual services 92,178 Commodities 16,075 Total activity and department 203,742 Community and economic development function totals Current Compensation and benefits 655,718 Contractual services 1,213,177 Commodities 21,351 Subtotal 1,890,246 Capital outlay 35,427 Total community and economic development function $ 1,925,673 General government function Mayor Mayor's office Compensation and benefits $ 192,757 Contractual services 13,948 Commodities 772 Total activity 207,477 Mayor restricted projects Contractual services Total activity 617 617 Administrative and management information services Compensation and benefits 219,562 Contractual services 119,588 Commodities 14,281 Total activity 353,431 Total department 561,525 City council City council Compensation and benefits Contractual services Total activity and department (Continued) 105 65,751 1,848 67,599 Page 390 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures: General government function (continued): City clerk and finance Telecommunications Compensation and benefits $ 143,616 Contractual services 966 Commodities 1,068 Total activity 145,650 City clerk and finance Compensation and benefits 843,619 Contractual services 300,917 Commodities 77,838 Total activity 1,222,374 Liability insurance Compensation and benefits Contractual services Total activity Health/life insurance Compensation and benefits Contractual services Total activity Self-funded worker's compensation Contractual services Total activity Print shop Contractual services Total activity Total department 45,241 1,614,246 1,659,487 2,429 325,079 327,508 468,584 468,584 30,042 30,042 3,853,645 City attorney City attorney Compensation and benefits 200,425 Contractual services 58,061 Commodities 7,447 Total activity and department 265,933 Human resources Employee assistance program Contractual services Total activity 1,560 1,560 Human resources Compensation and benefits 297,010 Contractual services 70,414 Commodities 6,568 Total activity 373,992 (Continued) 106 Page 391 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures (continued): General government function (continued): Human resources (continued): Safety committee Compensation and benefits Contractual services Commodities Total activity Total department 540 5,507 2,170 8,217 383,769 Building inspection department Facilities maintenance Compensation and benefits 259,495 Contractual services 204,467 Commodities 43,212 Total activity 507,174 Facilities restricted project Contractual services 552 Commodities 1,848 Total activity 2,400 Veteran's memorial hall Contractual services Total activity Total department 6,801 6,801 516,375 General government function totals Current Compensation and benefits 2,270,445 Contractual services 3,223,197 Commodities 155,204 Total general government function $ 5,648,846 107 Page 392 of 486 City of Waterloo, Iowa Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) General Fund Year Ended June 30, 2016 Expenditures: Public safety Public works Health and social services Culture and recreation Community and economic development General government $ 26, 938,184 3,146, 095 375,769 10, 008, 068 1,925,673 5,648,846 Total expenditures $ 48,042,635 Revenue under expenditures $ (6,300,838) Other financing sources (uses): Transfers in Transfers out Insurance proceeds Proceeds from sale of capital assets Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year 108 6,453,326 (138,478) 766,470 214,138 7,295,456 994,618 24, 506, 394 $ 25,501,012 Page 393 of 486 City of Waterloo, Iowa Combining Balance Sheet Nonmajor Governmental Funds June 30, 2016 Special Revenue Capital Projects Total Assets Cash and cash equivalents $ 12,521,958 $ 10,618,763 $ 23,140,721 Receivables: Customer accounts 14,935 121,424 136,359 Property taxes: Delinquent 3,261 - 3,261 Succeeding year 583,702 - 583,702 Accrued interest 9,182 - 9,182 Due from other funds 1,650 - 1,650 Due from other governments: Federal 658,094 - 658,094 Iowa 8,059,136 - 8,059,136 Other 420,133 - 420,133 Inventories and prepaids 290,117 - 290,117 Restricted assets, cash and cash equivalents 2,091,379 - 2,091,379 Advances to other funds 129,612 - 129,612 Total assets Liabilities, Deferred Inflows of Resources and Fund Balances $ 24, 783,159 $ 10, 740,187 $ 35, 523, 346 Liabilities: Accounts payable $ 1,731,166 $ 756,212 $ 2,487,378 Retainages payable 630,244 55,120 685,364 Accrued liabilities 208,773 - 208,773 Due to other funds 2,663,474 1,436,610 4,100,084 Compensated absences 29,221 - 29,221 Payable from restricted assets 77,947 - 77,947 Total liabilities 5,340,825 2,247,942 7,588,767 Deferred inflows of resources: Unavailable revenue - property taxes 586,963 - 586,963 Unavailable revenue - local option sales tax 375,000 - 375,000 Unavailable revenue - intergovernmental 3,464,759 121,424 3,586,183 Total deferred inflows of resources 4,426,722 121,424 4,548,146 Fund Balances: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances 290,117 15, 377, 581 1,953,669 (2,605,755) 10,260,091 (1,889,270) 290,117 25, 637, 672 1,953,669 (4,495,025) 15,015,612 8,370,821 23,386,433 $ 24, 783,159 $ 10, 740,187 $ 35, 523, 346 109 Page 394 of 486 City of Waterloo, Iowa Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds Year Ended June 30, 2016 Special Revenue Capital Projects Total Revenues: Property taxes $ 594,097 $ - $ 594,097 Other taxes 9,634,250 - 9,634,250 Licenses and permits 35,511 - 35,511 Investment income 11,269 59,992 71,261 Rent 195,025 - 195,025 Intergovernmental 25,463,875 - 25,463,875 Charges for services 318,609 - 318,609 Interfund charges for services 50,000 - 50,000 Miscellaneous 121,431 456,798 578,229 Total revenues 36,424,067 516,790 36,940,857 Expenditures: Current: Public safety 18,583 - 18,583 Public works 23,518,475 - 23,518,475 Culture and recreation 829,915 - 829,915 Community and economic development 9,715,687 - 9,715,687 General government - - Debt service, interest and fees 27,460 27,460 Capital outlay 12,781,239 12,781,239 Total expenditures 34,082,660 12,808,699 46,891,359 Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Bond discount Bond premium Proceeds from the sale of capital assets Total other financing sources (uses) 2,341,407 (12,291,909) (9,950,502) 43,718 121,480 5,631,304 (43,718) 5,675,022 (43,718) 121,480 165,198 5,587,586 5,752,784 Net change in fund balance 2,506,605 (6,704,323) (4,197,718) Fund balance, beginning of year 12,509,007 15,075,144 27,584,151 Fund balance, end of year $ 15,015,612 $ 8,370,821 $ 23,386,433 110 Page 395 of 486 City of Waterloo, Iowa Special Revenue Funds June 30, 2016 Special Revenue Funds account for the proceeds of specific revenue sources that are legally or contractually restricted for particular purposes. The proceeds are segregated into individual funds to ensure that expenditures are made exclusively for qualified purposes, as follows: Nonmajor: Local Option Tax Fund — This fund is used to account for resources provided from a 1 percent sales tax approved by the citizens of Waterloo which is restricted for the construction, reconstruction and repair of City streets. Library Tax Levy Fund — This fund is used to account for property taxes levied, as passed by local referendum, to be used to increase the hours of operation of the Waterloo Public Library. Community Development Block Grant Fund — This fund accounts for revenue received under the Community Development Block Grant federal entitlement. Road Use Tax Fund — This fund is required by the Code of Iowa to account for the City's share of fuel taxes collected and allocated by the state which is restricted for local street maintenance. Housing Programs Fund — This fund is used to account for resources received to provide housing assistance, primarily Federal Section 8 and Ridgeway Towers. Grants Fund — This fund is used to account for resources received for various federal and Iowa funded projects which are not accounted for elsewhere and are restricted to specific programs. Federal Aviation Agency Projects Fund — This fund is used to account for resources from the Federal Aviation Agency and Passenger Facility Charges restricted for airport development. 111 Page 396 of 486 City of Waterloo, Iowa Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2016 Special Revenue Community Local Option Library Development Sales Tax Tax Levy Block Grant Assets Cash and cash equivalents $ 4,823,080 $ 237,550 $ 700 Receivables: Customer accounts - - Property taxes: Delinquent 3,261 - Succeeding year 583,702 - Accrued interest - 8,849 Due from other funds - - Due from other governments: Federal - 93,272 Iowa 2,013,749 - 1,728,562 Other 413,457 5,876 - Inventories and prepaids - - Restricted cash and cash equivalents - - Advances to other funds 13,598 7,825 - Total assets Liabilities, Deferred Inflows of Resources and Fund Balances (Deficit) $ 7,263,884 $ 838,214 $ 1,831,383 Liabilities: Accounts payable $ 456,344 $ - $ 654,519 Retainages payable 282,197 - 216,402 Accrued liabilities 32,020 18,326 16,357 Due to other funds - - 931,658 Compensated absences 1,020 2,282 4,301 Payable from restricted assets - - - Total liabilities 771,581 20,608 1,823,237 Deferred inflows of resources: Unavailable revenue - property taxes 586,963 - Unavailable revenue - local option sales tax 375,000 - - Unavailable revenue - intergovernmental - 224,113 Total deferred inflows of resources 375,000 586,963 224,113 Fund balances (deficit): Nonspendable - - Restricted 4,244,692 149,585 - Assigned 1,872,611 81,058 - Unassigned - - (215,967) Total fund balances (deficit) 6,117,303 230,643 (215,967) Total liabilities, deferred inflows of resources and fund balances (deficit) $ 7,263,884 $ 838,214 $ 1,831,383 112 Page 397 of 486 Special Revenue Road Use Tax Federal Aviation Housing Programs Grants Agency Projects Total $ 5,127,801 $ 2,332,827 $ - $ $ 12,521,958 2,647 12,288 - 14,935 - - 3,261 - - 583,702 - 333 - 9,182 - 1,650 1,650 - 23,257 - 541,565 658,094 1,692,087 2,580,845 43,893 8,059,136 - - 800 420,133 280,829 9,288 - 290,117 - 2,041,640 - 49,739 2,091,379 108,189 - 129,612 $ 7,211,553 $ 4,419,633 $ 2,582,495 $ 635,997 $ 24,783,159 90,619 $ 124,192 1,650 17,108 25,188 $ 17,465 4,510 77,947 292,550 $ 211,946 $ 1,731,166 87,378 44,267 630,244 413 - 208,773 1,543,808 186,358 2,663,474 29,221 77,947 233,569 125,110 1,924,149 442,571 5,340,825 119,961 5,849 2,541,210 573,626 586,963 375,000 3,464,759 119,961 5,849 2,541,210 573,626 4,426,722 280,829 6,577,194 9,288 - 290,117 4,279,386 - 126,724 15,377,581 - - 1,953,669 (1,882,864) (506,924) (2,605,755) 6,858,023 4,288,674 (1,882,864) (380,200) 15,015,612 $ 7,211,553 $ 4,419,633 $ 2,582,495 $ 635,997 $ 24,783,159 113 Page 398 of 486 City of Waterloo, Iowa Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) Nonmajor Special Revenue Funds Year Ended June 30, 2016 Special Revenue Community Local Option Library Development Sales Tax Tax Levy Block Grant Revenues: Property taxes $ $ 594,097 $ - Other taxes 9,597,048 25,976 - Licenses and permits - - - Investment income 9,398 439 - Rent - - Intergovernmental - 4,272,867 Charges for services - 101,959 Interfund charges for services - - Miscellaneous 48 40,708 Total revenues 9,606,446 620,560 4,415,534 Expenditures: Current: Public safety - - Public works 9,511,073 - - Culture and recreation 584,726 - Community and economic development - 4,624,828 General government - - Total expenditures 9,511,073 584,726 4,624,828 Excess of revenues over expenditures 95,373 35,834 (209,294) Other financing sources (uses): Transfers in Proceed from the sale of capital assets Total other financing sources (uses) - - Change in fund balance (deficit) 95,373 35,834 (209,294) Fund balances (deficit), beginning of year 6,021,930 194,809 (6,673) Fund balances (deficit), end of year $ 6,117,303 $ 230,643 $ (215,967) 114 Page 399 of 486 Special Revenue Road Use Tax Federal Aviation Housing Programs Grants Agency Projects Total - $ $ - $ $ 594,097 - 11,226 9,634,250 35,511 - 35,511 - 1,117 - 315 11,269 - 195,025 - 195,025 8,379,362 4,941,923 7,069,668 800,055 25,463,875 60,214 38,627 - 117,809 318,609 50,000 - - 50,000 73,215 7,460 - 121,431 8,598,302 5,184,152 7,080,894 918,179 36, 424, 067 5,208 7,098,393 5,651,271 245,189 5,061,733 29,126 13,375 1,257,738 18,583 23,518,475 829,915 9,715,687 7,098,393 5,061,733 5,930,794 1,271,113 34,082,660 1,499,909 122,419 1,150,100 (352, 934) 2,341,407 43,718 43,718 121,480 121,480 165,198 165,198 1,499,909 122,419 1,315,298 (352, 934) 2,506,605 5,358,114 4,166,255 (3,198,162) (27,266) 12,509,007 $ 6,858,023 $ 4,288,674 $ (1,882,864) $ (380,200) $ 15,015,612 115 Page 400 of 486 City of Waterloo, Iowa Capital Projects Funds June 30, 2016 Capital Projects Funds account for the City's financial resources used for the acquisition or construction of major nonproprietary capital facilities. The City of Waterloo has capital projects funds as follows: Nonmajor: June 2009 GO Bonds Fund — This fund is used to account for proceeds from the 2009 general obligation bond sale until expended for the restricted purpose. June 2010 GO Bonds Fund — This fund is used to account for proceeds from the 2010 general obligation bond sale until expended for the restricted purpose. June 2011 GO Bonds Fund — This fund is used to account for proceeds from the 2011 general obligation bond sale until expended for the restricted purpose. June 2012 GO Bonds Fund — This fund is used to account for proceeds from the 2012 general obligation bond sale until expended for the restricted purpose. June 2013 GO Bonds Fund — This fund is used to account for proceeds from the 2013 general obligation bond sale until expended for the restricted purpose. June 2014 GO Bonds Fund — This fund is used to account for proceeds from the 2014 general obligation bond sale until expended for the restricted purpose. June 2015 GO Bonds Fund — This fund is used to account for proceeds from the 2015 general obligation bond sale until expended for the restricted purpose. Capital Improvements Funds — This fund is used to account for the use of resources on governmental capital projects not accounted for in other capital projects funds and are restricted for specific projects. 116 Page 401 of 486 City of Waterloo, Iowa Combining Balance Sheet Capital Projects Funds June 30, 2016 June 2009 GO Bonds June 2010 GO Bonds June 2011 GO Bonds Assets Cash and cash equivalents $ $ 450,381 $ 572,519 Receivables, customer accounts Total assets $ $ 450,381 $ 572,519 Liabilities, Deferred Inflows of Resources and Fund Balances (Deficit) Liabilities: Accounts payable $ $ 11,019 $ 864 Retainages payable - Due to other funds - Total liabilities 11,019 864 Deferred inflows of resources, unavailable revenue - intergovernmental Fund balances (deficit): Restricted 439,362 571,655 Unassigned Total fund balances (deficit) 439,362 571,655 Total liabilities, deferred inflows of resources and fund balances (deficit) $ $ 450,381 $ 572,519 117 Page 402 of 486 June 2012 GO Bonds June 2013 GO Bonds June 2014 GO Bonds June 2015 Capital GO Bonds Improvements Total $ 1,193,406 $ 1,521,566 $ 1,837,204 $ 5,043,687 $ 121,424 $ 10,618,763 121,424 $ 1,193,406 $ 1,521,566 $ 1,837,204 $ 5,043,687 $ 121,424 $ 10,740,187 $ 2,879 $ 10,579 $ 157,098 $ 249,540 $ 324,233 $ 756,212 55,120 55,120 1,436,610 1,436,610 2,879 10,579 157,098 249,540 1,815,963 2,247,942 121,424 121,424 1,190, 527 1,510,987 1,680,106 4,794,147 73,307 (1,889,270) 10,260,091 (1,889,270) 1,190,527 1,510,987 1,680,106 4,794,147 (1,815,963) 8,370,821 $ 1,193,406 $ 1,521,566 $ 1,837,204 $ 5,043,687 $ 121,424 $ 10,740,187 118 Page 403 of 486 City of Waterloo, Iowa Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) Capital Projects Funds Year Ended June 30, 2016 June 2009 GO Bonds June 2010 GO Bonds June 2011 GO Bonds Revenues: Investment income Miscellaneous Total revenues Expenditures: Debt service, interest expense Capital outlay Total expenditures $ 1,098 $ 2,144 $ 3,137 1,098 2,144 3,137 320,352 36,692 280,653 320,352 36,692 280,653 Revenues over (under) expenditures (319,254) (34,548) (277,516) Other financing sources (uses): Transfers in - - Transfers out - - Bond discount - - Bond premium - - Issuance of long-term debt - - Total other financing sources (uses) - - Net change in fund balances (deficit) Fund balances (deficit), beginning of year Fund balances (deficit), end of year 119 (319,254) 319,254 (34,548) (277,516) 473,910 849,171 $ 439,362 $ 571,655 Page 404 of 486 June 2012 June 2013 June 2014 June 2015 Capital GO Bonds GO Bonds GO Bonds GO Bonds Improvements Total $ 6,789 $ 7,726 $ 11,531 $ 27,567 $ $ 59,992 - - - - 456,798 456,798 6,789 7,726 11,531 27,567 456,798 516,790 3,500 - 23,960 350,828 392,125 2,534,235 354,328 392,125 2,558,195 3,226,415 3,226,415 (347,539) (384,399) (2,546,664) (3,198,848) 27,460 5,639,939 12,781,239 5,639,939 12,808,699 (5,183,141) (12,291,909) - (43,718) 5,631,304 5,631,304 (43,718) - (43,718) 5,631,304 5,587,586 (347,539) (384,399) (2,546,664) (3,242,566) 448,163 (6,704,323) 1,538,066 1,895,386 4,226,770 8,036,713 (2,264,126) 15,075,144 $ 1,190,527 $ 1,510,987 $ 1,680,106 $ 4,794,147 $ (1,815,963) $ 8,370,821 120 Page 405 of 486 City of Waterloo, Iowa Fiduciary Funds June 30, 2016 Fiduciary Funds account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City of Waterloo has the following fiduciary fund: Agency Fund — This fund is used to account for property taxes collected on behalf of the Metropolitan Transit Agency, Water Works kill water assessments, and building permits passed through to Black Hawk County. 121 Page 406 of 486 City of Waterloo, Iowa Statement of Changes in Assets and Liabilities Agency Fund Year Ended June 30, 2016 Balance Balance June 30, June 30, 2015 Additions Deletions 2016 Assets, cash $ - $ 1,484,049 $ 1,484,049 $ Liabilities, due to private entities $ - $ 1,484,049 $ 1,484,049 $ 122 Page 407 of 486 City of Waterloo, Iowa Statistical Section This part of the City of Waterloo's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the city provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented GASB Statement 34 in fiscal 2003; therefore, schedules presenting government -wide information include information beginning in that year. 123 124 129 133 138 140 Page 408 of 486 coLnE CO 0) 0 0) ▪ N CO O CO CO N- O CO co- O co ▪ N N CO CA O 0 0 N- O CO N O O O CO- N— N— CO CO V V CO O OM • co co CA O N— LO • V 0 O ▪ 0) CO CO r 0) O n (3) co- O CO CO N CA O O N— O Ln CO • 0) Ln L0 COV 0) N T- 0 CO N (0 O • N— O CO N CA V CO ▪ LO CO CO LO N— G"; N • 0) ▪ LO d CO Ln CO O ( d LO CO N CA CO LO CO V CO N— CO CO V CO- CO CO 0) N O O CO CO CO 0) V N N CA CO N- O CO LO 0 LO Ln CO- N • CO CO COLO r O N 71- N— N— CO N CA CA V LO CO LO CO O CO CO CO- CO N CO N CO CO- N LO O N CA CO CO LO O 0 CA CO CO 0 CO CA $ 313, 448, 986 $ 302,733,649 $ 292,066,003 $ 281,007,309 $ 274,092,857 $ 254, 254,160 $ 235,555,535 $ 221,518,056 LOC CO N— 0 CO LO 71- N N N LO CO 0 r r CA V LO CO N— M N N CO N CO N N- CO O N— N- LO 0) N CO 0) CO CO O CO N 71- 0) 0) CO 71- 0)- 69 0) CA V 0) N- 0) LO Ln (0 CO CO 0 CO 0 LO CO N V � V r r CA 71 - CO CO 0) D) N— CO CO 71- N N CO CO � � V CA 0) V 0 LO 0) N O O CO O O O r CO Ln O CO M M O CA O r 0 V 0 LO N— CO 71- 0) 0) N- 71- N- CO -O CA N— CO O LO O LO 0 CO 0 71 - CO O CA CA CO N 0 N— CO CO 0) 0 LO V CO CO N— CO 0) CO CA $ 90,636,095 $ 92,676,796 0 N O 0) 0 O 0) CA $ 87,558,527 $ 83,834,093 C O O MO O) co co n 0 CO- LO CO N 0 LO N N— CO O O (3) N N— CO CA CA LO O CO N- M LO CO N 0) CO 0) CO 7I- N- N— CO 71- CO rM — 0 LO CO N CO CA 0 LO O 71 - CO CO CO 71- CO- M N— O 0 N— O O 71- 0)- 0) N N— CO CO N CO CA CO N 0 V LO CO V N CO N CO CO CO O LO O N CO N CO- N CO CA LO 0) CO LO CO 0 CO LO Ln (3) 0 CO CO N— CO — O N 0) O N N— CO N CO CA • T- c0 co N Ln CO N N- N--N--c, — N-rO V N T- M CO CO O(3) O CO T- M CA CA CA Total governmental activities ne Business -type activities Net investment in capital asse Restricted Unrestricted Total business -type activities ne Primary government Net investment in capital asse Restricted Unrestricted $ 405, 271,154 $ 396,808,283 N CO N- 0 O V CA $ 392,828,859 $ 379,624,530 $ 364,841,402 $ 354,485,863 $ 332,285,569 $ 311, 966,186 Total primary government net position Page 409 of 486 CO 0 Ln 0 0 N (0 0 N N 0 N O N 0 0 N 0) 0 0 CO 0 N 0 N CO 0) (0 0) ▪ N- O CO CO Ln Ln O O Lf) O CO r CO N N- O 0) Ln V V ▪ CO N O r N O 0) N- CO Ln N (0 69 ✓ r r r N (O V O r O 0 r 0) V r N (O N (O (O r • O Ln 0 O O CO CO r N r 0) (O O 0) 0 (0 (O CO N Ln 0) - CO V N N N c- c- 69 0) - 0) Ln (0 V 0) N V (O N N- O 0) r Ln N Ln r N (O O CO c- CO 0 O (3) (3) ✓ (O N V r 0) M M 0) r CO 0 c- N N N (0 N c- c- 69 CO CO CO (O 0 0) V N CO N N (O 0) (O CO CO (3) 0) (3) V O (0 0) 0) CV N CO 0) 0) N V r O V O V co N (0 N c- c- 69 0) - 0) 0) O (0 n O V (O CO N (0 n N Ln Ln c- (0 (0 N- (0 0) r r0- O N N 0 N V O CO O (O V N (0 N c- c- 69 0 0 0 0 CO LC) V N r CO 0 N 0) 0 (3) CO r O Ln O (3) N N- LC) CO r CO (0 CO N N O CO CO CO (3) CO O CO V N N 69 N V V 0 (O (O V CO 0) (O r N 0) V CO n O r r c - CV 0) V 0 0 (O (0 V n (0 V (0 (O CO N O) Ln ',- CO O N 0) n V N CO69 (0 V (0 N 0) LC) Ln N CO LC) CO N 0 r Ln V O O (N 0) LC) 0 N 0 0 0 ▪ (0 CO N CO r V N Ln Ln CO CO N 0) CO LC) N 69 0) N V O N- 0) CO r CO 0) 0) LC) N- CO y r CO O O N - ,r Ln CO 0 O 0 CO 0 CO CO N r (V V LC) LC) r CO 0 CO (3) V N N N O 0 69 O V CO (0 (0 N Ln (0 CO (O V (0 N N r CO (3) (3) O N (O Ln CO 0) (O (0 CO V (O Ln Ln (O O N O N N O (O 0) r O r CO 0) CO N N 69 97.085.907 87.830.050 90.377.696 88.167.939 86.945.917 87.418.836 84.071.652 80.478.129 73.471.862 (0 CMO CO (N CO 0) 0 0) V M O O 0 CO CO N 0 0 N (0 0) (0 O O CO N (3) CO V N- - o O co (0 0 (0 (O O CO COC0 V Ln 0 0 (0 CO N- CO 0) (0 (0 CO N Ln r CO r 0 (0 0 O co CO CO 0 CV O O N (0 CO CO CO CO (0 0 CO CO (0 (0 N- LC)LC) CO CO Ocr L c- CO 0) 0) (0 CO 0 N CO CO 0 CV 0 CO CO N CO V N N N 0 co 0) 0 O 0) CO 0 O (0 CO 0) LO r- (•1 CO 13, 673, 355 O (3) 0 0 O (O W CO 12, 555, 096 (0 r CO N 11, 938, 958 Ln 0)CO (0 CO 0 N O 69 $ 101,841,294 $ 100,356,882 $ 101,264,917 $ 96,626,748 $ 92,645,261 $ 85,410,820 79, 399, 053 69 r 0) r (0 Or Ln CO V M O N (O r O Ln V 0 0) Ln N CO V (O CO (O (0 N (O r n O ▪ c- CO CO (3) 69 ▪ r O V r (0 LC) 0) N- CO (0 r OCOOOr CO CO N- N- LC) CO ▪ 0) CO CO (0 O V (0 CO (0 ▪ N CO (0 CO69 LC) O 0) N r N 0) CO N N N (3) CO r N N- 0 N 0 N- CO CO 0 0 (0 (0 CO CO CO O Ln (3) CO CO (N CO 69 0) V CO 0 V CO c- N (0 CO (0 ▪ V V O c- r- (0 (0 N N 0) r v 0 0) 0) CO (O (O O c- V V 0) (0 CO N N c- V 0) 69 (O O V (O 0) Ln V r 0 V (0 N CO N CO V r N V N CO (0 O O N 0) (O O N (O N Ln N (O 69 • (O V (O (O r 0v 0) rc- N r 0 0) CO V V V 0) 0) (O N r CO (0 N r (0 CO 0) (0 N (0 CO CO c- N O (3) 69 ▪ O O (O N Ln 0) r n (0 (3) CO c- CO n r c- r r Ln NO (0 CO (0 N 0) (0 (0 CO (0 c- n 0) CO c- N c- CO V 69 O O r N (O 0) O n r Ln N N V r co co (0 V c- 0) (0 N- • 0) V (0 0 CO c- OvCor M N 0 CO N N- n V O M 0 0 N (0 0) (0 CO CO CO ▪ (0 (0 N- CO 0) (0 CO CO 0 V 0) N (0 0 CO CO (N V 0 CO69 0 CO (0 0) V 0 co V Ln 0) V co CO 0) 0) V O V N- 0 CO N- r N- 0 CO 0) N- 0 LC) LC) 0) ▪ N CO Ln 69 37, 671, 773 61, 997, 499 34,189, 882 37, 011, 820 35, 636, 888 42, 213, 622 39, 209, 250 r 0 r O (0 28, 853, 857 N c- N V CO n r 0) N N- N N CO (O N- N-© M r Ln r N- 01(0 N N V M � N O 0 r CON (O CO O LO CO V (0 N N (0 V V N N 0 ▪ 0 LO (0 LC) N- o N- N - 0) oC O CO LO r 0 LO 0 N CO � co ,rco ,rO N- N O Ln V Ln V r LO CO O N CO M 0 0 0 0) (0 CO O (0 0 V N 0) CO N V co 00) CO V Ln (3) Ln 0 V co 0) (0 ▪ (0 CO CO CO CO 0 0 rr 0)0 00 CO 0) V 0) N 0 CO 0) 0) V 0 co N V CO N- CO CO CO M V CO CO (O N V V (r0 CO O 0 V O 0 r 0) 0) V CO CV Ln N N N 00)) O N- (CO NLn V N ▪ V n 0) (N r 0) M N M r (0 V V Ln (O C6 (O (0 r 0 0 (O 0 CO N ✓ (0 0) Cd - 0) CO LO N O M (0 Ln 0) LLO V Ln 0- ✓ - (0 r(0 Expenses Governmental activities: Public safety Public works Health and social services Culture and recreation Community and economic development General government Interest on long-term debt Total governmental activities expenses Business -type activities: Sanitary sewer Sanitation Total business -type activities expenses Total primary government expenses Program Revenue Governmental activities: Charges for services: Public safety Public works Culture and recreation Other activities Operating grants and contributions Capital grants and contributions Total governmental activities program revenue Business -type activities: Charges for services: Sanitary sewer Sanitation Operating grants and contributions: Sanitary sewer Sanitation Capital grants and contributions: Sanitary sewer Sanitation Total business -type activities program revenue 69 O V 0 69 $ 52,479,757 N (O M O Ln $ 54,084,440 $ 52,973,232 $ 57,112,585 CO69 r O) LN 69 $ 45,177,404 $ 42,564,404 Total primary government program revenue N 69 CO 0 In M ,rf N- CO V N 69 0) (0 V 00) Ln (3) O O • (0 Ln 69 CO • 0 0 O (0 0 0 M N Ln 69 r LO 0) (CO (0 (0 CO CO 69 0) co W 0 CO- Ln CO CO N Ln 69 LO O (0- ,r V 0 0 Cr -69 ) N O 0) r O LC)c- r- v O N 0) N (0 69 $ (36,834,649) Total primary government net expense Page 410 of 486 CO 0 Ln 0 O N CO 0 N N 0 N O N 0 0 CO 0 N 0 O N M V O) O I, - M O O) I� V OM CO = O O O) M V V CO O) M Ln CO M CO I,- n Ln = O O Ln N N 69 O O) co M co V N 0) co co N I. N. co O N- N O co N V co CO O CO co .1- o O V I— 69 n O V Ln CO O CO V n V ✓ Ln I— CO M n V V CO r r 1,- C) O M O N CO N 69 V O I— CO CO O • V N M O) Cr O O N n n V ) 0 V V CV M n M CO N co69 • V N CV CO I— O 0 CO V V V V n V N O) V n V CO (3) CO CO (3) N V CO N 69 • V CO CO N V O CO CO CO Ln O O N O N (3) O V CO O n I— r • N 0 CO CO N V N 69 V O) O) O I— CO CV CO cr O) N N O) N 0 CO CO O (3) I,- O0 CO O) CO CO CO r CO n N 69 CO CO N M M O O Ln O O M M M M O O) CO O O O N Ln V M N V • V O N 69 O Ln O M n N Ln Ln V O) I— r O M CO O V N O V Ln I— M O CO O O V O) 0 O M M N 69 69 M O V co O) r N 0 O O CO CO CO - LC) Ln 61, 596, 053 O Ln Ln CV 0 0) Ln O CO co - LC) Ln ✓ Ln M • O O) N M Ln 0 n V Ln N- r -- N - M CO Ln Ln CO 0 N O N O co N M O co r Ln CO Ln CO CO CO Ln n N-- 0 M M V V co co N N CO CO Ln n $ 66,341,789 $ 64,316,881 $ 64,222,454 $ 64,666,998 $ 61,055,570 $ 58,647,224 $ 61,613,783 $ 60,052,856 $ 55,264,943 $ 54,152, 998 Total primary government CO M M V O CO CO CO O 69 O O CO 0 O O V n V 0) 69 MCO M n CO CO 69 O M M CO CO CO CO Ln 69 O0) M O V N 0 N O M 69 N Ln CO V 0 M O M 69 M I— O Ln M 0 M 69 Ln CO N Ln O I— CO CO O co69 O▪ M) ▪ O M O co co M 69 O co N- ▪ N- 69 - N- Ln r CO CO N V O 69 $ 38, 898, 886 N O) O O) M 69 O) M 0 M $ 14,783,128 $ 10,355,539 $ 22,099,620 CO69 CO CO O) CO O 69 N N Ln CO 0 Ln 69 V M O M 69 Total primary government CO 0) CO 0 (91 LC) 0 N O N CO 0 N N 0 N O N 0 0 (91 (3) 0 0 N CO 0 0 N 0 0 CO V CO N ▪ CO CO CO V V O • O N-(0 O O O N M O co Ln O) 69 69 (3) LC) 0 CO V O) (3) CO 1,- N- V n V co N N- CO 0 V M COO CO COCO CO V O 69 N- LC) N- CO N- CO N CO O O I,- (O N CO I, N (3) N- CO M V CO O) Ln LC)CO 69 CO N N- O) N- O) CO O) N CO CO CO CO CO N V (N co O CO V CO co co- V O) 69 N LC) N- CO coOV N- 03 coO O N N CO I M (▪ OO COOCO V 69 69 69 69 69 n r r co M O O O I— V I� 0- (9 N- O O CO COLn CO CO Ln - CO N LC▪ ) LC) CO I- O 91- (0 (O N Ln CO N- - (91- N 0 O O Ln 69 $ 24,506,394 N M 69 N 69 $ 18,212,204 $ 17,872,015 $ 16,751,869 N (O O N 69 (3) (3) CO (O CO (0 CO CO V O) V CO O I� r CO (3) O n V O CO - 0 O (3) (3) CO LC) CO N I- O) CO (O LC) CO 0) N Ln CO 69 14.237.680 69 Total general fund I- N (,) - co O M O r N co r 69 O CV CO N CO V CO CO O) CO N CO CO CO 69 O)O CV LID N CO O CO O) CO 1,- 91- Ln n n co M co CO V CO - CO N- CO (O O) O O) CO O CO N V N O CO N 69 N CO (3) 0 M I� CO 0 N (3) N V 69 CO N N- N - N I- O CO- N- 0 CO CO CO CO N- V (3) CO LC) O) (3) CO I- (O N O) co co co N (N M N N I- V 69 O CO 0 CO 0 LC) N CO 69 69 69 69 69 (O Ln OO M N O M LC) O) (91LO- CO CO LC) ' O) V n N- - N- co- - r(O O co I� V N (O N ' CO N N V N I- N M CO O) N Ln (3) (3) N N N- $ 45,893,585 $ 40,902,341 $ 37,755,575 $ 36,737,559 $ 31,341,480 $ 35,101,751 O O) ' CO N- CO M CO N O) N- CO CO- CO Ln Ln CO V O co CO CO N CO N O I— CO M CO CO CO CO LC) N CO LC) CO CO (3) LC) CO CN (3) O 0 O LN V N CO (O 69 $ 33,095,502 Total all other governmental funds GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, implemented in fiscal year 2011. Page 412 of 486 CO 0 Ln 0 N V O N CO 0 N N 0 N O N 0 0 N 0 0 0 0 0 0 D) r LO N r O V (3) I)( V N N O O CO N V O O LO (O N- O V (3) (3) r LO O N LO CO N LO O (3) CO CO N- V CO CO CO N CO V c- N CO 0) c- O I— c- c- 0 CO c- N V N 69 I� V (3) CO (3) LO O O (O (3) O O CO CO LO N I) O (O V (O CO I— (3) LO V CO O N (3) O (3) CO CO CO r c- LO r O V 0) O (3) V I) CO N (O V LO V c- N CO CO (3) c- c- c- c- CO N- c- N V N 69 LO (3) (3) LO N N— CO 0 CO I) 0 CO (3) CO r 0 0 0 CO (3) 0 Ln Ln 0 N CO O V Ln CO (O 0 I) M LO V LO 0) LO N V Ln N— (O N (3) CO CO N CO (3) CO N— N V CO (3) V CO co CO V N 69 (3) (3) CO CO (O I) N O N- CV N LO I) r (3) (O O (O I" - CV V LO LO CO I— V O V N— O CO CO LO c- I) N LO V co co co N V (3) (3) CO N O V (O c- N- LO (3) c- LO LO V c- c- N- (O c- V V N CO69 (O LO (3) CO LO O O M (3) CO CO c- CO CO O I) (O O I— CO V V (3) N O CO r V O (3) V CO CO CO LO CO N (O (O c- LO CO (3) V CO (3) O CO Cr c- LO I— (3) r N LO c- c- LO (O c- CO V N 69 LO N N CO c- N I) M c- CO (O LO I) r CO O LO r N LO O (3) O N V O LO c- N CO CO CO N V N N- V I) N O CO LO (3) (3) (3) CO V (3) O I— N c- O O CO c- N V c- c- O (O N CO V M 69 V N (O (3) N 0) O co co O (O co V co co co co (3) (O CO O (3) CO (3) V (O (3) N (O O O N LO LO M Ln CO (3) 0) (O CO CO CO N I) (3) (3) O CO (3) M N 0) O M N O LO N CO V M 69 Ln V co co (O N O M (O O (3) LO O LO (O 0) co M (O (O N M co LO co co co N N (3) CO r CO 0 N CO CO CO CO CO I) N CO CO CO 0 CO V I— M 0) V O (3) 0) O O O V N Ln N (O CO N 69 N- CO CO O CO 0) N 0) LO V Ln CO N LO CO CO V CO (3) 0 I— (3) CO (3) CO CO N V N N CO N- LO (3) CO CO CO I) CO (3) CO CO N CO CO CO LO N V (3) CO N- CO CO LO CO c- c- 0 LO N V M N 69 O V (3) V O I) N I) (3) co (3) co I) (O N M O I) co (3) V CO O I) co (3) .1- o O (3) co V co O N (3) co LLn 0 0 LN O 0 Ln co M W Ln N CO CO N 69 105, 401, 685 106,773,157 100,121, 944 103, 407, 054 98, 762, 505 100,163, 269 99,664,172 93, 407, 535 88, 246, 929 85, 019, 802 CO O (3) CO I— O CO N- CO CO N- (O co V V O (3) (3) LO I"- (3) ' CO LO (3) OoD M coOco co CO co CO O CO LO N CO N 0M W COO M c- r 00 O CO ) CO (O (O O N CO CO O CO O LO I) CO CO (3) (3) CO CO LO CMO W LO LO 0O O V O LO (3) N CO CO c- c - V V I"- CO N N (O V LO O M CO CO CO N- V (3) LO (3) LO LO (O CO CO O CO CO00) V 12, 835, 209 11, 855, 746 V LO O CO V N CO (O (3) LO LO CO O (3) CO CO LO cr 0 (3) (3) CV N co (N V M N I� LO LO V c- LO V LO LO 0) O c- O N LO co V N- O O V LO O O I,- CO LO O LO N CO LO O) LV O 00) 00)) Ln CO 1` - co O co 0 co 0 0) O I) N (O 0 CO 0) CO CO CO N (3) CO N M LN 0 0 O O I) 0) (3) (3) N LO (O (O V CO CO (O O I"- (O V (3) (3) LO N co V N LO CO CO I) (3) (O LO (3) LO 0) co V O N V N N O M 0M CO O LO CNO CO1"- c-O V CO I— (O V (O (O O CO c- LO O O CO LO CO N COO N- CO 00) N- CNO LOO CNO N I) (3) CO LO LO (3) N N O (O ' (3) I— (3) O (3) N N- CO (O (O (3) CO (3) N (3) (O I— CO N O 1"- N- I— LO (O V CO N- CO (3) CO V CO (O N (3) CO (3) CV (3) CO CO N V O I) r (O I� (3) r LO CO N LO N N (O LO (O (O I,- CO Cr O (3) LO Ln O CO I— N CO LO CO V O CO V V N CO LO 0) V co V LO co (3) r- (3) (3) co co co D) LO 0 (3) LO CO CO CO LO I) N N N N- (O (3) O V CO (3) (O N CO N CO N- V (3) O N- O O CO V (O CO LO (3) V CO 0) M M CO 0O O LM CO LO LO O V CO N N 16, 639, 618 20, 405, 512 O O M CO CO CO M LO CO N- V O O co (O O O V co N Ln r CO CO (3) LO O COO M CO C0 O.- M O) CO Ln N (3) V 0) N N 116.926.743 110.733.034 104.575.684 108.633.356 102.079.720 113.395.775 105.767.118 95.406.196 90.004.187 C E O N Na U W • 0 0 Z C O to O C T E fn 0 .�. to (6 OU N p E E m Ce) a7i .m 2 E rn C� (n Q O C Z a) (0 O— N 0 U (/) C a) a C E to a) W N g..: 4_,.,1,„ -,,,(:) 'gyp a y O a a) U a :.6 a) a) 4-(7-') O U a) N C 7 a) O C O U (C6 (.O C =r� oWa�� ac22y�E2aQ�aQQ y Q C (/) ,a) �'Ot 'U a) ` y a) 9 9 a) '--' E C C C y6 N aj O L a) a) C O a) a) a) Q O O a) O O a) 9 = p Q y6 w U N .- L ., Q ._ O X'5 a a S C) C) CD a) a m a) O Ka0J a Vic) cf)2EH WC) 0 C)E- (O Ln O O O (O O CO CO CO Ln (3) V (3) 0 COCO N CO M CO CO N CO (3) Ln 0) co oD Revenue over (under) expenditures I) 0) O co V Cr V N N CO LO CO CO CO CO CO CO I) M 0 O 0 O o CO (O CO IV C N N co W V r- 0 O n M N N V (3) co co CO r - 0 O M CO W r V CO COM O LO LO CO c- 0 0 0 N- r c - N N 0 CO 0 CO V 0 0 0 CO 0 CO 0 (3) 0 N- O V 0 co O O 0 0 0 0) 0 CO Ln Ln 0 (3) 0 CO CO Ln N CO CO N CO (3) O O co 0 ' 0 CO CO CO 00) 0 0 CO co co (3) 0 0 (3) 0 0 N— O V CO V V LO LO n c- Cr LO LO N (3) N N LO N LO LO 0) V (3) (3) N I— N N V LO LO O M M O CO O CO O Cr O CO 0 CO Ln CO 0 CO CO Ln Ln Ln r CO Ln Ln 0) O O O N O co O O M O co 0 N O N O (O N Ln , O N O O (,) O O 0 0 0 I) 0 O N N V ,r (3) r 0 O o) 0 V V (3) O M V CO (O 0 V O N 0 N LO c- O V V V M •— (O (O V V (3) O O CO CO CO CO (3) O N I) 0 CO CV 0 N— Ln N CO 00) OM) LN V CO 0) (3) co (3) O N CO CO V CV 12, 069, 090 N r CO V 11, 229, 056 CO CO N V CO (3) CV LO CO V V co N O M V O 69 W O O 69 O O co V 69 0) O O CO V 69 O N CO M 69 N LO CO CO (O 69 0 V N 0 69 N M 69 O CO O co N I"- (3) N 69 O I"- 1"- 1"- (.0 hI) N CO CO 69 0 L 0 0 O T' C Q 0) U a C a o o W N U O 0 a)m o -O aO o °13) oO to a) w (/) ( a 0 S S'8 C C U _ 0 0 9 0 (0 (/) a) 7 O 2 O to (On a a) 9 a) 0 a- 0) .- a 9 -O a s s 2 9 rn C -o a) (2 a) O E O- E C C N .0 C O °-- 0 _s 0 0 0 O U. C 2 2 O N =—, U N O U a 0 a 0 L C a w m m a a o L n- ; f a) .. a) Q L (6 (6 (r) O` a) a) a) O` O O a) a) a) OE-E-'aC)aaamF- z 0 **For the fiscal years prior to June 30, 2013, bond issuance costs were included with interest and fees Page 413 of 486 W Hnrj H 6 '`A a 0 W W E o a T C 0 W W a � W a O 0 N M }5p E W LL W E Lai !6 0 0 g Q N V Lo co N Ln Ln N -O co O V (3) (N N CO V 0 O Ln Ln LC) N N N CO I— N- CO co co co co co co co co co co co 2, 805, 711,189 3, 075, 559, 088 3,133, 666, 442 3, 447, 851, 253 3, 542, 643, 298 3, 566, 368, 445 3, 747, 030, 046 3,738,165,467 3,762,106,346 3, 623, 346, 971 3, 656, 417, 436 CO 0 (3) N- (3) CO LO LO (3) (3) 0 LOO CO coOcoOcoOco 0 LO co CO LO V CO CO 0 CO CO 0 (3) LO CO CO CO CO N LO (N V 0) r O) O W W W W W W r r r V CO 0 CO (3) V CSO CO 1,1- Cr- V O (N 0) 1, 941, 432, 330 co co co r -- (N - 2, 204, 374, 314 2, 241, 473, 608 2, 302, 737, 262 2, 469, 886, 911 2, 526, 575, 935 2,446,131,446 2, 433, 777, 550 co co co Ln (N CO (N CO CO CO 0) CO 0 LO V (N CO 0 CO (N V co co CO N- CO CO CO O) O) I� CO V cocoLO N CO 1,-- 0 0 0 0 LO (3) LO CO V LO co LO V 0) N (3) N- LO N CO CO CO N- r r r CO CO CO CO CO N. V V (N CO (N LO LO C0 I— 0 CO V CO CO CO CO LO V V co co co N N V co- LO CO a) V V CO N- cor r O LO co co coo co 00) co co O (N 0 0 0 0 O CON LO CO (N (O (N (3) LO V O N - Co V co V co co co (O N- C0 O 0) co (N (O CO 0_ (O LO N- O V cococoCO) CO (0 V co co co co Ln co (0 co c» (3) CO V Ln CO CO Ln CO CO (3) CO- LO LO V (O O O) M N- V (O (3) (3) (N CO CO LO N- CO 0 N N O O O Ln co O co O O O O co Lnc0 LO co Ln CO 0 0 0 co N N CON- CO0 CO- V c0 .1-- (N N CO (N CO V 0) V N O O CO CO_ (N O) O V co O N CO (3) (3) O (N N LC) - (3) n(3) 0 0 (3) (3) (3) 0 (N N O O L co 0 co co 00) LOO O 0 co N CO LO 0 CO CO_ (O O) LO N- O N CO LO r LO V LO I� V co co (O LO N- (N CO CO LO CO CO 0 0 0 CO 0 (0 I— (0 M O I— (N- CO CO CO CO (O CO CO CO 0 (O CO CO (O N- N- N- N- CO CO N- (O O CO 0 V CO CO (3) C0 N O CO co N- V I� LO O 00) 00) 1, 021, 046, 822 1, 080, 004, 413 co 0) 1,166,201,221 1, 251, 445, 651 1, 316, 533, 993 1, 303, 730, 888 1, 347, 497, 993 O O O O O (N CO V LO co O O O O O O O O O O O O N (N (N (N (N (N (N (N (N (N O O O O O O O (N co .1 - CV N N (N (N (N (N (N (N (N (N N Source: Black Hawk County Auditor. Page 414 of 486 Overlapping Rates o To O (1) H 0 L U Black Hawk County City of Waterloo N 0 N O o = N U_ N 0 cn N U N 0 cn (Y) (O Ln (O - N (Y) (Y) Ln N- CO (O N N- CO N (Y) O Ln O (Y) O V (O O CO Ln N V (O - N O (O 0) CO - O CO O - Cr) CO (O Ln (O V C) V C) N N N O V V V V V V V V V - V N 0) O N N - 0)0)O O I— D Ln - CO Cr) CO 0 Cr) CO CO - Cr) 0) CO V C) — Cr) C) C) N (' ) C) C) CO N 00)) N ▪ 00)) V - 0 CO - N Cr) Cr) 0) LI( LI( () CO - N CO LO N Cr) I— O V V N CO N. O) (O O O O O O O Iri ID ID ID Iri ID O O O O O O O CO Ln Ln OOOOOOO ON CO CO CO O O O O O O O (O (O (O N N N Ln N Ln (O - Ln Ln - N. 0) 00)) N. N. 0) N- N Cr) 0 0 Cr) V Ln Ln Cr) CO O N CO N Cr) I— (O V V N CO - N 0) L( L( L( L( L( L( V (- (- N (O O - O V I— Cr) (O 0) 1'- O N 0) N CO Cr) 0) 0) O Ln L(') I— 0) N—N— 0) - 00 CO - Cr) O I— 0) Cr) N V C) V 0) I— (O Ln N O - N. V N. Ln 0) N N V N N N � CCO N. N. V N. V - N 00)) CO Ln Ln Ln Ln V (O (O (O Ln C) O 0 0 0 0 0 0 0 0 N C) (O - N Ln 6) V Ln CO () () V CO (O - (O CO 0) V - CO N V 6) C) N Ln N N N 6) 6) N (Y) CO CO Cr) — N 6) Ln Cr) Ln O O O O O L( L( L( L( L( OCO 0 CCO CCOO O LO (() O O - I N- Ln (O (O (O V Cr) Ln Cr) Cr) V (O (O O (O Cr) O 0) Ln (O CO N- Cr) Cr) N Ln N V 0) ICO CO CO CO CO CO CO — N- 0) 0) Cr) Cr) 0 0) Cr) 0) M CO 0) CO - 0) N - O N 0) (O Cr) Ln CO Cr) I— N- O O Ln (Y) V N N C) C) - N N C) C) C) C) C) C) C) C) C) C) O V V N- 0 CO Cm() (O V N- N Cm() I� Ln I� CO V O CO N 0) V I— CO O - N (O CO 0) V O V CO - O 0) - O CO LO 0O 0) O - N C) V LO (O O O 0 N N N N - N N N N N N Source: Black Hawk County Auditor. Page 415 of 486 Employer Deere and Company IOC Black Hawk County, Inc. Waterloo Owner, LLC (Crossroads Mall) Equitable Life Assurance in 2003 Con Agra k/n/a Hunt Wesson, Inc. Ferguson Enterprises, Inc. Tyson Fresh Meats (formerly IBP, Inc.) Bertch Cabinet Manufacturing Howard L. Allen Investments, Inc. Walmart Stores VGM Management MidAmerican Energy Qwest Corporation (formerly US West) Banco Mortgage Company Menard Inc City of Waterloo, Iowa Principal Taxpayers Current Year and Nine Years Ago 2016 Assessed Value 1/1/2014 Rank $ 48,943,842 1 48,937,500 2 32,155,128 3 3 19,951,236 4 18,636,903 5 15, 531, 098 6 14, 746, 095 7 14, 606, 889 8 12, 019, 959 9 10, 640, 866 10 Total $ 236,169, 516 Source: Official Bond Statements prepared by Speer Financial, Inc. 131 Percentage of Total Assessed Value 1.34% 1.34% 0.88% 0.55% 0.51% 0.42% 0.40% 0.40% 0.33% 0.29% 2007 Assessed Value 1/1/2005 $ 25,245,560 30, 996, 870 16,357,690 20, 654, 850 19, 968, 530 15, 518, 840 Rank 3 2 7 4 5 8 105, 839, 708 1 16,408,174 6 10,487,300 9 9,882,890 10 6.46% $ 271,360,412 Percentage of Total Assessed Value 0.90% 1.10% 0.58% 0.74% 0.71% 0.55% 3.77% 0.58% 0.37% 0.35% 9.32% Page 416 of 486 City of Waterloo, Iowa Property Tax Levies and Collections Last Ten Fiscal Years Percent of Percent of Assessment Fiscal Year Current Current Tax Delinquent Total Total Tax Date Ended Total Tax Collections Tax Tax Collections January 1, June 30, Tax Levy Collections To Tax Levy Collections Collections To Tax Levy 2005 2007 $ 33,117,028 33,098,938 99.95% $ 20,019 $33,118,957 100.01% 2006 2008 33,302,685 33,292,118 99.97% 22,716 33,314,834 100.04% 2007 2009 35,238,473 35,092,505 99.59% 40,319 35,132,824 99.70% 2008 2010 36,645,462 36,619,212 99.93% 16,989 36,636,201 99.97% 2009 2011 37,312,210 37,186,887 99.66% 34,746 37,221,633 99.76% 2010 2012 38,703,447 38,469,916 99.40% 20,895 38,490,811 99.45% 2011 2013 40,620,062 40,275,404 99.15% 18,966 40,294,370 99.20% 2012 2014 39,993,210 39,763,526 99.43% (72,698) " 39,690,828 99.24% 2013 2015 39,200,603 38,901,557 99.24% (362,370) " 38,539,187 98.31% 2014 2016 38,480,720 38,405,051 99.80% (176,170) " 38,228,881 99.35% Source: Black Hawk County Auditor's office. Current year tax collections can exceed the total tax levy in certain instances, such as when property valuation adjustments are made after the tax levy certifications are completed. Information regarding changes to levies and the years that delinquent payments are attributable is not available to the City. "A number of property valuation appeals for the valuation at the January 1, 2011 assessment date were settled during the fiscal years ended June 30, 2014, 2015 and 2016 which resulted in refunds owed for prior taxes paid on those properties. Black Hawk County netted those refunds from delinquent taxes paid to the City, resulting in negative delinquent tax collections. 132 Page 417 of 486 > ti Business -T Governmental Activities 0)o ccoo coo ccoo co 0 00) 0) co co co co V V V co V V — r r r r r r r r r r a m 0 a) Tz 0 O O C o E U d U U ow_ o — i 0) a3 a3 E o E ~ 0_ • > 0 _ 0 .2 • N N (6 0 0) U O Ur 0 0) Q t 0) 5 U 0) .0 J N 0) O a3 C 0) a3 0 o Q 'Q Z Q 0 _ 0) .0 • N 0) (6 0 0) U O Qr 0 o N N } LL O 0 .1•," 0 0 0 c c 0 0 M O 0 W W W LO M M LO ✓ V M M M M M M M M In 0 CO 0 CO I� 0) 0 0 N O 0) V CO CO V CO In N 0 0 V LO 0 LO 0 0 N co In M M N- co O I� co- M I� 0 CO CO 0) co r r In V N N In O co V 0) 0) 0) 0) 0) 0) 0) 0) 0) O oo o 0 0 o u) co coo CO co 0 O 0 0 0 0 0) CO V N CO O LO- O LO- In r (3) V (3) C,1 In O CO In NV CO CO CO N CO N.-0 r M N O 0 I� V co - CO V N CO 0 I� r N CO V CO • O 0 O V N lf) 0 N co 0 V I� M CO lOf)) 0 i. M 1 r CON1 O� 0 LO 0 0) CO CO I� 0 CO V N CO V V O O V N In 0, - CV N N N N N N $ 2,708,707 CO 00 CO 0 CO 00 CO CO 0 0) N 0) 0 CO 0 N V 0) M 0) CO 0 N In (O V V M 0 V O N 00 (O M 0 co co In N 0 0 M N N N N N C,1 o o o o O O N 0 N M $ 63,940,000 O V V O O 0) M O N 00 N N 0 ( CO CO I� N 0 r O 00 00 N (O (O M N. -- o co In r O CO N CO 0 I� O O r CO 0 N CO CO LO- CO CO CO CO CO CO CO CO O 0 0 0 N— N M V LO CO O O 0 0 0 0 0 0 0 0 N N N N N N N N N N Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Page 418 of 486 City of Waterloo, Iowa Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Percentage of General Total Assessed Fiscal Obligation Assessed Value Value Per Year Bonds of Property of Property Capita* 2007 $ 79,019,518 $ 3,075,559,088 2.57% $ 1,149 2008 80,518,995 3,133,666,442 2.57% 1,171 2009 81,200,822 3,447,851,253 2.36% 1,181 2010 83,832,977 3,542,643,298 2.37% 1,219 2011 85,835,630 3,566,368,445 2.41% 1,255 2012 89,522,781 3,747,030,046 2.38% 1,302 2013 90,366,627 3,738,165,467 2.42% 1,321 2014 91,480,632 3,762,106,346 2.43% 1,337 2015 93,637,457 3,623,346,971 2.58% 1,369 2016 99,096,543 3,656,417,436 2.71% 1,449 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. * Population data can be found in the Schedule of Demographic and Economic Statistics. 134 Page 419 of 486 City of Waterloo, Iowa Direct and Overlapping Governmental Activities Debt As of June 30, 2016 Governmental Unit Estimated Estimated Percentage Share of Debt Applicable Overlapping Outstanding To City* Debt City of Waterloo direct debt $ 77,831,781 100.00% $ 77,831,781 Overlapping: Black Hawk County $ 37,940,000 43.94% 16,670,836 Hudson Community Schools 0 0.00% - Hawkeye Community College 3,680,000 25.50% 938,400 Subtotal, overlapping debt $ 41,620,000 $ 17,609,236 Total direct and overlapping debt $ 119,451,781 $ 95,441,017 Source: Black Hawk County Auditor Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Waterloo. This process recognizes that, when considering the city's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. *The percentage of overlapping debt applicable is estimated using net taxable property values. Applicable percentages were estimated by determining the portion of the County's net value that is within the government's boundaries and dividing it by the County's total value. Prep Notes Only: Source: Black Hawk County Auditor Helen R. Steffen 09-14-16 Taxable val for DS excl G&E BHCo 5,352,884,257 Waterloo 2,728,994,072 135 Page 420 of 486 co co 00 $ 186,908,273 $ 187,351,502 $ 178,318,423 $ 178,318,422 $ 172,392,563 $ 156,683,322 $ 153,777,954 07. $ 94,503,961 $ 95,513,435 $ 89,675,893 $ 92,339,979 $ 87,799,473 $ 73,933,241 $ 72,049,729 Legal debt margin £ Lri / co d 0 d ca CO LO co - = \'=0 e Legal Debt Margin Calculation for Fiscal Year 2016 3,656,417,436 Estimated actual valuation (assessed) as of January 1, 2014 CO CO LO 0 Total net debt applicable to limit 07. Legal debt margin Note: Under the State of Iowa Constitution, the city's outstanding general obligation debt should not exceed 5% of total assessed property value. Page 421 of 486 City of Waterloo, Iowa Sewer Revenue Bond Coverage Last Ten Fiscal Years Less: Applicable Net Revenue Debt Fiscal Gross Operating Available for Service Year Revenue Expenses Debt Service Requirements Coverage 2007 9,761,167 4,580,852 5,180,315 3,020,198 1.7152 2008 10,121,735 5,051,048 5,070,687 2,099,173 2.4156 2009 10,030,590 5,070,016 4,960,574 2,038,173 2.4338 2010 11,195,472 5,266,284 5,929,188 2,079,198 2.8517 2011 13,468,610 7,041,089 6,427,521 2,059,323 3.1212 2012 13,217,083 6,450,294 6,766,789 1,655,847 4.0866 2013 12,312,670 6,803,784 5,508,886 1,659,883 3.3188 2014 12,863,347 8,069,660 4,793,687 1,259,403 3.8063 2015 12,716,670 9,894,071 2,822,599 1,233,703 2.2879 2016 14,261,375 11,319,925 2,941,450 592,413 4.9652 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Gross revenue includes both operating and non-operating revenue. Operating expenses do not include interest, depreciation or amortization of bond issue costs. 137 Page 422 of 486 City of Waterloo, Iowa Demographic and Economic Statistics Last Ten Calendar Years Per Capita Personal Personal Median Unemployment School Year Population' Income Income2 Age' Rate3 Enrollment4 2005 68,747 $ 2,117,888,829 30,807 35.9 5.3% 10,391 2006 68,747 2,216,265,786 32,238 35.9 4.3% 10,192 2007 68,747 2,326,329,733 33,839 35.9 4.3% 10,039 2008 68,747 2,396,932,902 34,866 35.9 4.7% 10,069 2009 68,747 2,475,029,494 36,002 35.9 6.8% 10,150 2010 68,406 2,501,812,638 36,573 35.9 7.3% 10,020 2011 68,406 2,524,386,618 36,903 35.9 7.1% 10,103 2012 68,406 2,681,173,170 39,195 35.9 6.5% 10,239 2013 68,406 2,827,835,634 41,339 35.7 5.6% 10,483 2014 68,406 2,857,250,214 41,769 35.5 6.5% 10,611 2015 68,406 2,817,779,952 41,192 35.8 5.4% 10,445 N/A = Not available. Sources: 1 2000 and 2010 U.S. Census 2 U.S. Department of Commerce, Bureau of Economic Analysis 3 Iowa Workforce Development 4 Waterloo Community Schools 138 Page 423 of 486 Employer City of Waterloo, Iowa Principal Area Employers Current Year and Nine Years Ago 2015 2006 Percentage Percentage of Total City of Total City Employees Rank Employment Employees Rank Employment Deere & Company 5,600 1 17.02% 5,400 1 15.93% Wheaton Franciscan Health Care * 3,060 2 9.30% 2,910 2 8.58% Tyson Fresh Meats (formerly IBP, Inc.) 2,500 3 7.60% 2,500 3 7.37% University of Northern Iowa 1,740 4 5.29% 1,780 4 5.25% Unity Point Health(Allen Memorial Hospital) 1,615 5 4.91% 1,770 5 5.22% Waterloo Community Schools 1,610 6 4.89% 1,670 6 4.93% Hy -Vee 1,545 7 4.70% 980 9 2.89% Wal-Mart 1,045 8 3.18% -- Target Distribution Center 860 9 2.61% CBE Companies 800 10 2.43% -- -- Bertch Cabinet Manufacturing -- -- -- 1,500 7 4.42% Omega Cabinets 1,350 8 3.98% GMAC 735 10 2.17% Total 20,375 61.93% Source: Official Bond Statements from Speer Financial, Inc. * Formerly known as Covenant Medical Center 139 19,860 54.60% Page 424 of 486 City of Waterloo, Iowa Full -Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Public Safety Police 130.0 128.0 131.0 135.0 139.0 138.0 131.0 130.0 130.0 130.0 Fire 115.0 118.0 113.0 116.5 114.5 112.5 109.5 108.5 106.5 109.5 Building Inspection 15.0 16.0 15.0 15.5 10.5 12.5 12.5 12.5 13.5 13.5 Public Works City Engineer 19.0 19.0 20.0 19.0 18.0 20.0 20.0 20.0 20.0 20.0 Traffic 13.5 12.0 13.0 12.0 12.0 12.0 15.0 16.0 16.0 14.0 Central Garage 9.5 10.0 10.0 8.0 9.0 9.0 9.0 10.0 10.0 9.0 Street 36.0 34.0 40.0 39.0 37.0 38.0 36.0 34.0 37.0 35.0 Airport 5.5 5.5 5.5 5.5 5.5 6.0 5.0 6.0 6.0 6.0 Health & Social Services Human Rights 3.0 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Culture & Recreation Cultural & Arts 10.0 12.0 13.5 13.5 14.0 14.5 13.0 11.0 13.0 12.0 Library 25.5 24.0 24.5 25.0 24.5 24.5 25.0 25.0 24.5 24.0 Leisure Services 37.0 39.0 41.0 40.0 40.0 39.0 36.0 40.0 43.0 42.0 Community & Economic Development Community Planning & Development 25.0 24.0 24.0 24.0 24.0 24.0 22.0 23.0 23.0 22.0 General Government Mayor's Office Administrative Services/MIS City Clerk & Finance City Attorney/Code Enforcement Human Resources Facilities Maintenance 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 2.0 2.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 2.0 13.0 13.0 13.0 13.0 13.0 13.0 14.0 14.0 12.0 12.0 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 6.0 3.0 3.0 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 Waste Management Services Sewer 30.1 30.1 30.1 29.0 32.0 35.0 33.9 41.0 39.0 40.0 Sanitation 13.9 13.9 13.9 13.0 15.0 14.0 17.1 13.0 17.0 13.0 Total 511.5 511.0 520.0 521.5 521.5 525.5 511.5 517.5 524.0 521.0 Source: City Human Resources Department records. 140 Page 425 of 486 V O co O O O_ O 0) O 00 O 0 0 Function/Program I- 0 N- 0 O O 0 N- 0) 0) O O V V co (O N- O r- co co N N- lO 1,-- (0 ,(O 0) CO 0) M 0) CO CO M 00 N 0) 0) (O I,- V CO V CO (0 0) V V CN CO LO M V (O d) OC) 0) I, r V LO N CO N I- O U) N- co N 0) r O � N N- COMV 0) d) V d) O to N- co- I- N LO - N- CO V 4' CO M O N N r 0) U) N M (O In LO- N- r CN CO (O 0 co V co 0) N- o) 0) V CO (0 N- V 0) M (O N- 00 00 00 N- CO 0O N U) M r- I,- O) (O O N- M N- 0 U) r r r O co U) N co N 0) O NI co N 0) Or N N I-- N 0) � d) V (O 0 (0 O (0VI (.O CO CO N N M V 0 N CO CO O (O co M N N r co co O co r O 00 M O I- N M (O U) O U) (O O N N V M O M NO 0)) N 01 - Eft V3 I- co 0) Co O O O O V N I- U) (0 O N N- lf) r M V 00 N.: M to O -4-- .- I- (O 0) N N co N N ,r- 0 O Eft (0 O N- CN O U) Cs) N- M N N 0) r r co CO (0 CO c O_ ER 00 CO O O 0 V M V O M 00 N O I- 0) I� (O 0) V3 N V 0) (0 0 -4- 0 O 00 N N (O O co - co co 00 ,r- ,r - NI N V3 M 0) V N- 0 0 N 0) N N- 0) V co N O 0) O N 0 u, N N 0000 (M0 0) N— O O O I,- O M O V N 00 N I-- 0) 0) N M O 0) O I- N N N M O Eft U) (30)) V O V N N N M V 00 O V lO O I- 00 V3 V V U) ((0 0) V N N 00 (O V co- O O N- N U) I- (3) ui ,r - N. r V3 (0 O lf) U) CO (O d) r — M ui 00 V 00 co 0) ( (O CO (9- 0) V3 0) O V V V 0 U) O U) M CN 0) (O M O N O (O N- r In lf) I� 0) CN - LO O 00 O � 00 Eft co U) M O I- N N N O co 0 O N N N N N- 0 O 0) LO - CV N N I� V CO 0 0) O co co 0 0 CN f) U) (O O CO (0 O U) M (O 0) M M r (0 CO 00 V M 01 d) d) N N V O 0) U) V (O O o0 co r O V N- co I- (O V (0 N O (NO (O CO O CO V O 0) U) M O 00 M I- V M (--M V N- CO M N- (0 V N N O co r O) O CO N d) M to to (O r 0) (0 N .- N N 00 co r O U) U) u, co co 0) O O d) O U) 00 00 V z co co LO CO N- O N- V LO (O N N- N- M CO N 0O lO O O — N CO z O N N V M CO lO M I. 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N a) a) N U 'U .2 E t N co U N > U > N wU) - Q (6 Cr) Q 7 C0 s w 73 U 7 N w Uc cU0a) 113 N N O co W N dQ O i U tltlN>, 0-) Oc0N a) a) m N CO Nn 0 E U ° a) e ulaT 73 N A c y (i) c m w mm o EuEQ ac 'OD m 6 O o (0 W (6 L wwt O c >, >, >, a(n N O) .- -0 W O cU—— U c. O c -Ne w O R c c (i) O .rn i./ &_ N (6 63 ..0-.Y D ._nnU U O d N0 p CO mm• o o— m oE 03 >() D 03 .aa`)NQYQuoa� CL 0 E a) a) c U o ai 't 433 o - a• ucaQC o.o m o ca) o �1 o f Q� ai Lu s.o oQ 3 d LL )CDMMmmMH UMWM0QM)J W a a U CO U) N/A - not available Page 428 of 486 City of Waterloo, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2016 Federal Grantor/Pass-Through Grantor/Program Title Pass -Through Federal Amount Entity Identifying CFDA Provided to Federal Number Number Subrecipients Expenditures Department of Commerce Direct: Economic Adjustment Assistance: Disaster Recovery 5-79-05007 11.307 $ - $ 3,050 Department of Housing and Urban Development Direct: Community Development Block Grants/Entitlement Grants HOME Investments Partnerships Program Title 1, VA -HUD Independent Agencies Appropriations Act for FY 2008, PL 110-161 B -15 -MC -190008 14.218 M -15 -DC -190206 14.239 B -08 -SP -IA -0568 14.251 108,331 167,814 1,432,549 552,036 71,566 Fair Housing Assistance Program -State and Local FF207k0270M 14.401 - 2,608 Fair Housing Assistance Program -State and Local FF207K137014 14.401 - 13,246 Subtotal - 15,854 Public and Indian Housing IA050001043 14.850 - 156,371 Public and Indian Housing IA05003 14.850 - 86,364 Subtotal - 242,735 Section 8 Housing Choice Vouchers IA05VO+CE 14.871 - 4,924,155 Public Housing Capital Fund Public Housing Capital Fund Subtotal Total direct IA05P05050114 14.872 IA05P05050115 14.872 21,395 21,047 42,442 276,145 7,281,337 Indirect: Pass Through Iowa Department of Economic Development: Community Development Block Grants/State's Program 08-DRH-011 14.228 12,378 08-DRH-211 14.228 2,286,299 2,521,704 Disaster Recovery Infrastructure 08 -DRI -078 14.228 - 813,758 08 -DRI -277 14.228 2,230,421 Total indirect 2,286,299 5,578,261 Total Department of Housing and Urban Development 2,562,444 12,859,598 Department of Interior Indirect: Pass Through Sios and Smokestacks: National Heritage Area Federal Financial Assistance 15.939 - 500 Department of Justice Direct: Bulletproof Vest Partnership Program N/A 16.607 - 7,525 Edward Byrne Memorial Justice Assistance Grant Program 2012 -DJ -BK -0617 16.738 - 23,531 Edward Byrne Memorial Justice Assistance Grant Program 2013 -DJ -BK -0604 16.738 - 16,492 Edward Byrne Memorial Justice Assistance Grant Program 2013 -DJ -BK -0217 16.738 - 11,034 Edward Byrne Memorial Justice Assistance Grant Program 2013 -DJ -BK -0713 16.738 - 1,408 Subtotal - 52,465 Total direct - 59,990 Indirect: Pass Through Crime Victims Assistance Division, Federal Violence Against Women Act Contract Pass Through Governor's Office of Drug Control Policy, Public Safety Partnership and Community Policing Grants Edward Byrne Memorial Justice Assistance Grant Program Total indirect Total Department of Justice VW -16 -92 -CJ 16.588 - 35,113 14-HotSpots-Enforcement-02 16.710 4,406 11 -JAG -58456 16.738 (Continued) 144 140,848 15,587 211,750 145,254 262,450 145,254 322,440 Page 429 of 486 City of Waterloo, Iowa Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016 Federal Grantor/Pass-Through Grantor/Program Title Pass -Through Entity Identifying Number Federal CFDA Number Amount Provided to Subrecipients Federal Expenditures Department of Transportation Direct: Federal Aviation Administration: Airport Improvement Program Total direct Indirect: Federal Highway Administration Pass Through Iowa Department of Transportation: Highway Planning and Construction Subtotal 20.205 National Highway Traffic Safety Administration Pass Through Iowa Department of Public Safety Governor's Traffic National Priority Safety Programs Subtotal Total indirect Total Department of Transportation U.S. Equal Employment Opportunity Commission Direct: Employment Discrimination Title VII of the Civil Rights Act of 1964 Employment Discrimination Title VII of the Civil Rights Act of 1964 Total U.S. Equal Employment Opportunity Commission National Foundation on the Arts and the Humanities Indirect, National Endowment for the Humanities Pass Through Iowa Arts Council Promotion of the Humanities Federal/State Partnership Environmental Protection Agency Direct: Brownfield Assessment & Cleanup Cooperative Agreements Brownfield Assessment & Cleanup Cooperative Agreements Total Environmental Protection Agency Department of Homeland Security Indirect: Pass Through Iowa Homeland Security and Emergency Management Division: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Staffing for Adequate Fire & Emergency Response (SAFER) Total Department of Homeland Security Total Expenditures of Federal Awards See Notes to Schedule of Expenditures of Federal Awards. 3-19-0094-43 3-19-0094-44 N HSX-63-6(69)--3H-07 STP -U-8155(711)--70-07 STP -U-8155(714)--70-07 STP -E -8155(723)--8V-07 SRTS-U-8155(728)--8U-07 STP -U -8155(729)--8U-07 STP -U-8155(731)--70-07 TAP -U-8155(741)--81--07 STP -U-8155(744)--70-07 20.106 20.106 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 PAP-15-405d-M6OT, Task 57 20.616 PAP-16-405d-M6OT, Task 48 20.616 EECCN130125FFY13 30.001 EECCN130125FFY14 30.001 OSP 1420 FY15 BF -97731101-0 BF -97731201-0 45.129 66.818 66.818 013-82425-00 DR 4187 97.036 EMW-2014-FH-00136 97.083 145 1,012 1,004,112 1,005,124 4,587 16,974 636 66,093 64,860 75,521 1,488,689 22,861 33,671 1,773,892 15,748 40,002 55,750 1,829,642 2,834,766 15,072 22,086 37,158 17,027 1,188 522 1,710 8,250 51,735 59,985 $ 2,707,698 $ 16,136,234 Page 430 of 486 City of Waterloo, Iowa Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2016 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Waterloo, Iowa (the City). The schedule of expenditures of federal awards does not include the federal grant activity of the City's discretely presented component units. All federal awards received directly from federal agencies, as well as federal awards passed through other governmental agencies are included in this schedule. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements. Program expenditures include only amounts subject to reimbursements from the grantor agency or program income; thus, they are net of local matching. Note 2. Significant Accounting Policies Expenditures reported on the schedule are reported on the accrual basis of accounting whereas expenditures/expenses are recognized in the accounting period in which the cost is incurred. Such expenditures are recognized following the cost principles contained in OMB Circular A-87 or Uniform Guidance, as appropriate, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. Note 4. Total Expenditures by Program The total expenditures for the Edward Byrne Memorial Justice Assistance Grant Program, CFDA No. 16.738 is $264,215. Note 5. Indirect Cost Rate The City has elected not to use the 10 percent deminimis indirect cost rate allowed under the Uniform Guidance. 146 Page 431 of 486 City of Waterloo, Iowa Summary Schedule of Prior Audit Findings Year Ended June 30, 2016 Finding Corrective Action Plan Status or Other Explanation Other Findings Related to Required Statutory Reporting 15 -IV -H The Grants, Special Revenue Fund, Community Development Block Grant, Special Revenue Fund, Federal Aviation and Capital Improvements, Capital Projects Fund had deficit fund balances as of June 30, 2015. 15 -IV -J The City did not amend the airport ordinance to repeal the positive cash balance requirement. Through June 30, 2015, the accumulative cash deficit totaled $580,771. 147 Not corrected See corrective action plan at 16 -IV -H. Not corrected See corrective action plan at 16 -IV -J. Page 432 of 486 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor's Report To the Honorable Mayor and Members of City Council City of Waterloo, Iowa Waterloo, Iowa We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Waterloo, Iowa, (the City) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated January 30, 2017. As explained in Note 22 to the basic financial statements, the Waterloo Water Works adopted GASB Statement Nos. 68 and 71 which restated beginning net position, net pension liability and deferred outflow of resources. Our report includes a reference to other auditors who audited the financial statements of the Waterloo Water Works as of and for the year ended December 31, 2015 and the Waterloo Convention & Visitors Bureau, Inc. as of and for the year ended June 30, 2016, both discretely presented component units, as described in our report on the City's financial statements. This report does not include the results of the other auditor's testing of internal control over financial reporting or compliance and other matters that are reported separately by those auditors. The financial statements of Waterloo Convention & Visitors Bureau, Inc. were not audited in accordance with Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. THE POWER OF BEING UNDERSTOOD AUDIT 1 TAX [ CONSULTING 148 RSM US LLP is the as. member firm of RSM International. a global network of independent audit tax, and consulting firms. Visit rsmus.cam/aboutus for more information regarcun .'ag_e..4,33 of 486 RSM international. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a deficiency in internal control in the accompanying schedule of findings and questioned costs as item 2016-001 that we consider to be a significant deficiency. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. However, we noted immaterial instances of noncompliance or other matters that are described in Part IV of the accompanying schedule of findings and questioned costs. Comments involving statutory or other legal matters about the City's operations for the year ended June 30, 2016 are based exclusively on the knowledge obtained from procedures during our audit of the basic financial statements of the City. 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 interpretation of those statues. The City's Response to Findings The City's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the City's responses and, accordingly, we express no opinion on them. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. s1-1 vs 12? Davenport, Iowa January 30, 2017 149 Page 434 of 486 Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance Independent Auditor's Report To the Honorable Mayor and Members of the City Council City of Waterloo, Iowa Waterloo, Iowa Report on Compliance for the Major Federal Program We have audited the City of Waterloo, Iowa's (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2016. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Scope The City's basic financial statements include the operations of the Waterloo Water Works and the Waterloo Convention & Visitors Bureau, Inc. discretely presented component units which did not have a single audit performed for their fiscal years ended December 31, 2015 and June 30, 2016, respectively. Our audit, described below, does not include the operations of the Waterloo Water Works or the Waterloo Convention and Visitors Bureau, Inc. because these discretely presented component units were audited by other auditors. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City of Waterloo, Iowa's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City's compliance. THE POWER OF BEING UNDERSTOOD AUDIT 1 TAX [ CONSULTING 150 RSM US LLP is the as. member firm of RSM International. a global network of independent audit tax, and consulting firms. Visit rsmus.cam/aboutus for more information regarcun .'ag_e..435 of 486 RSM international. Opinion on each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Uniform Guidance. Accordingly, this report is not suitable for any other purpose. s1-1 vs 12? Davenport, Iowa January 30, 2017 151 Page 436 of 486 City of Waterloo, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2016 I. Summary of the Independent Auditor's Results Financial Statements Type of auditors report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? Significant deficiencies identified? Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: Material weakness(es) identified? Significant deficiencies identified? Type of auditors report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516(a)? Identification of major programs: CFDA Number Name of Federal Program or Cluster 14.218 Community Development Block Grants 20.106 Airport Improvement Program 20.205 Highway Planning & Construction Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? (Continued) 152 ❑ Yes ❑ No ❑.r Yes ❑ None Reported ❑ Yes ❑ No ❑ Yes ❑ No ❑ Yes ❑ None Reported ❑ Yes ❑ No ❑ Yes ❑ No Page 437 of 486 City of Waterloo, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2016 II. Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance With Generally Accepted Government Auditing Standards A. Significant Deficiency in Internal Control 2016-001 Finding: The City did not have adequate procedures in place across all departments to ensure that retainage payable is complete and accurate at year-end. Condition: One of 27 subsequent disbursements tested within the aggregate non -major funds had retainage of $216,402 that was not properly accrued as retainage payable at year-end. The related project was approved for the CDBG Disaster Relief grant; therefore, the related federal receivable and expenditures had not been properly recorded either. An adjustment was subsequently made by the City to properly include this retainage in the financial statements and schedule of expenditures of federal awards. Context: Pervasive to all expenditure accounts and to retainage payable balances. Effect: Potential misstatement of retainage payable balances and related expenditures. Cause: The project was being monitored by a department that is not familiar with the requirements of recording retainage at year-end. Recommendation: We recommend the City implement procedures across all departments to ensure all retainage has been properly accounted for and recorded in the City's financial statement as of year-end. Corrective Action Plan: The City will implement procedures to more closely monitor contracts with retainage for all City departments. B. Compliance findings None reported. III. Findings and Questioned Costs for Federal Awards A, Internal Control None reported. B. Compliance Findings None reported. IV. Findings Related to Statutory Reporting 16 -IV -A Certified Budget Expenditure/expenses during the year ended June 30, 2016, did not exceed the budgeted amounts. 16 -IV -B Questionable Disbursements No questionable disbursements were noted. 16 -IV -C Travel Expenses No expenditures of City money for travel expenses of spouses of City officials or employees were noted. 16 -IV -D Business Transactions No material business transactions between the City and City officials or employees were noted. 153 Page 438 of 486 City of Waterloo, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2016 16 -IV -E Bond Coverage Surety bond coverage of City officials and employees is in accordance with statutory provisions. 16 -IV -F Council Minutes and Resolutions No instances of noncompliance with the council minutes and resolutions. 16 -IV -G Deposits and Investments No instances of noncompliance with the deposit and investment provisions of Chapter 12B and 12C of the Code of Iowa and the City's investment policy were noted. 16 -IV -H Deficit Balances Finding: The following funds had deficit balances as of June 30, 2016: Grants, Special Revenue Community Development Block Grant, Special Revenue Federal Aviation Agency Projects, Special Revenue Capital Improvements, Capital Projects $ 1,882,864 215,967 380,200 1,815,963 Recommendations: The City should investigate alternatives to eliminate these deficits in order to return the funds to sound financial positions. Response and Corrective Action Plan: The Grants, Special Revenue Fund reported a deficit fund balance due to timing delays in receiving grant reimbursements. Most grants that the City receives require the City request and receive reimbursement from the granting agencies only after the City has expended the funds. This creates a temporary deficit in the funds. Because the City's books are maintained on an accrual basis, expenses are recorded for invoices that may not be paid until after year-end. The City can not request reimbursements until after the invoices are paid, creating temporary timing deficits. The City continues to investigate alternatives for shortening the turnaround time between spending grant funds and receiving reimbursements where possible. 16 -IV -I Revenue Bonds No instances of noncompliance noted regarding the provisions of the revenue bond indentures. Information required by sewer revenue bond resolutions is reported in the statistical section. 16 -IV -J Airport Ordinance Finding: The City adopted ordinance number 4400 on December 13, 1999 which established an Airport Board of Directors and requires the Board to "Maintain a positive cash balance at all times in airport operations." Airport operations are accounted for in the General Fund (Fund 010), Airport Commission Department (Department number 29), Airport Administration Activity (Activity number 7700). Through June 30, 2016, the accumulative cash deficit totaled $546,618. Recommendations: To ensure the City is in compliance with its own ordinances, we recommend that the City either provide airport operations with additional cash resources to enable it to achieve and maintain a positive cash balance or amend the ordinance to repeal the positive cash balance requirement. Response and Corrective Action Plan: It is the City's intent at this time to continue to require the positive cash balance, although City management realizes that the Airport may not be able to maintain that balance due to current economic conditions. 154 Page 439 of 486 City of Waterloo, Iowa Corrective Action Plan Year Ended June 30, 2016 Current Anticipated Date Number Comment Corrective Action Plan of Completion Contact Person Findings Related to the Financial Statement Audit 2016-001 The City does not have adequate procedures across all departments in place to ensure that retainage payable is complete and accurate at year-end. Other Findings Related to Required Statutory Reporting 16 -IV -H The Grants, Special Revenue Fund, Community Development Block Grant, Special Revenue Fund, Federal Aviation Agency Projects, Special Revenue Fund and Capital Improvements, Capital Projects Fund had deficit fund balances as of June 30, 2016. 16 -IV -J The City did not amend the airport ordinance to repeal the positive cash balance requirement. Through June 30, 2016, the accumulative cash deficit totaled $546,618. See corrective action plan at 2016-001 See corrective action plan at 16 -IV -H. See corrective action plan at 16 -IV -J. 155 June 2017 June 2017 June 2017 Chief Financial Officer Chief Financial Officer Chief Financial Officer Page 440 of 486 Page 441 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C APPENDIX B DESCRIBING BOOK -ENTRY -ONLY ISSUANCE 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds (the "Securities"). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully - registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. 2. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. B-1 Page 442 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Securities to any Tender/Remarketing Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. The City may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. B-2 Page 443 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C APPENDIX C DRAFT FORMS OF OPINIONS OF BOND COUNSEL AHLERS C❑❑NEY ATTORNEY. DRAFT Ahlers & Cooney, P.C. Attorneys at Law 100 Court Avenue, Suite 600 Des Moines, Iowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Waterloo, State of Iowa (the "Issuer"), relating to the issuance of General Obligation Bonds, Series 2017A, by said City, dated June 20, 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the 'Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent the necessary funds are not provided from other sources. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. Wishard & Baily - 1088, Guernsey & Baily -1893, Baily & Stipp -1901, Stipp, Perry, Bannister & Starzinger -1914, Bannister, Carpenter, Ahlers & Cooney - 1950, Ahiers, Cooney, Dorweiler, Allbee, Haynie & Smith - 1974, Ahiers, Gooney, Dorweiier, Haynie, SmEth & Allbee, P.C. - 1990 C-1 Page 444 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C DRAFT City of Waterloo, State of Iowa $ General Obligation Bonds, Series 2017A Page 2 The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. 01359093-1111310-119 Respectfully submitted, C-2 Page 445 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C IIHLERS COONEY ATTO NEy5 DRAFT Ahlers & Cooney, P.C. Attorneys at Law 100 Court Avenue, Suite 600 Des Moines, Iowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Waterloo, State of Iowa (the "Issuer"), relating to the issuance of Taxable General Obligation Bonds, Series 2017B, by said City, dated June 20, 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have retied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: I. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2, The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due an the Bonds to the extent the necessary funds are not provided from other sources. 4. The interest on the Bonds is not excluded from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended. THE HOLDERS OF THE BONDS SHOULD TREAT THE INTEREST THEREON AS SUBJECT TO FEDERAL INCOME TAXATION. We express no other opinion regarding any other federal or state income tax consequences caused by the receipt or accrual of interest on the Bonds. We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. Wishard & Baily — 1888, Guernsey & Baily —1893, Baily & Stipp — 1901, Stipp, Perry, Bannister & Starzinger — 1914, Bannister, Carpenter, Ahlers & Cooney — 1950, Ahlers, Cooney, Dorweiler, Allbee, Haynie & Smith —1974, Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee, P.C. — 1990 C-3 Page 446 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C DRAFT City of Waterloo, State of Iowa $ Taxable General Obligation Bonds, Series 2017B Page 2 This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. 01359095-1111310-120 Respectfully submitted, C-4 Page 447 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C AHLERS COONEY ATTORNEYS DRAFT Ahlers & Cooney, P.C. Attorneys at Law 100 Court Avenue, Suite 600 Des Moines, Iowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Waterloo, State of Iowa (the "Issuer"), relating to the issuance of Taxable General Obligation Urban Renewal Bonds, Series 2017C, by said City, dated June 20, 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent the necessary funds are not provided from other sources. 4. The interest on the Bonds is not excluded from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended. THE HOLDERS OF THE BONDS SHOULD TREAT THE INTEREST THEREON AS SUBJECT TO FEDERAL INCOME TAXATION. We express no other opinion regarding any other federal or state income tax consequences caused by the receipt or accrual of interest on the Bonds. 5. Interest on the Bonds is exempt from the taxes imposed by Division 11 (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, as amended (the "Iowa Code"); it should be noted, however, that interest on the Bonds is required to be included in adjusted current earnings to be used in computing the "state alternative minimum taxable income" of corporations and financial institutions for purposes of Sections 422.33 and 422.60 of the Iowa Code. Interest on the Bonds is subject to the taxes imposed by Division V (Taxation of Financial Institutions) of Chapter 422 of the Iowa Code. We express no opinion regarding other State tax consequences arising with respect to the Bonds. Wishard & Baily -1888, Guernsey & Baily - 1893, Baily & Stipp - 1901, Stipp, Perry, Bannister & Starzinger -1914, Bannister, Carpenter, Ahlers & Cooney- 1950, Ahlers, Cooney, Donweiler, Alhbee, Haynie & Smith -1974, Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee. P_C. - 1990 C-5 Page 448 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C DRAFT City of Waterloo, State of Iowa $ Taxable General Obligation Urban Renewal Bonds, Series 20170 Page 2 We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. 01359097-1\11310-121 Respectfully submitted, C-6 Page 449 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C APPENDIX D DRAFT CONTINUING DISCLOSURE CERTIFICATE CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Waterloo, State of Iowa (the "Issuer"), in connection with the issuance of $9,245,000* General Obligation Bonds, Series 2017A, $3,600,000* Taxable General Obligation Bonds, Series 2017B, and $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C (the "Bonds") dated June 20, 2017. The Bonds are being issued pursuant to a Resolution of the Issuer approved on June 5, 2017 (the "Resolution"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2 -12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Infori,ration" shall mean financial information or operating data of the type included in the final Official Statement, provided at least annually by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" shall mean a day other than a Saturday or a Sunday or a day on which banks in Iowa are authorized or required by law to close. "Dissemination Agent" shall mean the issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders"' shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1300 I Street NW, Suite 1000, Washington, DC 20005. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA" (emma.msrb.org). "Official Statement" shall mean the Issuer's Official Statement for the Bonds, dated , 2017. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. D-1 Page 450 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Iowa. Section 3. Provision of Annual Financial Information. a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred seventy (270) days after the end of the Issuer's fiscal year (presently June 30th), commencing with information for the 2016/2017 fiscal year, provide to the National Repository an Annual Financial Information filing consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Financial Information filing must be submitted in such format as is required by the MSRB (currently in "searchable PDF" format). The Annual Financial Information filing may be submitted as a single document or as separate documents comprising a package. The Annual Financial Information filing may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Financial Information filing and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). b) If the Issuer is unable to provide to the National Repository the Annual Financial Information by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A-1, A-2, and A-3. c) The Dissemination Agent shall: i. each year file Annual Financial Information with the National Repository; and ii. (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Financial Information has been filed pursuant to this Disclosure Certificate, stating the date it was filed. Section 4. Content of Annual Financial Information. The Issuer's Annual Financial information filing shall contain or incorporate by reference the following: a) The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time Annual Financial Information is required to be filed pursuant to Section 3(a), the Annual Financial Information filing shall contain unaudited financial statements of the type included in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available. D-2 Page 451 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C b) A table, schedule or other information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the caption "Socioeconomic Information - Retail Sales", "Local Option Sales Tax", "Property Tax Information", "Debt Information", and "Financial Information." Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. a) Pursuant to the provisions of this Section, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than 10 Business Days after the day of the occurrence of the event: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; v. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-1'E13) or other material notices or determinations with respect to the tax-exempt status of the Series Bonds, or material events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Holders of the Bonds, if material; viii. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; ix. Defeasances of the Bonds; x. Release, substitution, or sale of property securing repayment of the Bonds, if material; xi. Rating changes on the Bonds; xii. Bankruptcy, insolvency, receivership or similar event of the Issuer; xiii. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an D-3 Page 452 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material. b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall determine if the occurrence is subject to notice only if material, and if so shall as soon as possible determine if such event would be material under applicable federal securities laws. c) If the Issuer determines that knowledge of the occurrence of a Listed Event is not subject to materiality, or determines such occurrence is subject to materiality and would be material under applicable federal securities laws, the Issuer shall promptly, but not later than 10 Business Days after the occurrence of the event, file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. D-4 Page 453 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Financial Information filing, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Financial Information filing for the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information filing or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. if the Issuer chooses to include any information in any Annual Financial Information filing or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Information filing or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this ikclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be i cessary and appropriate, including seeking mandate or specific performance by court order, to cause the ;suer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and puiu;tive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. D-5 Page 454 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Date: ATTEST: By: day of , 2017. Kelley Felchle, City Clerk CITY OF WATERLOO, STATE OF IOWA By: Quentin M. Hart, Mayor EXHIBIT A-1 NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Waterloo, Iowa. Name of Bond Issue: $9,245,000* General Obligation Bonds, Series 2017A Dated Date of Issue: June 20, 2017 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of , 20_ CITY OF WATERLOO, STATE OF IOWA By: Its: D-6 Page 455 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A $3,600,000* Taxable General Obligation Bonds, Series 2017B $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C EXHIBIT A-2 NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Waterloo, Iowa. Name of Bond Issue: $3,600,000* Taxable General Obligation Bonds, Series 2017B Dated Date of Issue: June 20, 2017 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of , 20_ CITY OF WATERLOO, STATE OF IOWA By: Its: EXHIBIT A-3 NOTIICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of issuer: City of Waterloo, Iowa. Name of Bond Issue: $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Dated Date of Issue: June 20, 2017 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: 01358986-1111310-119 day of , 20 . CITY OF WATERLOO, STATE OF IOWA By: Its: D-7 Page 456 of 486 OFFICIAL BID FORM SERIES 2017A BONDS City of Waterloo 715 Mulberry Street Waterloo, IA 50703 City Council Members: May 17, 2017 Speer Financial, Inc. Facsimile: (319) 291-8628 For the $9,245,000 General Obligation Bonds, Series 2017A (the "Tax -Exempt Bonds"), of the City of Waterloo, Black Hawk County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we will pay you $ (no less than $9,171,040). The Tax -Exempt Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of 1%) for the Tax -Exempt Bonds of each designated maturity. AMOUNTS' AND MATURITIES — JUNE 1 $1,090,000 2018 % $770,000 2023 % $415,000 2028 % 795,000 2019 % 785,000 2024 % 425,000 2029 % 795,000 2020 % 380,000 2025 % 440,000 2030 % 810,000 2021 % 390,000 2026 % 455,000 2031 % 815,000 2022 % 405,000 2027 % 475,000 2032 % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity *Subject to principal adjustment in accordance with the Official Terms of Offering. The Tax -Exempt Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to apply for CUSIP numbers and pay the fee charged by the CUSIP Service Bureau and will accept the Tax -Exempt Bonds with the CUSIP numbers as entered on the Tax -Exempt Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Tax -Exempt Bonds. Alternatively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Tax -Exempt Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Prior to Bid Opening: Certified/Cashier's Check Wire Transfer [1 [1 Within TWO Hours of Bid Opening: Wire Transfer [ Amount: $184,900 Account Manager Information Bidders Option Insurance Underwriter/Bank Address Authorized Rep City State/Zip Direct Phone ( ) FAX Number ( ) E -Mail Address We have purchased insurance from: Name of Insurer (Please fill in) Premium: Maturities: (Check One) [J Years 1 1 All The foregoing bid was accepted and the Tax -Exempt Bonds sold by resolution of the City on May 17, 2017, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. ATTEST: CITY OF WATERLOO BLACK HAWK COUNTY, IOWA City Clerk Mayor NOT PART OF THE BID (Calculation oftrue interest cos Gross Interest $ Less Premium/Plus Discount $ True Interest Cost $ True Interest Rate % TOTAL BOND YEARS AVERAGE LIFE 61,487.07 6.651 Years Page 457 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A Page 1 of 5 OFFICIAL TERMS OF OFFERING $9,245,000* CITY OF WATERLOO Black Hawk County, Iowa General Obligation Bonds, Series 2017A The City of Waterloo, Black Hawk County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www.SpeerAuction.com" for its $9,245,000* General Obligation Bonds, Series 2017A (the "Tax -Exempt Bonds"), on an all or none basis between 10:00 A.M. and 10:30 A.M., C.D.T., Wednesday, May 17, 2017. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). The City will also receive sealed bids for the Tax - Exempt Bonds, on an all or none basis, in City Hall, 715 Mulberry Street, Waterloo, Iowa, until 10:30 A.M., C.D.T Wednesday, May 17, 2017. The City will also receive facsimile bids at (319) 291-8628 or (319) 291-4571 for the Tax - Exempt Bonds, on an all or none basis, until 10:30 A.M., C.D.T., Wednesday, May 17, 2017. Upon receipt, facsimile bids will be sealed and treated as a sealed bids, and along with all other sealed bids will be publicly opened and, together with any electronic bids, read. Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Tax -Exempt Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Tax -Exempt Bonds are general obligations payable as to both principal and interest from ad valorem taxes levied against all taxable property of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The Tax -Exempt Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Tax -Exempt Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Tax -Exempt Bonds shall be paid by check or draft of Bankers Trust Company, Des Moines, Iowa (the "Tax -Exempt Bond Registrar") to the person in whose name such Tax -Exempt Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such Tax -Exempt Bond. The principal of the Tax -Exempt Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Tax -Exempt Bond Registrar in Des Moines, Iowa. Semiannual interest is due June 1 and December 1 of each year, commencing December 1, 2017 and is payable by the "Tax -Exempt Bond Registrar". The Tax -Exempt Bonds are dated the date of delivery (expected to be on or about June 20, 2017). AMOUNTS* AND MATURITIES — JUNE 1 $1,090,000 2018 $770,000 2023 $415,000 2028 795,000 2019 785,000 2024 425,000 2029 795,000 2020 380,000 2025 440,000 2030 810,000 2021 390,000 2026 455,000 2031 815,000 2022 405,000 2027 475,000 2032 Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. *ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER DETERMINATION OF BEST BID. The aggregate principal amount of the Tax -Exempt Bonds, and each scheduled maturity thereof are subject to increase or reduction by the City or its designee after the determination of the Winning Bidder. The City may increase or decrease each maturity in increments of $5,000, but the total amount to be issued will not exceed $ . Interest rates specified by the Winning Bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the City. The dollar amount of the purchase price proposed by the Winning Bidder will be changed if the aggregate principal amount of the Tax -Exempt Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Tax -Exempt Bonds will be made while maintaining, as closely as possible, the Winning Bidder's net compensation, calculated as a percentage of Tax -Exempt Bond principal. The Winning Bidder may not withdraw or modify its bid as a result of any post - bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the Winning Bidder. Page 458 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A Page 2 of 5 The Tax -Exempt Bonds due June 1, 2018 - 2025, inclusive, are non -callable. The Tax -Exempt Bonds due June 1, 2026 - 2032, inclusive, are callable in whole or in part and on any date on or after June 1, 2025, at a price of par and accrued interest. If less than all the Tax -Exempt Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, Inc., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. All -or -none bids must be submitted via the internet address www.SpeerAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Tax -Exempt Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Notice of Sale, Terms of Offering or Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Bidding: Bids may be submitted via facsimile at (319) 291-8628 or (319) 291-4571. Electronic facsimile bids will be sealed and treated as sealed bids. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax numbers prior to the time of sale specified above. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full and complete responsibility for the transmission of such bid. Neither the City nor its agents will assume responsibility for the inability of the bidder to reach the above specified fax number prior to the time of sale. Time of receipt shall be the time recorded by the person receiving the facsimile and shall be conclusive. Page 459 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A Page 3 of 5 Bidding Parameters and Award of the Tax -Exempt Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non -descending order. The differential between the highest rate bid and the lowest rate bid shall not exceed six percent (6%). All bids must be for all of the Tax -Exempt Bonds and must be for not less than $9,171,040. Award of the Tax -Exempt Bonds: The Tax -Exempt Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Tax -Exempt Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Tax -Exempt Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cost, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Tax -Exempt Bonds will be awarded to the bidder complying with the terms of this Official Terms of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Tax -Exempt Bonds are changed, allowing the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Tax -Exempt Bonds will be awarded, if and when such award is made. The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Tax -Exempt Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("SIFMA") will be required to pay SIFMA's standard charge per bond. The winning purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Tax -Exempt Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Tax - Exempt Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Tax -Exempt Bonds on the sale date. The winning purchaser will be required to provide a certificate satisfactory to Bond Counsel and the City at closing confirming the information required by this paragraph. Page 460 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A Page 4 of 5 Good Faith Deposit and Other Matters The winning bidder is required to wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Tax -Exempt Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Tax -Exempt Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38th Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Waterloo, Black Hawk County, Iowa bid for $9,245,000 General Obligation Bonds, Series 2017A If the wire shall arrive in such account prior to the date and time of the sale of the Tax -Exempt Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Tax - Exempt Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Undertaking") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Tax -Exempt Bonds on or before the date of delivery of the Tax -Exempt Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Underwriter's obligation to purchase the Tax -Exempt Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of delivery of the Tax -Exempt Bonds. The Tax -Exempt Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 20, 2017. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Tax -Exempt Bonds will cease. Page 461 of 486 City of Waterloo, Black Hawk County, Iowa $9,245,000* General Obligation Bonds, Series 2017A Page 5 of 5 The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Tax -Exempt Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Tax -Exempt Bonds, as that term is defined in the Rule. By awarding the Tax -Exempt Bonds to any underwriter or underwriting syndicate, the City agrees that, no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to which the Tax -Exempt Bonds are awarded, up to 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Tax -Exempt Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Tax -Exempt Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship with all Participating Underwriters of the Tax -Exempt Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Tax -Exempt Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. The City will, at its expense, deliver the Tax -Exempt Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Tax -Exempt Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Tax -Exempt Bonds are lawful and enforceable obligations of the City in accordance with their terms; (2) the opinion of said attorneys that the interest on the Tax -Exempt Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the Tax - Exempt Bonds; and (3) a no litigation certificate by the City. The City intends to designate the Tax -Exempt Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Tax -Exempt Bonds. Copies of such Official Statement or additional information may be obtained from Ms. Kelley Felchle, City Clerk, City of Waterloo, 715 Mulberry Street, Waterloo, Iowa, 50703 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). /s/ KELLEY FELCHLE City Clerk CITY OF WATERLOO Black Hawk County, Iowa Page 462 of 486 OFFICIAL BID FORM SERIES 2017B BONDS City of Waterloo 715 Mulberry Street Waterloo, IA 50703 City Council Members: May 17, 2017 Speer Financial, Inc. Facsimile: (319) 291-8628 For the $3,600,000 Taxable General Obligation Bonds, Series 2017B (the "Series 2017B Bonds"), of the City of Waterloo, Black Hawk County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we will pay you $ (no less than $3,571,200). The Series 2017B Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of 1%) for the Bonds of each designated maturity. AMOUNTS' AND MATURITIES — JUNE 1 $210,000 2018 % $225,000 2023 % $255,000 2028 % 210,000 2019 % 230,000 2024 % 265,000 2029 % 210,000 2020 % 235,000 2025 % 270,000 2030 % 215,000 2021 % 240,000 2026 % 280,000 2031 % 220,000 2022 % 245,000 2027 % 290,000 2032 % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity *Subject to principal adjustment in accordance with the Official Terms of Offering. The Series 2017B Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to apply for CUSIP numbers and pay the fee charged by the CUSIP Service Bureau and will accept the Bonds with the CUSIP numbers as entered on the Series 2017B Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Series 2017B Bonds. Altematively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Series 2017B Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Prior to Bid Opening: Certified/Cashier's Check Wire Transfer [1 [1 Within TWO Hours of Bid Opening: Wire Transfer [ Amount: $72,000 Account Manager Information Bidders Option Insurance Underwriter/Bank Address Authorized Rep City State/Zip Direct Phone ( ) FAX Number ( ) E -Mail Address We have purchased insurance from: Name of Insurer (Please fill in) Premium: Maturities: (Check One) [J Years 1 1 All The foregoing bid was accepted and the Series 2017B Bonds sold by resolution of the City on May 17, 2017, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. ATTEST: CITY OF WATERLOO BLACK HAWK COUNTY, IOWA City Clerk Mayor NOT PART OF THE BID (Calculation oftrue interest cos Gross Interest $ Less Premium/Plus Discount $ True Interest Cost $ True Interest Rate % TOTAL BOND YEARS AVERAGE LIFE 30,245.00 8.401 Years Page 463 of 486 City of Waterloo, Black Hawk County, Iowa $3,600,000* Taxable General Obligation Bonds, Series 2017B Page 1 of 5 OFFICIAL TERMS OF OFFERING $3,600,000* CITY OF WATERLOO Black Hawk County, Iowa Taxable General Obligation Bonds, Series 2017B The City of Waterloo, Black Hawk County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www. SpeerAuction.com" for its $3,600,000* Taxable General Obligation Bonds, Series 2017B (the "Series 2017B Bonds"), on an all or none basis between 10:30 A.M. and 11:00 A.M., C.D.T., Wednesday, May 17, 2017. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). The City will also receive sealed bids for the Series 2017B Bonds, on an all or none basis, in City Hall, 715 Mulberry Street, Waterloo, Iowa, until 11:00 A.M., C.D.T Wednesday, May 17, 2017. The City will also receive facsimile bids at (319) 291-8628 or (319) 291-4571 for the Series 2017B Bonds, on an all or none basis, until 11:00 A.M., C.D.T., Wednesday, May 17, 2017. Upon receipt, facsimile bids will be sealed and treated as sealed bids, and along with all other sealed bids will be publicly opened and, together with any electronic bids, read. Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Series 2017B Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Series 2017B Bonds are general obligations payable as to both principal and interest from ad valorem taxes levied against all taxable property of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The Series 2017B Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Series 2017B Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Series 2017B Bonds shall be paid by check or draft of the Bankers Trust Company, Des Moines, Iowa (the "Series 2017B Bond Registrar")to the person in whose name such Series 2017B Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such Series 2017B Bond. The principal of the Series 2017B Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Series 2017B Bond Registrar in Des Moines, Iowa. Semiannual interest is due June 1 and December 1 of each year, commencing December 1, 2017 and is payable by the Series 2017B Bond Registrar. The Series 2017B Bonds are dated the date of delivery (expected to be on or about June 20, 2017). AMOUNTS* AND MATURITIES — JUNE 1 $210,000 2018 $225,000 2023 $255,000 2028 210,000 2019 230,000 2024 265,000 2029 210,000 2020 235,000 2025 270,000 2030 215,000 2021 240,000 2026 280,000 2031 220,000 2022 245,000 2027 290,000 2032 Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. *ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER DETERMINATION OF BEST BID. The aggregate principal amount of the Series 2017B Bonds, and each scheduled maturity thereof are subject to increase or reduction by the City or its designee after the determination of the Winning Bidder. The City may increase or decrease each maturity in increments of $5,000, but the total amount to be issued will not exceed $3,600,000. Interest rates specified by the Winning Bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the City. The dollar amount of the purchase price proposed by the Winning Bidder will be changed if the aggregate principal amount of the Series 2017B Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Series 2017B Bonds will be made while maintaining, as closely as possible, the Winning Bidder's net compensation, calculated as a percentage of Series 2017B Bond principal. The Winning Bidder may not withdraw or modify its bid as a result of any post - bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the Winning Bidder. Page 464 of 486 City of Waterloo, Black Hawk County, Iowa $3,600,000* Taxable General Obligation Bonds, Series 2017B Page 2 of 5 The Series 2017B Bonds due June 1, 2018 - 2025, inclusive, are non -callable. The Series 2017B Bonds due June 1, 2026 - 2032, inclusive, are callable in whole or in part and on any date on or after June 1, 2025, at a price of par and accrued interest. If less than all the Series 2017B Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, Inc., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. All -or -none bids must be submitted via the internet address www.SpeerAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Series 2017B Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Notice of Sale, Terms of Offering or Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Bidding: Bids may be submitted via facsimile at (319) 291-8628 or (319) 291-4571. Electronic facsimile bids will be sealed and treated as sealed bids. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax numbers prior to the time of sale specified above. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full and complete responsibility for the transmission of such bid. Neither the City nor its agents will assume responsibility for the inability of the bidder to reach the above specified fax number prior to the time of sale. Time of receipt shall be the time recorded by the person receiving the facsimile and shall be conclusive. Page 465 of 486 City of Waterloo, Black Hawk County, Iowa $3,600,000* Taxable General Obligation Bonds, Series 2017B Page 3 of 5 Bidding Parameters and Award of the Series 2017B Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non -descending order. The differential between the highest rate bid and the lowest rate bid shall not exceed six percent (6%). All bids must be for all of the Series 2017B Bonds and must be for not less than $3,571,200. Award of the Series 2017B Bonds: The Series 2017B Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Series 2017B Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Series 2017B Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cost, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Series 2017B Bonds will be awarded to the bidder complying with the terms of this Official Terms of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Series 2017B Bonds are changed, allowing the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Series 2017B Bonds will be awarded, if and when such award is made. The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Series 2017B Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("SIFMA") will be required to pay SIFMA's standard charge per bond. The winning purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Series 2017B Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Series 2017B Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Series 2017B Bonds on the sale date. The winning purchaser will be required to provide a certificate satisfactory to Bond Counsel and the City at closing confirming the information required by this paragraph. Page 466 of 486 City of Waterloo, Black Hawk County, Iowa $3,600,000* Taxable General Obligation Bonds, Series 2017B Page 4 of 5 Good Faith Deposit and Other Matters The winning bidder is required to wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Series 2017B Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Series 2017B Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38th Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Waterloo, Black Hawk County, Iowa bid for $3,600,000 Taxable General Obligation Bonds, Series 2017B If the wire shall arrive in such account prior to the date and time of the sale of the Series 2017B Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Series 2017B Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Undertaking") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Series 2017B Bonds on or before the date of delivery of the Series 2017B Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Underwriter's obligation to purchase the Series 2017B Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of delivery of the Series 2017B Bonds. The Series 2017B Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 20, 2017. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Series 2017B Bonds will cease. Page 467 of 486 City of Waterloo, Black Hawk County, Iowa $3,600,000* Taxable General Obligation Bonds, Series 2017B Page 5 of 5 The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Series 2017B Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Series 2017B Bonds, as that term is defined in the Rule. By awarding the Series 2017B Bonds to any underwriter or underwriting syndicate, the City agrees that, no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to which the Series 2017B Bonds are awarded, up to 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Series 2017B Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Series 2017B Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship with all Participating Underwriters of the Series 2017B Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Series 2017B Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. The City will, at its expense, deliver the Series 2017B Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Series 2017B Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Series 2017B Bonds are lawful and enforceable obligations of the City in accordance with their terms; and (2) a no litigation certificate by the City. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Series 2017B Bonds. Copies of such Official Statement or additional information may be obtained from Ms. Kelley Felchle, City Clerk, City of Waterloo, 715 Mulberry Street, Waterloo, Iowa, 50703 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). /s/ KELLEY FELCHLE City Clerk CITY OF WATERLOO Black Hawk County, Iowa Page 468 of 486 OFFICIAL BID FORM - SERIES 2017C BONDS City of Waterloo 715 Mulberry Street Waterloo, IA 50703 May 17, 2017 Speer Financial, Inc. Facsimile: (319) 291-8628 City Council Members: For the $8,100,000 Taxable General Obligation Urban Renewal Bonds, Series 2017C (the "Tax -Exempt Bonds"), of the City of Waterloo, Black Hawk County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we will pay you $ (no less than $8,035,200). The Series 2017C Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of 1%) for the Bonds of each designated maturity. Semiannual principal and interest is due December 1 and June 1 of each year commencing December 1, 2017. AMOUNTS* AND MATURITIES Due Due $180,000 12/1/17 % $165,000 6/1/18 165,000 12/1/18 % 170,000 6/1/19 170,000 12/1/19 % 175,000 6/1/20 175,000 12/1/20 % 175,000 6/1/21 180,000 12/1/21 % 180,000 6/1/22 185,000 12/1/22 % 185,000 6/1/23 190,000 12/1/23 % 195,000 6/1/24 195,000 12/1/24 % 200,000 6/1/25 205,000 12/1/25 % 205,000 6/1/26 210,000 12/1/26 % 215,000 6/1/27 220,000 12/1/27 % 220,000 6/1/28 225,000 12/1/28 % 230,000 6/1/29 235,000 12/1/29 % 240,000 6/1/30 245,000 12/1/30 % 250,000 6/1/31 255,000 12/1/31 % 260,000 6/1/32 265,000 12/1/32 % 275,000 6/1/33 280,000 12/1/33 % 285,000 6/1/34 290,000 12/1/34 % 300,000 6/1/35 305,000 12/1/35 % Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Ok Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity *Subject to principal adjustment in accordance with the Official Terms of Offering. The Series 2017C Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to apply for CUSIP numbers and pay the fee charged by the CUSIP Service Bureau and will accept the Bonds with the CUSIP numbers as entered on the Series 2017C Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Series 2017C Bonds. Alternatively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Series 2017C Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Prior to Bid Opening: Certified/Cashier's Check [ 1 Wire Transfer [ 1 Within TWO Hours of Bid Opening: Wire Transfer [ 1 Amount: $162,000 Account Manager Information Bidders Option Insurance Underwriter/Bank Address Authorized Rep City State/Zip Direct Phone ( ) FAX Number ( ) E -Mail Address We have purchased insurance from: Name of Insurer (Please fill in) Premium: Maturities: (Check One) [J Years 1 1 All The foregoing bid was accepted and the Series 2017C Bonds sold by resolution of the City on May 17, 2017, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. ATTEST: CITY OF WATERLOO BLACK HAWK COUNTY, IOWA City Clerk Mayor NOT PART OF THE BID (Calculation oftrue interest cos Gross Interest $ Less Premium/Plus Discount $ True Interest Cost $ True Interest Rate % TOTAL BOND YEARS AVERAGE LIFE 84,540.00 10.437 Years Page 469 of 486 City of Waterloo, Black Hawk County, Iowa $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Page 1 of 5 OFFICIAL TERMS OF OFFERING $8,100,000* CITY OF WATERLOO Black Hawk County, Iowa Taxable General Obligation Urban Renewal Bonds, Series 2017C The City of Waterloo, Black Hawk County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www.SpeerAuction.com" for its $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C (the "Series 2017C Bonds"), on an all or none basis between 11:00 A.M. and 11:30 A.M., C.D.T., Wednesday, May 17, 2017. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). The City will also receive sealed bids for the Series 2017C Bonds, on an all or none basis, in City Hall, 715 Mulberry Street, Waterloo, Iowa, until 11:30 A.M., C.D.T Wednesday, May 17, 2017. The City will also receive facsimile bids at (319) 291-8628 or (319) 291-4571 for the Series 2017C Bonds, on an all or none basis, until 11:30 A.M., C.D.T., Wednesday, May 17, 2017. Upon receipt, facsimile bids will be sealed and treated as sealed bids, and along with all other sealed bids will be publicly opened and, together with any electronic bids, read. Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Series 2017C Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Series 2017C Bonds are general obligations payable as to both principal and interest from ad valorem taxes levied against all taxable property of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The Series 2017C Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Series 2017C Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Series 2017C Bonds shall be paid by check or draft of Bankers Trust Company, Des Moines, Iowa (the "Series 2017C Bond Registrar")to the person in whose name such Series 2017C Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such Series 2017C Bond. The principal of the Series 2017C Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Series 2017C Bond Registrar in Des Moines, Iowa. Semiannual interest is due June 1 and December 1 of each year, commencing December 1, 2017 and is payable by the Series 2017C Bond Registrar. The Series 2017C Bonds are dated the date of delivery (expected to be on or about June 20, 2017). Page 470 of 486 City of Waterloo, Black Hawk County, Iowa $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Page 2 of 5 AMOUNTS* AND MATURITIES Due Due $180,000 12/1/17 % $165,000 6/1/18 % 165,000 12/1/18 % 170,000 6/1/19 % 170,000 12/1/19 % 175,000 6/1/20 % 175,000 12/1/20 % 175,000 6/1/21 % 180,000 12/1/21 % 180,000 6/1/22 % 185,000 12/1/22 % 185,000 6/1/23 % 190,000 12/1/23 % 195,000 6/1/24 % 195,000 12/1/24 % 200,000 6/1/25 % 205,000 12/1/25 % 205,000 6/1/26 % 210,000 12/1/26 % 215,000 6/1/27 % 220,000 12/1/27 % 220,000 6/1/28 % 225,000 12/1/28 % 230,000 6/1/29 % 235,000 12/1/29 % 240,000 6/1/30 % 245,000 12/1/30 % 250,000 6/1/31 % 255,000 12/1/31 % 260,000 6/1/32 % 265,000 12/1/32 % 275,000 6/1/33 % 280,000 12/1/33 % 285,000 6/1/34 % 290,000 12/1/34 % 300,000 6/1/35 % 305,000 12/1/35 % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. *ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER DETERMINATION OF BEST BID. The aggregate principal amount of the Series 2017C Bonds, and each scheduled maturity thereof are subject to increase or reduction by the City or its designee after the determination of the Winning Bidder. The City may increase or decrease each maturity in increments of $5,000, but the total amount to be issued will not exceed $8,500,000. Interest rates specified by the Winning Bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the City. The dollar amount of the purchase price proposed by the Winning Bidder will be changed if the aggregate principal amount of the Series 2017C Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Series 2017C Bonds will be made while maintaining, as closely as possible, the Winning Bidder's net compensation, calculated as a percentage of Series 2017C Bond principal. The Winning Bidder may not withdraw or modify its bid as a result of any post - bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the Winning Bidder. The Series 2017C Bonds due June 1, 2018 - 2025, inclusive, are non -callable. The Series 2017C Bonds due June 1, 2026 - 2036, inclusive, are callable in whole or in part and on any date on or after June 1, 2025, at a price of par and accrued interest. If less than all the Series 2017C Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, Inc., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. All -or -none bids must be submitted via the internet address www.SpeerAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Series 2017C Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. Page 471 of 486 City of Waterloo, Black Hawk County, Iowa $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Page 3 of 5 All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Notice of Sale, Terms of Offering or Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Bidding: Bids may be submitted via facsimile at (319) 291-8628 or (319) 291-4571. Electronic facsimile bids will be sealed and treated as sealed bids. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax numbers prior to the time of sale specified above. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full and complete responsibility for the transmission of such bid. Neither the City nor its agents will assume responsibility for the inability of the bidder to reach the above specified fax number prior to the time of sale. Time of receipt shall be the time recorded by the person receiving the facsimile and shall be conclusive. Bidding Parameters and Award of the Series 2017C Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non -descending order. The differential between the highest rate bid and the lowest rate bid shall not exceed six percent (6%). All bids must be for all of the Series 2017C Bonds and must be for not less than $8,035,200. Award of the Series 2017C Bonds: The Series 2017C Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Series 2017C Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Series 2017C Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cost, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Series 2017C Bonds will be awarded to the bidder complying with the terms of this Official Terms of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Series 2017C Bonds are changed, allowing the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Series 2017C Bonds will be awarded, if and when such award is made. Page 472 of 486 City of Waterloo, Black Hawk County, Iowa $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Page 4 of 5 The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Series 2017C Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("SIFMA") will be required to pay SIFMA's standard charge per bond. The winning purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Series 2017C Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Series 2017C Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Series 2017C Bonds on the sale date. The winning purchaser will be required to provide a certificate satisfactory to Bond Counsel and the City at closing confirming the information required by this paragraph. Good Faith Deposit and Other Matters The winning bidder is required to wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Series 2017C Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Series 2017C Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38th Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Waterloo, Black Hawk County, Iowa bid for $8,100,000 Taxable General Obligation Urban Renewal Bonds, Series 2017C If the wire shall arrive in such account prior to the date and time of the sale of the Series 2017C Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Series 2017C Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Undertaking") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Series 2017C Bonds on or before the date of delivery of the Series 2017C Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. Page 473 of 486 City of Waterloo, Black Hawk County, Iowa $8,100,000* Taxable General Obligation Urban Renewal Bonds, Series 2017C Page 5 of 5 The Underwriter's obligation to purchase the Series 2017C Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of delivery of the Series 2017C Bonds. The Series 2017C Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 20, 2017. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Series 2017C Bonds will cease. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Series 2017C Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Series 2017C Bonds, as that term is defined in the Rule. By awarding the Series 2017C Bonds to any underwriter or underwriting syndicate, the City agrees that, no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to which the Series 2017C Bonds are awarded, up to 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Series 2017C Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Series 2017C Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship with all Participating Underwriters of the Series 2017C Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Series 2017C Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. The City will, at its expense, deliver the Series 2017C Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Series 2017C Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Series 2017C Bonds are lawful and enforceable obligations of the City in accordance with their terms; (2) the opinion of said attorneys that the interest on the Series 2017C Bonds is exempt from State of Iowa income taxes as and to the extent set forth in the Official Statement of the Series 2017C Bonds; and (3) a no litigation certificate by the City. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Series 2017C Bonds. Copies of such Official Statement or additional information may be obtained from Ms. Kelley Felchle, City Clerk, City of Waterloo, 715 Mulberry Street, Waterloo, Iowa, 50703 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). /s/ KELLEY FELCHLE City Clerk CITY OF WATERLOO Black Hawk County, Iowa Page 474 of 486 CITY OF WATERLOO Council Communication Resolution directing the advertisement for sale of $3,600,000 Taxable General Obligation Bonds, Series 2017B; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 12:40 PM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:49 PM ATTACHMENTS: Description Type ❑ Council Comm Direct Sale 2017B Cover Memo SUBJECT: Resolution directing the advertisement for sale of $3,600,000 Taxable General Obligation Bonds, Series 2017B; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Submitted by: Submitted By: Michelle Weidner, Chief Financial Officer Summary Statement: We are planning to sell $3,600,000 in general obligation bonds for a number of general purposes. Series 2017B will be taxable for bondhodlers. Interest received by bondholders will be taxable for federal and state income tax purposes. The par amounts for each series are subject to adjustment according to the terms of the offerings. Final sale amounts may be different depending on the bid prices received at the sale. Page 475 of 486 Mayor QUENTIN HA RT COUNCI L MEMBERS TOM POWERS [Ford 1 BRUCE JACOBS Ward PATRICK MORRISSEY !Yard 3 JEROME AMOS. JR. Ward -1 RON WEEPER Ward 5 TOM LIND AP -Large STEVE SCHMITT Al -Large c OF WATERLOO, IOWA City Clerk and Finance Department 715 Mulberry St. • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571 KELLEY FELCHLE • Cio, Clerk MICHELLE WEIDNER. CPA • Chief Financial Officer Council Communication City Council Meeting: Prepared: Dept. Head Signature: Number of Attachments: May 8, 2017 May 3, 2017 GJ) 42#u. o None SUBJECT: FYE2017 Bond Issue - Direction to Advertise Sale of $3,600,000 General Obligation Bonds, Series 2017B Submitted by: Michelle Weidner, Chief Financial Officer Recommended City Council Actions: Adopt a Resolution directing the advertisement for sale of $3,600,000 General Obligation Bonds, Series 2017B; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Summary Statement: We are planning to sell $3,600,000 in general obligation bonds for a number of general purposes. Series 2017B will be taxable for bondholders. The par amounts for each series are subject to adjustment according to the terms of the offerings. Final sale amounts may be different depending on the bid prices received at the sale. Expenditure Required: See council communication for hearings. Source of Funds: Policy Issue: Alternative: See council communication for hearings. See council communication for hearings. See council communication for hearings. Background Information: See council communication for hearings. WE'RE WORKING FOR YOU! An Equal Opportunity/Affirmative Action Employer Page 476 of 486 CITY OF WATERLOO Council Communication Resolution directing the advertisement for sale of $8,100,000 Taxable General Obligation Bonds, Series 2016C; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Finance Weidner, Michelle Approved 5/3/2017 - 12:40 PM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:49 PM ATTACHMENTS: Description Type ❑ Council Comm Direct Sale 2017C Cover Memo SUBJECT: Resolution directing the advertisement for sale of $8,100,000 Taxable General Obligation Bonds, Series 2016C; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Submitted by: Submitted By: Michelle Weidner, Chief Financial Officer Summary Statement: We are planning to sell $8,100,000 in general obligation bonds for the TechWorks project as required by the development agreement. Series 2017 will be taxable bonds. Interest received by bondholders will be taxable for federal income tax purposes. The par amounts for each series are subject to adjustment according to the terms of the offerings. Final sale amounts may be different depending on the bid prices received at the sale. Page 477 of 486 hlavor QUENTIN HART COUNCIL MEMBERS TON POWERS Ward 1 BRUCE JACOBS Ward 2 PATRICK MORRISSEY Ward 3 JEROME AMOS, JR. Ward d 4 RON WELPER frard 5 TOM LIND At -Large STEVE SCHMITT At -Large Ce" Y OF WATER3.,OO„ WA City Clerk and Finance Department 715 Mulberry St. • Waterloo, IA 50703 • (319) 291-4323 Fax (319) 291-4571 KELLEY FELCHLE • Cily Clerk MICHELLE WEIDNER, CPA • Chief Financial Officer Council Communication City Council Meeting: Prepared: Dept. Head Signature: Number of Attachments: May 8, 2017 May 3, 2017 None SUBJECT: FYE2017 Bond Issue - Direction to Advertise Sale of $8,100,000 General Obligation Bonds, Series 2017C Submitted by: Michelle Weidner, Chief Financial Officer Recommended City Council Actions: Adopt a Resolution directing the advertisement for sale of $8,100,000 General Obligation Bonds, Series 2017C; setting the sale date as May 17, 2017, approving electronic bidding procedures and the Official Statement for the sale. Summary Statement: We are planning to sell $8,100,000 in general obligation bonds for the TechWorks Iowa Reinvestment District project. Series 201CA will be taxable for bondholders. The par amounts for each series are subject to adjustment according to the terms of the offerings. Final sale amounts may be different depending on the bid prices received at the sale. Expenditure Required: Source of Funds: Policy Issue: Alternative: See council communication for hearings. See council communication for hearings. See council communication for hearings. See council communication for hearings. Background Information: See council communication for hearings. WE'RE WORKING FOR YOU! An Equal Opportunity/Affirmative Action Employer Page 478 of 486 CITY OF WATERLOO Council Communication Resolution approving sales agreement with Conference Technologies, Inc., to upgrade the public access television studio to digital high-definition in the amount of $111,653.51 and authorize mayor to execute said document. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Information Services Reviewer Even, LeAnn Action Approved ATTACHMENTS: Description Type D High Definition Upgrades Agreement Cover Memo SUBJECT: Submitted by: Recommended Action: Summary Statement: Expenditure Required: Source of Funds: Alternative: D ate 5/4/2017 - 3:54 PM Resolution approving sales agreement with Conference Technologies, Inc., to upgrade the public access television studio to digital high-definition in the amount of $111,653.51 and authorize mayor to execute said document. Submitted By: Chris Youngblut, Director of Information Technology Approval The public access television studio is currently able to only produce in standard definition which is a lower quality output then what is currently the accepted standard (high definition). This upgrade will allow the studio to produce in high definition which became the new standard about 10 years ago. Proposal by CTI (Conference Technologies, INC) is for $111,653.51. Included in this is equipment, installation and implementation, and design. CIP - 412-01-8255-2106 Do not approve and continue to produce in standard definition. Page 479 of 486 ell CONFERENCE TECHNOLOGIES, INC Digital High -Definition Upgrade to TV Studio Project ID J17110092 Proposal issued: 5/2/2017 Prepared For: City of Waterloo Prepared By: Design Consultant Page 480 of 486 el; CONFERENCE TECHNOLOGIES, INC (800) 743-6051 www.conferencetech.com IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Sales Agreement Digital High -Definition Upgrade to TV Studio Proposal Number: J17110092 Prepared By: Rex Lawrence Phone: 563-359-1825 Email: RLawrence@conferencetech.com Bill To City of Waterloo 715 Mulberry Street Waterloo, IA 50703-5714 Proposal Date: 5/2/2017 Prepared For: Attn: Phone: Email: Ship To City of Waterloo 715 Mulberry Street Waterloo, IA 50703-5714 Description Scope of Work Conference Technologies, Inc. Confidential 1 3513 Vine Ct Davenport, IA 52807 1 - iip 481 of 486 el; CONFERENCE TECHNOLOGIES, INC (800) 743-6051 www.conferencetech.com IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Products and Services Products and Services Summary Digital High -Definition Upgrade to TV Studio • Equipment • Installation Materials • Implementation Services • Freight • Subtotal Project Total $100,052.97 $200.00 $10,381.00 $1,019.54 $111,653.51 $111,653.51 Project Total 60% Deposit Due 40% Estimate Due Upon Completion $111,653.51 $66,992.11 Conference Technologies, Inc. Confidential 1 3513 Vine Ct Davenport, IA 52807 $44,661.40 2 - JiRiage 482 of 486 el§CONFERENCE miNEN TECHNOLOGIES, INC (800) 743-6051 www.conferencetech.com Standard Disclaimer System warranty covers all parts and labor on all new equipment per manufacturer's warranty. Two hours of training on the above equipment is included in this proposal if installation is purchased. This training will occur after the installation of the above system and completion and sign -off has taken place. Terms: Terms are NET 30 with approved credit. For orders that exceed ten thousand dollars; 60% to initiate order, 40% NET 30, or progress billing based on purchase agreement at time of order. Payments made by credit card are subject to a 2.5% fee. All applicable taxes, freight, and delivery charges are the responsibility of the purchaser and will be added to the final invoice. Any cancelled orders or returns are subject to manufacturer acceptance; shipping and restocking fees may apply. This proposal is valid for ninety (90) days. INSTALLATION DESCRIPTION AND REQUIREMENTS: Provided by Conference Technologies, Inc.: If installation is purchased, Conference Technologies, Inc. will install all A/V components. Conference Technologies, Inc. will also perform all programming, alignments, and end-user training. Conference Technologies, Inc. will provide A/V project management, and provide drawings as required. This install price assumes a Monday through Friday 8:OOam to 5:OOpm install time. Room availability must be in consecutive 8 hour blocks. Any required changes or rushes may affect the final price. Provided by Others: Electrical requirements are to be provided by others or billed separately. Travel: All travel and expenses outside the Conference Technologies, Inc. office metropolitan areas will be invoiced separately and will be based upon travel expenses by Conference Technologies, Inc. This project will be designed to integrate all audio/visual equipment. STATEMENT: This system proposal is the property of Conference Technologies, Inc. and is delivered with the sole intent of being viewed by management of for evaluation purposes only. This proposal or any part of this proposal is not to be presented to, or viewed by any other party, vendor or Conference Technologies, Inc. competitor without the written consent of Conference Technologies, Inc. Any effort to do so will be considered a violation of copyright law. Proposal Acceptance Agreed and Accepted By Customer Signature Rex Lawrence Printed Name Printed Name Title Title Date Date Conference Technologies, Inc. Confidential 1 3513 Vine Ct Davenport, IA 52807 3 - JiRiage 483 of 486 (1. CONFERENCE (800)743-6051 TECHNOLOGIES, INC www.conferencetech.com Bill of Materials Digital High -Definition Upgrade to TV Studio_REV2 Atlas ATPLATE-052 Atlas AT100-RM Audio-Technica AT875R BIAMP 428.9 BIAMP 0393.900 BIAMP 0395.900 BIAMP 0396.900 Black Magic BMD- CONVCMIC/HS Black Magic BMD- CONVCMIC/SH Crestron HD-MD4X1-4K-E IKAN DH7 IKAN DV -DUAL -S750 Middle Atlantic PBL -2 Middle Atlantic UMS1-11.5 Peerless ST630P West Penn WPW254245BLAV Portabrace CS-DV4R Transcend TS32GSDHC10U1 Middle Atlantic PBL -1 Middle Atlantic PBL -3 Middle Atlantic PBL -4 Motu MOTU-AVB- SWITCH Belden 1694 -B -B-100 IKAN EI -7003 IKAN PDL -F Leightronix UltraNEXUS-HD LG 24MP48HQP General Attenuator Rack Mounting Plate Holds up to 6 Attenuators Deluxe, Rack Mounted 100W Attenuator, 3dB Steps Line + Gradient Microphone Tesira HD-1 TesiraFORTE AVB VI TesiraFORTE AVB CI TesiraFORTE AVB Al Micro Converter - HDMI to SDI Micro Converter - SDI to HDMI 4x1 4K HDMI Switcher Monitors Power 2SP FLANGED ALUM BLANK PA 1SP UM SHELF,11.5"D SmartMount Universal Tilt Mount For 10" to 29" TV's 4 PAIR 24 AWG SOLID CAT 5E CMP Mini -Dv soft camera case (black/red) for AG-AC160 32GB SDHC Class 10 UHS-I Card Blank Rack Panel (1U) Blank Rack Panel (3U) Blank Rack Panel (4U) 5 -Port AVB Switch Belden 1694A SDI -HDTV RG6 BNC Cable 100 ft. Lightweight Tripod Dolly Rear Lens Control Network -Managed HD/SD Video system controler and server 24" Full HD IPS Monitor 1 $18.66 $18.66 1 $19.85 $19.85 1 $138.25 $138.25 1 $494.12 $494.12 1 $2,351.76 $2,351.76 1 $2,175.29 $2,175.29 1 $1,763.53 $1,763.53 1 $85.00 $85.00 1 $85.00 $85.00 1 $437.50 $437.50 4 $456.50 $1,826.00 4 $73.00 $292.00 1 $8.63 $8.63 4 $34.50 $138.00 1 $18.75 $18.75 1 $216.63 $216.63 4 $191.63 $766.52 4 $18.17 $72.68 3 $7.13 $21.39 1 $13.06 $13.06 2 $14.25 $28.50 1 $321.59 $321.59 4 $73.46 $293.84 4 $91.41 $365.64 4 $762.25 $3,049.00 2 $12,183.88 $24,367.76 2 $149.00 $298.00 Conference Technologies, Inc. Confidential 1 3513 Vine Ct Davenport, IA 52807 4 - 11R e 484 of 486 (1. CONFERENCE (800)743-6051 TECHNOLOGIES, INC www.conferencetech.com LG 32MP58HQP Panasonic AG-UX180 Panasonic AG-VBR89G IKAN EG01A2 Netgear JGS516PE-100NAS Newtek TC8000- Newtek PTTC8000 Leightronix LGX-1TBR-L Totals 32" FII HD IPS Monitor Color Camer System Battery Pack 2 Stage Alum. Tripodw/Fluid Pan/Tilt Head (E -Image) 16 -Port ProSafe Plus Gigabit Ethernet Switch w/POE TriCaster 8000 ProTek care forTriCasterTC8000 (initial 2 year coverage) 1 Terabyte USB RAID External Hard Disk Array (Rack Mountable) for Use with E-HD2, Ultra NEXUS -SDI, UltraNEXUS, and NEXUS 1 $229.00 $229.00 4 $3,795.00 $15,180.00 4 $291.50 $1,166.00 4 $154.75 $619.00 1 $229.00 $229.00 1 $34,995.00 $34,995.00 1 $5,995.00 $5,995.00 2 $986.51 $1,973.02 1119 loolooloolooloolooloolooloolooloolooloo 11111111111111111 11111111111111111111111111111111111111 looloolo looloolo looloolo 11111111111111111 11111111111111111 ooloorooloolool000lon oloolooloo loolooloolooloolooloolooloolooloolooloolooloolooloolooloolool IOW 111111111111111111111111111111111111111111 Equipment Total Installation Materials Implementation Services Total Freight $100,052.97 $200.00 $10,381.00 $1,019.54 Digital High—Definition Upgrade to TV Studio_REV2 Subtotal $111,653.51 Digital High—Definition Upgrade to TV Studio_REV2 Tax: $0.00 Digital High—Definition Upgrade to TV Studio_REV2 Total: $111,653.51 Conference Technologies, Inc. Confidential 1 3513 Vine Ct Davenport, IA 52807 5 - 11R u1 e 485 of 486 CITY OF WATERLOO Council Communication Motion approving Change Order No. 6 (Extra Work) for $48,903.18 for the FY 2016 W 2nd, Cedar, and W. 3rd Streets Street Improvements, Contract No. 912. City Council Meeting: 5/8/2017 Prepared: 5/3/2017 REVIEWERS: Department Reviewer Action Date Engineering Thorson, Eric Approved 5/3/2017 - 11:31 AM Clerk Office Even, LeAnn Approved 5/3/2017 - 1:38 PM Submitted by: Summary Statement: Expenditure Required: Submitted By: Eric Thorson, PE, City Engineer This extra work will relocate and reconstruct one of the driveways to the Center for the Arts parking lot to help with the maneuvering of large semis into the loading dock for the Single Speed Brewery. The driveway to the parking lot was planned to be reconstructed in the future, so this is just doing it earlier to accommodate truck movements for Single Speed Brewery. $48,903.18 Source of Funds: G.O. Bonds Page 486 of 486