HomeMy WebLinkAboutSupplemental Attachments - 1/16/2018743,178.47 1
City of Waterloo
Finance Committee Open Invoice Report
For januF 2018 Appr, va
Finance Committee Accounts Payable Open Invoice Report Total
As of Friday, January 12, 2018
EFT Transactions:
Add: Relocation PV
Remove B & B Lawn Care Service
Add: Wellmark Weekly Claims
576,490.45
240.00
(22,650.00)
184,129.19
'Subtotal - as of Tuesday, January 16, 2018
738,209.64
Workers Compensation Issued by TPA
Housing Authority Housing Assistance EFT's
Housing Authority Housing Assistance EFT's
Payroll
2,247.48
2,721.35
'Bill Payment Total - Tuesday January 16, 2018
Payment to Council members or related
ities:
Nancy Higby
From: KELLEY FELCHLE
Sent: Tuesday, January 16, 2018 4:26 PM
To: Nancy Higby
Subject: FW: Vote No on walkway workorder
Follow Up Flag: Follow up
Flag Status: Flagged
Hi Nancy,
Could you please print this and add it to the council packet? Thank you!
Kelley
Kelley Felchle
City Clerk
City of Waterloo
715 Mulberry Street
Waterloo, Iowa 50703
(319)291-4323
PURSUANT TO IOWA CODE CHAPTER 22 E-MAIL COMMUNICATION TO AND FROM THIS ADDRESS MAY BE SUBJECT TO
PUBLIC DISCLOSURE.
Original Message
From: Jerome Amos Jr
Sent: Tuesday, January 16, 2018 4:25 PM
To: KELLEY FELCHLE
Subject: FW: Vote No on walkway workorder
From: Bob Reisinger [bob@waterloobob.com]
Sent: Tuesday, January 16, 2018 10:23 AM
To: Jerome Amos Jr; Bruce Jacobs; Chris Shimp; Margaret Klein; Pat Morrissey; Sharon Juon; Steve Schmitt
Subject: Vote No on walkway workorder
I see the contractor that did the work on the 4th st bridge walkway want an extra $93,000 or so. Why do you get a bid if
they can come back and get more $$$ by filling out a form. Seems you can underbid other contractors by 10%, get the
bid, say I'm sorry I missed that item and collect the money.
Doesn't work that way in the real world!!
Bob Reisinger
310 W. Park Lane
Waterloo, IA. 50701
1
SANDIE GRECO
From: Jeff Melcher <jmelcher@mcgrathauto.com>
Sent: Friday, January 05, 2018 4:06 PM
To: SANDIE GRECO
Subject: COLORADO BID
Sandie -
Your latest colorado Bid I was sending off the order today and checking all the specs.
I made a mistake.
I bid you an extended cab (small back seat) your bid is asking for a Crew Cab (big back seat)
I thought something was funny when my price was so much lower than the rest.
I am sorry for the inconvenience.
Our Price for a Crew Cab would be $28,660
No Charge for delivery.
Jeff Melcher
McGrath Family of Dealerships
1600 51st Street NE
Cedar Rapids, IA 52402
Phone: 218-760-0987
800+ Vehicles Available n ----
Mayor
QUENTIN
HART
COUNCIL
MEMBERS
TOM
POWERS
Ward 1
BRUCE
JACOBS
Ward 2
PATRICK
MORRISSEY
Ward 3
JEROME
AMOS
Ward 4
RON
WELPER
Ward 5
TOM
LIND
At -Large
STEVE
SCHMITT
At -Large
CITY OF WATERLOO, IOWA
PUBLIC WORKS DIVISION
625 Glenwood Street • Waterloo, IA 50703
Street: (319) 291-4267 Fax (319) 291-0264 Sanitation: (319) 291-4455
Central Garage: (319) 291-4445 Fax (319) 291-3825
Traffic Operations: (319) 291-4440 Fax (319) 291-4094 Animal Control: (319) 833-0797
Sandie Greco — Interim Public Works Director
December 20, 2017
Pat McGrath Chevy
Attn: Jeff Melcher
1600 52nd Street NE
Cedar Rapids, IA 52402
Dear Jeff,
The City of Waterloo has received your bid for the purchase of one (1) 2018 Chevrolet
Colorado — 4 WD Crew Cab Pickup Truck. Bids received were:
Vendor
Location
Bid
Pat McGrath Chevy
Cedar Rapids, IA
$26,517.00
Community Motors Co.
Cedar Falls, IA
$29,576.79
Jerry Roling Motors
Waverly, IA
$29,609.40
Rydell Chevrolet
Waterloo, IA
$30,644.60
You should consider this letter as your notice to proceed based on the specifications as
bid, at a total price of $26,517.00 for the 2018 Crew Cab Pickup Truck. This vehicle should
be delivered to the following address:
City of Waterloo
Public Works
625 Glenwood Street
Waterloo, IA 50702
If you have any questions, please do not hesitate to call.
Sandie Greco
Interim Public Works Director
City of Waterloo, Iowa
319-291-4445
sandie.greco@waterloo-ia.org
WE'RE WORKING FOR YOU!
An Equal Opportunity/Affirmative Action Employer
CITY OF WATERLOO, IOWA
CITY HALL 715 MULBERRY STREET 50703
Today's Date: 12/12/2017
Effective Date: 1/3/2018
Employment Date: 1/3/1990
To: City Council Members
Re: Notice of Severance
Department POLICE
Job Title/Classification Police Officer
This is to report that the employment of Jeffrey Duggan
with the City of Waterloo has been severed by reason of: ▪ Retired
Disability Related EI No ❑ Yes
❑ Resigned
❑ Termination
❑ Other
In accordance with City Policy, it is requested to allow payment which consists of the following:
Comments:
Benefits
Total Hours
(x) Hourly Rate
Total Payout
Vacation -Accrued
2.50
$34.46
$ 86.15
Vacation -Current
304.00
$34.46
$ 10,475.84
Usable Sick Leave
0.00
$34.46
(x) 25%
$ -
Frozen Sick Leave
0.00
$34.46
(x)_%
$ -
Personal Hours
0.00
$34.46
$ -
Sick Time Pay
0.00
$34.46
$ -
Unscheduled Leave
23.00
$34.46
$ 792.58
Other Pay
0.25
$34.46
$ 8.62
Tota
$ 11,363.19
Approved by
Human Resources/
Date
Date
Routing:
Original to Human Resources by Department
Human Resources will forward original to City Clerk (Copy in Personnel File)
Clerk's Office will forward approved form to Department
Council Agenda Date: I 111 AS/400 Status/Accruals ❑ 1-9
TRAVEL REQUEST
CITY OF WATERLOO
FINANCE DEPT. STAFF ONLY
LINE ITEM USED ‘26)____a_40 /3440
FY4dig BUDGETED 6V00 °'
EXPENDED YTD 3S'Yi
THIS REQUEST
LEFT AFTER THIS
REQUEST /714%
DATE
Original - Clerk/Finance Co. be.artment
NAME(S) AND POSITION(S):
Garrett Gingrich
DATE:
January 8, 2018
NAME OF CLASS / MEETING:
EMS Refresher
DESTINATION: Hiawatha, Iowa
DEPARTURE POINT
IF NOT WATERLOO:
DEPARTURE DATE:
January 26, 2018
RETURN DATE:
January28, 2018
DATE(S) OF MEETING:
January 26-28, 2018
PURPOSE OF TRAVEL/TRAINING:
Attend Paramedic continuing education conference
WILL TRAVEL REQUIRE ADDITIONAL PERSONNEL:
x COST $ N/A
YES NO
METHOD OF TRAVEL:
x CITY VEHICLE
AIRFARE DEPARTING FROM:
PRIVATE VEHICLE
ESTIMATE OF COST:
LODGING TAXI
$45.00 MEALS PARKING
$299.00 REGISTRATION AIRFARE
MILEAGE/FUEL MISC/TOLLS
TOTAL FOR ALL: $ 344.00
BUDGET LINE ITEM: 6 t ) --! . —/ 41'/4
x GRANT REIMBURSABLE
YES NO
x
YES NO
REQUIRED CERTIFICATION
TOTAL: $ 344.00 PER PERSON
I BELIEVE THIS TRIP SERVES A PUBLIC PURPOSE
AND IS NECESSARY AND BENEFICIAL TO THE
CITY O TE
DEPARTMENT HEA
I APPROVE THIS TRAVEL REQUEST
MAYOR
t/fib/j8
DATE DATE
K:\Shared Goodies\Forms\ Travel Request Form January 2010
TRAVEL REQUEST
CITY OF WATERLOO
FINANCE DEPT.
LINE ITEM USED
FYAd ll BUDGETED
EXPENDED YTD
THIS REQUEST
LEFT AFTER THIS
REQUEST
DATE
Original - Clerk/Finance
STAFF ONLY
IBC) 1:541,;
Aloe
8137 q3
7//4, 7-/o' lS
Copy - Department
NAME(S) AND POSITION(S):
Ben Neil, Engineering Technician
DATE:
January 9, 2018
NAME OF CLASS / MEETING:
lowa Department of Transportation recertifications
DESTINATION: Cedar Rapids, IA
DEPARTURE POINT
IF NOT WATERLOO:
DEPARTURE DATE:
February 7, 2018
March 16, 2018
RETURN DATE:
February 27, 2018
March 16, 2018
PURPOSE OF TRAVEL/TRAINING:
To attend Iowa Department of Transportation recertifications
2/7/18 Soils Recertification (9am — 4pm) $120.00
3/16/18 Level Il PCC Recertification (9am — 4 pm) $120.00
DATE(S) OF MEETING:
February 27, 2018
March 16, 2018
WILL TRAVEL REQUIRE ADDITIONAL PERSONNEL:
X COST $
YES NO
METHOD OF TRAVEL:
X CITY VEHICLE
AIRFARE
DEPARTING FROM:
PRIVATE VEHICLE
ESTIMATE OF COST:
LODGING
30.00 MEALS
240.00 REGISTRATION
MILEAGE/FUEL
TOTAL FOR ALL: $ 270.00
TAXI
PARKING
AIRFARE
MISC/TOLLS
BUDGET LINE ITEM: 266-07-7830-1346
X GRANT REIMBURSABLE
YES NO
X
YES NO
REQUIRED CERTIFICATION
TOTAL: $ 270.00 PER PERSON
I BELIEVE THIS TRIP SERVES A PUBLIC PURPOSE
AND IS NECESSARY AND BENEFICIAL TO THE
CITY OF WATER
I APPROVE THIS TRAVEL REQUEST
DEPARTMENT EAD/ Nt 5s MAYOR
January 9, 2018
DATE DATE
K:\Shared Goodies\Forms\Travel Request Form January 2010
Ben Neil
Subject:
Location:
Soils Technician recertification Enrollment Complete
District 6 - Cedar Rapids District Office - Lower Room A
Start: Wed 2/7/2018 9:00 AM
End: Wed 2/7/2018 4:00 PM
Show Time As: Tentative
Recurrence: (none)
Meeting Status: Not yet responded
Organizer: idotu@learnsoft.com
Categories: Course
This confirmation notice also serves as the invoice for any payment required for this class.
No additional invoices will be sent.
BENJAMIN NEIL,
You have been enrolled in Soils Technician recertification.
Class time(s):
2/7/2018 9:00 AMCST - 2/7/2018 4:00 PM CST
The class will be held at:
District 6 - Cedar Rapids District Office - Lower Room A
5455 Kirkwood Blvd. Cedar Rapids IA 52404
Exit from Highway US 30 to Kirkwood Blvd SW. Go South on Kirkwood Blvd. SW to the second stoplight and
turn east. The DOT buildings are to the right. The Conference room is in the south building. Parking is south of
the building.
Please bring to class a calculator (may not use phone calculator), your DMACC ID number (if you have one),
and a photo ID. PLEASE NOTE: This is a recertification class, so you are expected to have an understanding
of the subject matter that will be covered in the examination. Web based reviews are available at:
https://www.iowadot.gov/training/web based training.html
Payment Type: Check
Price:$120.00
If paying by check, please make the check out to "Iowa DOT" and send payment to:
1
Iowa DOT
800 Lincoln Way
Ames, IA 50010
Attn: Brian Squier
Company Information for CIT funding:
CITY OF WATERLOO
715 MULBERRY STREET
WATERLOOIOWA50703
(319) 291-4312
2
Ben Neil
Subject:
Location:
PCC Level II recertification Enrollment Complete
District 6 - Cedar Rapids District Office - Lower Room A
Start: Fri 3/16/2018 9:00 AM
End: Fri 3/16/2018 4:00 PM
Show Time As: Tentative
Recurrence: (none)
Meeting Status: Not yet responded
Organizer: idotu@learnsoft.com
Categories: Course
This confirmation notice also serves as the invoice for any payment required for this class.
No additional invoices will be sent.
BENJAMIN NEIL,
You have been enrolled in PCC Level II recertification.
Class time(s):
3/16/2018 9:00 AMCST - 3/16/2018 4:00 PM CST
The class will be held at:
District 6 - Cedar Rapids District. Office - Lower Room A
5455 Kirkwood Blvd. Cedar Rapids IA 52404
Exit from Highway US 30 to Kirkwood Blvd SW. Go South on Kirkwood Blvd. SW to the second stoplight and
turn east. The DOT buildings are to the right. The Conference room is in the south building. Parking is south of
the building.
Please bring to class a calculator (may not use phone calculator), your DMACC ID number (if you have one),
and a photo ID. PLEASE NOTE: This is a recertification class, so you are expected to have an understanding
of the subject matter that will be covered in the examination. Web based reviews are available at:
https://www.iowadot.gov/training/web based training.html
Payment Type: Check
Price:$120.00
If paying by check, please make the check out to "Iowa DOT" and send payment to:
1
Iowa DOT
800 Lincoln Way
Ames, IA 50010
Attn: Brian Squier
Company Information for CIT funding:
CITY OF WATERLOO
715 MULBERRY STREET
WATERLOOIOWA50703
(319) 291-4312
2
CITY OF WATERLOO, IOWA
CITY HALL 715 MULBERRY STREET 50703
Today's Date: 1/3/2018
Effective Date: 12/31/2017
Employment Date: 4/24/2012
To: City Council Members
Re: Notice of Severance
Department POLICE
Job Title/Classification Property Evidence Coordinator
This is to report that the employment of David Boesen
with the City of Waterloo has been severed by reason of:
O Retired
Disability Related LI No ❑ Yes
❑ Resigned
❑ Termination
❑ Other
In accordance with City Policy, it is requested to allow payment which consists of the following:
Comments:
Benefits
Total Hours
(x) Hourly Rate
Total Payout
Vacation -Accrued
80.00$27.08
$ 2,166.40
Vacation -Current
0.00
$27.08
$ -
Usable Sick Leave
31.00
$27,08
(x) 25%a
$ 209.87
Frozen Sick Leave
0.00
$27,08
(x) 60%
$0.00
Personal Hours
16.00
$27,08
$ 433.28
Sick Time Pay
0.00
$27.08
$ -
Unscheduled Leave
0.00
$27.08
$ -
Other Pay -Comp
24.63
$27.08
$ 666.98
Total Payment
$ 3,476.53
Approved by
Human Resources
Routing:
Original to Human Resources by Department
Human Resources will forward original to City Clerk (Copy in Personnel File)
Clerk's Office will forward approved form to Department
Council Agenda Date: tib M 0 AS/400 Status/Accruals 0 1-9
Date
l jlil 1,
Date \1`�>>�
CITY OF WATERLOO, IOWA
CITY HALL 716 MULBERRY STREET 50703
To.: City Coaincil Members
Re Atothie.ofSevere nee
Department Waste Management Services
Today's Date: December 20, 2017
Effective Date: December29, 2017
Employment Date: July 11, 1977
Job Title/Classification Administrative Secretary
This hi to report that the employment of Evelyn Russell
with the City of Waterloo has been severed by. Mason of:•
O Refired
Disability Related 0 No 0 Yes
O Resigned
ED Termination
O Other
in accordance with City Policyf it is requested to allow payment which consists of the following:
.Comments:
Original to Human Resources by Department
,Human Resources will forward original to City Clerk (Copy in Personnel File)
'Clerks Office will forward approved form to Department
Commit Agenda Date: I 0 — AS/400 Status/Accrtials 0 1-9
•
Updated 7120/1 0
CITY OF WATERLOO, IOWA
To: City Council Members
Re: Notice of Severance
CITY HALL 715 MULBERRY STREET 50703
Department WATERLOO CULTURAL & ARTS DEPARTMENT
Today's Date: 12/13/2017
Effective Date: 12/26/2017
Employment Date: 5/19/2014
Job Title/Classification DIGITAL ARTS MANAGER
This is to report that the employment of BENJAMIN RENDALL
with the City of Waterloo has been severed by reason of:
❑ Retired
Disability Related ❑ No ❑ Yes
EJ Resigned
❑ Termination
❑ Other
In accordance with City Policy, it is requested to allow payment which consists of the following:
2018
2017
Comments:
Benefits
Total Hours
(x) Hourly Rate
Total Payout
Vacation -Accrued
79
$ 18.15
$ 1,433.85
Vacation -Current
16.5
$ 18.15
$ 299.48
Usable Sick Leave
8$
18.15
(x) 25%
$ 36.30
Frozen Sick Leave
0
$ 18.15
(x)60%
$ -
Personal Hours
14.62
$ 18.15
$ 265.35
Comp Hours
Other Pay
Total Payment
$ 2,034.98
Approved by
Human Resource
Routing:
Original to Human Resources by Department
Human Resources will forward original to City Clerk (Copy in Personnel File)
Clerk's Office will forward copy of approved form to Department and Human Resources
Date i2/0/1 -7 -
Date
2//1Date 24(2)I�
Council Agenda Date: • ' " ❑ Accruals ❑Status 0-9
Updated 6/28/11
Item Coversheet Page 1 of 1
CITY OF WATERLOO
Council Communication
>~l
Resolution approving Completion of Project and Recommendation of Acceptance of Work for work performed by Aspro, Inc. of aterloo, Iowa, in
the amount of $6,458,741.49 for the FY 2016 Street Reconstruction Program, Contract No. 898, and receive and file two (2) year maintenance
bond.
City Council Me
Prepared: 1/9/201
REVIEWERS:
Department
Engineering
Clerk Office
SUBJECT:
ng: 1/16/2018
Submitted by:
Summary Statement:
Source of Funds:
Reviewer Action
(.ientz, Dennis Approved
Even, l.cAnn Approved
Date
1/10/2018- 10:19 AM
1/10/2018 - l 1:09 AM
Resolution approving Completion of Project and Recommendation of Acceptance of Work for work
performed by Aspro Inc. of Waterloo, Iowa, in the amount of $6,458,741.49 for the FY 2016 Street
Reconstruction Program, Contract No. 898, and receive and file two (2) year maintenance bond.
Submitted By: Eric Thorson, PE, City Engineer
Aspro, Inc. has completed the above referenced project in accordance with the plans and
specifications.
Transmitted also to the Clerk's Office is the Maintenance Bond that guarantees to remedy any defects
in workmanship or materials that may develop in said work within a period of two (2) years from the
date of the acceptance of the work under said contract.
Local Option Sales Tax, Sewer Fund, Waterloo Water Works
https://waterloo.novusagenda.com/AgendaWeb/CoverSheet.aspx?ItemID=10585 1/17/2018
MAINTENANCE 13ONi)"
KNOW ALL MEN BY THESE PRLSBNTS:
Band No. 2212654
That, Aspro, Inc. of Waterloo, Iowa
as Principal, and the North American Specialty Insurance Company as Surety,
are held and firmly bound unto City of Waterloo, IA in the
penal sum of Six Million Four Hundred Fifty-eight Thousand Seven Hundred Forty-one ($ $6,458,741.49
And 49l100THS
Dollars, lawful money of the United States of America, for the payment of which, well and truly to be made,
the Principal and Surety bind themselves, their and each of their heirs, executors, administrators, successors
and assigns, jointly and severally, firmly by these presents.
Whereas. the said Principal entered into a certain contract. with City of Waterloo, IA
To furnish all the material and labor necessary for the construction of
F.Y. 2016 Street Reconstruction Program - Contract No. 898
in Waterloo, Iowa in conformity with certain specifications; and
Whereas, a further condition of said contract IS that the said Principal should furnish a bond in
indemnity, guaranteeing to remedy any defects in workmanship or materials that may develop in
said work within a period of Two (2) years from the date of acceptance of the work
under said contract; and
Whereas, the said North American Specialty Insurance Company fora valuable consideration,
has agreed to join with said Principal in such bond or guarantee, Indemnifying said
City of Waterloo, IA
Now, therefore, the condition of this obligation is such, chat if the said Principal shalt, at his own cost
and expense, rernedy any and all defects that may develop in said work within the period
of Two (2) years from the date of acceptance of the work under said Contract, by
reason of bad workmanship or poor material used in the construction of said work, and shall keep all work
in continuous good repair during said period, and shall in all other respects, comply with all the terms and
conditions of said contract with respect to maintenances and repair of said work, then this obligation to be
null and void; otherwise to be and remain in full force and virtue in law.
In Witness whereof, we have hereunto set our hands and seals this
day of 4i/14 Ai , 221 Y
4-
/
G -i t --d
4-1-4 y 360--
Aspro, Inc.
/1
rincip f
pecialty Insurance Company
Surety
rowner
ori- act
SWISS RE CORPORATE SOLUTIONS
NORTH AMERICAN SPECIALTY INSURANCE COMPANY
WASHINGTON INTERNATIONAL INSURANCE COMPANY
WESTPORT INSURANCE CORPORATION
GENERAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT North American Specialty Insurance Company, a corporation duly organized and existing under
laws of the State of New Hampshire, and having its principal office in the City of Overland Park, Kansas and Washington International Insurance
Company a corporation organized and existing under the laws of the State of New Hampshire and having its principal office in the City of Overland
Park, Kansas, and Westport Insurance Corporation, organized under the laws of the State of Missouri, and having its principal office in the City of
Overland Park, Kansas each does hereby make, constitute and appoint:
JAY D. FREIERMIJTH, CRAIG E. HANSEN, BRIAN M. DEIMERLY, SHIRLEY S. BARTENHAGEN, CINDY BENNETT, ANNE CROWNER,
TIM McCULLOH„ STACY VENN, DIONE R. YOUNG, and WENDY ANN CASEY JOINTLY OR SEVERALLY
Its true and lawful Attorney(s)-in-Pact, to make, execute, seal and deliver, for and on its behalf and as its act and deed, bonds or other writings
obligatory in the nature of a bond on behalf of each of said Companies, as surety, on contracts of suretyship as are or may be required or permitted by
law, regulation, contract or otherwise, provided that no bond or undertaking or contract or suretyship executed under this authority shall exceed the
amount of: ONE IIUNDRED TWENTY FIVE MILLION ($125,000,000.00) DOLLARS
This Power of Attorney is granted and is signed by facsimile under and by the authority of the following Resolutions adopted by the Boards of
Directors of North American Specialty Insurance Company and Washington International Insurance Company at meetings duly called and held
on March 24, 2000 and Westport Insurance Corporation by written consent of its Executive Committee dated July 18, 2011.
"RESOLVED, that any two of the President, any Senior Vice President, any Vice President, any Assistant Vice President,
the Secretary or any Assistant Secretary be, and each or any of them hereby is authorized to execute a Power of Attorney qualifying the attorney named
in the given Power of Attorney to execute on behalf of the Company bonds, undertakings and all contracts of surety, and that each or any of them
hereby is authorized to attest to the execution of any such Power of Attorney and to attach therein the seal of the Company; and it is
FURTHER RESOLVED, that the signature of such officers and the seal of the Company may be affixed to any such Power of Attorney or to any
certificate relating thereto by facsimile, and any such Power of Attorney or certificate bearing such facsimile signatures or facsimile seal shall be
binding upon the Company when so affixed and in the future with regard to any bond, undertaking or contract of surety to which it is attached."
Steven P. Anderson, Senior Vice I resident of Washington International insurance Company
& Senior Vice President of North American Specialty Iosuranee Company
& Senior Vice President of Westport Insurance Corporation
By
Mike A. Ito, Senior Vice President of Washington International Insnntnce Company
& Senior Vice President of North American Specialty Insurance Company
& Senior Vice President of Westport insurance Corporation
IN WITNESS WHEREOF, North American Specialty Insurance Company, Washington International Insurance Company and Westport
Insurance Corporation have caused their official seals to be hereunto affixed, and these presents to be signed by their authorized officers this
this 3rd day of November , 20 17 .
State of Illinois
County of Cook
On this 3rd day of November , 20 17, before me, a Notary Public personally appeared Steven P. Anderson , Senior Vice President of
SS:
North American Specialty Insurance Company
Washington International Insurance Company
Westport Insurance Corporation
Washington International Insurance Company and Senior Vice President of North American Specialty Insurance Company and Senior Vice President of
Westport Insurance Corporation and Michael A. Ito Senior Vice President of Washington International Insurance Company and Senior Vice President
of North American Specialty Insurance Company and Senior Vice President of Westport Insurance Corporation, personally known to me, who
being by me duly sworn, acknowledged that they signed the above Power of Attorney as officers of and acknowledged said instrument to be the
voluntary act and deed of their respective companies
OFFICIAL SEAL
M. KENNY
Notary Public • Male xpllinoic
My Commission Expim
12/0412021
M. Kenny, Notary Public l
I, Jeffrey Goldberg , the duly elected Vice President and Assistant Secretary of North American Specialty Insurance Company, Washington
International Insurance Company and Westport Insurance Corporation do hereby certify that the above and foregoing is a true and correct copy of a
Power of Attorney given by said North American Specialty Insurance Company, Washington International Insurance Company and Westport Insurance
Corporation which is still in full force and effect.
IN WITNESS WHEREOF, I have set my hand and affixed the seals of the Companies this
day of 7/9 4/ , %'V/.0
Jeffrey Goldberg, Vice President & Assistant Secretary of Washington International Insurance Company &
North American Specialty Insurance Company & Vice President & Assistant Secretary of Westport Insurance Corporation
CITY OF
WATERLOO, IOWA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Year Ended June 30, 2017
Prepared by:
City of Waterloo Finance Department
Michelle C. Weidner, CPA, Chief Financial Officer
Emily Graham, Financial Analyst
Brent Bohlen, Financial Analyst
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Contents
Introductoryr Section
Table of contents
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 32-75
Required supplementary information:
Other postemployment benefit plan 76
Iowa Public Employees' Retirement System:
Schedule of the City's proportionate share of the net pension liability 77
Schedule of City contributions 78
Notes to required supplementary information — IPERS pension liability 79
Municipal Fire and Police Retirement System of Iowa:
Schedule of the City's proportionate share of the net pension liability 80
Schedule of City contributions 81
Notes to required supplementary information — MFPRSI pension liability 82
Budgetary comparison schedule — budget and actual (modified cash basis) — all
governmental funds and proprietary funds 83-84
Note to required supplementary information - budgetary reporting 85
Schedule of comparison — funds statements (GAAP basis) to budgetary
(modified cash) basis 86-89
Schedule of employer contributions for Waterloo Water Works pension plan 90-91
Schedule of changes in net pension liability and related ratios for Waterloo
Water Works pension plan 92
Notes to required supplementary information for Waterloo Water Works
pension plan 93
IPERS schedule of the Waterloo Water Works' proportionate share of the
net pension liability 94
IPERS schedule of Waterloo Water Works contributions 95-96
Contents
Financial Section (continued)
Supplementary information:
Schedule of revenues, expenditures and changes in fund balances — General
Fund
Nonmajor governmental funds:
Combining balance sheet
Combining schedule 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
97-107
108
109
110
111-112
113-114
115
116-117
118-119
120
121
Statistical Section (Unaudited)
Statistical section contents 122
Net position by component 123
Changes in net position 124-125
Fund balances, governmental funds 126
Changes in fund balances, governmental funds 127
Assessed and taxable value of property 128
Property tax rates 129
Principal taxpayers 130
Property tax levies and collections 131
Ratios of outstanding debt by type 132
Ratios of general bonded debt outstanding 133
Direct and overlapping governmental activities debt 134
Legal debt margin information 135
Sewer revenue bond coverage 136
Demographic and economic statistics 137
Principal area employers 138
Full-time equivalent city government employees by function/program 139
Operating indicators by function/program 140-141
Capital asset statistics by function/program 142
Compliance Section
Schedule of expenditures of federal awards 143-144
Notes to schedule of expenditures of federal awards 145
Summary schedule of prior audit findings 146
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 147-148
Report on compliance for the major federal program and report on internal
control over compliance required by Uniform Guidance 149-150
Schedule of findings and questioned costs 151-153
ii
Mayor
QUENTIN
HART
CITY OF WATERLOO, IOWA
CITY CLERK AND FINANCE DEPARTMENT
QUENTIN HART • Mayor MICHELLE WEIDNER, CPA • Chief Financial Officer
COUNCIL January 12, 2018
_. MEMBERS
MARGARET
KLEIN
Ward 1
BRUCE
JACOBS
Ward 2
PATRICK
MORRISSEY
Ward 3
JEROME
AMOS, JR.
... Ward 4
Odialo
CHRIS
SHIMP
Ward 5
SHARON
JUON
At -Large --
STEVE
SCHMITT
At -Large
Members of the City Council
and Citizens of the City of Waterloo, Iowa
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, 2017. The Code of Iowa
requires that a complete set of audited financial statements presented in conformity with
generally accepted accounting principles be published. Pursuant to these requirements,
the Comprehensive Annual Financial Report (CAFR) of the City for the fiscal year ended
June 30, 2017 is hereby submitted. The City is also required to undergo an annual single
audit in conformity with the provisions of Title 2 U.S. Code of Federal Regulations
(CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Management assumes full responsibility for the completeness and reliability of the
information contained in this report, based upon a comprehensive framework of internal
control that it has 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.
RSM US LLP, a firm of independent public accountants has issued an unmodified
("clean") opinion on the City's financial statements for the year ended June 30, 2017.
Their opinion is included in the Financial Section of this report.
Management's Discussion and Analysis (MD&A) immediately follows the independent
auditor's report and provides a narrative introduction, overview, and analysis of the basic
financial statements. This letter of transmittal is designed to complement MD&A and
should be read in conjunction with it.
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 population of 68,406, according to the 2010 census. The City was
incorporated in 1868 and is the county seat of Black Hawk County in the northeastern
part of the state. 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 is
empowered to levy a property tax on real property located within its boundaries.
The City operates under a Mayor — Council form of government, with the mayor as the
elected chief executive. Policy-making and legislative authority are vested in the
governing council.
WE'RE WORKING FOR YOU!
An Equal Opportunity/Affirmative Action Employer
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 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, planning and zoning,
building inspections and code enforcement, a regional airport, construction and maintenance of
highways, streets and other infrastructure, and recreational and cultural and arts services,
including library services. The City also provides solid waste collection and wastewater
treatment services. Other human services are provided through the community development,
housing and human rights departments. The central garage provides vehicle maintenance
services, and the human resources, management information systems, city attorney, city clerk
and finance 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 meet the
requirements to be considered component units of the City and these entities are 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 not included in this report.
The annual budget serves as the foundation for the City's financial planning and control. The
adopted budget provides authority to spend funds for program operations. Budget amendments
must be prepared and adopted in the same manner as the original budget.
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 several Deere & Company manufacturing facilities, including
the Waterloo Works Drivetrain Operations, Engine Works, Foundry, Product Engineering and
Tractor Assembly facilities. Other major businesses include Tyson Fresh Meats, ConAgra,
Omega/Master Brand Cabinetry and Bertch Cabinet Manufacturing.
The 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. Total
building permit valuation was over $100 million for the fourth consecutive year, reaching $108.7
million for the fiscal year ended June 30, 2017. There were 164 permits issued for new
residential construction during the year, which is a substantial increase from a few years ago.
Waterloo is a regional retail center for Black Hawk and surrounding counties. Retail sales have
increased steadily over the last few years and totaled $1.142 billion in fiscal 2017. Waterloo's
population has remained 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 in recent years, although Deere & 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 its
largest taxpayers. The company has invested nearly $1.0 billion dollars in its Waterloo facilities
since 2010, including the Westfield advanced manufacturing facility and the Waterloo Foundry,
the largest electric foundry in the state. The City's average unemployment level stands at 2.8%
compared to the state level of 3.0% and the national level of 4.1%. A recent population estimate
was 70,150, indicating growth in the current decade.
iv
MEIN
MAJOR INITIATIVES AND PROJECTS
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 Riverfront Renaissance
The Riverfront Renaissance project was a major project that utilized state "Vision Iowa"
program funds, as well as private funds, local funds, and partnerships with other
businesses to create three major objectives:
➢ The RiverWalk Loop — a walking and recreational trail system along the banks of
Cedar River from 1St Street to 18t Street in Downtown Waterloo.
➢ The Cedar River Dam improvements — an inflatable bladder dam system that
improved boatable recreational water depth upstream of the dam at 4th Street.
➢ The Riverfront Amphitheater — this space has become a popular destination for
many activities, and is bringing more residents and visitors to downtown
Waterloo and the riverfront.
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.
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 & Company 6 -story industrial
buildings into a Courtyard by 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, 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.
The public investments are encouraging significant private redevelopment. The historic
WonderBread factory has been renovated into the SingleSpeed Brewery and Beer Hall.
Other development in the downtown area includes the $15 million Grand Crossing
private development. Phase I is complete and created 68 residential condominium units,
Phase II construction is underway and will have 40 residential condominium units in
addition to first floor retail and commercial space, and Phase III is in planning stages for
over 40 additional residential units and commercial space. Hawkeye Community College
has begun construction on an $8 million urban campus downtown between these sites
which will bring additional educational and student services populations downtown.
v
Logan Plaza
The former Logan Plaza Shopping Center in the northern part of the City was acquired by
a developer and completely demolished, with plans to replace it with several new
buildings. The first new medical office building is now open, with another in the
beginning stages of construction. Overall, there will be four phases of projects, with over
$9 million in private investment, creating a medical and retail park for this part of the
community. The public-private partnership for the redevelopment of this area has also
been created from:
➢ The $30 million Highway 63 redevelopment project which created green
space, aesthetics, recreational trails, and economic opportunity along the
corridor, as well as improving traffic movements with turning lanes
➢ The continued investment by Unity Point Health (formerly Allen Hospital)
with over $40 million in improvements and expansions to the hospital
campus, and over $8 million in the Nursing College campus
➢ The new Carver Academy middle school built on the former Logan School
site, offering a more aesthetically pleasing campus setup for students with a
greenhouse, and partnerships with other entities
➢ Improvements to the secondary road system along Highway 63, with the
elimination of un -needed frontage roads for better economic outlots for
developments, and improvements in lane configurations and improvements to
Donald Street
Street Improvements
The one -cent local option tax was renewed in November 2013 by the taxpayers for
another ten years, 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 and central parts of the city. The first segment of
Highway 63 is open and design and construction is underway for other segments through
downtown. Additionally, $7 million has been invested in traffic flow improvements to
Kimball Avenue, which is now open and under traffic.
FINANCIAL MANAGEMENT INFORMATION
Budgetary Controls - The City's management staff is responsible and is actively involved in the
financial planning and management of the City for daily operations and long-range strategic
planning. The objective of budgetary controls is to ensure compliance with the annual budget
approved by the City Council, as well as the budget control procedures mandated by the State of
Iowa.
Management control policies adopted by the City Council require that departmental and activity
budgets comply with line -item appropriations. Amendments exceeding de minimus guidelines
require the specific approval of the City Council Finance Committee. These policies also require
expenditures exceeding $1,000 to be pre -authorized by the City Council Finance Committee.
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.
vi
Mai
The City adopted a minimum fund balance requirement for the General Fund that requires the
maintenance of cash reserves of 5% of revenue. The City met that requirement and also
maintained unassigned fund balance of 19.8% of revenue at June 30, 2017.
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 fiscal year 2016.
This is the thirteenth 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 Finance
department and staff in all City departments in addition to the RSM US LLP audit team. We
want to thank all of the City departments for their assistance in providing data necessary for this
report. Special thanks go to Emily Graham, Brent Bohlen, and Kimberly Bahr in the Finance
Department and also the City Clerk staff, as well as services provided by James Slife. Each of
you has our appreciation and respect for your contributions to this report. We also want to thank
the members of the City Council for their support of our efforts to conduct the financial
operations of the City in a prudent, responsible and progressive manner.
Sincerely,
Quentin M. Hart
Mayor
vii
Michelle C. Weidner, CPA
Chief Financial Officer
City of Waterloo, Iowa
Officials
As of June 30, 2017
Name
Title
Term Expires
Quentin Hart
Tom Powers
Bruce Jacobs
Patrick Morrissey
Jerome Amos
Ron Welper
Tom Lind
Steven Schmitt
Michelle Weidner, CPA
Kelley Felchle, CMC
Eric Thorson, PE
David Zellhoefer
Daniel Trelka
Elected
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
viii
January 2018
January 2018
January 2020
January 2018
January 2020
January 2018
January 2018
January 2020
Indefinite
December 31, 2017
Indefinite
Indefinite
Indefinite
CITY OF WATERLOO, IOWA - ORGANIZATIONAL STRUCTURE
0
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120
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ix
c
4
Government Financc Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Waterloo
Iowa
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2016
p.
Executive Director/CEO
Independent Auditor's Report
To the Honorable Mayor and
Members of the City Council
City of Waterloo, Iowa
1
RSM
RSM US LLP
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, 2017, 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 Govemment 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 GovemmentAuditing
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 i CONSULTING
1
ftSM ijS LLP is the LI.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms, Visit rsmus.com/aboutus for more informtion regarding RSM US LLP and
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, 2017, and the respective changes in financial position and,
where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion
and Analysis, schedule of funding progress for other postemployment benefit information, the schedule of the
proportionate share of the net pension liability and schedule contributions for the Iowa Public Employees' Retirement
System for the City and for Waterloo Water Works, 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, budgetary
comparison information, and the Schedule of Contributions for Waterloo Water Works Pension Plan and Schedule of
changes in net pension liability and related ratios for the Waterloo Water Works Pension Plan, 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 GovemmentAuditing Standards, we have also issued our report dated January 12, 2018 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
solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of
that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the City's internal control over financial reporting and compliance.
Sit/ vs L4.P
Davenport, Iowa
January 12, 2018
2
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
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, 2017. 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
— iii - vii 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 $424,784,202 (net
position). Of this amount, the City's unrestricted net position ($16,611,146) 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 $19,513,048 compared to the 2016 ending net position of
$405,271,154.
• As of the close of this current fiscal year, the City of Waterloo's governmental funds reported
combined ending fund balances of $98,591,058, an increase of $27,196,462 in comparison with the
prior year. Approximately 6.3 percent of this total amount, $6,199,236, 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 $9,546,862,
or 18.5 percent of total General Fund expenditures.
• The City of Waterloo's total long-term liabilities increased by $19,619,044 or 12.7 percent during the
current fiscal year, due primarily to the issuance of general obligation bonds to finance various
capital improvements and economic development projects and also due to an increase in pension
liabilities.
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
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
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, Road Use Tax Fund and the June 2017 GO Bonds Fund,
all of which are considered to be major funds. Data from the other 14 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
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
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, 2017.
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 $424,784,202 at the close of the fiscal year ended June 30,
2017.
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, 2017 and 2016 follows:
Assets
Current and other assets
Capital assets
Total assets
City of Waterloo's Net Position
Governmental Activities Business -Type Activities Total
2017 2016 2017 2016 2017 2016
$ 160,262,329 $ 128,687,675 $ 24,940,110 $ 22,481,940 $ 185,202,439 $ 151,169,615
361,366,873 365,180,771 96,002,802 97,981,444 457,369,675 463,162,215
521,629,202 493,868,446
120, 942, 912 120, 463, 384
642,572,114 614,331,830
Deferred outflows of
resources 21,156,718 14,935,009 940,474 889,137 22,097,192 15,824,146
Liabilities
Current liabilities 20,229,201 19,807,201 4,186,920 4,222,849 24,416,121 24,030,050
Long-term liabilities 140,564,602 120,636,207 23,312,095 24,297,384 163,876,697 144,933,591
Total liabilities 160,793,803 140,443,408 27,499,015 28,520,233 188,292,818 168,963,641
Deferred inflows of
resources 51,539,230 55,309,481 53,056 611,700 51,592,286 55,921,181
r. Net position
Net investment in capital assets 306,360,558 316,701,068 79,180,253 79,522,665 385,540,811 396,223,733
Restricted 55,182,022 20,032,995 672,515 672,515 55,854,537 20,705,510
Unrestricted (31,089,693) (23,683,497) 14,478,547 12,025,408 (16,611,146) (11,658,089)
Total net position $ 330,452,887 $ 313,050,566 $ 94,331,315 $ 92,220,588 $ 424,784,202 $ 405,271,154
5
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
$55,854,537 of the City of Waterloo's net position (13.1 percent) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net position
($16,611,146) 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 $19,513,048 during the current fiscal year from the 2016 net
position of $405,271,154. Governmental -type activities' net position increased by $17,402,321 from the
2016 net position of $313,050,566. 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 $2,110,727 from the 2016 net position of $92,220,588. 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, 2017 and 2016 follows:
City of Waterloo's Changes in Net Position
Governmental Activities
Business -Type Activities Total
2017 2016 2017 2016 2017 2016
Revenues:
Program revenues:
Charges for services $ 11,818,461 $ 10,025,626 $ 19,055,784 $ 17,926,023 $ 30,874,245 $ 27,953,649
Operating grants and
contributions 13,138,910 18,581,010 496,658 275,516 13,635,568 18,856,526
Capital grants and
contributions 35,704,168 9,065,137 192,977 1,271,776 35,897,145 10,336,913
General revenues:
Property taxes 46,530,686 46,327,997 - 46,530,686 46,327,997
Other taxes 17,260,380 17,554,079 17,260,380 17,554,079
Other 3,116,000 2,410,436 51,489 49,277 3,167,489 2,459,713
Total revenues
127, 568, 60 5 103, 964, 285
19,796,908 19, 524, 592
147, 365, 513 123,488,877
Expenses:
Public safety 33,735,948 34,120,160 - 33,735,948 34,120,160
Public works 35,579,527 29,670,192 - 35,579,527 29,670,192
Health and social services 381,203 295,088 - 381,203 295,088
Culture and recreation 15,012,599 11,950,688 - 15,012,599 11,950,688
Community and economic
development 12,860,289 13,753,669 - 12,860,289 13,753,669
General government 10,421,434 5,247,593 10,421,434 5,247,593
Interest on long-term debt 2,175,284 2,048,517 2,175,284 2,048,517
Sanitary sewer 13,635,403 14,018,836 13,635,403 14,018,836
Sanitation 4,050,778 3,921,263 4,050,778 3,921,263
Transfers
Total expenses 110,166,284 97,085,907 17,686,181 17,940,099 127,852,465 115,026,006
Increase in net
position before
transfers 17,402,321 6,878,378 2,110,727 1584,493 19,513,048 8,462,871
Change in net position 17,402,321 6,878,378 2,110,727 1,584,493 19,513,048 8,462,871
Net position, beginning 313,050,566 306,172,188 92,220,588 90,636,095 405,271,154 396,808,283
Net position, ending $ 330,452,887 $ 313,050,566 $ 94,331,315 $ 92,220,588 $ 424,784,202 $ 405,271,154
6
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
Total governmental activities' revenue for the current fiscal year was $127,568,605. The largest single
revenue source for the City was property taxes of $46,530,686. Property taxes increased by $202,689
(0.4 percent) during the year. This increase is a result of a combination of factors, including an increase in
the assessed value of property of 3.1 percent, an increase of 2.1 percent in the taxable value of property
and a reduction of 0.9 percent in the levy rate.
Certain revenues are generated that are specific to governmental program activities. These totaled
$60,661,539 during the fiscal year ended June 30, 2017. 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
$45,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
91111111111ler L. .
is sty Pudic works Health ana Culture and CorrrnJniry General Interest and
soda) recreation and government issuance
services economic costs cn
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 Taxes - -
14%
Property Taxes
37%
Other'
2%
Charges for
services
9%
7
Operating Grants
and Contributions
10%
Capital Grants and
Contributions
28%
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
Total business -type activities' revenue for the fiscal year was $19,796,908. $19,745,419 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 itation
■ Expenses ■ Revenues
The graph below shows the breakdown of revenues by source for the business -type activities.
Revenues by Source - Business-TypeActivities
Capital Grants and
Contributions
1%
Operating Grants
and Contributions
3%
Charges for
services
96%
Business -type activities. Business -type activities increased the City of Waterloo's net position by
$2,110,727 from the 2016 net position of $92,220,588, accounting for 10.8 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
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
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 $98,591,058, an increase of $27,196,462 in comparison with the prior year. Fund
balance in the amount of $92,391,822 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 6.3 percent of total
fund balance or $6,199,236, 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 $9,546,862, while total fund balance was
$23,720,432. 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 18.5
percent of total General Fund expenditures, while total fund balance represents 45.9 percent of that same
amount.
Net general fund operations resulted in a decrease in total general fund balance of $1,780,580, and a
decrease in unassigned fund balance of $289,270 for the year.
Several items contributed to these results:
Because of the large health insurance reserves built up the past several years, the City chose to reduce
property taxes for health insurance and instead used a portion of the restricted health reserves to pay
claims during the year ended June 30, 2017. 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 primarily from positions that were vacant for portions of the
year.
Overall general fund revenue was less than budgeted. Building inspection fees exceeded expectations by
$116,598, while police fines were $64,000 less than budgeted and property sales revenue was $112,499
less than budgeted. Golf, sports and ice arena fees were $197,276 less than budgeted. The combination
of all these factors resulted in the reduction of unassigned fund balance in the amount of $289,270 for the
year.
The City originally budgeted to use $500,000 in unassigned fund balance for the year, meaning that
overall, the general fund performance was better than expected by $210,280.
Trust & Agency Fund— The net decrease in fund balance during the current year was $19,555, resulting
from a variety of factors, including revenue less than originally budgeted due to the settlement of several
property tax appeal cases, the receipt of less property tax replacement funds than expected and less
unemployment claims incurred than anticipated.
9
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
The General Obligation Debt Service Fund—The net increase in fund balance of $235,103 during the
current year is largely due to savings realized from the refunding bond issue.
TIF Fund—The total fund balance of $3,367,043 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
$1,264,493 and is the result of timing differences between revenue collections and the payment of TIF
obligations.
June 2017 GO Bonds Fund – The net increase in fund balance of $17,241,948 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 $89,439,860, an increase of
$2,055,334 from the 2016 net position of $87,384,526. 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 $167,056,645 was increased to
$184,546,874 (an increase of $17,490,229).
• In the Public Safety program category, expenses and related revenue for various law enforcement
grants and non -property tax funded projects were increased ($0.4 million).
• The Public Works category reflects the increase of damage claims revenue and related repair
expense for the airport. The use of Road Use Tax fund balance was added to fund the anticipated
increase in street repair expenses ($0.4 million).
• The Health and Social Services category was increased to reflect revenue and expense for the award
received from the U.S. Conference of Mayors for the Healthy H2Ioo program ($0.1 million).
• The Culture & Recreation program category was increased to reflect a number of additional grants
and donations received by the Cultural and Arts department, the Library and Leisure Services.
Revenue and expenses were increased for the Sportsplex to more closely match operations and the
use of unassigned fund balance was increased for Young Arena operations ($0.3 million).
10
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
• In the Community and Economic Development program category, additional revenue and expense
using Block Grant and Housing funds were added ($1.0 million).
• Amendments reflecting the use of restricted fund balance for health and liability insurance claims
were made in the General Government category in addition to amendments to use energy rebates
received ($3.9 million).
• Under the Debt Service category, revenue and expenses were increased to reflect the planned
refunding bond issue. ($2.9 million).
• In the Capital Projects program, additional expenses relating to grant revenue awarded during the
year that was not originally budgeted were added. Several construction project budgets were
adjusted to more accurately reflect the work expected to be completed by June 30, 2017 ($1.3
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. ($1.8 million).
• In the Business/Enterprises activity, which accounts for the activities of the sewer and garbage funds,
line item adjustments were made to more accurately reflect the amount that will be spent for capital
improvement projects and operations by June 30, 2017 ($5.4 million).
The total original revenue budget, including other financing sources of $164,158,612 was increased to
$172,300,681 (an increase of $8,142,069).
• State and federal grant revenue was increased to reflect additional grants awarded after the original
budget certification for community development block grants, public safety projects, airport and traffic
improvements, and storm water lift stations, as well as others ($1.2 million).
• Amendments were made to various 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 for various City projects
and for insurance and other refunds received that exceeded original budget projections ($0.4 million).
• The City amended the original budget for debt proceeds to reflect bond proceeds from anticipated
general obligation and sewer bond refunding issues ($2.9 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 ($1.8 million.)
See pages 83 through 89 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, 2017, amounts to $457,369,675 (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 1.3 percent (a 1.0 percent increase for governmental activities and a 2.0
percent increase for business -type activities).
11
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
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.
Land
Land held for redevelopment
Buildings and improvements
Other improvements
Software
Infrastructure
Furniture, vehicles, machinery
and equipment
Construction -in -progress
City of Waterloo's Capital Assets at Fiscal Year End (Net of Depreciation)
Governmental Activities
Business -Type Activities Total
2017 2016 2017 2016 2017 2016
$ 44,395,439 $ 44,331,630
10, 989, 706 10,672,268
67,297,884 71,510,780
205,011 305,913
216,855,739 220,540,159
$ 534,242 $ 348,055 $ 44,929,681 $ 44,679,685
10, 989, 706 10, 672, 268
46, 315, 435 47, 720,172 113, 613, 319 119, 230, 952
40,272,939 38,836,964 40,272,939 38,836,964
205,011 305,913
216,855,739 220,540,159
10,214,950 10,666,916 5,318,519 6,236,960 15,533,469 16,903,876
11,408,144 7,153,105 3,561,667 4,839,293 14,969,811 11,992,398
$ 361,366,873 $ 365,180,771 $ 96,002,802 $ 97,981,444 $ 457,369,675 $ 463,162,215
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
and the Logan Urban Renewal Area for continued economic development ($.5 million).
• The city invested $1.9 million in new vehicles, equipment, computers and software for various city
departments. The most significant of these included two new snow control trucks, a new ambulance,
bucket loader and garbage compactor.
• New investments in infrastructure assets totaled $5.4 million, including street reconstruction ($3.7
million), and existing street asphalt overlay ($1.7 million).
• The City invested $0.03 million in new vehicles and equipment for the sewer and sanitation
departments and replaced a belt filter press with related building improvements at a cost of $2.1
million.
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 $104,225,000. This entire amount is comprised of debt backed by the full faith and credit of
the government.
12
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
The City has incurred other debt to 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 $13,483,074.
The City of Waterloo's total long-term liabilities increased by $19,619,044 (12.7 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 City issued general obligation bonds in the amount of $20,945,000 during the current fiscal year;
$17,325,000 for general purposes and $2,845,000 in general use refunding bonds and $775,000 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.
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 $188,507,108, which is
significantly greater than the City of Waterloo's outstanding general obligation debt ($105,375,117) and
other debt subject to debt limitation ($1,788,702). The total debt subject to this limitation is $107,163,819,
resulting in available debt margin of $81,343,289.
Additional information about the City of Waterloo's long-term liabilities can be found in Note 9 of this
report.
Economic Factors and Next Year's Budgets and Rates
Property taxes provide 47 percent of General Fund revenues. Over the past five years, citywide assessed
valuations have risen an average of 1 percent annually, while property tax regulations imposed by the
State of Iowa resulted in taxable values increasing by an average of 1.5 percent over that same time
period. The fiscal 2017 budget reflects total property tax and utility excise tax revenue to increase by 0.7
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 gas and electric
utility franchise fee of 3 percent was implemented to diversify revenue sources and was expected to
generate approximately $2.7 million in revenue for the year ending June 30, 2018. 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, 2018.
Personnel costs comprise a significant portion of City operating costs. Wage increases identified in
contractual bargaining agreements are 2.65% percent for fiscal year 2018. The employer contribution rate
required for the Municipal Fire and Police Retirement System will increase by 1.3 percent, while the
contribution rate for the Iowa Public Employees Retirement System will increase by 5.7%. After many
years of increases in health care costs, the anticipated health care costs for the year ending June 30,
2018 are expected to remain fairly stable.
Federal and state mandates for clean water continue to result in additional costs both for sewer system
users and property taxpayers.
These factors were considered in preparing the City of Waterloo's budget for fiscal year 2018.
13
City of Waterloo, Iowa
Management's Discussion and Analysis
For Fiscal Year Ended June 30, 2017
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
This Page Intentionally Left Blank
City of Waterloo, Iowa
Statement of Net Position
June 30, 2017
Primary Government
Governmental Business -Type
Activities Activities
Total
Waterloo
Convention
Waterloo & Visitors
Water Works Bureau, Inc.
Assets
Current assets:
Cash and cash equivalents $ 80,681,435 $ 13,598,682 $ 94,280,117 $ 9,975,070 $ 209,116
Restricted cash and cash equivalents 1,021,123 1,021,123
Investments - 399,648 274,548
Receivables:
Customer accounts, net of allowance for
uncollectible accounts 1,809,981 4,053,634 5,863,615 1,512,310 -
Property taxes:
Delinquent 252,732 252,732 -
Succeeding year 45,311,296 45,311,296
Internal accounts (38,704) 38,704 -
Due from other governments:
Component unit 1,917,552 1,917,552
Primary government - 298,368
Other 17,068,030 237,924 17,305,954
Miscellaneous - - -
Accrued interest 250,164 250,164 4,976 1,405
Special assessments 170,715 333,424 504,139 -
Inventories and prepaids 459,094 28,200 487,294 522,362 9,738
Total current assets 146,985,866 20,208,120 167,193,986 12,414,366 793,175
Noncurrent assets:
Restricted assets:
Cash and cash equivalents 13,050,431 4,731,990 17,782,421
Investments - 186,156 524,586
Receivables 13,770 13,770
Loans and notes, net of allowance for
uncollectible amounts 27,500 27,500 -
Special assessments receivable 184,762 - 184,762 232,999
Capital assets, net of accumulated depreciation 294,573,584 91,906,893 386,480,477 25,566,575 33,051
Capital assets not being depreciated 66,793,289 4,095,909 70,889,198 1,344,376
Total noncurrent assets 374,643,336 100,734,792 475,378,128 27,330,106 557,637
Total assets 521,629,202
Deferred Outflows of Resources
Pension related amounts
Deferred charge on refunding
Total deferred outflows of resources
See notes to basic financial statements.
120,942,912 642,572,114
39,744,472 1,350,812
21,156,718 924,686
22,081,404 911,448
15,788 15,788
21,156, 718
940,474 22,097,192 911,448
15
Primary Government
Governmental Business -Type
Activities Activities
Total
Waterloo
Convention
Waterloo & Visitors
Water Works Bureau, Inc.
Liabilities
Current:
Accounts and retainages payable $ 3,744,007 $ 1,145,380 $ 4,889,387 $ 224,618 $ 2,462
Accrued liabilities and other 1,609,353 180,034 1,789,387 125,787 6,966
Due to primary government 1,615,547
Due to component unit 298,368 298,368
Due to other governments 53,292
Noncurrent liabilities due and payable
within one year 12,782,566 2,799,527 15,582,093 69,914
Unearned revenues 150,445 150,445 -
Current liabilities payable from restricted assets:
Health claims 1,021,123 1,021,123
Other 456,764 456,764 -
Accrued interest 166,575 61,979 228,554
Total current liabilities 20,229,201 4,186,920 24,416,121 2,089,158 9,428
Noncurrent:
Customer deposits 78,199 384,485 462,684 186,156
Worker's compensation claims 535,187 535,187
General obligation bonds and notes, net of bond
discounts and premium 73,904,844 19,135,273 93,040,117
Other loans and notes 1,607,357 1,607,357
Other postemployment benefits obligation 3,977,250 570,296 4,547,546
Compensated absences 1,524,513 89,179 1,613,692
Net pension liability 58,937,252 3,132,862 62,070,114 3,761,480
Total noncurrent liabilities 140,564,602 23,312,095 163,876,697 3,947,636
Total liabilities 160,793, 803
Deferred Inflows of Resources
Property taxes
Pension related amounts
Total deferred inflows of resources
Net Position
Net investment in capital assets
Restricted for:
Debt service
Tourism promotion
Public access television
Civil rights enforcement
Housing
Donor specified
Library
Street and right-of-way maintenance
Improvements
Self-funded insurance
Employee benefits
Unrestricted (deficit)
27, 499, 015 188, 292, 818
6,036,794 9,428
45,663,122 - 45,663,122
5,876,108 53,056
5,929,164 52,024
51,539,230 53,056
51,592,286 52,024
306, 360, 558
3,682,691
1,281,710
159,427
53,016
4,409,232
606,509
203,959
29, 767,117
6,524,086
8,255,387
238,888
(31,089,693)
79,180,253 385,540,811
196,533
475,982
14,478, 547
3,879,224
1,281,710
159,427
53,016
4,409,232
606,509
203,959
29, 767,117
7,000,068
8,255,387
238,888
(16,611,146)
26,843,829 33,051
7,723,273 1,308,333
Total net position $ 330,452,887 $ 94,331,315 $ 424,784,202 $ 34,567,102 $ 1,341,384
16
City of Waterloo, Iowa
Statement of Activities
Year Ended June 30, 2017
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.
$ 33,735,948 $ $ 4,231,224 $ 679,688 $
35,959,527 (380,000) 2,474,497 9,340,225 30,503,282
456,203 (75,000) 53,925
15,062,599 (50,000) 3,538,243 130,560
12,860,289 - 773,917 2,923,065 5,200,886
11,059,934 (638,500) 800,580 11,447 -
2,175,284 - -
111, 309, 784
(1,143,500) 11,818,461
13,138,910 35,704,168
12,943,403
3,599,278
692,000 15,235,503
451,500 3,820,281
206,145
290,513
192,977
16,542,681
1,143, 500 19, 055,784
496,658 192,977
$ 127,852,465 $ $ 30,874,245 $ 13,635,568 $ 35,897,145
$ 6,674,988 $ - $ 8,919,511 $ - $ 13,656
$ 581,607 $
$ 619,703 $
General Revenues
Taxes:
Property taxes
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
Net position, end of year
17
Net (Expense) Revenue and Changes in Net Position
Primary Government Component Units
Governmental Business -Type
Activities Activities
Total
Waterloo
Convention &
Waterloo Visitors
Water Works Bureau, Inc.
_ $ (28,825,036) $ $ (28,825,036) $
6,738,477 6,738,477
(327,278) (327,278)
(11, 343, 796) (11, 343, 796)
_ (3,962,421) (3,962,421)
(9,609,407) - (9,609,407)
(2,175,284) - (2,175,284)
(49, 504, 745) (49, 504, 745)
1,999,222 1,999,222
60,016 60,016
2,059,238 2,059,238
(49,504,745)
2,059,238 (47,445,507)
46, 530,686 46, 530, 686
9,588,261
1,479,848
1,301,082
1,239,346
2,835,985
748,325
67,533
339,895
2,741,240
34,865
51,489
9,588,261
1,479,848
1,301,082
1,239,346
2,835,985
748,325
67,533
391,384
2,741,240
34,865
66,907,066
51,489 66,958,555
$
2,258,179
38,096
72,594
952,783
(12, 330)
11,941
3,173
1,013,047 15,114
17,402,321 2,110,727 19,513,048 3,271,226 53,210
313,050,566 92,220,588 405,271,154 31,295,876 1,288,174
_, $ 330,452,887 $ 94,331,315 $ 424,784,202 $ 34,567,102 $ 1,341,384
City of Waterloo, Iowa
Balance Sheet
Governmental Funds
June 30, 2017
General
Trust and
Agency
Assets
Cash and cash equivalents $ 10,826,534 $ 310,776
Receivables:
Customer accounts, net 1,308,565
Property tax:
Delinquent 119,681 57,349
Succeeding year 19,937,663 9,535,809
Special assessments 355,477 -
Accrued interest 111,699
Loans and notes 27,500
Due from other funds 4,458,733
Due from other governments:
Federal 54,236
Iowa 368,678 -
Other 205,879 87,132
Inventories and prepaids 197,324 -
Restricted assets:
Cash and cash equivalents 10,000,395 1,844,107
Receivables 13,770 -
Advances to other funds
Total assets $ 47,986,134 $ 11,835,173
(Continued)
19
Tax Increment
Financing
General Obligation
Debt Service
Road Use June 2017 Other
Tax GO Bonds Governmental
Total
$ 4,930,772 $ 871,562 $ 23,516,463 $ 17,379,596 $ 22,845,732 $ 80,681,435
- 990 - 500,426 1,809,981
28,195 43,922 - 3,585 252,732
— 7,655,820 7,585,881 596,123 45,311,296
- - - - 355,477
- - - 138,465 250,164
27,500
- - 4,458,733
- - 433,783 488,019
- - 12,039,597 - 3,539,219 15,947,494
50,643 69,390 - 219,473 632,517
- - 251,556 - 10,214 459,094
- 40,930 - 2,186,122 14,071,554
- - - 13,770
- - 108,189 - 21,423 129,612
$ 12,665,430 $ 8,611,685 $ 35,916,795 $ 17,379,596 $ 30,494,565 $ 164,889,378
20
City of Waterloo, Iowa
Balance Sheet (Continued)
Governmental Funds
June 30, 2017
General
Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities
Accounts payable
Retainages payable
Accrued liabilities
Due to other funds
Unearned revenue
Compensated absences
Due to Waterloo Convention & Visitors Bureau, Inc.
Payables from restricted assets
Advances from other funds
Total liabilities
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
$ 346,688 $
8,230
1,213,487
150,445
59,507
298,368
1,477,887
168,316
Trust and
Agency
2,708
156,312
3,722,928 159,020
20,140, 750
327,434
74,590
9,593,158
20,542,774 9,593,158
Nonspendable 197,324 -
Restricted 8,565,653 2,082,995
Assigned 5,410,593 -
Unassigned 9,546,862
Total fund balances 23,720,432 2,082,995
Total liabilities, deferred inflows of resources
and fund balances
See notes to basic financial statements.
21
$ 47,986,134 $ 11,835,173
Tax Increment General Obligation Road Use June 2017 Other
Financing Debt Service Tax GO Bonds Governmental
Total
$ 217,714 $ 13,550 $ 507,040 $ 137,648 $ 1,535,146 $ 2,760,494
- - - - 975,283 983,513
--- 147,413 - 92,141 1,609,353
1,396,658 3,062,075 4,458,733
- - - - 150,445
_ - 6,268 - 3,356 69,131
- - - - 298,368
- - 78,199 1,556, 086
- - - - 168,316
1,614,372 13,550
660,721 137,648
5,746,200 12,054,439
"' 7,684,015 7,629,803
- 5,237,401
599,708 45,647,434
94,000 94,000
- 327,434
2,863,022 8,175,013
7,684,015 7,629,803 5,237,401 - 3,556,730 54,243,881
- - 251,556 - 10,214 459,094
2,880,934 968,332 29,767,117 17,241,948 22,556,877 84,063,856
486,109 - - 1,972,170 7,868,872
— - - - (3,347,626) 6,199,236
3,367,043 968,332 30,018,673 17,241,948 21,191,635 98,591,058
$ 12,665,430 $ 8,611,685 $ 35,916,795 $ 17,379,596 $ 30,494,565 $ 164,889,378
22
City of Waterloo, Iowa
Reconciliation of Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2017
Total governmental fund balances
Amounts reported for governmental activities in the statement of
net position are different because:
$ 98,591,058
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 361,366,873
Certain revenues are not available to pay for current period expenditures
and, therefore, are reported as deferred inflows of resources in the funds 8,580,759
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
Workers' compensation claims payable
Compensated absences
Net pension liability - IPERS
Net pension liability - MFPRSI
Accrued interest payable
3,540,990
17,615,728
(258,550)
(5,617,558)
$ (82,734,000)
(1,788,702)
225,984
(1,174, 828)
(3,977,250)
(535,187)
(4,278,603)
(12,213,965)
(46,723,287)
(166,575)
15,280,610
(153,366,413)
Net position of governmental activities $ 330,452,887
See notes to basic financial statements.
23
This Page Intentionally Left Blank
City of Waterloo, Iowa
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Year Ended June 30, 2017
General
Trust and
Agency
Revenues:
Property taxes $ 20,387,130 $ 9,550,955
Other taxes 6,959,983 394,367
Licenses and permits 1,521,808 -
Investment income 198,340 14,085
Rent 998,034
Intergovernmental 984,769 -
Charges for services 7,631,540 -
Interfund charges for services 2,135,000
Special assessments 133,943
Miscellaneous 1,390,425
Total revenues 42,340,972 9,959,407
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
Other financing sources (uses):
Transfers in
Transfers out
Payment to refunding bond escrow
Insurance proceeds
Bond discount
Bond premium
Proceeds from sale of capital assets
Issuance of long-term debt
Total other financing sources (uses)
26, 326,146
3,104,466
379,958
9,947,787
1,841,540
10,025,237
4,177,317
17,063
51,625,134 4,194,380
(9,284,162) 5,765,027
5,944,388
(135,750) (5,784,582)
1,624,380
70,564
7,503,582 (5,784,582)
Net changes in fund balances (1,780,580) (19,555)
Fund balances, beginning of year 25,501,012 2,102,550
Fund balances, end of year $ 23,720,432 $ 2,082,995
See notes to basic financial statements.
24
Tax Increment General Obligation Road Use June 2017 Other
Financing Debt Service Tax GO Bonds Governmental
Total
$ 8,127,766 $ 7,859,205 $ $ - $ 605,630 $ 46,530,686
292,763 - 9,894,267 17, 541, 380
21,908 1,543,716
"` 15,871 9,140 - 11,927 90,532 339,895
64,296 - 195,103 1,257,433
68,467 31,722,242 - 10,872,187 43,647,665
32,664 361,646 8,025,850
- - - 50,000 2,185, 000
133,943
96,728 74,672 - 204,075 1,765,900
8,143,637 8,390,599
31,901,486 11,927
22, 223, 440 122, 971,468
1,354,939
145,361
78,238
9,553,200
2,075,345
7,340,812
1,400,024
14,917
9,080,753
668,545
9,068,981
30, 518, 380
19, 526, 031
379,958
10,616,332
12,265,460
10, 042, 300
9,698,561
110,080 5,000 2,268,663
76,488 18,149, 338 19, 625, 850
1,578,538 11, 628, 545
8,740,836 186,568
36, 987, 534 114, 941, 535
6,565,099 (3,237,946)
23,160,650 (174,641)
(14,764,094) 8,029,933
88,500
(5,726,696)
3,443,053
(2,040,000)
109,996
1,960,000
2,381,912 11, 857, 853
(210,825) (11,857,853)
(2,040,000)
1,624,380
(73,397) (73,397)
239,986 - 349,982
- 25,000 95,564
17,250,000 - 19,210,000
(5,638,196) 3,473,049 - 17,416,589 2,196,087 19,166,529
926,903 235,103 23,160,650 17,241,948 (12,568,007) 27,196,462
2,440,140 733,229 6,858,023 - 33,759,642 71,394,596
.- $ 3,367,043 $ 968,332 $ 30,018,673 $ 17,241,948 $ 21,191,635 $ 98,591,058
Omen
25
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, 2017
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 $ 12,262,241
Depreciation (16,015,440)
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
$ 27,196,462
(3,753,199)
(95,564)
34,865 (60,699)
Change in assets held for resale (21,137)
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
Payment to escrow for refunded bonds
Repayment of general obligation bond principal
Repayment of other long-term debt principal
Bond discount
Bond premium
Amortization of bond discounts and premiums
Change in accrued interest
Revenue in the statement of activities that does not provide current financial
resources is not reported as revenue in the governmental funds:
Current year
Prior year
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
Change in workers' compensation claims payable
Change in compensated absences and deferred compensation liabilities
Pension expense - IPERS
Pension expense - MFPRSI
Change in net position of governmental activities
See notes to basic financial statements.
26
(19, 210, 000)
2,040,000
9,553,200
145,361
73,397
(349,982)
108,260
(14,984)
(7,654,748)
8,580,759
(4,601,264)
466,049
(87,687)
(237,756)
(225,833)
(2,198,626)
$ 17,402,321
This Page Intentionally Left Blank
City of Waterloo, Iowa
Statement of Net Position
Enterprise Funds
June 30, 2017
Sanitary Sewer
Nonmajor -
Sanitation
Total
Assets
Current assets:
Cash and cash equivalents $ 10,288,817 $ 3,309,865 $ 13,598,682
Customer accounts receivable 3,324,132 729,502 4,053,634
Special assessments receivable 62,842 270,582 333,424
Due from other governments:
Waterloo Water Works 1,450,813 466,739 1,917,552
Other 209,945 27,979 237,924
Inventories 28,200 - 28,200
Total current assets 15,364,749 4,804,667 20,169,416
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.
27,003
4,612,411
90,708,037
4,095,909
11,701
119,579
1,198, 856
38,704
4,731,990
91, 906, 893
4,095,909
94,803,946
1,198,856 96,002,802
99,443,360
1,330,136 100, 773,496
114, 808,109
6,134, 803 120, 942, 912
658,868
265,818 924,686
15,788 - 15,788
674,656
265,818 940,474
27
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
907,499 $
102,093
125,470
2,557,000
175,506
61,979
135,788 $ 1,043,287
102,093
54,564 180,034
2,557,000
67,021 242,527
61,979
3,929,547
257,373 4,186,920
264,906
19,135,273
353,851
59,882
2,260,205
119,579
216,445
29,297
872,657
384,485
19,135, 273
570,296
89,179
3,132, 862
22, 074,117
1,237,978 23,312,095
Total liabilities 26,003,664
1,495, 351 27,499, 015
Deferred Inflows of Resources, pension related amounts 39,241
Net position:
Net investment in capital assets
Restricted for:
Debt service
Improvements
Unrestricted
13,815 53,056
77, 981, 397
196,533
475,982
10,785,948
1,198,856 79,180,253
196,533
475,982
3,692, 599 14,478, 547
Total net position $ 89,439,860 $ 4,891,455 $ 94,331,315
28
City of Waterloo, Iowa
Statement of Revenues, Expenses and Changes in Net Position
Enterprise Funds
Year Ended June 30, 2017
Sanitary Sewer
Nonmajor -
Sanitation
Total
Operating revenues:
Charges for sales and service $ 15,188,253 $ 3,712,605 $ 18,900,858
Miscellaneous 47,250 107,676 154,926
Total operating revenues 15,235,503 3,820,281 19,055,784
Operating expenses:
Salaries and benefits
Contractual services
Intra -city reimbursements
Commodities
Depreciation
Total operating expenses
3,785,174
3,006,884
692,000
2,343,170
3,152,676
1,588,505
1,163,725
451,500
547,305
299,743
5,373,679
4,170,609
1,143, 500
2,890,475
3,452,419
12,979,904
4,050,778 17,030,682
Operating income (loss) 2,255,599 (230,497) 2,025,102
Nonoperating revenues (expenses):
Interest income 40,762 10,727 51,489
Intergovernmental 206,145 290,513 496,658
Interest expense (665,311) - (665,311)
Amortization 9,812 - 9,812
Total nonoperating revenues (expenses) (408,592) 301,240 (107,352)
Income prior to other financing sources (uses) 1,847,007
Other financing sources (uses):
Transfers in
Transfers out
Capital contributions
15,350
192,977
70,743 1,917,750
(15,350)
15,350
(15,350)
192,977
Change in net position 2,055,334 55,393 2,110,727
Net position, beginning of year 87,384,526 4,836,062 92,220,588
Net position, end of year $ 89,439,860 $ 4,891,455 $ 94,331,315
See notes to basic financial statements.
29
City of Waterloo, Iowa
-` Statement of Cash Flows
Enterprise Funds
Year Ended June 30, 2017
Sanitary Sewer
Nonmajor -
Sanitation
Total
Cash flows from operating activities:
—
Receipts from customers and users $ 14,295,439 $ 3,628,217 $ 17,923,656
Payments to suppliers (5,759,813) (1,686,725) (7,446,538)
Payments to or on behalf of employees (3,809,025) (1,609,925) (5,418,950)
Payment for interfund services used (692,000) (451,500) (1,143,500)
Net cash provided by (used in) operating
activities 4,034,601 (119,933) 3,914,668
Cash flows from noncapital financing activities,
intergovernmental proceeds 1,163
Cash flows from capital and related financing activities:
Purchase and construction of capital assets
Proceeds from bonds, loans and notes, net bond premiums
Principal paid on debt
Interest paid on debt
Net cash (used in) capital and related
financing activities
--- Cash flows from investing activities,
270,976 272,139
(735,877)
1,820,382
(3,446,800)
(730,691)
(24,898)
(760,775)
1,820,382
(3,446,800)
(730,691)
(3,092,986)
(24,898) (3,117,884)
interest received 40,762
10,727 51,489
(Decrease) in cash and cash equivalents 983,540
Cash and cash equivalents, beginning of year 13,917,688
Cash and cash equivalents, end of year
136,872 1,120,412
3,292,572 17,210,260
$ 14,901,228 $ 3,429,444 $ 18,330,672
Reconciliation of cash and cash equivalents to
statement of net position:
Unrestricted cash and cash equivalents $ 10,288,817 $ 3,309,865 $ 13,598,682
Restricted cash and cash equivalents 4,612,411 119,579 4,731,990
$ 14,901,228 $ 3,429,444 $ 18,330,672
MOM
(Continued)
mmlbs
30
City of Waterloo, Iowa
Statement of Cash Flows (Continued)
Enterprise Funds
Year Ended June 30, 2017
Sanitary Sewer
Nonmajor -
Sanitation
Total
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) $ 2,255,599 $ (230,497) $ 2,025,102
Adjustments to reconcile operating income (loss) to net cash
provided by operating activities:
Depreciation 3,152,676 299,743 3,452,419
(Increase) in accounts receivable (243,750) (21,104) (264,854)
(Increase) decrease in due from Waterloo Water Works (687,214) (156,185) (843,399)
(Increase) in inventories and prepaids (4,985) - (4,985)
Increase (decrease) in accounts payable (416,512) 7,710 (408,802)
Increase in security deposits 2,638 1,820 4,458
Increase in accrued liabilities 15,115 4,188 19,303
Increase in other post employment benefits obligation (59,193) (36,172) (95,365)
Increase in compensated absences and
deferred compensation (19,376) 3,694 (15,682)
Increase in net pension liability 484,665 184,714 669,379
(Increase) in deferred outflows of resources (325,592) (132,311) (457,903)
(Decrease) in deferred inflows of resources (119,470) (45,533) (165,003)
Net cash provided by operating activities
$ 4,034,601 $ (119,933) $ 3,914,668
Schedule of noncash capital and related financing activities:
Payables for acquisition of capital assets $ 452,978 $ $ 452,978
Capital assets contributed 192,977 - 192,977
Capitalized interest 67,048 67,048
Capital assets transferred between funds 15,350 (15,350)
See notes to basic financial statements.
31
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 Compensated Absences 50-51
8 Long -Term Liabilities 51-54
9 Operating Leases 54
10 Retirement Systems 55-67
11 Deficit Fund Balances 68
12 Commitments 68
13 Other Postemployment Benefits 69-70
14 Employee Health Care Plan 70-71
15 Worker's Compensation Plan 71
16 Joint Ventures and Jointly Governed Organizations 71
17 Industrial Development Revenue Bonds 72
18 Risk Management 72
19 Tax Abatements 72
20 Fund Balances 73
21 New GASB Statements and Pending Pronouncements 74-75
22 Subsequent Event 75
32
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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
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 governments due from the Waterloo Water
Works do not agree by $1,317,179.
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
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
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.
Road Use Tax Fund is a special revenue fund 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.
June 2017 GO Bonds Fund is a capital project fund used to account for proceeds from the 2017
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
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.
37
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)
Receivables and payables: Receivables are reported net of any allowance for uncollectible
accounts. As of June 30, 2017, the General Fund had allowances for uncollectible customer
accounts totaling $980,250.
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, 2015
assessed property valuations; was for the tax accrual period July 1, 2016 through June 30, 2017;
and reflected the tax asking contained in the budget certified to the County Board of Supervisors in
March 2016.
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,
which are recorded as an expenditure or an expense when consumed.
38
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)
Restricted assets: Certain assets of the governmental funds and enterprise funds are classified as
restricted assets because their use is completely restricted by donors, bond indentures, contracts or
grant agreements.
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. $66,994 of
interest expense in the Sanitary Sewer Fund was capitalized during the year ended June 30, 2017.
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
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
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 IPERS' and MFPRSI's fiduciary net position have been determined
on the same basis as they are reported by IPERS 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
and compensatory time 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
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 $28,715,259 and the Sanitary Sewer enterprise fund is
$4,076,473. 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 $47,393,940 of restricted net position of
which $3,894,401 is restricted by enabling legislation for debt service, 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
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, 2017, 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. Accordingly, 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, 2017, the City's investments were not subject to concentration of credit risk.
43
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, 2017 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:
2018 $ 81,692
2019 75,692
2020 70,992
2021 72,338
2022 46,213
2023 46,213
Total future minimum lease rentals to be received
$ 393,140
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, 2021 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:
2018 $ 72,421
2019 72,421
2020 72,421
2021 10,058
Total future minimum lease rentals to be received $ 227,321
44
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, 2017 is $39,168. The lease includes a management agreement with the Hotel
for the management of the Center.
Note 4. Loans and Notes
General Fund:
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,
2017, with a balance of $21,551. 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, 2017
was $1,280,730. 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, 2017, the City had made 1,685 such loans totaling $32,622,443.
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
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, 2017 was as follows:
Due From Due To
Major governmental funds:
General $ 4,458,733 $ -
Tax increment financing - 1,396,658
General obligation debt service - -
Nonmajor governmental funds - 3,062,075
$ 4,458,733 $ 4,458,733
Advances to and from other funds as of June 30, 2017, were as follows:
Major governmental funds:
General
Road Use Tax
Nonmajor governmental funds
Advances To Advances From
$ $ 168,316
108,189
21,423
Major Enterprise Fund, sanitary sewer 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 $ 1,450,813
Sanitation 466,739
Due from Waterloo Water Works 1,917,552
Waterloo Water Works - due to primary government 1,615,547
Difference $ 302,005
The difference in the above amounts of $302,005 results from the different year ends of the entities as
described in Note 1.
Due to Waterloo Convention & Visitors Bureau, Inc. from General Fund $ 298,368
46
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 $ 5,944,388 $ 135,750
Trust and agency 5,784,582
Tax increment financing 88,500 5,726,696
General obligation debt service 3,443,053 -
Nonmajor governmental funds 2,381,912 210,825
Major Enterprise Fund, sanitary sewer
15,350
Nonmajor Enterprise Fund, sanitation - 15,350
$ 11,873,203 $ 11,873,203
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, 2017 was as follows:
M. Governmental Activities
Capital assets, not being depreciated:
Land
Land held for redevelopment
Construction -in -progress
Total capital assets, not being
depreciated
Beginning
Balance
June 30, 2016 Additions
Deletions
Ending
Balance
Transfers June 30, 2017
$ 44,331,630 $ 65,309 $
10,672,268 317,438
7,153,105 9,733,499
1,500 $ $ 44,395,439
10,989,706
(5,478,460) 11,408,144
62,157, 003 10,116, 246
1,500 (5,478,460) 66,793,289
Capital assets, being depreciated:
Buildings and improvements 130,556,466
Infrastructure 356,421,570
Vehicles, machinery, furniture and equipment 30,590,346
Software 752,449
Total capital assets, being
depreciated 518, 320, 831
Less accumulated depreciation for:
31,300
419,825
1,653,719
41,151
108,121 17,615 130,497,260
5,403,595 362,244,990
1,090,586 57,250 31,210,729
793,600
2,145, 995
1,198,707 5,478,460 524,746,579
Buildings and improvements 59,045,686 4,240,708 87,018
Infrastructure 135,881,411 9,507,840 -
Vehicles, machinery, furniture and equipment 19,923,430 2,124,839 1,052,490
Software 446,536 142,053 -
Total accumulated depreciation 215,297,063 16,015,440 1,139,508
63,199, 376
145,389,251
20,995,779
588,589
230,172, 995
Total capital assets, being
depreciated, net 303,023,768 (13,869,445) 59,199
5,478,460 294,573,584
Governmental activities capital
assets, net $ 365,180,771 $ (3,753,199) $
60,699 $ $ 361,366,873
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 6. Capital Assets (Continued)
Business -Type Activities
Capital assets, not being depreciated:
Land
Construction -in -progress
Total capital assets, not
being depreciated
Beginning Ending
Balance Balance
June 30, 2016 Additions Deletions Transfers June 30, 2017
$ 348,055 $ 186,187 $
4,839,293 1,256,392
$ - $ 534,242
(2,534,018) 3,561,667
5,187, 348 1,442, 579
(2,534,018) 4,095,909
Capital assets, being depreciated:
Buildings 71,132,866
Improvements other than buildings 54,902,176
Vehicles, machinery, furniture and equipment 12,980,717
Software 19,940
Total capital assets,
being depreciated
31,198
224,483
19,940
2,534,018
71,132, 866
57,436,194
12,787,432
139,035,699
31,198 244,423
2,534,018 141, 356,492
Less accumulated depreciation for:
Buildings 23,412,694 1,404,737 - 24,817,431
Improvements other than buildings 16,065,212 1,098,043 - 17,163,255
Vehicles, machinery, furniture and equipment 6,743,757 949,639 224,483 7,468,913
Software 19,940 19,940
Total accumulated depreciation 46,241,603 3,452,419 244,423 49,449,599
Total capital assets, being
depreciated, net
92,794,096 (3,421,221)
2,534,018 91,906,893
Business -type activities capital
assets, net $ 97,981,444 $ (1,978,642) $ $ - $ 96,002,802
48
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 - 2016 Additions Deletions 2017
Waterloo Water Works Capital Assets
Capital assets, not being depreciated:
Land $ 314,543 $ - $ - $ 314,543
-- Construction -in -progress 395,658 1,139,343 (505,168) 1,029,833
Total capital assets, not being depreciated 710,201 1,139,343 (505,168) 1,344,376
Capital assets, being depreciated:
Buildings and improvements
Water supply and distribution systems
Meters and equipment
Machinery and equipment
Total capital assets, being depreciated
Less accumulated depreciation for:
Buildings and improvements
Water supply and distribution systems
Meters and equipment
Machinery and equipment
Total accumulated depreciation
Total capital assets, being depreciated, net
Net discretely presented
component unit - Waterloo Water
Works capital assets, net
1,772,617 8,536
30,178,520 611,860
1,173,594 -
3,313,454 351,492
(78,622)
1,781,153
30, 790, 380
1,173, 594
3,586,324
36,438,185 971,888
(78,622) 37,331,451
813,118
8,051,859
718,817
1,478,444
11, 062, 238
29,317
472,215
25,293
239,905
766,730
(64,092)
(64,092)
842,435
8,524,074
744,110
1,654,257
11,764, 876
25,375,947 205,158
(14,530) 25,566,575
$ 26,086,148 $ 1,344,501 $ (519,698) $ 26,910,951
Ending
Balance Balance
Discretely Presented Component Unit - June 30, 2016 Additions Deletions June 30, 2017
Waterloo Convention & Visitors Bureau, Inc.
_ Capital assets, being depreciated:
Equipment $ 66,802 $ $ $ 66,802
Leasehold improvements 125,924 125,924
Total capital assets, being depreciated 192,726 192,726
Less accumulated depreciation 143,530
Total capital assets, being depreciated, net
MOMS
49
16,145 159,675
$ 49,196 $ (16,145) $ $ 33,051
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, 2017:
Governmental activities:
Public safety $ 897,061
Public works 12,407,332
Culture and recreation 2,161,419
Community and economic development 339,603
General government 210,025
Total governmental activities 16,015,440
Business -type activities:
Sanitary sewer 3,152,676
Sanitation 299,743
Total business -type activities 3,452,419
Total primary government $ 19,467,859
Component unit - Waterloo Water Works $ 766,730
Component unit - Waterloo Convention & Visitors Bureau, Inc. $ 16,145
Note 7. 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, 2017, there was $2,887,930 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, 2017, there was $127,555 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 rolled over to the employee's casual leave bank 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 roll 75 percent of their unused sick leave, with the
balance added to their sick leave storage bank.
50
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 7. Compensated Absences (Continued)
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, 2017, there was $1,555,720 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 accrued casual
pay is reported as compensated absences in the applicable fund which includes $69,129 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.
Note 8. Long -Term Liabilities
The following is a summary of the changes in long-term liabilities for the year ended June 30, 2017:
Increases Decreases and Due Within
June 30, 2016 and Issues Retirements June 30, 2017 One Year
Governmental activities:
General obligation bonds $ 75,117,200 $ 19,210,000 $ 11,593,200 $ 82,734,000 $ 9,778,000
Loans and notes 1,934,063 - 145,361 1,788,702 181,345
Deferred compensation 238 - 238 - -
Compensated absences 4,247,266 3,702,111 3,601,643 4,347,734 2,823,221
— Other postemployment benefit
obligation 4,433,249 - 456,049 3,977,200
Net pension liability - !PERS 9,653,901 2,560,064 - 12,213,965
Net pension liability - MFPRSI 36,408,843 10,314,444 - 46,723,287 -
Subtotal 127,361,511 35,786,619 15,796,491 151,784,888 12,782,566
Unamortized discounts (174,914) (73,397) (22,327) (225,984)
Bond premium 955,433 349,982 130,587 1,174,828
— Total long-term
liabilities, governmental
activities $ 128,142,030 $ 36,063,204 $ 15,904,751 $ 148,300,483 $ 12,782,566
_ Business -type activities:
General obligation bonds
Revenue bonds
Compensated absences
Other postemployment benefit
obligation
Net pension liability
Subtotal
Unamortized discounts
Bond premium
Total long-term
,_ liabilities, business -
type activities
$ 23,062,800 $ 1,735,000 $ 3,306,800 $ 21,491,000 $ 2,557,000
140,000 - 140,000 -
347,388 332,483 348,165 331,706 242,527
665,661
2,463,483 669,379
95,365 570,296
3,132,862
26,013,671 2,736,862 3,890,330 25,525,864
(79,221) - (15,466) (63,755)
217,849 85,382 38,203 265,028
2,799,527
$ 26,152,299 $ 2,822,244 $ 3,913,067 $ 25,727,137 $ 2,799,527
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 8. Long -Term Liabilities (Continued)
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.
On June 20, 2017, the City issued $9,245,000 in General Obligation Bonds, Series 2017A maturing
June 1, 2018 through June 1, 2032 with an interest rate of 3.00 percent. Included in this series is
$2,845,000 that refunded the balance of the 2009A General bond issue of which $2,040,000 was for
general purposes and $805,000 was for sewer purposes.
On June 20, 2017, the City issued $3,600,000 in General Obligation Bonds, Series 20176 maturing
June 1, 2018 through June 1, 2032 with interest rates ranging from 1.35 percent to 3.35 percent.
On June 20, 2017, the City issued $8,100,000 in General Obligation Bonds, Series 2017C maturing
December 1, 2017 through December 1, 2035 with interest rates ranging from 2.75 percent to 2.80
percent.
Reasons for issuance were to refund the General Obligation Bonds, Series 2009A as well as finance
certain capital improvements, equipment and vehicle acquisitions and urban renewal projects in the City
and pay a portion of the costs of issuance of the Bonds.
The City's outstanding general obligation long-term debt is as follows:
Issue Date
Outstanding
Purpose Interest Rates June 30, 2017
June 2008 Taxable 5.000% $ 360,000
June 2009 Taxable 1.00 - 3.00 270,000
June 2010 Taxable 1.00 - 5.00 4,725,000
June 2011 Tax-exempt - capital improvements/general 2.00 - 4.00 5,055,000
June 2011 Taxable 0.60 - 4.60 5,145,000
June 2012 Tax-exempt - capital improvements/general 2.00 - 2.30 5,310,000
June 2012 Refunding 0.35 - 1.35 1,620,000
June 2012 Taxable 2.20 - 3.50 3,560,000
June 2013 Tax-exempt - capital improvements/general 2.00 - 3.70 4,470,000
June 2013 Taxable 2.00 - 3.70 5,355,000
June 2013 Refunding 0.50 - 2.50 735,000
June 2014 Tax-exempt - capital improvements/general 2.00 - 3.12 7,200,000
June 2014 Taxable 1.00 - 4.00 4,180,000
June 2014 Refunding 2.00 4,490,000
June 2015 Tax-exempt - capital improvements/general 3.00 - 3.50 10,950,000
June 2015 Taxable 1.50 - 4.00 1,365,000
June 2016 Tax-exempt - capital improvements/general 2.00 - 2.25 7,900,000
June 2016 Taxable 0.80 - 3.10 1,705,000
June 2016 Taxable 0.90 - 3.40 8,885,000
June 2017 Tax-exempt - capital improvements/general 3.00 9,245,000
June 2017 Taxable 1.35 - 3.35 3,600,000
June 2017 Taxable - urban renewal 2.75 - 3.50 8,100,000
$ 104,225,000
52
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 8. Long -Term Liabilities (Continued)
Annual debt service on general obligation and revenue bonds as of June 30, 2017 are as follows:
GO Debt Service
General Obligation Bonds
Principal Interest
Year ending June 30:
2018 $ 9,778,000 $ 2,263,308
2019 8,586,000 2,054,767
2020 7,120,000 1,836,676
2021 6,233,000 1,663,029
2022 5,880,000 1,500,065
2023 - 2027 25,767,000 5,176,449
2028 - 2032 14,925,000 1,880,015
2033 - 2036 4,445,000 349,855
$ 82,734,000 $ 16,724,164
Sanitary Sewer Enterprise
General Obligation Bonds
Principal Interest
Year ending June 30:
2018 $ 2,557,000 $ 669,301
2019 2,519,000 608,648
_ 2020 2,060,000 541,923
2021 2,007,000 482,573
2022 1,955,000 420,695
2023 - 2027 8,318,000 1,143,730
2028 - 2030 2,075,000 141,107
$ 21,491,000 $ 4,007,977
Loans and notes: 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, 2017,
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. As of June 30, 2017, the outstanding balance of these loans was $1,533,272.
• 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.
53
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 8. 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:
2018 $ 181,345 $ 78,623
2019 191,835 70,600
2020 193,658 63,983
2021 200,453 57,428
2022 215,659 50,633
2023 - 2026 805,752 139,336
Discretely presented component unit:
Compensated absences
$ 1,788,702 $ 460,603
Balance Balance Due Within
December 31, 2016 Additions Deletions December 31, 2017 One Year
$ 67,508 $ 151,018 $ 148,612 $ 69,914 $ 69,914
Total long-term debt $ 67,508 $ 151,018 $ 148,612 $ 69,914 $ 69,914
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 9. 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, 2017.
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, 2017, and no capital lease liability as
of June 30, 2017.
The Leisure Services department of the General Fund is operating the facility with the intent for it to be
self-supporting.
54
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. 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. IPERS provides retirement and death benefits which are established by State
statute to plan members and beneficiaries. IPERS issues a publicly available financial report that includes
financial statements and required supplementary information. The report may be obtained by writing to
IPERS, P.O. Box 9117, Des Moines, Iowa, 50306-9117.
Benefits provided: IPERS 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
IPERS 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, 2017, was 5.95 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 $1,585,908 for the year
ended June 30, 2017.
Pension Liabilities, Pension Expense, and Deferred Inflow and Outflows of Resources Related to
Pensions: At June 30, 2017, the City reported a liability of $15,346,827 for its proportionate share of the
net pension liability. The net pension liability was measured as of June 30, 2016, 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, 2016, the City's proportion was 0.2438592 percent, a decrease of
.00140795 percent from the City's proportion at June 30, 2015.
55
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
For the year ended June 30, 2017, the City recognized pension expense of $1,313,602. At June 30,
2017, 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 $ 135,635 $ (183,160)
Changes of assumptions 234,145
Net difference between projected and actual earnings
on pension plan investments 2,186,437
Changes in proportion and differences between City
contributions and proportionate share of contributions 323,551 (128,446)
Total deferred amounts to be recognized in pension
expense in future periods 2,879,768 (311,606)
City contributions subsequent to the measurement date 1,585,908
Total deferred amounts related to pensions $ 4,465,676 $ (311,606)
$1,585,908 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, 2018. 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 IPERS 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:
2018 $ 1,380,401
2019 1,380,401
2020 1,288,252
2021 723,402
2022 (2,204,294)
$ 2,568,162
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
Actuarial assumptions: The total pension liability was determined by an actuarial valuation as of
June 30, 2016, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation
Salary increases
Investment rate of return
Wage growth
3.00 percent
4.00 to 17.00 percent, average, including inflation.
7.50 percent, net of pension plan investment expense, including inflation
4.00 percent per annum based on 3.00 percent inflation and 1.00 percent
real wage 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, 2016 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
Asset
Allocation
Long -Term
Expected Real
Rate of Return
U.S. equity
Non U.S. equity
Private equity
Real estate
Core plus fixed income
Credit opportunities
TIPS
Other real assets
Cash
24%
16
11
8
28
5
5
2
1
100%
6.29%
6.75
11.32
3.48
2.04
3.63
1.91
6.24
(0.71)
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.
57
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. 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 $ 24,829,092 $ 15,346,827 $ 7,343,674
Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is
available in the separately issued IPERS financial report; which can be located atwww.ipers.orq.
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.
58
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. 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, 2017.
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 27.77 percent for the year ended June 30, 2017.
The City's contributions to MFPRSI for the year ended June 30, 2017 were $4,186,850.
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 their fiscal year ended June 30, 2016.
59
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
Net Pension Liabilities, Pension Expense, and Deferred Inflows and Outflows of Resources
Related to Pensions: At June 30, 2017, the City reported a liability of $46,723,287 for its proportionate
share of the net pension liability. The net pension liability was measured as of June 30, 2016, 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, 2016, the City's proportion was 5.724535 percent, an increase of 0.004015 percent from the
City's proportion at June 30, 2015.
For the year ended June 30, 2017, the City recognized pension expense of $1,988,224. At June 30,
2017, 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
$ 11,858,517 $ (32,985)
1,501,663 (487,173)
(4,846,496)
68,698 (250,904)
13,428,878 (5,617,558)
City contributions subsequent to the measurement date 4,186,850
Total deferred amounts related to pensions $ 17,615,728 $ (5,617,558)
$4,186,850 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, 2018. 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:
2018 $ 1,335,673
2019 1,335,673
2020 3,592,871
2021 2,079,005
2022 (531, 902)
$ 7,811,320
60
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
Actuarial Assumptions: The total pension liability in the June 30, 2016, 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, 2016 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 were based on RP 2000 Blue Collar Combined Healthy table with males set -back two
years, females set -forward one year and disableds set -forward one year (males only rates), with no
projection of future mortality improvement.
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.
61
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. 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 $ 57,671,218 $ 46,723,287 $ 20,168,576
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 34
Inactive plan members entitled to but not yet receiving benefits 2
Active plan members 17
Total members 53
62
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. 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 IPERS 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, 2016,
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, 2016 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, 2016 valuation were based on the results of an
actuarial experience study for the period January 1, 2016 through December 31, 2016. 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, 2016 are summarized in the following table:
Long -Term
Target Expected Real
Allocation Rate of Return
Asset Class:
Cash and fixed income 11% 2.50%
Equity large cap 63 5.50
Equity mid cap 12 6.00
Equity small cap 12 6.00
Real estate 2 5.00
Total 100%
63
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. 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, 2016 were as follows:
Balance, beginning of year
Changes for the year:
Service cost
Interest
Difference between expected and actual
experience
Changes in assumptions
Contributions, employer
Contributions, member
Net investment income
Benefit payments including refunds of
employee contributions
Balance, end of year
Total Plan Net
Pension Fiduciary Net Pension
Liability Position Liability
$ 7,927,445 $ 5,105,369 $ 2,822,076
53,886
616,847
164,103
13,141
489,448
60,713
281,674
(541,494) (541,494)
53,886
616,847
164,103
13,141
(489,448)
(60,713)
(281,674)
$ 8,233,928 $ 5,395,710 $ 2,838,218
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 $ 3,496,932 $ 2,838,218 $ 2,228,297
64
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
Net pension liabilities, pension expense and deferred outflows of resources and deferred inflows
of resources related to pensions: At December 31, 2016, the Water Works' recognized pension
expense of $396,172. At December 31, 2016, 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 $ 109,402 $ 9,345
Changes in assumptions 12,961
Net difference between projected and actual earnings on
pension plan investments 448,401
$ 570,764 $ 9,345
Amounts reported as deferred outflows of resources and deferred inflows or resources will be recognized
in pension expense as follows:
Year ending December 31:
Pension
Expense
Amount
2017 $ 194,929
2018 200,075
2019 140,995
2020 25,420
Total
$ 561,419
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 IPERS 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, 2016, 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,
2016, 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 IPERS
participating employers. At June 30, 2016, the Water Works' collective proportion was .014220 percent,
which was an increase of .001423 percent from its proportion measured as of June 30, 2015.
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
For the year ended December 31, 2016, the Water Works recognized pension expense of $90,305. At
December 31, 2016, the Water Works 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 $ 8,159 $ 11,019
Changes of assumptions 14,086
Net difference between projected and actual earnings
on pension plan investments 163,196 31,660
Changes in proportion and differences between Water Works
contributions and proportionate share of contributions 107,243
Total deferred amounts to be recognized in pension
expense in future periods 292,684 42,679
Water Works contributions subsequent to the measurement date 48,000
Total deferred amounts related to pensions $ 340,684 $ 42,679
$48,000 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, 2017. 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 December 31:
2017 $ 54,161
2018 54,161
2019 92,999
2020 47,682
2021 1,002
$ 250,005
There were no non -employer contributing entities at IPERS.
Actuarial assumptions: The total pension liability in the June 30, 2016 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, 2016 valuation were based on the results of actuarial
experience. Study for the four-year period ending June 30, 2014. 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.
66
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 10. Retirement Systems (Continued)
— The Tong -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 Tong -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:
Long -Term
Asset Expected Real
— Asset Class 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%)
$ 1,493,708 $ 923,262 $ 441,792
Payables to the pension plan: At December 31, 2016, 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 IPERS.
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 11. Deficit Fund Balances
Funds with deficit balances as of June 30, 2017 were as follows:
Nonmajor governmental:
Special revenue:
Community Development Block Grant $ 143,856
Grants 1,487,189
Capital projects,
Capital Improvements 1,827,736
The deficit of the above funds are expected to be eliminated through future transfers from other funds,
grant proceeds or bond proceeds.
Note 12. 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 and local option taxes. As of June 30, 2017, the City was committed to
approximately $18.7 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, 2017, the loan balance was $204,532. 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.
Development agreement: 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.
68
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 13. 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
IPERS 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.
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 2017, the City
contributed $2,139,632. Retiree and active members receiving benefits have required contributions of
$623 per month for single health coverage and $1,573 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, 2016
Net OPEB obligation - June 30, 2017
$ 1,655,000
204,000
(280,782)
1,578,218
2,139,632
(561,414)
5,108, 960
$ 4,547,546
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net
OPEB obligations for 2017 and the two preceding years follows. OPEB liability attributable to
governmental activities are generally liquated by the General fund.
Fiscal Year Ended
June 30, 2015
June 30, 2016
June 30, 2017
Percentage of
Annual Annual OPEB Net OPEB
OPEB Cost Cost Contributed Obligation
$ 1,712,953 92.97% $ 4,957,430
1,580,588 90.41 5,108,960
1,587,218 135.57 4,547,546
69
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 13. Other Postemployment Benefits (Continued)
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.
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 14. 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.
70
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 14. Employee Health Care Plan (Continued)
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 2018, 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
2017 2016
$ 1,117,473 $ 1,012,196
10,522,908 8,894,980
(10,619,258) (8,789,703)
$ 1,021,123 $ 1,117,473
Note 15. 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, 2017, and is recorded as a liability in the government -wide statement of
net position. $62,436 is considered matured and is recorded in the General Fund and governmental
activities with accrued liabilities. Changes and balances are as follows:
2017 2016
Estimated unpaid claims, beginning of year $ 494,081 $ 399,777
Estimated claims incurred 1,004,016 600,529
Claims payments (900,474) (506,225)
Estimated unpaid claims, end of year $ 597,623 $ 494,081
Note 16. 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 ($2,112,508 during the year ended June 30, 2017). Also, during the year ended June 30, 2017, 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.
71
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 17. 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, 2017 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.
Note 18. 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, 2017, the City has assigned $3,629,003 of its General Fund, fund balance for insurable
risks retained.
Note 19. Tax Abatements
GASB Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an
agreement between one or more governments and an individual or entity in which (a) one or more
governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or
entity promises to take a specific action after the agreement that has been entered into that contributes to
economic development or otherwise benefits the governments or the citizens of those governments.
City tax abatements: The City provides tax abatements for urban renewal and economic development
projects with tax increment financing as provided for in Chapters 15A and 403 of the Code of Iowa. For
these types of projects, the City enters into agreements with developers which require the City, after
developers meet the terms of the agreements, to rebate a portion of the property tax paid by the
developers, to pay the developers an economic development grant or to pay the developers a
predetermined dollar amount. No other commitments were made by the City as part of these agreements.
For the year ended June 30, 2017, the City abated $700,829 of property tax under the urban renewal and
economic development projects.
72
City of Waterloo, Iowa
Notes to Basic Financial Statements
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 Road Use June 2017 Nonmajor
Fund balances: General Agency Financing Debt Service Tax GO Bonds Governmental Total
Nonspendable:
Inventories $ 125,635 $ - $ - $ - $ - $ - $ - $ 125,635
Prepaids 71,689 - - - 251,556 - 10,214 333,459
Total
nonspendable 197,324 - - - 251,556 - 10,214 459,094
Restricted:
Debt service - - 2,880,934 968,332 - - 3,849,266
Self-funded health
— insurance 6,411,280 1,844,107 - - - - - 8,255,387
Tourism promotion 1,281,710 _ _ _ - 1,281,710
Public access
television 159,427 - -
- - - 159,427
Civil rights enforcement 53,016 - -
53,016
Housing 53,711 - - - - - 4,355,521 4,409,232
Donor specified 606,509 - - - 606,509
Employee benefits 238,888 - - - - 238,888
Library 203,959 203,959
—
Street and right-of-way
maintenance - - - - 29,767,117 29,767,117
Improvements 17,241,948 17,997,397 35,239,345
Total restricted 8,565,653 2,082,995 2,880,934 968,332 29,767,117 17,241,948 22,556,877 84,063,856
Assigned:
Insurance 3,629,003 -
3,629,003
Other postemploy-
ment benefits 1,040,792 -
1,040,792
Improvements - - - - 1,890,440 1,890,440
Other 240,798 486,109 - - - 81,730 808,637
Use of fund balance for
future budget 500,000 - - - 500.000
Total assigned 5,410,593 - 486,109 - - - 1,972,170 7,868,872
Unassigned 9,546,862 -
(3,347,626) 6,199,236
Total fund
balances
$ 23,720,432 $ 2,082,995 $ 3,367,043 $ 968,332 $ 30,018,673 $ 17,241,948 $ 21,191,635 $ 98,591,058
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. 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 Statement
identifies the circumstances that trigger the recognition of these transactions. The Statement also
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 while the deferred outflow of resources associated with
the 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. The Statement requires disclosures including 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.
GASB Statement No. 84, Fiduciary Activities, issued February 2017, will be effective for the City
beginning with its fiscal year ending June 30, 2020. The objective of Statement No. 84 is to improve
guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes
and how those activities should be reported. This Statement establishes criteria for identifying fiduciary
activities of all state and local governments. The focus of the criteria generally is on (1) whether a
government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a
fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and
postemployment benefit arrangements that are fiduciary activities.
An activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements.
Governments with activities meeting the criteria should present a statement of fiduciary net position and a
statement of changes in fiduciary net position. An exception to that requirement is provided for a
business -type activity that normally expects to hold custodial assets for three months or less. This
Statement describes four fiduciary funds that should be reported, if applicable: (1) pension (and other
employee benefit) trust funds, (2) investment trust funds, (3) private -purpose trust funds, and (4) custodial
funds. Custodial funds generally should report fiduciary activities that are not held in a trust or equivalent
arrangement that meets specific criteria.
A fiduciary component unit, when reported in the fiduciary fund financial statements of a primary
government, should combine its information with its component units that are fiduciary component units
and aggregate that combined information with the primary government's fiduciary funds.
74
City of Waterloo, Iowa
Notes to Basic Financial Statements
Note 21. New GASB Statements and Pending Pronouncements (Continued)
This Statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an
event has occurred that compels the government to disburse fiduciary resources. Events that compel a
government to disburse fiduciary resources occur when a demand for the resources has been made or
when no further action, approval, or condition is required to be taken or met by the beneficiary to release
the assets.
GASB Statement No. 85, Omnibus 2017, issued March 2017, will be effective for the City beginning with
its fiscal year ending June 30, 2018. Statement No. 85 is designed to address the practice issues that
have been identified during implementation and application of certain GASB Statements. This statement
addresses a variety of topics including issues related to blending component units, goodwill, fair value
measurement and application, and postemployment benefits (pensions and other postemployment
benefits).
GASB Statement No. 86, Certain Debt Extinguishment Issues, issued May 2017, will be effective for the
City beginning with its fiscal year ending June 30, 2018. Statement No. 86 is designed to improve
consistency in accounting and financial reporting for in -substance defeasance of debt by providing
guidance for transactions in which cash and other monetary assets acquired with only existing resources,
other than the proceeds of refunding debt, are placed in an irrevocable trust for the sole purpose of
extinguishing debt. This statement also requires the inclusion of any remaining prepaid insurance related
to extinguished debt in the net carrying amount of the debt when calculating the difference between the
reacquisition price and the net carrying amount of the debt for debt that is extinguished through a legal
extinguishment or an in -substance defeasance. This Statement also improves notes to financial
statements for debt that is defeased in substance.
GASB Statement No. 87, Leases, issued June 2017, will be effective for the City beginning with its fiscal
year ending June 30, 2021, with earlier adoption encouraged. Statement No. 87 establishes a single
approach to accounting for and reporting leases by state and local governments. Under this statement, a
government entity that is a lessee must recognize (1) a lease liability and (2) an intangible asset
representing the lessee's right to use the leased asset. In addition, the [City, Authority, County] must
report the (1) amortization expense for using the lease asset over the shorter of the term of the lease or
the useful life of the underlying asset, (2) interest expense on the lease liability and (3) note disclosures
about the lease. The Statement provides exceptions from the single -approach for short-term leases,
financial purchases, leases of assets that are investments and certain regulated leases. This statement
also addresses accounting for lease terminations and modifications, sale-leaseback transactions, non -
lease components embedded in lease contracts (such as service agreements), and leases with related
parties.
The City's management has not yet determined the effect these Statements will have on the City's
financial statements, except for GASB Statement No. 75, which may have a material effect on the
financial statements.
Note 22. Subsequent Event
The City entered into a development agreement with LK Holdings Waterloo, LLC for the sale and
conveyance of the Five Sullivan Brothers Convention Center. The agreement requires that the Center be
renovated at an estimated cost of $6 million and that the Center be valued at $5 million for tax purposes.
The City will provide economic development grants to the Company in the amount of $1,050,000 and pay
property tax rebates of 34 percent for 15 years, if the Company meets required performance incentives.
Title to the property had not transferred from the City to LK Holdings Waterloo, LLC as of the date of this
report.
75
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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
Actuarial Value of Liability AAL Funded Covered of Covered
—
Valuation Assets (AAL) (UAAL) Ratio Payroll Payroll
Date (a) (b) (b -a) (a/b) (c) [(b-a)/c]
7/1/11 $ $ 42,655,000 $ 42,655,000 - % $ 30,477,806 139.95%
7/1/13 - 22,667,000 22,667,000 32,617,036 69.49
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 the dates referred
to above. 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.
76
City of Waterloo, Iowa
Required Supplementary Information
Schedule of the City's Proportionate Share of the Net Pension Liability
Iowa Public Employees' Retirement System
2017
2016 2015
City's proportion of the net pension liability 0.2438592%
0.2452672% 0.2415504%
City's proportionate share of the net
pension liability $ 15,346,827 $ 12,117,384 $ 9,579,663
City's covered -employee payroll
City's proportionate share of the net pension
liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of
the total pension liability
$ 17,523,333 $ 16,800,363 $ 15,816,626
87.58% 72.13% 60.57%
81.82% 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.
77
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
2017 $ 1,585,908 $ 1,585,908 $
2016 1,564,955 1,564,955
2015 1,500,510 1,500,510
2014 1,420,507 1,420,507
2013 1,358,920 1,358,920
2012 1,250,399 1,250,399
2011 1,066,879 1,066,879
2010 991,202 991,202
2009 923,462 923,462
2008 843,709 843,709
N/A - information was not available
Note: The amounts reported in this schedule are as of the City's fiscal year-end.
See notes to required supplementary information.
78
$ 17,523,333
17,523,333
16,800,363
15,816,626
N/A
N/A
N/A
N/A
N/A
N/A
9.05%
8.93
8.93
8.98
N/A
N/A
N/A
N/A
N/A
N/A
City of Waterloo, Iowa
Notes to Required Supplementary Information — !PERS Pension Liability
Year Ended June 30, 2017
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.
79
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
2017
2016 2015
City's proportion of the net pension liability 5.688362%
5.724535% 5.720520%
City's proportionate share of the net
pension liability $ 46,723,287 $ 36,408,843 $ 26,777,406
City's covered -employee payroll $ 15,365,321 $ 15,012,366 $ 14,608,497
City's proportionate share of the net pension
liability as a percentage of its covered payroll 304.08%
Plan fiduciary net position as a percentage of
the total pension liability 78.20%
242.53% 183.30%
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.
80
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
Covered -
Employee
Payroll
Contributions
as a Percentage
of Covered
Employee
Payroll
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
N/A - information was not available
$ 4,186,850
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
$ 4,186,850
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
Note: The amounts reported in this schedule are as of the City's fiscal year-end.
See notes to required supplementary information.
81
$ 15,365,321
- 15,365,321
- 15, 012, 366
14,608,497
N/A
N/A
N/A
N/A
N/A
N/A
27.25%
27.86
30.41
30.25
N/A
N/A
N/A
N/A
N/A
N/A
City of Waterloo, Iowa
Notes to Required Supplementary Information — MFPRSI Pension Liability
Year Ended June 30, 2017
Note 1. Changes of Benefit Terms
There were no significant changes of benefit terms.
Note 2. Changes of Assumptions
Postretirement mortality changed to the RP -2000 Blue Collar Combined Healthy Mortality Table with
males set -back two years, females set -forward one year and disableds set -forward one year (male only
rates), with no projection of future mortality improvement.
82
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, 2017
Budgeted Amounts
Original Final
Revenues and other financing sources receipts:
Receipts:
Property taxes $ 38,823,734 $ 38,823,734
Tax increment financing 7,738,405 7,738,405
Other City taxes 17,349,519 17,349,519
Licenses and permits 1,341,775 1,341,775
Use of money and property 1,392,216 1,400,731
Intergovernmental 27,605,273 28,791,782
Charges for services 26,244,143 26,707,716
Special assessments 248,000 248,000
Miscellaneous 4,762,064 6,548,536
Total receipts 125,505,129 128,950,198
Other financing sources:
Transfer from other funds
Issuance of long-term debt
Total other financing sources
Total receipts and other financing sources
Disbursements and other financing uses:
Governmental -type activities:
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 disbursements
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.
83
16,868,483
21, 785, 000
18,685,483
24,665,000
38,653,483 43,350,483
164,158,612 172,300,681
31, 783, 633
26,184, 083
427,954
11,501,545
14,960,886
6,566,198
15, 087, 646
22,958,500
20,717,717
32,213,820
26, 595, 031
527,954
11,761,084
15,938,940
10,508,258
17, 959, 646
24,210,183
26,156,475
150,188,162 165, 871, 391
16,868,483 18, 675, 483
167,056,645 184, 546, 874
(2,898,033) (12,246,193)
77, 310,111 77, 310,111
$ 74,412,078 $ 65,063,918
Variance
Actual Amounts With Final
Budgetary Basis Budget
$ 38,731,044 $ (92,690)
— 7,873,742 135,337
18,443,966 1,094,447
1,565,429 223,654
1,529,704 128,973
42, 327, 575 13, 535, 793
26,278,248 (429,468)
219,394 (28,606)
7,136,778 588,242
144,105, 880 15,155,682
16,795,736
20,945,000
(1,889,747)
(3,720,000)
37,740,736 (5,609,747)
181,846,616 9,545,935
30,616,468
22, 534,171
381,464
10,506,477
13,012,735
9,942,653
17,702,578
19, 968, 313
15,262,104
1,597,352
4,060,860
146,490
1,254,607
2,926,205
565,605
257,068
4,241,870
10,894,371
139,926,963 25,944,428
16,795,736 1,879,747
— 156,722,699 27,824,175
25,123,917 37,370,110
88,152,246 -
$ 113,276,163 $ 37,370,110
84
City of Waterloo, Iowa
Note to Required Supplementary Information — Budgetary Reporting
Year Ended June 30, 2017
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
$14,862,696. 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 could
be recorded in and reported by the Sanitary Sewer Enterprise Fund are recorded in and reported by
governmental funds.
85
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City of Waterloo, Iowa
Schedule of Comparison
Funds Statements (GAAP Basis) to Budgetary (Modified Cash) Basis
Required Supplementary Information
Year Ended June 30, 2017
Governmental
Fund Types
GAAP Basis
Actual Amounts
Enterprise
Fund Types
GAAP Basis
Actual Amounts
Total Funds
Revenue/Receipts:
Property taxes and TIF revenue
Other taxes
Licenses and permits
Use of money and property
Intergovernmental
Charges for services
Interfund charges for services
Special assessments
Miscellaneous
Total revenue/receipts
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
$ 46,530,686 $
17, 541, 380
1,543,716
1,597,328
43,647,665
8,025,850
2,185, 000
133,943
1,765,900
51,489
496,658
18,900,858
347,903
$ 46,530,686
17,541,380
1,543,716
1,648,817
44,144, 323
26, 926, 708
2,185,000
133,943
2,113, 803
122,971,468
19,796,908
142,768,376
30, 518, 380
19, 526, 031
379,958
10,616,332
12,265,460
10, 042, 300
11, 967, 224
19,625,850
17,686,181
30, 518, 380
19, 526, 031
379,958
10,616,332
12,265,460
10, 042, 300
11,967,224
19,625,850
17,686,181
114,941,535
17,686,181 132,627,716
Net 8,029,933 2,110,727 10,140,660
(Continued)
86
Im
Property Tax
Collected
for and
Budgetary Remitted Other GAAP
Basis to MET, Grout Conversion Budgetary
Exceptions and Water Works Adjustments Basis
$ 2,112,508 $ (2,038,408) $ 46,604,786
- 902,586 18,443,966
21,713 1,565,429
- (119,113) 1,529,704
- (1,816,748) 42,327,575
- (648,460) 26,278,248
- (2,185,000) -
85,451 219,394
- 5,022,975 7,136,778
2,112,508
(775,004) 144,105,880
98,088 30,616,468
2,112,508 895,632 22,534,171
1,506 381,464
(109,855) 10,506,477
747,275 13,012,735
(99,647) 9,942,653
5,735,354 17,702,578
342,463 19,968,313
(2,424,077) 15,262,104
2,112,508
5,186,739 139,926,963
(5,961,743) 4,178,917
City of Waterloo, Iowa
Schedule of Comparison
Funds Statements (GAAP Basis) to Budgetary (Modified Cash) Basis (Continued)
Required Supplementary Information
Year Ended June 30, 2017
Governmental Enterprise
Fund Fund
Types Basis Types Basis
Actual Amounts Actual Amounts Total Funds
Other financing sources (uses):
Transfers in
Transfers out
Payment to refunding bond escrow
Insurance proceeds
Bond discount
Bond premium
Proceeds from sales of capital assets
Issuance of long-term debt
Total other financing sources (uses)
$ 11,857,853 $ $ 11,857,853
(11,857,853) (11, 857, 853)
(2,040,000) - (2,040,000)
1,624,380 - 1,624,380
(73,397) - (73,397)
349,982 - 349,982
95,564 - 95,564
19,210,000 - 19,210,000
19,166, 529 19,166, 529
Change in fund balance/net position 27,196,462 2,110,727 29,307,189
Balance, beginning of year 71,394,596 92,220,588 163,615,184
Balance, end of year $ 98,591,058 $ 94,331,315 $ 192,922,373
88
Property Tax
Collected
for and
Budgetary Remitted Other GAAP
Basis to MET, Grout Conversion Budgetary
Exceptions and Water Works Adjustments Basis
$ - $ 4,937,883 $ 16,795,736
- (4,937,883) (16,795,736)
- 2,040,000 -
(1,624,380)
- 73,397
- (349,982) -
- (95,564) -
- 1,735,000 20,945,000
1,778,471 20,945,000
(4,183,272) 25,123,917
(75,462,938) 88,152,246
$ $ $ (79,646,210) $ 113,276,163
City of Waterloo, Iowa
Required Supplementary Information
Schedule of Employer Contributions for Waterloo Water Works Pension Plan
Last Nine Fiscal Years
2016 2015 2014 2013
Actuarially determined
contribution $ 489,448 $ 475,911 $ 481,861 $ 480,199
Contributions in relation to
actuarially determined contribution 550,161 540,043 570,419 538,658
Contribution deficiency (excess) (60,713) (64,132) (88,558) (58,459)
Covered payroll $ 1,004,723 $ 1,045,603 $ 1,064,651 $ 1,100,185
Contributions as a percentage of
covered payroll 54.8% 51.6% 53.6% 49.0%
90
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
205,059
(223,540)
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% 37.2% 16.2%
91
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 $ 53,886
Interest 616,847
Difference between expected and actual experience 164,103
Changes in assumptions 13,141
Benefit payments including refunds (541,494)
Change in total pension liability 306,483
Total pension liability, beginning of year 7,927,445
Total pension liability, end of year 8,233,928
Plan fiduciary net position
Contributions, employer
Contributions, member
Contributions, nonemployer contributing member
Net investment income
Benefit payments including refunds
Administrative expense
Change in plan fiduciary net position
Plan fiduciary net position, beginning of year
Plan fiduciary net position, end of year
Net pension liability, end of year
489,448
60,713
281,674
(541,494)
290,341
5,105,369
5,395,710
$ 2,838,218
Plan fiduciary net position as a % of total pension liability 65.5%
Covered payroll $ 1,004,723
Net pension liability as a % of covered payroll 282.5%
Additional years will be added going forward as information becomes available.
92
City of Waterloo, Iowa
Notes to Required Supplementary Information for Waterloo Water Works Pension Plan
For the Year Ended December 31, 2016
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
93
Entry age cost method
Level dollar
20 years
Market value of assets
2.50%
3.00%
8.00%
100% at age 62
2017 IRS combined mortality
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,
2016 2015 2014
Water Work's proportion of the net pension liability 0.014805%
0.014220% 0.012797%
Water Work's total proportionate share of the
net pension liability $ 923,262 $ 706,956 $ 524,011
Water Work's covered -employee payroll $ 1,018,040 $ 885,398 $ 791,254
Water Work's proportionate share of the net pension
liability as a percentage of its covered -employee
payroll
91% 80% 61%
IPERS' net position as a percentage of the
total pension liability 81.82%
Additional years will be added going forward as information becomes available.
94
85.19% 87.61%
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City of Waterloo, Iowa _
Required Supplementary Information
(PERS Schedule of Waterloo Water Works Contributions
2016 2015 2014 2013
Statutorily required contribution $ 96,378 $ 90,911 $ 79,066 $ 70,659
Contributions in relation to the
Statutorily required contribution (96,378) (90,911) (79,066) (70,659)
Contribution deficiency
(excess)
Water Work's covered -employee
payroll $ 1,079,261 $ 1,018,040 $ 885,398 $ 791,254
Contributions as a percentage of
covered -employee payroll
8.93% 8.93%
Additional years will be added going forward as information becomes available.
95
8.93% 8.93%
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%
96
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances
General Fund
Year Ended June 30, 2017
Revenues:
Property taxes $ 20,387,130
Other taxes 6,959,983
Licenses and permits 1,521,808
Investment income 198,340
Rent 998,034
Intergovernmental 984,769
Charges for services 7,631,540
Indirect allocations 2,135,000
Special assessments 133,943
Miscellaneous 1,390,425
Total revenues $ 42,340,972
Expenditures:
Public safety function
Mayor
Black Hawk Emergency Management Agency
Contractual services $ 76,343
Total activity and department 76,343
Police department
Police operations
Compensation and benefits 11,530,761
Contractual services 992,916
Commodities 229,365
Total activity 12,753,042
Police computer services
Contractual services
Commodities
Total activity
77,201
112,771
189,972
Police grants
Compensation and benefits 495,869
Contractual services 387
Commodities 92,872
Total activity 589,128
Law enforcement programs
Compensation and benefits 60,349
Contractual services 144,787
Commodities 326,191
Total activity 531,327
Tobacco grant
Compensation and benefits
Total activity
(Continued)
97
3,175
3,175
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures (continued):
Public safety function (continued)
Police department (continued)
Public safety administration
Compensation and benefits $ 149,711
— Contractual services 2,022
Total activity 151,733
Total department 14,218,377
Fire department
Fire protection
Compensation and benefits 7,991,589
Contractual services 453,346
Commodities 87,998
Total activity 8,532,933
Fire restricted programs
Compensation and benefits
Commodities
Total activity
7,539
22,015
29,554
Fire ambulance services
Compensation and benefits 1,647,071
Contractual services 188,488
Commodities 192,498
Total activity 2,028,057
Fire safety program
Compensation and benefits 134,205
Contractual services 36,116
Commodities 816
Total activity 171,137
Fire Federal CDC Grant
Compensation and benefits
Contractual services
Total activity
Total department
72,173
13,547
85,720
10, 847, 401
Building inspection department
Building and housing safety
Compensation and benefits 902,647
Contractual services 48,659
Commodities 29,758
Total activity and department 981,064
(Continued)
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures:
Public safety function (continued)
Central garage department
Fire - garage parts & service
Compensation and benefits $ 83,263
Commodities 95,950
Total activity 179,213
Ambulance - garage parts & service
Commodities
Total activity
Total department
23,748
23,748
202,961
Public safety function totals
Current
Compensation and benefits 23,078,352
Contractual services 2,033,812
Commodities 1,213,982
Subtotal 26, 326,146
Total public safety function $ 26,326,146
Public works function
Clerk
Sidewalk repair/construction
Capital outlay
Total activity and department
Traffic operations
Parking maintenance
Compensation and benefits
Total activity and department
214,776
214,776
18,808
18,808
Central garage
Central garage
Compensation and benefits 685,910
Contractual services 20,301
Commodities 96,818
Total activity 803,029
Motor pool service
Commodities
Total activity
Total department
(Continued)
99
520,000
520,000
1,323,029
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures:
Public works function (continued)
Airport
Airport administration
Compensation and benefits $ 578,072
Contractual services 280,146
Commodities 77,271
Total activity and department 935,489
Building inspection department
Parking operations
Contractual services
Commodities
Total activity and department
553,842
58,522
612,364
Public works function totals
Current
Compensation and benefits 1,282,790
Contractual services 854,289
Commodities 752,611
2,889,690
Capital outlay 214,776
Total public works function
$ 3,104,466
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 232,340
Contractual services 11,104
Commodities 2,000
Total activity 245,444
EEOC contract
Compensation and benefits
Contractual services
Total activity
Housing enforcement
Contractual services
Total activity
Total department
10,000
29,527
39,527
19,987
19,987
304,958
Health and social services function totals
Current
Compensation and benefits 242,340
Contractual services 135,618
Commodities 2,000
Total health and social services function $ 379,958
(Continued)
100
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
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 588,103
Contractual services 79,937
Commodities 31,928
Total activity 699,968
Youth pavilion
Compensation and benefits 321,044
Contractual services 46,787
Commodities 23,965
Total activity 391,796
Culture and arts grants and projects
Compensation and benefits
Contractual services
Commodities
Total activity
Total department
Library
Library services
Compensation and benefits
Contractual services
Commodities
Total activity
Library Enrich Iowa
Contractual services
Commodities
Total activity
Library access plus
Commodities
Total activity
Library grants
Contractual services
Commodities
Total activity
(Continued)
101
6,014
45,497
500
52,011
1,143, 775
1,376,598
163,326
222,019
1,761,943
14,397
264
14,661
2,888
2,888
691
17,644
18,335
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures (continued):
Culture and recreation function (continued):
Library (continued):
Library gift and trust
Contractual services $ 12,643
Commodities 53,008
Total activity 65,651
Library service area
Commodities
Total activity
County library system
Compensation and benefits
Commodities
Total activity
Library open access
Contractual services
Commodities
Total activity
-- Total department
1,779
1,779
28,305
2,168
30,473
7,741
6,077
13,818
1,909,548
Leisure services
Leisure services
— Compensation and benefits 1,876,590
Contractual services 234,285
Commodities 247,470
Capital outlay
Total activity 2,358,345
Downtown area maintenance
Compensation and benefits 203,678
Contractual services 35,530
Commodities 33,001
Total activity 272,209
Leisure services projects
Compensation and benefits 1,000
Contractual services 71,088
Commodities 58,522
Capital outlay 167,265
Total activity 297,875
Golf courses
Compensation and benefits 928,192
Contractual services 114,417
Commodities 133,629
_ Total activity 1,176,238
Golf course improvements
Contractual services
Total activity
(Continued)
6,624
6,624
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures (continued):
Culture and recreation function (continued):
Leisure services (continued)
Sports and youth services
Compensation and benefits $ 462,259
Contractual services 46,053
Commodities 120,466
Total activity 628,778
Young arena
Compensation and benefits 457,525
Contractual services 191,557
Commodities 197,097
Total activity 846,179
Sportsplex
Compensation and benefits
Contractual services
Commodities
Capital outlay
Total activity
Total department
779,467
324,705
144,754
9,290
1,258,216
6,844,464
Culture and recreation function totals
Current
Compensation and benefits 7,028,775
Contractual services 1,445,278
Commodities 1,297,179
Subtotal 9,771,232
Capital outlay 176,555
Total culture and recreation function $ 9,947,787
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
246,126
246,126
619,673
619,673
897,950
Planning and zoning
Planning and zoning
Compensation and benefits 564,241
Contractual services 19,002
Commodities 4,272
Total activity 587,515
City property management
Contractual services
Total activity
(Continued)
103
119,348
119,348
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures (continued):
Community and economic development function (continued):
Planning and zoning (continued)
Economic development
Compensation and benefits $ 72,007
Total activity 72,007
Total department 778,870
Building inspection department
Five Sullivans Civic Center
Compensation and benefits 95,532
Contractual services 58,184
Commodities 11,004
Total activity and department 164,720
Community and economic development function totals
Current
Compensation and benefits 731,780
Contractual services 1,094,484
Commodities 15,276
Total community and economic development function $ 1,841,540
General government function
Mayor
Mayor's office
Compensation and benefits $ 188,431
Contractual services 20,697
Commodities 3,623
- Total activity 212,751
Administrative and management information services
Compensation and benefits 239,199
Contractual services 134,441
Commodities 46,358
Total activity 419,998
Total department 632,749
City council
City council
Compensation and benefits
Contractual services
Total activity and department
(Continued)
104
66,778
2,515
69,293
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures:
General government function (continued):
City clerk and finance
Telecommunications
Compensation and benefits $ 141,658
Contractual services 480
Commodities 971
Total activity 143,109
City clerk and finance
Compensation and benefits 774,220
Contractual services 234,427
Commodities 97,038
Total activity 1,105,685
Liability insurance
Compensation and benefits
Contractual services
Total activity
Health/life insurance
Contractual services
Total activity
Self-funded worker's compensation
Contractual services
Total activity
Print shop
Contractual services
Total activity
Total department
39,703
1,927,238
1,966,941
3,990,228
3,990,228
894,048
894,048
29,100
29,100
8,129,111
City attorney
City attorney
Compensation and benefits 160,058
Contractual services 64,717
Commodities 12,677
Total activity and department 237,452
Human resources
Employee assistance program
Contractual services
Total activity
12,288
12,288
Human resources
Compensation and benefits 328,473
Contractual services 37,692
Commodities 2,285
Total activity 368,450
(Continued)
105
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures (continued):
General government function (continued):
Human resources (continued):
Safety committee
Contractual services $ 9,252
Commodities 3,587
Total activity 12,839
Total department 393,577
Building inspection department
Facilities maintenance
Compensation and benefits 309,435
Contractual services 199,283
Commodities 41,722
Total activity 550,440
Facilities restricted project
Contractual services 92
Commodities 1,865
Total activity 1,957
Veteran's memorial hall
Contractual services
Total activity
Total department
10,658
10,658
563,055
General government function totals
Current
Compensation and benefits 2,247,955
Contractual services 7,567,156
Commodities 210,126
Total general government function $ 10,025,237
(Continued)
106
City of Waterloo, Iowa
Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued)
General Fund
Year Ended June 30, 2017
Expenditures:
Public safety
Public works
Health and social services
Culture and recreation
Community and economic development
General government
Total expenditures
Revenue under expenditures
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
107
$ 26,326,146
3,104,466
379,958
9,947,787
1,841,540
10,025,237
$ 51,625,134
$ (9,284,162)
5,944,388
(135,750)
1,624,380
70,564
7,503,582
(1,780,580)
25,501,012
$ 23,720,432
City of Waterloo, Iowa
- Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
Special Revenue Capital Projects Total
Assets
Cash and cash equivalents $ 10,587,504 $ 12,258,228 $ 22,845,732
Receivables:
Customer accounts 12,620 487,806 500,426
Property taxes:
Delinquent 3,585 3,585
Succeeding year 596,123 596,123
Accrued interest 138,465 138,465
Due from other governments:
Federal 433,783 433,783
Iowa 3,539,219 3,539,219
Other 219,473 219,473
Inventories and prepaids 10,214 10,214
Restricted assets, cash and cash equivalents 2,186,122 2,186,122
Advances to other funds 21,423 21,423
Total assets
Liabilities, Deferred Inflows of Resources and
Fund Balances
$ 17,748,531 $ 12,746,034 $ 30,494,565
Liabilities:
Accounts payable $ 575,678 $ 959,468 $ 1,535,146
Retainages payable 769,659 205,624 975,283
Accrued liabilities 92,141 - 92,141
Due to other funds 1,443,516 1,618,559 3,062,075
Compensated absences 3,356 3,356
-
Payable from restricted assets 78,199 78,199
Total liabilities 2,962,549 2,783,651 5,746,200
Deferred inflows of resources:
Unavailable revenue - property taxes
Unavailable revenue - local option sales tax
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
599,708
94,000
2,546,211
316,811
599,708
94,000
2,863,022
3,239,919
316,811 3,556,730
10,214
10,975,396
1,972,170
(1,411,717)
11, 581,481
(1,935,909)
10,214
22,556,877
1,972,170
(3,347,626)
11,546,063
9,645,572 21,191,635
$ 17,748,531 $ 12,746,034 $ 30,494,565
City of Waterloo, Iowa
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
Year Ended June 30, 2017
Special Revenue Capital Projects Total
Revenues:
Property taxes $ 605,630 $
Other taxes 9,894,267
Investment income 25,157
Rent 195,103
Intergovernmental 10,872,187
Charges for services 361,646
Miscellaneous 33,080
65,375
170,995
$ 605,630
9,894,267
90,532
195,103
10,872,187
361,646
204,075
Total revenues 21,987,070
Expenditures:
Current:
Public safety
Public works
Culture and recreation
Community and economic development
Debt service, interest and fees
Capital outlay
Total expenditures
236,370 22,223,440
14,917
9,080,753
668,545
9,068,981
5,000
18,149,338
14,917
9,080,753
668,545
9,068,981
5,000
18,149, 338
18, 833,196
18,154,338 36,987,534
Revenues over (under) expenditures 3,153,874
Other financing sources (uses):
Transfers in
Transfers out
Proceeds from the sale of capital assets
Total other financing sources (uses)
(17,917,968) (14,764,094)
209,600
25,000
2,172,312
(210,825)
2,381,912
(210,825)
25,000
234,600
1,961,487 2,196,087
Net change in fund balance 3,388,474 (15,956,481) (12,568,007)
Fund balance, beginning of year 8,157,589 25,602,053 33,759,642
Fund balance, end of year $ 11,546,063 $ 9,645,572 $ 21,191,635
109
City of Waterloo, Iowa
Nonmajor Special Revenue Funds
June 30, 2017
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.
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.
110
City of Waterloo, Iowa
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2017
Community
Local Option Library Development
Sales Tax Tax Levy Block Grant
Assets
Cash and cash equivalents $ 7,915,680 $ 295,808 $ 5,160
Receivables:
Customer accounts - -
Property taxes:
Delinquent 3,585
Succeeding year - 596,123
Accrued interest 1,573 - 16,146
Due from other governments:
Federal - - 117,901
Iowa 922,762 - 445,608
Other 213,148 5,525
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)
$ 9,066,761 $ 908,866 $ 584,815
Liabilities:
Accounts payable $ 411,699 $ - $ 61,852
Retainages payable 344,205 - 376,165
Accrued liabilities 37,225 22,189 13,261
Due to other funds - 26,236
Compensated absences 1,280 323
Payable from restricted assets - -
Total liabilities 793,129 23,469 477,837
Deferred inflows of resources:
Unavailable revenue - property taxes -
Unavailable revenue - local option sales tax 94,000
Unavailable revenue - intergovernmental -
599,708
250,834
Total deferred inflows
of resources 94,000
599,708 250,834
Fund balances (deficit):
Nonspendable - -
Restricted 6,289,192 203,959
Assigned 1,890,440 81,730
Unassigned - - (143,856)
Total fund balances (deficit) 8,179,632 285,689 (143,856)
Total liabilities, deferred
inflows of resources and
fund balances (deficit) $ 9,066,761 $ 908,866 $ 584,815
111
Special Revenue
Federal Aviation
Housing Programs Grants Agency Projects Total
$ 2,370,856 $ $ - $ 10,587,504
12,620 - 12,620
3,585
596,123
746 120,000 138,465
20,861 295,021 433,783
- 2,152,099 18,750 3,539,219
- 800 219,473
10,214 - 10,214
2,077,492 108,630 2,186,122
- - 21,423
$ 4,492,789 $
2,272,099 $
423,201 $ 17,748,531
21,673 $ 69,025 $ 11,429 $ 575,678
- 49,289 - 769,659
19,466 - - 92,141
1,368,276 49,004 1,443,516
1,753 - 3,356
78,199 - 78,199
121,091 1,486,590 60,433 2,962,549
- - 599,708
- - 94,000
5,963 2,272,698 16,716 2,546,211
5,963 2,272,698
16,716 3,239,919
10,214
4,355,521
126,724
(1,487,189) 219,328
10,214
10,975,396
1,972,170
(1,411,717)
4,365,735 (1,487,189)
346,052 11,546,063
$ 4,492,789 $
2,272,099 $
423,201 $ 17,748,531
City of Waterloo, Iowa
Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit)
Nonmajor Special Revenue Funds
Year Ended June 30, 2017
Community
Local Option Library Development
Sales Tax Tax Levy Block Grant
Revenues:
Property taxes
Other taxes
Investment income
Rent
Intergovernmental
Charges for services
Miscellaneous
Total revenues
$ $ 605,630 $
9,869,261 25,006
17,828 713
2,938,241
47,286 174,735
13,623
9,934,375
631,349 3,126,599
Expenditures:
Current:
Public safety -
Public works 7,541,937
Culture and recreation - 576,303
Community and economic development - - 3,054,488
Total expenditures 7,541,937 576,303 3,054,488
Excess of revenues
over expenditures 2,392,438
Other financing sources (uses):
Transfers in
Proceed from the sale of capital assets
Total other financing sources (uses)
55,046 72,111
(330,109)
(330,109)
Change in fund balance (deficit) 2,062,329 55,046 72,111
Fund balances (deficit), beginning of year 6,117,303 230,643 (215,967)
Fund balances (deficit), end of year $ 8,179,632 $ 285,689 $ (143,856)
113
Special Revenue
Federal Aviation
Housing Programs Grants Agency Projects Total
$ $ - $ $ 605,630
r„ - 9,894,267
6,303 313 25,157
195,103 - 195,103
5,374,996 1,678,111 880,839 10,872,187
- - 32,792 - 106,833 361,646
19,457 - - 33,080
5,628,651 1,678,111
987,985 21,987,070
1,082,400
92,242
5,551,590 462,903
14,917
456,416
14,917
9,080,753
668,545
9,068,981
5,551,590 1,637,545
471,333 18, 833,196
77,061 40,566 516,652 3,153,874
330,109 209,600 209,600
25,000 - 25,000
355,109 209,600 234,600
77,061 395,675 726,252 3,388,474
4,288,674 (1,882,864) (380,200) 8,157,589
$ 4,365,735 $ (1,487,189) $ 346,052 $ 11,546,063
This Page Intentionally Left Blank
City of Waterloo, Iowa
Capital Projects Funds
June 30, 2017
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 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.
June 2016 GO Bonds Fund — This fund is used to account for proceeds from the 2016 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.
115
City of Waterloo, Iowa
Combining Balance Sheet
Capital Projects Funds
June 30, 2017
June 2012
GO Bonds
June 2013
GO Bonds
June 2014
GO Bonds
Assets
Cash and cash equivalents
Receivables, customer accounts
Total assets
Liabilities, Deferred Inflows of Resources and
Fund Balances (Deficit)
Liabilities:
Accounts payable
Retainages payable
Due to other funds
Total liabilities
Deferred inflows of resources,
unavailable revenue - intergovernmental
Fund balances (deficit):
Restricted
Unassigned
Total fund balances (deficit)
$ 1,095,747 $ 1,149,468 $ 1,117,314
$ 1,095,747 $ 1,149,468 $ 1,117,314
81,364 $ 64,528 $
217,331
81,364
64,528 217,331
1,014,383
1,084,940 899,983
1,014,383
1,084,940 899,983
Total liabilities, deferred inflows of resources
and fund balances (deficit) $ 1,095,747 $ 1,149,468 $ 1,117,314
116
June 2015
GO Bonds
June 2016 Capital
GO Bonds Improvements
Total
$ 2,952,864 $ 5,942,835 $ $ 12,258,228
487,806 487,806
$ 2,952,864 $ 5,942,835 $
487,806 $ 12,746,034
$ 86,208 $ 184,297 $ 325,740 $ 959,468
151,192 54,432 205,624
- 1,618,559 1,618,559
86,208 335,489
1,998,731 2,783,651
316,811 316,811
2,866,656 5,607,346
108,173
(1,935,909)
11,581,481
(1,935,909)
2,866,656 5,607,346
(1,827,736) 9,645,572
$ 2,952,864 $ 5,942,835 $ 487,806 $ 12,746,034
City of Waterloo, Iowa
Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit)
Capital Projects Funds
Year Ended June 30, 2017
June 2010 June 2011 June 2012
GO Bonds GO Bonds GO Bonds
Revenues:
Investment income
Miscellaneous
Total revenues
$ 461 $ 1,146 $ 5,701
461 1,146 5,701
Expenditures:
Debt service, interest expense - - 5,000
Capital outlay 439,823 572,801 176,845
Total expenditures 439,823 572,801 181,845
Revenues over (under) expenditures (439,362)
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
(571,655) (176,144)
Net change in fund balances (deficit) (439,362) (571,655) (176,144)
Fund balances (deficit), beginning of year 439,362 571,655 1,190,527
Fund balances (deficit), end of year $ - $ $ 1,014,383
June 2013 June 2014 June 2015 June 2016 Capital
GO Bonds GO Bonds GO Bonds GO Bonds Improvements Total
$ 6,410 $ 6,209 $ 16,307 $ 29,141 $ $ 65,375
- - 170,995 170,995
6,410 6,209 16,307 29,141 170,995 236,370
432,457 786,332 1,943,798
432,457 786,332 1,943,798
11,653,027
11,653,027
2,144,255
2,144,255
5,000
18,149, 338
18,154, 338
(426,047) (780,123)
(1,927,491) (11,623,886)
(1,973,260) (17,917,968)
- - 2,172,312 2,172,312
- - (210,825) (210,825)
- - 1,961,487 1,961,487
(426,047) (780,123) (1,927,491) (11,623,886) (11,773) (15,956,481)
— 1,510,987 1,680,106 4,794,147 17,231,232 (1,815,963) 25,602,053
$ 1,084,940 $ 899,983 $ 2,866,656 $ 5,607,346 $ (1,827,736) $ 9,645,572
This Page Intentionally Left Blank
City of Waterloo, Iowa
Fiduciary Funds
June 30, 2017
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, Grout Museum District, Water Works kill water assessments and building permits passed
through to Black Hawk County.
120
City of Waterloo, Iowa
Statement of Changes in Assets and Liabilities
Agency Fund
Year Ended June 30, 2017
Balance Balance
June 30, June 30,
2016 Additions Deletions 2017
Assets, cash $ - $ 2,112,508 $ 2,112,508 $
Liabilities, due to private entities $ $ 2,112,508 $ 2,112,508 $
121
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.
122
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$ 27,325,835
$ 37,755,575
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$ 31,341,480
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Employer
City of Waterloo, Iowa
Principal Taxpayers
Current Year and Nine Years Ago
2017 2008
Assessed Percentage of Assessed Percentage of
Value Total Assessed Value Total Assessed
1/1/2015 Rank Value 1/1/2005 Rank Value
Deere and Company $ 49,961,776 1 1.37% $ 25,099,360 3 0.82%
-- IOC Black Hawk County, Inc. 48,937,500 2 1.34%
Waterloo Owner, LLC (Crossroads Mall) 31,363,821 3 0.86% 30,996,870 2 1.01%
Equitable Life Assurance in 2003 3 --
-- Con Agra k/n/a Hunt Wesson, Inc. 19,951,236 4 0.55% 16,357,690 6 0.53%
Ferguson Enterprises, Inc. 18,636,903 5 0.51% 22,690,240 4 0.74%
Tyson Fresh Meats (formerly IBP, Inc.) 15,499,193 6 0.42% 19,968,530 5 0.65%
Bertch Cabinet Manufacturing 14,746,095 7 0.40% 15,518,840 7 0.50%
Walmart Stores 12,011,454 8 0.33%
VGM Management 10,641,484 9 0.29% --
Menard Inc 10,433,542 10 0.29% 9,939,390 10 0.32%
—
MidAmerican Energy 117,777,075 1 3.83%
Qwest Corporation (formerly US West) 12,440,593 8 0.40%
Banco Mortgage Company 10,487,300 9 0.34%
Total $ 232,183,004 6.35% $ 281,275,888 9.15%
Source: Official Bond Statements prepared by Speer Financial, Inc.
130
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
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%
2015 2017 33,086,343 33,010,145 99.77% 9,310 * 33,019,455 99.80%
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.
131
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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*
2008 $ 80,518,995 $ 3,133,666,442 2.57%
2009 81,200,822 3,447,851,253 2.36%
2010 83,832,977 3,542,643,298 2.37%
2011 85,835,630 3,566,368,445 2.41%
2012 89,522,781 3,747,030,046 2.38%
2013 90,366,627 3,738,165,467 2.42%
2014 91,480,632 3,762,106,346 2.43%
2015 93,637,457 3,623,346,971 2.58%
2016 99,096,543 3,656,417,436 2.71%
2017 105,375,117 3,770,142,165 2.79%
1,171
1,181
1,219
1,255
1,302
1,321
1,337
1,369
1,449
1,540
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.
133
City of Waterloo, Iowa
Direct and Overlapping Governmental Activities Debt
As of June 30, 2017
Governmental Unit
City of Waterloo direct debt
Overlapping:
Black Hawk County
Hudson Community Schools
Hawkeye Community College
Subtotal, overlapping debt
Total direct and overlapping debt
Source: Black Hawk County Auditor
Estimated Estimated
Percentage Share of
Debt Applicable Overlapping
Outstanding To City* Debt
$ 85,476,143 100.00% $ 85,476,143
$ 40,495,000
2,000,000
$ 42,495,000
$ 127,971,143
46.16% 18,692,492
0.00%
27.30% 546,000
$ 19,238,492
$ 104,714,635
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.
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$ 186,908,273
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$ 81,790,266
$ 85,468,585
$ 94,342,688
$ 94,503,961
$ 89,675,893
$ 92,339,979
$ 87,799,473
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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
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
2017 15,236,339 11,307,231 3,929,108 144,200 27.2476
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.
136
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
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
2016 68,406 2,837,344,068 41,478 36.2 4.8% 10,357
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
137
Employer
City of Waterloo, Iowa
Principal Area Employers
Current Year and Nine Years Ago
2016 2008
Percentage Percentage
of Total City of Total City
Employees Rank Employment Employees Rank Employment
Deere & Company 5,100 1 15.79% 5,600 1 17.45%
• Wheaton Franciscan Health Care * 2,895 2 8.96% 3,030 2 9.44%
Tyson Fresh Meats (formerly IBP, Inc.) 2,700 3 8.36% 2,500 3 7.79%
Unity Point Health(Allen Memorial Hospital) 2,520 4 7.80% 1,980 4 6.17%
• University of Northern Iowa 1,820 5 5.63% 1,780 5 5.55%
Hy -Vee 1,720 6 5.33% 1,155 9 3.60%
Waterloo Community Schools 1,605 7 4.97% 1,450 8 4.52%
AMER Omega Cabinets 950 8 2.94% 1,500 7 --
Target Distribution Center 950 9 2.94%
CBE Companies 900 10 2.79% -- --
- Bertch Cabinet Manufacturing -- 1,500 6 4.67%
Area Education Agency 7 1,150 10 3.58%
Total 21,160 65.51% 21,645 59.17%
Source: Official Bond Statements from Speer Financial, Inc.
* Formerly known as Covenant Medical Center
138
City of Waterloo, Iowa
Full -Time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Public Safety
Police 128.0 131.0 135.0 139.0 138.0 131.0 130.0 130.0 130.0 130
Fire 118.0 113.0 116.5 114.5 112.5 109.5 108.5 106.5 109.5 107.5
Building Inspection 16.0 15.0 15.5 10.5 12.5 12.5 12.5 13.5 13.5 13.0
Public Works
City Engineer 19.0 20.0 19.0 18.0 20.0 20.0 20.0 20.0 20.0 20
Traffic 12.0 13.0 12.0 12.0 12.0 15.0 16.0 16.0 14.0 15
Central Garage 10.0 10.0 8.0 9.0 9.0 9.0 10.0 10.0 9.0 9
Street 34.0 40.0 39.0 37.0 38.0 36.0 34.0 37.0 35.0 36
Airport 5.5 5.5 5.5 5.5 6.0 5.0 6.0 6.0 6.0 6
Health & Social Services
Human Rights 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3
Culture & Recreation
Cultural & Arts 12.0 13.5 13.5 14.0 14.5 13.0 11.0 13.0 12.0 13
Library 24.0 24.5 25.0 24.5 24.5 25.0 25.0 24.5 24.0 23.5
Leisure Services 39.0 41.0 40.0 40.0 39.0 36.0 40.0 43.0 42.0 41
Community & Economic Development
Community Planning & Development 24.0 24.0 24.0 24.0 24.0 22.0 23.0 23.0 22.0 21
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
2.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 2.0 4
13.0 13.0 13.0 13.0 13.0 14.0 14.0 12.0 12.0 9
1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 6.0 6
3.0 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4
3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 4.0
Waste Management Services
Sewer 30.1 30.1 29.0 32.0 35.0 33.9 41.0 39.0 40.0 39.0
Sanitation 13.9 13.9 13.0 15.0 14.0 17.1 13.0 17.0 13.0 13.0
Total 511.0 520.0 521.5 521.5 525.5 511.5 517.5 524.0 521.0 518.0
Source: City Human Resources Department records.
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This Page Intentionally Left Blank
City of Waterloo, Iowa
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
Federal Grantor/Pass-Through Grantor/Program Title
Pass -Through Federal Amount
Entity Identifying CFDA Provided to Federal
Number Number Subrecipients Expenditures
IM" Department of Housing and Urban Development
Direct:
y
Title 1, VA -HUD Independent Agencies Appropriations Act for FY
2008, PL 110-161 B -08 -SP -IA -0568 14.251 26,819
Fair Housing Assistance Program -State and Local FF207K137014 14.401 - 23,186
Public and Indian Housing IA05000104J 14.850 201,616
Section 8 Housing Choice Vouchers IA05V0+CE 14.871 5,286,924
Public Housing Capital Fund IA05P05050114 14.872 16,205
Public Housing Capital Fund IA05P05050115 14.872 - 25,344
IIMINA
Public Housing Capital Fund IA05P05050115 14.872 33,075
Community Development Block Grants/Entitlement Grants B -15 -MC -190008 14.218 $ 43,465 $ 1,196,114
HOME Investments Partnerships Program M -15 -DC -190206 14.239 84,963 652,840
Subtotal - 74,624
Total direct 128,428 7,462,123
Indirect:
Pass Through Iowa Department of Economic Development:
Community Development Block Grants/State's Program 08-DRH-211 14.228 990,059 1,164,330
Title III of the Housing and Economic Recovery Act (HERA) 11 -NSP -018 14.228 180,613
Total indirect 990,059 1,344,943
Total Department of Housing and
Urban Development
Department of Interior
Indirect:
Pass Through Sios and Smokestacks:
National Heritage Area Federal Financial Assistance
N/A
1,118,487 8,807,066
15.939 739
Department of Justice
Direct:
Bulletproof Vest Partnership Program N/A 16.607
10,161
Edward Byrne Memorial Justice Assistance Grant Program 2012 -DJ -BX -0617 16.738 5,453
Edward Byrne Memorial Justice Assistance Grant Program 2013 -DJ -BX -0604 16.738 4,159
... Edward Byrne Memorial Justice Assistance Grant Program 2014 -DJ -BX -0217 16.738 47,969
Edward Byrne Memorial Justice Assistance Grant Program 2015 -DJ -BX -0713 16.738 24,324
Edward Byrne Memorial Justice Assistance Grant Program 2016 -DJ -BX -0594 16.738 237
Subtotal 82,142
Total direct 92,303
Indirect:
Pass Through Crime Victims Assistance Division,
Federal Violence Against Women Act Contract VW -16 -92 -CJ 16.588 36,113
Pass Through Governor's Office of Drug Control Policy,
Public Safety Partnership and Community Policing Grants 15 -CAMP -04 16.710 17,397
... Edward Byrne Memorial Justice Assistance Grant Program 11 -JAG -58456 16.738 137,514 193,000
Total indirect 137,514 246,510
Total Department of Justice
(Continued)
143
137,514 338,813
City of Waterloo, Iowa
Schedule of Expenditures of Federal Awards (Continued)
Year Ended June 30, 2017
Federal Grantor/Pass-Through Grantor/Program Title
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
Pass -Through
Entity Identifying
Number
Federal
CFDA
Number
Amount
Provided to
Subrecipients
Federal
Expenditures
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
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
Indirect,
Iowa Department of Natural Resources Pass Through
Capitalization Grants for Clean Water State Revolving Funds
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)
Subtotal
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.
3-19-0094-44
TAP -U-8155(741)--81--07
N H SX -63-6 (69)--3 H-07
STP -U-8155(711)--70-07
STP -U-8155(714)--70-07
20.106
20.205
20.205
20.205
20.205
PAP-15-405d-M6OT, Task 57 20.616
PAP-16-405d-M6OT, Task 48 20.616
EECCN130125FFY14
EECCN130125FFY15
EECCN130125FFY16
OSP 1420 FY15
N/A
013-82425-00 DR 1763
013-82425-00 DR 4289
30.001
30.001
30.001
45.129
66.458
97.036
97.036
EMW-2014-FH-00136 97.083
144
47,412
47,412
156,017
3,063
79,465
2,188
240,733
20,630
14,898
35,528
276,261
323,673
13,314
24,733
1,877
39,924
8,506
224,031
224,031
211,493
611,962
823,455
83,715
907,170
$ 1,256,001 $ 10,649,922
City of Waterloo, Iowa
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
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 $275,142.
Note 5. Indirect Cost Rate
The City has elected not to use the 10 percent deminimis indirect cost rate allowed under the Uniform
Guidance.
145
City of Waterloo, Iowa
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2017
Finding
Corrective Action Plan
Status or Other Explanation
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.
146
Corrected
The City implemented
procedures to more
closely monitor contracts
with retainage for all
City departments.
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
RSM
RSM US LLP
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, 2017, 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 12, 2018.
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 I TAXI CONSULTING
147
RSM US LLP is the U.S. member frm of RSM International, a global network of independentaudit. tax, and consulting firms. Unit rsmus.comfaboutus for rnore informatian regarding RSM US LLP and
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. Given these limitations, during our audit, we did not identify any
deficiencies in internal control that we considered to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under 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, 2017 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.
s,.i vs .
Davenport, Iowa
January 12, 2018
148
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
RSCA
RSM US LLP
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, 2017. 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 I TAX I CONSULTING
149
RSM U5 LLP is the 11.5. member firm of RSM International. a global network of independent audit. tax. and consulting firms. Vsit rsmus.comtaboutus for more in regarding RSM U5 LLP and
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, 2017.
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.
S/./ Us "../..P
Davenport, Iowa
January 12, 2018
150
City of Waterloo, Iowa
Schedule of Findings and Questioned Costs
Year Ended June 30, 2017
I. Summary of the Independent Auditor's Results
Financial Statements
Type of auditor's 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 auditor's 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
14.871 Section 8 Housing Choice Vouchers
97.036 Disaster Grants
Dollar threshold used to distinguish between type A and type B programs: $750,000
Auditee qualified as low-risk auditee?
(Continued)
151
❑ Yes E No
❑ Yes E None Reported
❑ Yes ❑✓ No
❑ Yes ❑� No
❑ Yes Li None Reported
❑ Yes ❑s No
❑ Yes L No
City of Waterloo, Iowa
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2017
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
None reported.
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
17 -IV -A Certified Budget
Expenditure/expenses during the year ended June 30, 2017, did not exceed the budgeted
amounts.
17 -IV -B Questionable Disbursements
No questionable disbursements were noted.
17 -IV -C Travel Expenses
No expenditures of City money for travel expenses of spouses of City officials or employees were
noted.
17 -IV -D Business Transactions
No material business transactions between the City and City officials or employees were noted.
17 -IV -E Bond Coverage
Surety bond coverage of City officials and employees is in accordance with statutory provisions.
17 -IV -F Council Minutes and Resolutions
No instances of noncompliance with the council minutes and resolutions.
17 -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.
17 -IV -H Deficit Balances
Finding: The following funds had deficit balances as of June 30, 2017:
Grants, Special Revenue
Community Development Block Grant, Special Revenue
Capital Improvements, Capital Projects
152
$ 1,487,189
143,856
1,827,736
City of Waterloo, Iowa
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2017
Recommendations: The City should investigate alternatives to eliminate these deficits in order to
return the funds to sound financial positions.
Management's Response: 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.
17 -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.
17 -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, 2017, the accumulative cash deficit totaled $519,666.
Recommendations: To ensure the City is in compliance with its own ordinances, we recommend
that the City either provide airport operations with additional cash resources to enable it to
achieve and maintain a positive cash balance or amend the ordinance to repeal the positive cash
balance requirement.
Management's Response: It is the City's intent at this time to continue to require the positive cash
balance, although City management realizes that the Airport may not be able to maintain that
balance due to current economic conditions.
153
This Page Intentionally Left Blank
MAINTENANCE BONG?
KNOW ALL MEN BY THESE PRESENTS:
Road No. IAC586712
That, Municipal Pipe Tool Co., LLC of Hudson, Iowa
as Principal, and the Merchants Bonding Company (Mutual)
are held and firmly bound unto
City of Waterloo, Iowa
as Surety,
in the
penal sum of One Million Five Hundred Forty-five Thousand Six Hundred ($ $1,545,675.43
Dollars, lawful money of the United States of America, for the payment of which, well and truly to be made.
the Principal and Surety bind themselves, their and each of their heirs, executors. administrators, successors
and assigns, jointly and severalty, firmly by these presents.
Whereas. the said Principal entered into a certain contract. with
City of Waterloo, Iowa
To furnish all the material and labor necessary for the construction of
FY 2017 CIP Pipelining Phase IIIA, Waterloo, Iowa - .„,,_i -Contract No. 919
in Waterloo, Iowa In conformity with certain specifications; and
Whereas, a further condition of said contract is that the said Principal should furnish a bond in
indemnity, guaranteeing to remedy any defects in workmanship or materials that may develop in
said work within a period of two (2) years from the date of acceptance of the work
under said contract; and
Whereas, the said Merchants Bonding Company (Mutual) fora valuable consideration,
has agreed to_ join with said Principal in such bond or guarantee, indemnifying said
City of Waterloo, Iowa
Now, therefore, the condition of this obligation is such, that Ville said Principal shall, at his own cost
and expense, t-emedv any and all defects that may develop in said work within the period
of two (2) years from the date of acceptance of the work under said contract, by
reason of bad workmanship or poor material used in the construction of said work, and shall keep a!l work
in continuous good repair during said period, and shall in all other respects, comply with all the terms and
conditions of said contract with respect to maintenance and repair of said work, then this obligation to be
null and void; otherwise to be and remain in full force and virtue in law.
in Witness whereof, we have hereunto set our hands and seals this
day of January , 2018
10th
Municipal Pipe Tool Co., LLC
Principal
Merchants Bonding Cony (Mutual)
Surer.
Dione R. Young
-in-Fact
z -
_.
''
'
`-.
~
MERCHAN1771
BONDING COMPANY-•
POWER OF ATTORNEY
Know All Persons By These Presents, that MERCHANTS BONDING COMPANY (MUTUAL) and MERCHANTS NATIONAL BONDING, INC.,
both being corporations of the State of Iowa (herein collectively called the "Companies") do hereby make, constitute and appoint, individually,
Anne Crowner; Brian M Deimerly; Cameron M Burt; Cindy Bennett; Craig E Hansen; Dana Wiebers; Dione R Young; Jay D Freiermuth; Jody
Decker; Kami Brower; Kathleen Brewer; Kevin J Knutson; Michelle R Gruis; Shirley S Bartenhagen; Stacy Venn; Tim McCulloh
their true and lawful Attorney(s)-in-Fact, to sign its name as surety(ies) and to execute, seal and acknowledge any and all bonds, undertakings,
contracts and other written instruments in the nature thereof, on behalf of the Companies in their business of guaranteeing the fidelity
actions or proceedings allowed by law.
of persons, guaranteeing the performance of contracts and executing or guaranteeing bonds and undertakings required or permitted in any
This Power -of -Attorney is granted and is signed and sealed by facsimile under and by authority of the following By -Laws adopted by the Board
of Directors of Merchants Bonding Company (Mutual) on April 23, 2011 and amended August 14, 2015 and adopted by the Board of Directors
of Merchants National Bonding, Inc., on October 16, 2015.
"The President, Secretary, Treasurer, or any Assistant Treasurer or any Assistant Secretary or any Vice President shall have power and authority
to appoint Attorneys -in -Fact, and to authorize them to execute on behalf of the Company, and attach the seal of the Company thereto, bonds and
undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof."
"The signature of any authorized officer and the seal of the Company may be affixed by facsimile or electronic transmission to any Power of Attorney
or Certification thereof authorizing the execution and delivery of any bond, undertaking, recognizance, or other suretyship obligations of the
Company, and such signature and seal when so used shall have the same force and effect as though manually fixed."
In connection with obligations in favor of the Florida Department of Transportation only, it is agreed that the power and aut hority hereby
Attorney -in -Fact includes any and all consents for the release of retained percentages and/or final estimates on engineering and construction
contracts required by the State of Florida Department of Transportation. It is fully understood that consenting to the State of Florida Department
of Transportation making payment of the final estimate to the Contractor and/or its assignee, shall not relieve this surety company of any of
its obligations under its bond.
In connection with obligations in favor of the Kentucky Department of Highways only, it is agreed that the power and authority hereby given
to the Attorney -in -Fact cannot be modified or revoked unless prior written personal notice of such intent has been given to the Commissioner -
Department of Highways of the Commonwealth of Kentucky at least thirty (30) days prior to the modification or revocation.
In Witness Whereof, the Companies have caused this instrument to be signed and sealed this 7th day of November , 2017
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STATE OF IOWA President
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COUNTY OF DALLAS ss.
On this this 7th day of November 2017 before me appeared Larry Taylor, to me personally known, who being by me duly sworn
did say that he is President of MERCHANTS BONDING COMPANY (MUTUAL) and MERCHANTS NATIONAL BONDING, INC.; and that the
seals affixed to the foregoing instrument are the Corporate Seals of the Companies; and that the said instrument was signed and sealed in behalf
of the Companies by authority of their respective Boards of Directors.
ALICIA K. GRAM
Commission Number 767430
My Commission Expires
April 1, 2020
Notary Public
(Expiration of notary's commission
does not invalidate this instrument)
I, William Warner, Jr., Secretary of MERCHANTS BONDING COMPANY (MUTUAL) and MERCHANTS NATIONAL BONDING, INC., do hereby
force and effect and has not been amended or revoked.
certify that the above and foregoing is a true and correct copy of the POWER-OF-ATTORNEY executed by said Companies, which is still in full
In Witness Whereof, I have hereunto set my hand and affixed the seal of the Companies on this 10th day of January 2018.
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POA 0018 (3/17)
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Secretary