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CITY OF CEDAR FALLS, IOWA

Comprehensive Annual Financial Report

For the Fiscal Year Ended June 30,20 13

Prepared by:

Finance/Public Records Division of

Department of Administrative Services

Jennifer Rodenbeck, CPA, CPFO Finance Manage/City Clerk

City of Cedar Falls, Iowa Gomprehensive Annual Financial Report For the Fiscal Year Ended June 30,2013

Table of Contents

INTRODUCTORY SECTION Letter of Transmittal. . GFOA Certificate of Achievement . Organizational Charts . . . . Principal Officials.

FINANCIAL SECTION I ndependent Auditor's Report Management's Discussion and Analysis Basic Financial Statements:

Government-wide Financíal Statements: Statement of Net Position Statement of Activities. . . .

Fund Financial Statements: Balance Sheet- Governmental Funds . . . . Statement of Revenues, Expenditures, and Changes ín Fund

Balances - Governmental Funds. . . . . . . Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Statement of Net Position - Proprietary Funds. Statement of Revenues, Expenses, and Changes in Fund Net

Assets - Proprietary Funds. Statement of Cash Flows - Proprietary Funds.

Notes to Financial Statements. . . . Required Supplementary lnformation :

Budgetary Comparison Schedule - Function Budget Notes to Required Supplementary lnformation Schedule of Funding Progress

Other Supplem entary I nformation : Combining Fund Statements and Schedules:

Combining Balance Sheet - Nonmajor Governmental Funds . Combining Statement of Revenues, Expenditures, and

Changes in Fund Balances - Nonmajor Governmental Funds

Paqe

39 40

Combining Statement of Net Position - lnternal Service Funds. Combining Statement of Revenues, Expenses, and Changes

in Fund Net Position - lnternal Service Funds Combining Statement of Cash Flows - lnternal Service Funds. Capital Assets Used in the Operation of Governmental Funds:

Comparative Schedules by Source. Schedule by Function and Activity Schedule of Changes by Function and Activity.

STATISTICAL SECTION Financial Trends:

Net Position by Component Changes in Net Position. Fund Balances, Governmental Funds Changes in Fund Balances, Governmental Funds

Revenue Capacity: Assessed and Taxable Value of Property. . . . Property Tax Rates - Direct and Overlapping Governments. . . Principal Property Taxpayers Property Tax Levies and Collections.

Debt Capacity:

Ratios of Outstanding Debt by Type. Ratios of General Bonded Debt Outstanding Direct and Overlapping Debt. Legal Debt Margin lnformation. . . Revenue Bond Coverage - Sewer Authority. Sales History and Total Sewer Charges. Water Meters by Rate Class. Largest Sewer Customers

Demographics on Economic lnformation: Demographic and Economic Statistics Principal Employers . . . . Full-Time Equivalent City Government Employees by

Function/Department Operating I nformation :

Operating lndicators by Function. . . . Capital Asset Statistics by Function . . . .

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DEPARTMENT OF ADMINISTRATIVE SERVICES CITY OF CEDAR FALLS, IOWA 220 CLAY STREET CEDAR FALLS, IOIVA 50613 PHONE: 319-273-8600 FAX: 319-268-5126 www.cedarfalls,comw

October 1,2013

To Mayor Crews, Members of the City Council and citizens of the City of Cedar Falls:

I am pleased to submit to you the comprehensíve Annual Financial Report (CAFR) of the city of cedar Falls, lowa,for the year ended June 30, 2013. This is the eleventh CAFR completed in compliance with the Governmental Accountíng standards Board Statement No. 34 (GASB 34). Responsibility for both the accuracy of the data andthe completeness and fairness of the presentation, including all disclosures, rests with the city. To the best of ourknowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designedto present fairly the financíal position and results of operations of the city. All disclosures necessary to enable thereader to gain an understanding of the city's financial activities have been included.

GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basicfinancial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal isdesigned to complement MD&A and should be read in conjunction with it. The city of cedar Falls, MD&A can befound immediately following the report of the independent auditors.

The city is required to undergo an annual single audit in conformity with the provisions of the u.s. office ofManagement and Budget (oMB) circular A-133, "Audits of states, Local Governments, and Nonprofitorganizations'" lnformation to comply with oMB circular A-133, "Audits of states, Local Governments, andNonprofit organizations," and "Government Auditing standards" is included in another report under a separate cover.

The city of cedar Falls provides many municipal services including fire and police protection, streets, garbage collection, parks, recreation, cultural arts, planning, zonihg, g"n"r"i a¿m¡n¡stråtion, and sewer and storm waterservices' For financial reportíng purposes, all funds, agencies, boards, commissions, trusts and authoritiesinvolved in the provision of these services are included íf the city is financially accountable. Financial accountability is determined by several different factors, including fiscal dàpendence, ability to impose will upon theentity's governlng body, provision of specific financial burdens or benefits and separate legal entity status. Aftercareful evaluation of these factors, the city has included in this financíal report the cedar Falls Electric utílity, Gasutility, water utility, and communícations utility, as well as all funds of the cíty. The utilities are each reported asdiscretely presented component units.

"OUR CITZENS ARE OUR BUSINESS"

GOVERNMENTAL STRUCTURE

The City has operated under the mayor-council form of government since incorporation. Policy-making and legislative authority are vested in the governing council, which consists of seven members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, setting goals, and approving mayor- appointed committees. The full-time mayor is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day{o-day operations of the City, and for appointing department directors. The mayor and Council are elected on a nonpartisan basis. The Council consists of two council members elected at large and one council member elected from each of the five wards as established by ordinance, elected for terms of four years. The mayor is elected at large and to a two-year term.

ECONOM¡C CONDITION AND OUTLOOK

The City, incorporated in 1854, is located in the northeastern part of the state, has a land area of 28.9 square miles and a population of 39,260. The City is empowered to levy a property tax on both real and personal property located within its boundaries, and has the power by state statute to extend its corporate limits by annexation, which is seldom done, but will be done when deemed appropriate by the City Council.

The economic condition and outlook of Cedar Falls continues to be strong. The Cedar Falls economy was insulated from many of the impacts created by the recent recession due to the growth and stability of the University of Northern lowa and a diverse service business sector.

The Greater Cedar Valley Alliance was formed in the metro area to organize the human resources and generate needed development capital to attract new business and industry to the area and to encourage expansion of businesses already in the area. As a result, many new businesses have located offices and plants in the metro area. Target Corporation constructed a distribution center with an assessed value of approximately $¿S million in FY02 and in FY08 completed a second refrigeration center. The Cedar Falls lndustrial and Technology Park continues to show tremendous expansion.

The increase in new businesses and expansion of established firms has had a positive effect on employment and the City's tax base. Historically, Cedar Falls' unemployment rate has closely followed the State trends, which are significantly lower than the nation's unemployment rate (See Attachment A). This is due to the strong service employment base supported by the state university located in Cedar Falls. Since the devaluation of property in l9B6-1988, Cedar Falls has had steady growth in property values. Assessed values increased in FY14 by $gZ million, and taxable values increased by $229 million (See Attachment B) due to the increase in assessed valuations and the residential rollback.

The City of Cedar Falls maintains a comparatively low tax rate. Cedar Falls has the fifth lowest tax rate per capita of the twenty largest cities in the state of lowa (See Attachment C). Thís low rate can be attributed to the efforts of the City to streamline operations over the past twenty years. This has been accomplished by maintaining the approximate same number of employees, even when demand for service has increased. Cedar Falls had one of the lowest number of full{ime employees per 1,000 residents in FY12. (See Attachment D).

Over the past ten years Cedar Falls' residential housíng sales prices have significantly increased. ln 2002, the average sales price reported was $153,312. ln2012, the average sales pricewas $206,773, which is a thirty-five (35) percent increase in the past ten years (See Attachment E). These statistics indicate that Cedar Falls' local economy is sound and there is a strong market for Cedar Falls homes.

Housing values have surged from the recession and devaluation of the mid-1980's to values that once again place the homeowners living in Cedar Falls in an advantageous market position. This market growth is a credit to businesses, the school system, utilities, and quality of City services in Cedar Falls. Each entity has worked together to strengthen the local economy, create jobs, and improve Cedar Falls' quality of life.

MAJOR INITIATIVES

Disinfection Project: ln August 2009, the Public Works department presented to council information on an Ultraviolet Light (UV) Alternatives Evaluation Workshop. This is a process to treat bacteria at the Water Reclamation Facility. The Environmental Protection Agency (EPA) has directed a new standard of treatment. The advantage of UV over other disinfectants is it can inactivate hard to control organisms, such as E.coli, without chemical additions to the final product and without producing a harmful disinfection by-product. Using UV is a better and safer way to disinfect and there are no residuals.

ln FY11, the Public Works department solicited bids for the construction of the Water Reclamation Facility UV Disinfection and Biosolids Handling Facilities lmprovements Project (Disinfection Project). Construction of the project began in FY12 and a majority of the construction has occurred during FY13. Completion is expected in FY14. The total project cost will be approximately 921.8 million.

This project will have a significant impact on the City's sewer fund. The City Council did approve a So/o increase on sewer rates each year for five years beginning in FY12. The council also decided not to finance the project in a traditional way of selling sewer bonds. lnstead the City has opted to self-finance the project. Cash reserves from the City's Capital lmprovements Fund and Hospital Fund havefinanced the project. Through June 30,2013, these funds have foaned the sewer fund $15.9 million. Self-financing has allowed these funds to earn interest at a rate greater than earnings on traditional investments and the sewer fund benefits by paying interest costs lower than bond rates.

Bluff Street Lift Station: ln 1962, the Bluff Street Lift Station was constructed below the 1Oo-year flood elevation. During the Flood of 2008, the entire basement (pump room) filled with water and the control room had five feet of standing water in it. Due to its location, the station was not accessible for several days and out of service for about two weeks because of the significant damage to the mechanical equipment in the station as well as to the backup generator. Because of the dry well/wet well configuration of the station, conventional flood protection was not practical, therefore the City applied for a Community Development Grant (CDBG) Disaster Recovery Grant to construct the new station at a higher elevation and that is not subject to flooding and is completely accessible in a high water event.

ln FY10, design on the new lift station started and the Public Works Department solicited bids for the New Bluff Street Lift Station project. Construction began in FY12 and continued in FY13. Completion will occur in FY14. The total project cost will be approximately $Z.g million. The CDBG grant will fund $3.g million of the cost. The remaining cost will be financed with sewer bonds and self-financing options. Sewer rates increases described above also were needed to help finance this project as well.

ACCOUNTING SYSTEMS AND BUDGETARY CONTROL

ln developing and evaluating the City's accounting control system, consideration is given to the adequacy of internal accounting controls. Accounting control comprises the plan of organization and the procedures and records that are concerned with the safeguarding of assets and the reliability of financial records and consequen¡y are designed to provide reasonable assurance that:

¡ Transactions are executed in accordance with management's general or specific authorizations. ' Transactions are recorded as necessary(1)to permit preparation of financial statements in conformitywith

generally accepted accounting principles or any other criteria, such as finance-related legal and contractual compliance requirements applicable to such statements, and (2) to maintain accountability for assets.

. Access to assets is permitted only in accordance to management's authorization.

' The recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

The definition of accounting control comprehends reasonable, but not absolute, assurance that the objectives expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that the cost of internal controls should not exceed the benefits. The benefit consists of reductions in the risk of failing to achieve the objectives implicit in the definition of accounting control.

All internal controf evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.

ln accordance with the State of lowa, the City has formally established budgetary accounting control for its operating funds. Budgetary control is maintained at the function level (Public Safety, Public Works, Health and Social Services, Culture and Recreation, Community and Economic Development, General Government, Debt Service, Capital Projects, and Business-Type activities). The City has adhered to these budgetary laws.

INDEPENDENT AUDIT

Eide Bailly, LLP, a firm of independent public accountants has audíted the financial records, books of account and transactions of the City for the fiscal year ended June 30, 2013, and their opinion is included in the Financial Section of this report. The financial statements are the responsibility of the City. The responsibility of the independent public accountants is to express an opinion on the City's fínancial statements based on their audit. An audit is conducted in accordance with U.S. generally accepted auditing standards. Those standards require that the audit be planned and performed in a manner to obtain a reasonable assurance as to whether the financial statements are free of material misstatement.

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 Cedar Falls for its comprehensive annual financial report (CAFR) for the year ended June 30, 2012. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

ln 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. The City of Cedar Falls has received a Certificate of Achievement for the last twenty-three consecutive years (fiscal years ended 1990-2012). We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA.

ACKNOWLEDGMENTS

The preparation of this report could not be accomplished without the efficient and dedicated service of the entire staff of the Finance/Public Records Division, particularly Lisa Roeding, Deputy Finance Manager and Cathy Niebergall, Financial Technician. Each member of the division has my sincere appreciation for the contributions made in the preparation of this report. I would also like to thank the members of the City Council for their continued interest and support in planning and conducting the financial operations of the City in a responsible and prudent manner.

Sincerely,

enbeck, CPA, CPFO nce Manager/City Clerk

Unempl ATTACHMENT A

Unemployment Rates Cedar Falls, Waterloo, lowa & U.S.

Unemployment Rates Gedar Falls, Waterloo, lowa & U.S.

9.00

8.00

7.00

c) o) o c c)o L o fL

6.00

5.00

4.00

3.00

2.00 July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June

tCedarFalls +Waterloo +lowa +U.S.

Month 12-13

Cedar Falls (ln %)

Waterloo (ln %)

lowa (ln %)

U.S. (ln o/o)

July Aug sep Oct Nov Dec Jan Feb Mar Apr May June

4.O 4.4 3.2 3.5 3.1 3.5 3.8 3.3 3.1 3.0 3.1 3.9

6.6 6.8 5.7 5_8

5.8 6.8 7.6 6.6 5.8 5.4 5.4 5.7

5.3 5.5 5.2 5.1 4.9 4.9 5.0 5.0 4.9 4.7 4.6 4.6

8.3 8.1 7.8 7.9 7.7 7.8 7.9 7.7 7.6 7.5 7.6 7.6

Average 3.5 6.2 5.0 7.8

Cedar Falls has consistently remained below Waterloo and the nation's unemployment rates.

Historically Cedar Falls' unemployment rate has closely followed the State trends. Cedar Falls is insulated from many of the economic problems in the Metro area due to a strong service employment base supported by UNI.

ATTACHMENT B taxvaluel4

Taxable Valuations FY04-FY 14 City of Cedar Falls

3,000,000,000

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

FYO4 FYOs FYO6 FYOT FYOS FYO9 FYIO FY11 FY12 FY13 FY14

rTaxable Value trAssessed Value

Year Taxable Value

Assessed Value

FYO4

FYOs

FYO6

FYOT

FYOS

FYO9

FYlO FY11 FY12 FY13 FY14

817,996,990 903,439,479 920,739,030 985,250,969

1 ,018,530,694 1,098,295,277 1 ,150,079,051 1 ,1 85,969,161 1,254,921,347 1,393,51 1,204 1,622,962,335

1,427,127,146 1,673,902,007 1,737 ,456,552 1,931 ,759,494 2,013,912,356 2,252,421,925 2,336,646,915 2,402,107,961 2,459,320,459 2,618,319,943 2,650,433,900

The last ten years have provided a steady growth trend ín assessed valuations. ln addition, FY08 was the first year that assessed values exceeded $2 billion and taxable values exceeded $1 billion.

For FY14, assessed values increased by $32,t 14,057. However, taxable values increased by $229,35 1 ,191 due to the change in the residential rollback factor to 52.82% for Fy14 and the release of the TIF increment.

Citytaxr

900.00

800.00

700.00

600.00

500.00

400.00

300.00

200.00

Property Tax Per Capita (FY13) 20 Largest lowa Cities

ATTACHMENT C

Property Tax Per Gapita (FY13) 20 Largest Gities

WDM IC CR BE CB DA WA CL UR AN DI\4 FD MC MA SC CF AM MA DU BU

C¡ty 2010 Abbre-

Population viation

FYI3 Tax Per Person

West Des Moines lowa City Cedar Rapids Bettendorf Council Bluffs Davenport Waterloo Clinton Urbandale

keny Des Moines Fort Dodge Mason City Marion Sioux City Cedar Falls Ames Marshalltown Dubuque Burlington

800.53 749.90 685.03 675.82 673.97 664.56 609.53 570.61 550.35 548.16 535.64 493.31 486.57 480.96 448.28 435.53 407.26 402.19 394.58 385.09

56,609 67,862

126,326 33,217 62,230 99,685 68,406 26,885 39,463 45,582

203,433 25,206 28,079 34,768 82,684 39,260 58,965 27,552 57,637 25,663

WDM tc

CR BE CB DA WA CL UR AN DM

MC MA SC CF AM MA DU BU

Averaqe 549.89

For over two decades Cedar Falls' local government has operated at one of the lowest per capita property tax rates among the 20 largest cities in lowa.

At a cost of $435.53 per person, the City is sub- stantially below the average rate of $549.89. This rate can be attributed to the City's concerted efforts to streamline operations over the past 20 years.

lf the City of Cedar Falls operated at the state average property tax per capita, an additional 4.S million dollars would be devoted to operations. This would be an increase of 26% of taxes levied in FY13.

lncluded in Cedar Falls' population are university students who live in campus housing and do not pay property taxes. Thís results in an even greater property tax burden on the citizens.

ATTACHMENT D

Full-Time Employees Per 1,000 Residents Comparison of 20 Largest Cities

oe 9ù \o "so

a\s "$

Eo gù 9h .$Þ oQ (a & ow $*.$o$ o( È¡Þùe

City FY12

Employees 2010

Population Employees Per 1,000

Cedar Rapids Dubuque lowa City Mason City Des Moines Ames Sioux City Burlington Davenport Waterloo Council Bluffs Fort Dodge Bettendorf Clinton Marshalltown W. Des Moines Gedar Falls Ankeny Marion Urbandale

1293.0 550.0 626.0 250.0

1750.0 503.0 684.0 205.0 773.0 516.0 441.O

177.0 230.0 184.0 174.0 337.0 215.0 212.0 160.0 180.0

126,326 57,637 67,862 28,079

203,433 58,965 82,694 25,663 99,695 68,406 62,230 25,206 33,217 26,895 27,552 56,609 39,260 45,592 34,769 39,463

10.24 9.54 9.22 8.90 8.60 8.53 8.27 7.99 7.75 7.54 7.09 7.O2

6.92 6.84 6.31 5.95 5.48 4.65 4.60 4.56

Average 7.30

Among the top twenty largest cities in the State of lowa, the City of Cedar Falls continues to have one of the lowest number of employees per capita. The pressures of new construction growth, road development, and societal values have placed greater demands on existing staff. ln the near future, the City Council wíll need to prioritize services or focus on key services to address thé over extension of City staff.

Cedar Falls city government continued to have one of the lowest number of employees per 1,000 capita comparing the top 20 largest cities.

Cedar Falls has 1.82 employees per 1,000 capita less than the state average, which is equivalent to 71 fewer fu ll{ime employees.

Employment reductions have been implemented over the last 10 years, which has streamlined Cedar Falls' employment.

Resalel2 ATTACHMENT E

The average sale price of residential properties in Cedar Falls has grown by 35% between 2OO2- 2012 from $153,31 2 to $206,773.

However, in2O11 the average sale price declined slighfly

Average Residential Sales Price (Annual) Cedar Falls, lowa

220,000

210,000

200,000

190,000

180,000

170,000

160,000

150,000

140,000

130,000

120,000

110,000

100,000

90,000

80,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year

Average Sales Price

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

153,312 163,637 168,599 181,310 190,929 195,090 192,154 207,754 199,318 197,576 206,773

Average 186,g3g

- 10 -

Government Finance Officers Association

Certificate of Achievement for Excellence in Financial Reporting

Presented to

City of Cedar FaIIs fowa

For its Comprehensive Annual Financial Report

for the Fiscal Year Ended

June 30,2012

ØrtrÊtu- Executive Director/CEO

-11 -

City of Cedar Falls, lowa Organizational Chart

Operations and Maintenance

Water Reclamation

Public Works

lnvestigat¡ons

School Reserve Officer & Crossing

Guard Program

Police Department

Patrol

Code Enforcement

lnspections

Suppression

Prevent¡on

Fire Department

City Council

Mayor

Citizens of Cedar Falls

Cultural Services

Library*

Parks

Recreation

Visitor & Tourism Services

Community Ctr& Senior Services

Human & Leisure Services

Community Services

Engineering & Storm Water

lnspect¡on Services

Planning and Zoning

Developmental Services

Legal Services

Finance/Public Records & Parking

lnformation Systems

Cable W

Administrative Services

A I\) t

city division org.doc January 29,2013

Financial Services

*The Library is governed by the Library Board of Trustees' which are appointed by the Mayor & City Council. The Library is shown under the Human & Leisure Services Department since that department is the Board's liaison.

City of Cedar Falls, lowa Boards and Commissions

J (¡) I

Board of Electrical Examiners

Comm Ctr & Senior Services Board

Park & Recreation Commission

Historic Preservation Commission

Board of Appeals

Civil Service Commission

Library Board of Trustees

Visitors & Tourism Board

City Council

Jon Crews Mayor

Board of Adjustment

Cedar Falls Health Trust Board

Human Rights Commission

Utilities Board of Trustees

Art & Culture Board

Board of Plumbing Examiners

Housing Commission

Planning & Zoning Commission

Finance Division January 25,2011City boards & commissions.doc

CITY OF CEDAR FALLS, ¡OWA

PRINCIPAL OFFICIALS June 30,2013

Title Mayor Council Member- 1't Ward Council Member - 2nd Ward Council Member - 3'd Ward Council Member - 4th Ward Council Member- Sth Ward Council Member - At Large Council Member - At Large Administrative Services Director Developmental Services Director Human & Leisure Services Director Fire Chief Police Chief Public Works Director City Attorney Finance Manager/City Clerk lnformation Systems Manager Cable TV Manager City Engineer City Planner Community Services Manager lnspection Services Manager Acting Cultural Services Manager Recreation Division Manager Visitors & Tourism Manager Cedar Falls Public Library Director Operations and Maintenance Manager Water Reclamation Manager Cedar Falls Utilities General Manager

Name Jon Crews Tom Hagarty Susan deBuhr John Runchey Mare Madsen Schmidt Frank Darrah Nick Taíber Dave Wieland Richard L. McAlister Ron Gaines Mark Ripplinger John Schilling Jeff Olson Bruce Sorensen Steve Moore Jennifer Rodenbeck Laurene Saathoff Denny Bowman Randy Lorenzen Marty Ryan Robert Seymour Craig Witry Emily Drennen Bruce Verink Kimberly Manning Sheryl McGovern Brian Heath Lyle Krueger Jim Krieg

-14-

dar Falls Visitor 8. Tourism Center

.¿>\ EideBailly.

CPAs & BUSINESS ADVISORS

Independent Auditor's Report

To the Honorable Mayor and Members of the City Council

City of Cedar Falls, Iowa

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remainingfundinformationoftheCityofCedarFalls,Iowaasofandfortheyearended Jine30,2013, 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 e1Tor.

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 Cedar Falls Utilities, which represent the entire assets, net position, and revenues of the aggregate discretely presented component units. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Cedar Falls Utilities, is based on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from mateiial misstatement.

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 fiaud or error. In making those risk assessments, the auditor considers intemal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that ur" upprop.iate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of thè-entìty,s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

l5 www.eidebqilly.com

3999PennsylvonioAve.,Ste 100 | Dubuque,lAS2oo2-2273 I Tsó3.55ó t79o I Fs63.5577942 ) EoE

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Cedar Falls, Iowa, as of June 30,2013, 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

Re quir e d Supp le me ntary Informat ion

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the other required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Inþrmation

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively compromise the City of Cedar Falls, Iowa's financial statements. The introductory section, combining nonmajor fund financial statements, capital asset schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements.

The combining nonmajor fund financial statements and capital asset schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining nonmajor fund financial statements and capital asset schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report, under separate cover, dated September 27,2013, on our consideration of the City of Cedar Falls, Iowa's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the intemal control over financial reporting or on compliance.

õ*,4 z¿/ Dubuque, Iowa September 27,2013

MANAGEMENT'S DISCUSSION AND ANALYSIS

Our discussion and analysis of the City of Cedar Falls' financial performance provides an overview of the City's financial activities for the fiscal year ended June 30, 2013. Please read it in conjunction with the transmittal letter found on pages 1 - 10 of this report.

2013 FINANCIAL H¡GHLIGHTS

year 2013. Property taxes increased $893,816 for all activities.

from fiscal year 2012. Public Safety expenses increased by $t,029,534 and Public Works expenses decreased by $1,061,71 0.

amount, the net position of the governmental activities increased by $8,113,574 and the net position of the business-type activities increased by $3,804,534.

USING THIS ANNUAL REPORT

The annual report consists of a series of financial statements and other information as follows:

o Management's Discussion and Analysis introduces the basic financial statements and provides an analytical overview of the City's fínancial activities.

o Government-wide Financial Statements consist of a Statement of Net Position and a Statement of Activities. These provide ínformation about the activities of the City as a whole and present an overall view of the City's finances.

The Fund Financial Statements tell how governmental activities were financed in the short term as well as what remains for future spending. Fund fínancial statements report the City's operations in more detail than the government-wíde statements by providing information about the City's most significant funds.

Notes to Financial Statements provide additional information essential to a full understanding of the data provided in the basic financial statements.

Required Supplementary lnformation further explains and supports the financial statements with a comparison of the City's budget for the year.

Other Supplementary lnformation provides detailed information about the nonmajor Special Revenue and Capital Projects Funds and the lnternal Service Funds.

REPORTING THE CITY'S FINANCIAL ACTIV¡TIES

Government-wide Financial Statements

One of the most important questions asked about the City's finances is, "ls the City of Cedar Falls in a better financial position at the end of the fiscal year, compared to last year?" The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the

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accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid.

The Statement of Net Position presents all of the City's assets and liabilities, with the difference between the two reported as "net position". Over time, increases or decreases in the City's net position are one indicator of whether its financial health is improving or deteriorating. A person will need to consider other non-financial factors, however, such as changes in the City's property tax base and the condition of the City's infrastructure, to assess the overall health of the City.

The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will not result in cash flows untilfuture fiscal periods.

The Statement of Net Position and the Statement of Activities report two kinds of activities:

. Governmental activities - Most of the City's basic services are reported here, including the general administration, streets, fire, police, parks, recreation, library, and housing and block grant assistance. Property taxes, local option sales taxes, road use taxes, and federal and state grants finance most of these activities.

¡ Business-type activities - The City of Cedar Falls charges a fee to customers to help it cover all or most of the cost of certain services it provides. The City's sewer, refuse, and storm water are reported in this section.

The Government-wide financial statements can be found on pages 31 - 34 of this report.

Fund Financial Statements

The Fund financial statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by State law or by bond requirements. The City has two kinds of funds:

. Governmental Funds - Most of the City's basic services are reported in governmental funds, which focus on how money flows into and out of these funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called the "modified accrual basis" of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance City programs.

The required financial statements for governmental funds include a balance sheet and a statement of revenues, expenditures, and changes in fund balances. We describe the relationship between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation at the bottom of the fund financial statements.

The City maintains 21 individual governmentalfunds. lnformation is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund, Hospital Fund, TIF Fund, Street Repair Fund, Street Construction Fund, Debt Service Fund, FEMA Fund, and Bond Fund, all of which are considered to be major funds. Data from the

. other twelve governmentalfunds are combined into a single, aggregated presentation. lndividual fund data for each of these non-major governmental funds is provided in the form of combining statements located in the supplementary information section of this report.

Ïhe basic Governmental Fund Financial Statements can be found on pages 35 - 39 of this report.

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a Proprietary Funds - When the City charges customers for the service it provides, these services are generally reported in proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as businessìype activities in the government-wide financial statements. The City uses enterprise funds to account for its sewer, refuse and storm water activities.

lnternal Service Funds are used to accumulate and allocate costs internally. The City uses internal service funds for its information systems, vehicle maintenance, and various risk management activities. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Sewer Fund, Refuse Fund, and Storm Water Fund, all of which are considered major funds. lnternal Service Funds are combined into a single, aggregated presentation in the proprietary fund financial statements. lndividual fund data for internal service funds is provided in the form of combining statements located in the supplementary information section of this report.

The basic Proprietary Fund Financial Statements can be found on pages 40 - 45 of this report.

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GOVERNMENT.WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of financial position. The analysis that follows focuses on the change in the net position for governmental and business-type activities.

Governmental activities Business-type activities Total

2013 2012 2013 2012 2013 2012

g 107,527,954 $ 163,936,827

106,608,386 $

162,574,422

(4,381,386) $

83,715,207

1,255,950 $

74,092,070

103,146,568

247,652,034

$ 107,864,336 236,666,492

Current and

other assets

Capital assets

Total assets

Long-term debt

Other liabilities

Total liabilities

271,464,781

8,622,236 $

28,488,990

269,182,808

11,345,500 $

31,597,327

79,333,821

3,152,973 $

2,114,941

75,348,020

3,763,871 $

1,322,776

350,798,602

11,775,209 $

30,603,931

344,530,828

15,109,371

32,920,103

$ sz,r 11,226 g 42,942,827 $ 5,267,914 $ 5,086,647 $ 42,379,140 $ 48,029,474

Net assets:

Net investment

in capital assets $

Restricted

Unrestricted

155,314,591 $

24,150,307

54,888,657

151,130,097 $

24,405,828

50,704,056

79,677,940 $

9,500

(5,621,533)

70,328,202 $

9,500

(76,32s)

234,992.531

24,159,807

49,267,124

s 221,458,299 24,415,328

50,627,727

Total net position $ 234,353,555 $ 226,235,981 $ 74,065,907 $ 70,261,373 $ 308,419,462 $ 296,s01,3S4

Net position of governmental activities increased from FY12 by approximately $A.t million, or 3.59%. This increase was due primarily to the continued strength of the property tax base and the small amount of general obligation debt outstanding by the City. Net position of business-type activities increased from FY12by approximately $g.g million, or 5.41%. This increase was due to new assets constructed or being constructed. These assets include the new Public Works complex, the disinfection project and the Bluff Street liftstation. ln addition, this was the seventh year that storm water fees were collected. The largest portion of the City's net position is the net investment in capital assets (e.g., land, infrastructure, buildings, and equipment). The debt related to the investment in capital assets is liquidated with sources other than capital assets. Restricted net position represent resources that are subject to external restrictions, bond covenants, constitutional provisions or enabling legislation on how they can be used. Unrestricted net position, the part of net position that can be used to finance day{o-day operations are approximately $49 million at the end of the year.

-21 -

For the year ended June 30, 2013, net position changed as follows

Governmental Activities Business e Activities Total

2013 2012 2013 2012 2013 2012

Revenues

Program Revenues

Charges for

servrces

Operating grants

and contributions

Capital grants and

contributío ns

General Revenues

Property taxes

Local Option Sales Tax

Hotel/Motel Tax & Other

Use of money and

property

lntergovernm ental

Miscellaneous

Gain on Sale of assets

Utility contribution

Total revenues

Expenses

Public safety

Public works

Health and social

servrces

Culture and

recreation

Community and

economrc

development

General government

Debt service

Sewer

Refuse

Storm Water

Total expenses

$ 4,911,766 $ 5,099,756$ 8,461,470$ 8,469,215$ 13,373,236$ 13,568,971

2,098,639 1 ,695,1 1 7 2,098,639 1,695,117

6,479,932 1 1,529,905 577,411 140,450 7,O57,343 1 1 ,670,355

24,695,940

4,793,027

7 51,577

1,268,202

4,405,345

1,375,437

23,802,124

5,062,220

692,486

1,275,402

4,296,073

1,014,890

6,606

1,625,000

24,695,940

4,793,027

751,577

1,307,088

4,405,345

1,375,437

23,802,124

5,062,220

692,486

38,886 36,1 37 1 ,311,539

4,296,073

'1,014,890

6,606

1,625,0001,637,000 1,637,000

$ 52,416,865 $ 56,099,579 $ S,OZZ,767 g 8,645,802 $ 61,494,632 $ 64,745,381

$ 9,491,677 $ 11,909,568

$ $

320,864

7,262,'t 10

8,357,058

4,890,409

228,173

8,462,143 $

12,971,278

316,339

7,098,908

7,815,848

4,333,403

452,378

9,491,677 $

11,909,568

320,864

7,262,110

8,462,143

12,971,278

31 6,339

7,098,908

3,617,688

2,770,264

728,713

3,336,990

2,492,305

722,991

8,357,058

4,890,409

228,173

3,617,688

2,770,264

728,713

7,815,848

4,333,403

452,378

3,336,990

2,492,305

722,991

$ 42,459,85s $ 41,450,297 $ 7,1 16,665 $ 6,552,286 $ 49,576,524 $ 48,002,s83

$ 9,957,006

(1,843,432)

8 14,64s,282 $ 1,961,102 $ 1,843,432

2,093,516 $

8, 91 9,1 54

11,918,108 $ 16,742,758 9,154)

lncrease in net position

before transfers

ïransfers

lncrease in net position

Net position, beginning

Net position, ending

8,113,574 $

226,239,981

5,730J28 $ 220,509,853

3,804,534 $ 70,261,373

11,012,670 $

59,248,703

11,91 8,108 $ 296,501,354

16,742,798

279,758,556

$ 74,065,907 $ 70,261,373$ 234,353,555 $ 226,239,981

$ 308,419,462 $ 296,501,354

Property taxes increased by approximately $893,000 from FY12 due to increased taxable valuations. FEMA grants for property buyouts related to the 2008 Flood received in FY12, caused capital grants and contributions to decreasefor FY1 3.

INDIVIDUAL MAJOR FUND ANALYSIS

Governmental Fund Highlights

As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $64,696,852. $548,225 is nonspendable for inventory. $25,435,109 is restricted for TlF, debt service, road use tax funds, local option sales tax, employee retirement systems, bond proceeds and various grants. $16,551,115 is committed for the City's health trust fund and parking fund. $16,376,887 is assigned for recreational capital funds, police forfeiture funds, economic development and capital improvements. Thís leaves $5,785,516 for unassigned fund balances in the governmental funds.

The Governmental fund balances increased by $4,880,073, or 8.160/0. This increase was due in part to the increase in the FEMA Fund.

The General Fund is the chief operating fund of the City of Cedar Falls. At the end of the current fiscal year, unassigned fund balance of the General Fund was $6,978,807, while the total fund balance totaled $9,037,503. As a measure of the General Funds liquidity, it may be useful to compare both unreserved fund balances and total fund balances to total fund expenditures. Unassigned fund balance represents 33.51% of the total General Fund expenditures, while the total fund balance represents 43.39% of that same amount.

The following fund balances in the other major funds, which comprise the Total Governmental Funds are listed below: FY13 FY12 lncrease

Amount Amount (Decrease) Hospital Fund

TIF Fund

Street Repair Fund

Street Construction Fund

Debt Service Fund

FEMA Fund

Bond Fund

Other Governmental Funds

15,718,951 $ 15,435

12,609,671

6,012,776

318,846

(529,170)

(644,688)

22,157,628

$ 443,930 (3,767)

(1,061,578)

891,363

56,970

3,749,701

(595,880)

1,311,285

$ 15,274,921

19,202

13,671,249

5,121,413

261,976

(4,278,871)

(48,808)

20,846,343

The FEMA Fund had the largest increase in fund balance due to the reimbursements received for projects related to the 2008 Flood.

The Street Repair Fund had a decrease in fund balance due to many projects being able to be completed during FY13

The Hospital Fund had an increase in fund balance due to the fewer projects being funded by the Health Trust Board

The Street Construction Fund had an increase in fund balance due to the increase in road use taxes received. Road use tax funds have increased due to the population increase in Cedar Falls which causes the formula to be revised.

The Bond Fund had a decrease in fund balance due to bond proceeds received in prior years being spent out on various projects.

The Other Governmental Funds had an increase in fund balance due to the increase in the Capital lmprovements Fund. This increase was the result of the Fund being paid back for cashflowing various Capital Projects.

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The following schedule presents a summary of the governmental fund revenues for the fiscal year ended June 30, 2013 and June 30, 2012.

Revenues FY13

Amount Percent of Total

FY12

Amount

lncrease (Decrease)

from FY12

Percent of lncrease

(Decrease)

Property taxes and

assessments

Other city taxes Licenses and permits

Use of money and property

lntergovernm ental

Charges for services

Fines and forfeitures Miscellaneous

Utility contribution in lieu of taxes

$ 24,696,783 5,519,022

1 ,076 ,1 86

1,268,202

12,599,954

3,386,415

449j65 1 ,358,192

$ 23,766,846 5,755,920

1 ,162,401

1,275,402

18,920,930

3,507,339

430,016

1,052,265

$ 929,937 (236,8e8)

(86,215)

(7,200) (6,320,976)

(120,s24)

19,149

305,927

12,000

47.50 o/o

10.62

2.07

2.44

24.23

6.51

0.86

2.61

16.89 % (4.30)

(1.57)

(0.13)

(114.82)

(2.20)

0.35

5.56

0.221,637,000 3.16 1,625,000

$ 51,990,919 100.00 % 57,496,119 _q_(5,50529q_ j_qo.oo %_ The most significant decrease in revenues was in intergovernmental. The decrease was due to the receipt of FEMA disaster assistance payments and IJOBS grant revenues for the new Public Works Complex in FY12. The most significant increase was in property taxes. The increase was due to increased property tax valuation due to the change in the residential rollback factor.

Governmental Revenues FY13

Other City Taxes 10.620/o

Licenses & Permits 2.07%

Use of Money & Property 2.44o/o

Property Taxes 47.50%

Utility Contributions 3j6%

Fines & Forfeitures 0.86%

lntergovernmental 24.23%

Charges for Services 6.51%

Miscellaneous 2.61o/o

-25 -

The following schedule presents a summary of governmental expenditures for the fiscal years ended June 30, 2013 and June 30,2012.

Public Safety

Public Works

Health & Social Services

Culture & Recreation

Cummunity and Economic Development

General Government Debt Service

Capital Projects

$ 8,999,942 10,089,252

172,284

6,449,626

2,646,490

4,684,063

2,956,009

9,544,629

Expenditures

FY13

Amount

Percent

of Total

19.76 %

22.15

0.38

14.16

5.81

10.29

6.49

20.96

FY12

Amount

lncrease

(Decrease)

from FY12

Percent of lncrease

(Decrease)

$ 8,375,158 10,810,336

167,759

6,410,049

2,447,212

4,775,981

3,918,383

11,390,660

624,784 (721,084)

4,525

39,577

199,278

(e1,e18)

(962,374\ ( 1 ,846,031 )

22.69 % (26.1e)

0.16

1.44

7.24

(3.34)

(34.e5)

(67.05)

$ 45,542,295 100.00 % $ 48,295,538 $ (2,753,243) 100.00 %

The most significant decrease in expenditures occurred in the capital projects function. This was due to several projects occurring during FY12, including disaster recovery expenditures.

The most significant increase in expenditures occurred in Public Safety. This was due to increased pension costs as set by the State of lowa.

Governrnental Expend itures FY13

Capital Projects 20.960/o

Debt Service 6.49o/o

General Govemment 10.29o/o

Community and Economic

Development 5.81o/o

Public Safety 19.760/o

Public Works 22.15o/o

Culture and Recreation

14.160/o

Health & Social Services 0.38%

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Proprietary Funds

City of Cedar Falls proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Net position of the Sewer, Refuse and Storm Water funds at the end of the year amounted to $74,065,907. There are net position in the Governmental Activities lnternal Service fund of $15,126,691 .

These funds were established for the City operations that are financed and operated in a manner similar to private business enterprises. The cost of providing the services to the general public is recovered, in whole or in part, through user charges.

The City's enterprise operations are comprised of three separate and distinct activities: Sewer, Refuse and Storm Water. Results of operations for these funds for the years ended June 30, 2013 and June 30, 2012 are as follows:

Sewer Refuse Storm Water 2013 2012 2013 2012 2013 2012

Operating Revenues Operating Expenses

Non-Operating Rev (Exp)

CapitalContributions O perating Transfers, net

Change in Net Position

4,574,181 $ 3,208,163

(387,334)

178,978

1,633,090

2,790,752

$ 2,996,396 2,770,264

9,712

$ 3,328,306 $ 2,488,868

6,079

$ 4,313,923

2,856,740 (460,314)

77,480

5,028,445

6,102,794

210,342

446,186

4,143,060

4,988,577

890,893 $ 728,713

6,983

398,433

567,596

826,986

722,991

6,68 5

62,970

(252,351)

(78,701)

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

Proprietary Fund Operating Revenues & Expenses FYI3

Sewer Refuse Storm Water

I Operating Revenue ü Operating Expenses

BUDGETARY HIGHLIGHTS

Over the course of the year, the City Council revised the budget two times. These amendments were done in January and May 2013. The amendments were needed due to the City's participation in the Jumpstart, Buyout, Demolition, and Public Assistance Federal & State Programs. At the end of the year, the City did not exceed the amended budgeted amounts in any of its functions.

CAP¡TAL ASSET AND DEBT ADMINISTRATION

CapitalAssets At the end of June 30, 2013, the City had approximately $Z¿g million invested in capital assets including police and fire equipment, public buildings, park facilities, roads, bike trails, bridges, water treatment facilities, sanitary sewer lines, and storm water improvements. (See Table following.) This represents a net increase of approximately 911 million or 4.64% over last year.

City of Cedar Falts Capital Assets (net of depreciation)

Gove rnm enta I activities Business activities Total

2013 2012 2013 2012 2013 2012

Land

Buildings

lmprovements other than

buildings

Machinery and

equipment

lnfrastructure Construction

in progress

$ 28,867,975 18,419,051

$ 30,480,556 36,407,208

$ 30,316,450 37,498,908

$ 28,703,869 $ 1,612,581 $ 1,612,581 19,077 ,238 17,988,157 18,421,670

8,195,797 8,666,142 8,195,797 8,666,142

6,674,726

90,353,811

6,954,815

86,908,330

5,324,374

30,831,125

5,457,929

30,874,644

11,999,100

121,184,936

12,412,744

117,782,974

11,425,467 12,264,028 27,958,970 17,725,246 39,384,437 29,989,274 Total $ 163,936,S27 $ 162,574,422 $ 83,715,207 ç 74,092,070 $ 247,652,034 $ 236,666,492

Major capital asset events during the current fiscal year included the following:

. Hwy 58 Pedestrian Bridge.

. Bluff Street Liftstation. o Northern lndustrial Park. . Ridgeway Avenue. o TreatmentFacilityDisinfection.

More detailed information about the city's capital assets is presented statements.

tn Note 3 to the financial

Capital Assets Net of Depreciation Land

12.310/o

Construction ln Progress 15.90%

Buildings 14.70Yo

lmprovements 3.31Yo

Machinery & Equipment 4.85%lnfrastructure

48.93Yo

-28 -

Debt

Atyear-end,theCityhad$11,610,000ínoutstandingbondscomparedto$14,910,000¡astyear. Thatisadecreaseof $3,300,000 or 22.13%.

Gity of Cedar Falls Outstanding Debt General Obligation Debt

Govem rnental activities Total

2013 2012 2013 2012

Business-type activities

2013 2012 General obligation

bonds $ Tax increment

financing

Capital loan notes

1,125,000

10,210,000

$ $ 2,335,000 $ 2,755,000 $ 2,æ5,000 $ 2,755,000

575,000

8,075,000 625,000 920,000 575,000

8,700,000

1,125,000

11,030,000

Total $ 8,650,000 $ 11,335,000 $ 2,960,000 $ 3,575,000 $ 11,610,000 $ 14,910,000

The City of Cedar Falls was upgraded to a Aa1 rating from Moody's lnvestor Services for all general obligation issuances. This was a result of Moody's recalibrating their U.S. municipal rating scale.

State statutes limit the amount of general obligation debt a government entity may issue to 5% of its total assessed valuation. As of June 30, 2013, the City's legal debt margin was $1 19,762,511 .

More detailed information about the City's long-term debt is presented in Note 3 to the financial statements.

Gity of Cedar Falls Outstanding Debt FY13

CapitalLoan Notes 75o/o

GO Bonds 20To

TIF Bonds 5%

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ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

During the state legislative session in 2004, the legislature permanently eliminated certain state funding to local governments starting with FY2005 and will continue in all future years. This along with the continuation of the state rollback on residential properties greatly affects the City's general operating fund.

Even with the State reductions, the City Council did establish a balanced budget in the General Fund for Fyj4. The tax levy rate per $1,000 of taxable valuation for FY14 is provided below:

$ 8.10 2.76

.56

.21

.27

.10

.00

.02

$ 12.02

REQUESTS FOR INFORMATION

This financial report is designed to provide our citizens, taxpayers, customers and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. The City's discretely presented component units, Cedar Falls Utilities, have separately issued financial statements. lf you have questions about this report or need additional information, contact the Department of Administrative Services, 220 Clay Street, Cedar Falls, lowa 50613.

General levy

Trust and Agency levy

Debt Service levy

Transit levy

Library levy

Liability lnsurance levy

Emergency Management levy

Municipal Band levy

Total levy

30-

dar Falls The Falls Aquatic Center

dar Falls Veteran's Memorial

Park

CiÇ of Gedar Falls, lowa Statement of Net Position

June 30, 2013

Primarv Government

ASSETS Cash Certificates of Deposit Receivables, net of allowance for uncollectible amounts:

Property taxes Other city taxes Accrued interest Special assessments Notes from associated company Customers Human & Leisure services contributions Other

Due from component unit lnternal balances Due from other governments lnventories Prepaids and other assets Restricted assets:

Cash Certificates of deposit US government and agency securities

Capital assets: Land Land improvements Buildings Machinery and equipment lnfrastructure Construction in progress Accum ulated depreciation

Total assets

LIABILITIES Accounts payable Accrued liabilities Due to primary government Note payable to associated company Unearned revenue Long-term liabilities:

Portion due or payable within one year: Bonds payable Compensated absences

Portion due or payable after one year: Bonds payable Compensated absences Net OPEB liability Total liabilities

NET POSITION Net investment in capital assets Restricted:

Streets Debt service Em ployee retirement system TIF Post closure costs

Unrestricted Total net position

$ 61 ,017,101 S 9,732,421

21,855J75 979,860

64,720 44,163

11,977

3,925,645 959,113 850,000

15,340,000 1,615,165

877.012

28,867,975 13,155,356 27,818,640 I 7,1 53,865

163,497,944 11,425,467

(97,982,420\ $ 271,464,781

1,145,520

(15,340,000)

68,69ô

23,933,783 7,964,022

45,857,843 27,958,970

(23,611,9921 $ 79,333,821

Governmental Activities

Business-type Activities Total

$ 70,749,522

21,855,175 979,860

76,697 44,163

3,925,645 2,104,633

850,000

1 ,61 5,1 65 945,708

30,480,556 13,155,356 51,752,423 25,117,887

209,355,787 39,384,437

(121,594,412\ $ 350,798,602

1612,581

$ 2,624,404 't,028,432

21,789,027

2,775,O00 841,889

5,847,236 1,862,099

343, I 39 s 37,111,226

18,531,342 318,846

5,284,684 15,435

't,546,705 76,962

635,000 138,633

2,517,973 352,641

$ 4,171,109 1 ,'t 05,394

21,789,027

3,410,000 980,522

8,365,209 2,214,740

18,531,342 318,846

5,284,684 15,435 9,500

49.267.124 T--m6;413262-

343 139 $ 5.267 ,914 $ 42,379,140

$ 1s5,314,591 g 79,677,940 $ 234,ss2,531

54,888,657 $ 234,353,555

See notes to financial statements

-31 -

Component Units Electric Utility

Gas Ut¡litv

Water Utility

Communications Utititv

$ 25,140,464 4,863,620

50,292

738,090 4J25,443

7,088,038 8,165,964

883,693

3,416,O21 6,719,750 2,743,250

1,326,855 4,683

25,745.195 20,862,151

145,179,355 19,422,336

(78,980,669) $ 201,304,895

144,501 136,449 36,307

39,835

2,029,561 652,815

18,388,514 1,146,341

(9,824,603) 2 950 811

548,845-

72,035 1 10,378 24,687

63,466

838,873 376,977

28,285,949 572,606

(8,981,686) $ 26,107,994

1 ,005,1 81

502,746 't,183,414

216,366

259,544 340,000

1,321,858

18,042,813 17,205,059

1,4'10,409 (7,431,0s8)

$ 38,11 1,68s

s 7,782,233 $ 3,704,010 $ 2,341 ,894

5,006 13

3,000,000 1,562,201 419,347 1,709,01 1

4 448

4456883641038

4947263,206

$$ 5,973,191 5,210,181 1,430,000

2,590,000

48,361,300 738,286

$ 1,267,263 567,454

685,821 '165,403

$ 2,685,941

624,408 115,210

2,217,831 584,733

3,738,090

1,595,000

14,119,021 1,047,349

154,492 145,026

526 484

86 664 4 $ 1.039.136 S

$ 87,762,796 S 12,432,463 $ 2t,156,185 $ 9,775,113

I 20852,

3 912 673

32-

City of Cedar Falls, lowa Statement of Activities

For the Year Ended June 30, 2013

Proqram Revenues

Functions/Programs

Primary government:

Governmental activities:

Public safety

Public works

Health and social services

Culture and recreation

Community and economic development

General government

lnterest on long{erm debt and related fees

Total governmental activities

Business-Çpe activities:

Sewer

Refuse

Storm Water

Total business-type activities

Total primary government

Component units

Electric Utility

Gas Utility

Water Utility

Communications Utility

Total component units

Expenses Charges for

Services

Operating Grants and

Contributions

Capital Grants and

Contributions

6,479,932

$g 9,491,677 11,909,568

320,864

7,262,110

8,357,058

4,890,409

673,860

204,592

2,400,747

1,632,567

$ 172,475 $

346,880

1,579,284

173

$ 3,617,688 2,770,264

728,713

$ 4,911,766 $ 2,098,639

4,574,181

2,996,396

890.893

ö$

$ 6,479,932

$ 178,978

398,433

$ 7,116,665 s 8.461.470 $ 577,411 s 49. 76.524 $ 13,373,235 $ 2,098,639 $7. ,343

$ 44,734,893 9,421,934

3,003,090

13,669,240

$ 70,829,157

52,331,653

10,318,526

3,91 8,126

14,574,001

$ $ $ 4,528,905 570,795

877,513

482,690 $ 81.142.306 $ $ 6,459,903

General revenues:

Property taxes and assessments

Local option sales tax

Hotel/motel taxes

Other c¡ty taxes

Use of money and property

lntergovernmental, not restricted to specific programs

Miscellaneous

Utility contribution in lieu of taxes

Transfers

Total general revenues and kansfers

Change in net position

Net position - beginning

Net position - ending

See notes to financial statements

-33-

Net (Exoense) Revenue and Chanqes in net oosition Units

Governmental Activities Activities

Electric Total Utit¡ty

Gas Water Communications Ut¡lityU

$ (8,645,342) $ (5,225,044)

(320,864)

(4,514,483)

(6,777,774)

(3,257,8421

e28.173\

$ (8,645,342) (5,225,044)

(320,864)

(4,514,483)

(6,777,774)

(3,257,842)

(228,173\

$ (28,969,s22)$ (28,96e,522) $

$$ $ $

s $ s

$ 'lj35,471

226,132

560,613

$ $ $ $ $

s1 ,216 s s $ $ (28,969,522) s___1p22216 ß (27. 047.306) $ $ s $

$ $ $ $ 12,125,665 $ $ $ 1,467,387

1,792,549

$ $ $ s 12 125.665 S I $ 1,792,549 1,387,451

$ 1,387,451,387

$ 24,695,940 4,793,027

64't,404

110,173

1,268,202

4,405,345

1,375,437

1,637,000

(1,843,432)

$ 37,08s,096 $ 8,1 1 3,574

226

38,886

24,695,940

4,793,027

641,404

110,173

1,307,088

4,405,345

1,375,437

1,637,000

$ $ $ $$

14 060100 790 243 6 006

$ 38,965,414 S '100,790 s 14.060 g 243 $ 1,792,792

23,276,066

$ 25,068,858

$ 6,006 $ 11,918,108

296,501,354

$ 308,419,462

$ 12,226,455 124,053,956

$ 1,481,447 21.7 83,423

$ 136,280,41 1s 234.353.555 $ ,907

-34 -

Gity of Cedar Falls, lowa

Balance Sheet Governmental Funds

June 30, 2013

Special Revenue

General Fund

Hospital Fund

TIF Fund

Street Repair Fund

ASSETS Cash

Receivables, net of allowance for uncollectible amounts:

Property taxes Other city taxes Accrued interest Special assessments Human & Leisure services contributions Other

Due from component unit Due from other funds Advance to other funds Due from other governments lnventories

Total assets

LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Accrued liabilities Unavailable revenue Due to other funds

Total liabilities

FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned

Total fund balances

Total liabilities and fund balances

$ 8,387,522 g 4,449,430 $

17,500,966 89,494 20,376

3,925,645 203,097 850,000

1 1,255,000 36,436

241,612

2,045,522

$ 12,357,526

800,872

14,811

192,967543 459

$et 148 $ 16.247 ,889 $ 2,045,522 $ 13,366,176

$ 386,168 $ 368,260

21,463,217 529,03; 2,030,087

$ 707,862

48,643

$ 22,217,645 $ 529,038 $ 2,030,087 $ 7s6,505

12,609,671

$ 9,037,503 $ 15.718 ,851 $ 15,435 $ 12,609,671 $sl 148 $ r6,247,889 $ 2.045.522

Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. lnternal service funds are used by management to charge the costs of fleet management, management information

systems and risk management activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position.

Accrued interest payable is not due and payable in the current period and, therefore, is not reported in the funds.

Accrued compensated absences and other postemployment benefits, are not due and payable in the current period and, therefore, are not reported in the funds.

Bonds payable are not due and payable in the current period and, therefore, are not reported in the funds. Net position of governmental activities

241,612

1,817,084 6,978,807

15,718,851 15,435

$l 176

See notes to financial statements

-35-

Special Revenue Street

Construction Fund

Capital Projects Debt

Service Fund

FEMA Fund

Bond Fund

Other Governmental

Funds

Total Governmental

Funds

$ 5,524,030 $ 315,949 $

960,463

321,513 283,206

$ $ 16,714,455 $

1,348,224 89,494 13,380 44,163

8,987

47,748,912

310,544 843,'t45

1,413,731 4,085,000

103,527 23,407

21,855,175 979,860 48,567 44,163

3,925,645 948,510 850,000

1,413,731 1s,340,000

1,615,165 548,225

$ 6,128 ,749 $ 1 ,276,412 $ 310,544 $ 843,145 $ $ 95,317,953

$ $81,671 34,302

957,566 49,042 392,035

93,162 1,000,904

167,28s $ 10,016

1,488,647 20,792

2,135,390 412,578

26,659,402 1,413,731

$ 398,637 $ 393,767 $

$ r 15,973 S 957,566 $ 839,714 $ 1,487,833 $t 740 $ 30,621,101 283,206

5,729,570 318,846 23,407

6,761,587 832,264

14,559,803 (1e,433)

548,225 25,435,109 16,551 ,1 15 16,376,887 5,785,516(529,170) (644,688)

$ 6,012J76 $ 318,846 529 170 $ $ 6,128 ,749 $ I ,276,412 $ 310,544

$ 15722 628 $ 64,696,852 $ 843,145 $

161,247,257 4,870,375

15J26,691

(18,017)

(2,s47,367) (8,622,236)

$ 234,353,555

City of Gedar Falls, lowa statement of Revenues, Expenditures, and changes in Fund Balances

Governmental Funds For the Year Ended June 30, 2013

Special Revenue

General Fund

Hospital Fund

TIF Fund

Street Repair Fund

Revenues: Property taxes and assessments Other city taxes Licenses and permits

Use of money and property lntergovernmental Charges for services Fines and forfeitures Miscellaneous Utility contribution in lieu of taxes

Total revenues

Expenditures: Current:

Public safety Public works Health and social services Culture and recreation Community and economic development General government

Debt service Capital projects

Total expenditures

Excess (deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers: Transfers in Transfers out

Total other financing sources (uses)

Net change ín fund balances

Fund balances, beginning lncrease (decrease) in reserve for inventories

Fund balances, ending

$ 22,802,718 $ 601,464 $ 7.6 79,979 $ 5.455

$ 15,121 ,936 414,348

I ,076,186 79,054

829,802 3,337,424

283,084 23,884

1,637,000

$ 7,679,979 $$

600,922

542

4,793,027

46,875

615,890

,792

$$$ 7,665,379 $ 1,464,790

14,750 6,094,248

903,259 4,684,063

5,702,990 157,534

$ 20, 826,489 $ r sz 534 S

$ 1,976,229 $ 443,930 $ 2.679,979 $

$ 633,942 $ (2,583,045)

$ 766,990 $ (8,450,736)

$ s,702,990

7,1 98)

(814,380)

949 103 $1 $ (7,683,746) $ 814,380) $ 27,126 $

8,949,454 60,923

443,930 $

15,274,921

(3,767) $ 19,202

(1,061,578)

13,671,249

$ 9,037,503

See notes to financial statements

-37 -

$ r 5,718,351 s 15,435 $ 12. 609,671

Special Revenue Street

Construction Fund

Capital Proiects Debt

Service Fund

FEMA Fund

Bond Fund

Other Governmental

Funds

Total Governmental

Funds

$ $ $ $845,493 $ 3,736

1,049,375 $ 307,911

538,132 1,643,577

48,991

166,081

637,588

24,696,783 5,519,022 1,076,186

1,268,202 12,599,954 3,386,415

449,165 1,358,192

1,637,000

3,804,757

3,346

4,464,326 3,219

1,857,492

76,942

103 $'849,22994,464 ,326 $ 1,937,65s $ 4,391 ,655 $ st,990,919

$ $ 1,334,563 $ 233,078

8,999,942 10,089,252

172,284 6,449,626 2,646,490 4,684,063 2,956,009 9,544,629

2,688,394

2,956,009

355,378 1,743,231

1,764,779 3,382,280 4,397,570 $ 2,688,394 $ 2,956,009 $ 1,764,779

$ 1,119,709 $ (2,106.780) $ 2,699,547

$ 3,382,280 $ 8, 063,820 $ 45,542,295

$ (1,444,627\ $ (3,672,165) $ 6.448,624

$ 5,495 $ 2,163,750 (280,8e0)

$ 3,574,665 $ (2,524,511)

1,060,704 $ (211,957)

5,092,148 $ (111,350)

13,297,694 (14,976,86s)

$ (275,3e5) $ 2,1 63,750 $ 1 ,050,1s4 $ 848,747 $ 4,980,798 $ (1,679,175) $ 844,314 $

5,121,413 47,049

$ 3,749,701 $ (4,278,871)

(5es,880) $

(48,808) 20,846,343 2,652

59,816,779 110,624

56,970

261,876

1,308,633 g 4,769,449

318,846 $ (529,170) $$ 6,012/76 $

-38

688) $ 22,t57,628 $ ,852

Net change in fund balances - total governmental funds

Amounts reported for governmental activities in the statement of activities are different because:

Government funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures overthe life of the assets. capital ouflay expenditures exceeded depreciation expense in the current year, as follows:

Net acquisition of capital assets Depreciation expense

Because some revenues will not be collected for several months after the City's year end, they are not considered available revenues and are deferred in the governmentalfunds, as follows:

Other

Proceeds from issuing long-term liabilities provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of net posítion. Repayment of long-term liabilities is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of net position. current year repayments exceeded issues, as follows:

Discount on general obligation bonds Repaid Accrued interest

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, as follows:

Compensated absences Other postemployment benefìts Change in inventory

lnternal service funds are used by management to charge the costs of fleet management, management information systems and risk management activities to individual funds. The net revenue of certaín activities of internal service funds is reported with governmental activities

Change in net position of governmental activities

City of Gedar Falls, lowa Reconciliation of the Statement of Revenues, Expenditures, and

Changes in Fund Balances - Governmental Funds to the Statement of Activities

For the Year Ended June 30, 2013

8,392,833 16. 795,933)

1 926

38,262 2,685,000

4 572

1,194 (67,810) 110,623

$ +,t69,449

1,596,900

(183,926)

2,727,834

44,007

(840,6e0)

See notes to financial statements

-39-

$ 8,113.574

City of Gedar Falls, lowa Statement of Net Position

Proprietary Funds June 30, 2013

ASSETS Current assets:

Cash Receivables, net of allowance for uncollectible amounts:

Accrued interest Other

lnventories Total current assets

Noncurrent assets: Capital assets:

Land Buildings Machinery and equipment lnfrastructure Construction in progress Accu mulated depreciation

Total noncurrent assets Totalassets

LIABILITIES Current liabilities:

Accounts payable Accrued liabilities Bonds payable - due within one year Compensated absences - due within one year

Total current liabilities Noncurrent liabilities:

Bonds payable- after one year Advance from other funds Compensated absences - after one year

Total noncurrent liabilities Total liabilities

NET POSITION Net investment in capital assets Restricted for post closure costs Unrestricted

Total net position

B usiness-type Activities - Enterprise Fund

Sewer Fund Refuse Fund

$ 4,943,465 $ 2,740,373

6,921 741,598 40 937

5 73 921$g

2,916 366,850

27 759 137 898

$ zzs,aza 11,595,276 5,506,598

29,629,206 27,921,795

(16,716,752\ $ 58,715,981 $ 64,448,902

$ 1,487,753 53,530

635,000 76,255

$ 2o4,B4s 12,338,507 2,457,434

14,666 (1,969 ,065)

$ 13.046 ,387 184 85

$ 46,596 19,291

55,451 2 252 538 $ 't21,338

$ 2,517,973 15,340,000

119,479

217,041 $ 17,977 ,452 $ 217,041 $ 20,229,990 $ 338,329

$ 54,678,714 $ 13,046,397 9,500

1 459 802 790 019 fi 44,218,912

See notes to financial statements

-40-

$ 15,845,906

Business-type Activities - Governmental

Activities - lnternal

Service Funds Enterorise Fund

Storm Water Fund Total

fi 2,048,583 $ 9]32,qZt $ 13,268,189

2,140 37,072

I'1,977 1,145,520

68,696

16,153 10,603

328,787 $ 2,087,79s $ to, 958,614 $ 13,623,732

$ 627,858 $ 90,302

7,649,361 16,229,637

22,519 (4,926,175\

$ 11,952,839 $ 14,040,634

$ 12,356 4,141

$ 1,612,581 23,933,793 7,964,022

45,857,843 27,959,970

(23,611,992\ $ 83,715,207 $ 94,673,821

(5,050,093) $ 2,689,570 $ 16,313,302

1,546,705 76,962

635,000 138,633

489,014 597,837

$ 55,154 55 154

$ t,186,611

6,927

$ 23,424 397 300

$ 2,517,973 15,340,000

352,641 8 18,210,614 $ 20,607,914

16 12'l $ 16,121 $ s9,s4s

$ 11,952,839

2,048,250 $ 14,001,089

$ 2,689,570

1 437 121 $ 15,126,691

-41 -

City of Cedar Falls, lowa statement of Revenues, Expenses, and changes in Fund Net position

Proprietary Funds Forthe Year Ended June 30,2013

Business-type Activities - Enterprise Funds

Sewer Fund Refuse Fund

Operating revenues: Charges for services Other

Total operating revenues

Operating expenses: Personal services Contractual services Supplies and equipment Depreciation

Total operating expenses

Operating income

Nonoperating revenues (expenses): lnterest revenue lnterest expense Gain (loss) on disposal of equipment

Nonoperating revenues (expenses), net

lncome before contributions and transfers

Capital contributions Transfers in Transfers out

Contributions and transfers, net

Change in net position

Net position, beginning

Net position, ending

$ 4,572,082 2,099

$ 2,4s0,482 545,914

181 $ 2,996,3964 574

$ 1,192,506 782,117 279,469 954,072

$ 1,128,444 1,140,222

84,352 417,246

,264$ 3,208,163 $ 2]70 1 366 018 $ 226,132

$ 22,191 (409,525)

$ 9,712

$ (387 ,334) $ 9,712

$ 978,684 $ 235,844

$ 178,979 2,431,073 (797,983)

$ 343,792

(133,450)

$ 1.812,068 $ 210,342

$ 2,790,752 $ 446,196

41,429,160 15,399,720

See notes to financial statements

-42-

_$ 44218,912 _qj_5,845,906

Storm Water Fund

Business-type Activities - Enterprise Funds

Governmental Activities- lnternal

Service FundsTotal

$ 823,814 67,079

7,846,379 615,092

$ 6,311,468 204,351

$ 890,893 $ 8,461 ,470 $ 6,51s,819

$ 223,050 97,573 17,607

390,483

2,544,000 2,019,912

381,427 1,761,9O1

$ 1,413,994 4,235,561 1,147 ,335

41g,Og2

$ 728,713 $ 6,70r,140 $ 7,214,872 $ 162j80 $ 1 754 330 $ (699,053)

$ 6,993 $ 3g,gg6 (409,525)

$ s2,7s7 (30,137)

$ 6,983 $ (370,639) 22 620

$ 169,163 $ 1.383 $ (676,433),691

$ 398,433 $ 577,411 $ 2,774,965 (931,433) (164,257)

$ 398,433 $ 2,420,943 164 257

$74

567,596$3,904,534$(940,690)

13,433,493 70,261,373 15,967,391 $ 15,126,691$ 14,001,099 065

-43-

City of Cedar Falls, lowa Statement of Cash Flows

Proprietary Funds For the Year Ended June 30,2019

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts from interfund services Payments to suppliers Payments to employees

Net cash provided by operating activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds

Net cash provided by (used for) noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Net acquisition of property and equipment Capital contributions Advance from other funds Principal paid on debt maturities Payments on advance from other funds lnterest paid

Net cash (used for) capital and related financíng activities CASH FLOWS FROM INVESTING ACTIVITIES

Interest received on investments

Net increase (decrease) in cash

CASH BALANCES, Beginning CASH BALANCES, Ending

Reconciliation of operating income to net cash provided by operating activities:

Operating income (loss) Adjustments to reconcile operating income

to net cash provided by operating activities: Depreciation Change in assets and liabilities: (lncrease) decrease in:

Customer and other receivables lnventories

lncrease (decrease) in accounts payable, accrued and other liabilities Net cash provided by operating activities

See notes to financial statements

Business-type Activities -

Enterprise Funds Sewer Fund

$ 4,490,696

(323,299) (.173.442 ) 2 I 945

$ 2,431,013 . (797,993)

$ 1.633 ,090

$ (10,622,149) 17g,g7B

7,700,000 (615,000) (560,000) (383 ,166)

$ (4,301.336

21 479$

$ 1,366,01g

954,072

(83,079) 3,406

753.527

-44-

$2 945

Busíness-type Activities - Enterprise Funds

Governmental Activities -

lnternal Service Funds

6,290,399 (5,029,794) (1.0 04,492\

113

(164,257\

Refuse Fund

Storm Water Fund Total

$ 2,957,493 $ 985,277 $ 8,333,456 $ (1,256,072) (1,697,960) (1.107 ,889) 2 500 888

$ 210 342 $ $ 1,843,432 $ (164,257)

$ (243,002) $

(108,589) (219,557\

$ 593,532 $ 557,131 $ 4.144,608 $ 257

$ 343,792 (133,450)

$ $ 2,774,865 $ (931 ,433)

(519,789) 398,433

243,002) $ (121,356)

I '156 $ 6,T04 $ 442,479

$ (11,384,939) 577,411

7,700,000 (615,000) (560,000) (383,166)

$ (4,665,694)

$ (213,717)

$eß ,717\ $

$ s7o,o2g 2,170,345

$ 2,740,373

37,339 $ 52,608

606 1041

1,359,685

8,372,736 $ 9,732,421

$ (68,253) 13,336,442

$ 13,268,189$ 2,048,s83

$ 226,132 $ 162,180 $ 1,754,330 $ (699,053)

417,246 390,483 1,761,901 419,092

(52,442) (3,702)

(5,616)

6 298 10 084

(141,136) (2e6)

769,909

233,249 (92,015) 396 851

$ $ 4,144,609 $593 532 $ 557,131

-45-

257,113

dar Falls Oveffnan Park

NOTE I

NOTE 2

CITY OF CEDAR FALLS, ¡OWA NOTES TO FINANCIAL STATEMENTS

INDEX

SUMMARY OF SIGN¡FICANT ACCOUNTING POLICIES

A. Reporting Entity B. Government-wideand Fund FinancialStatements C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation D. Assets, Liabilities, and Net position or Equity

STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetarylnformation B. Deficit Fund Balances

NOTE 3. DETA¡L NOTES ON ALL FUNDS

A. Deposits and lnvestments B. Receivable C. CapitalAssets D. Leases E. Long{erm Debt F. Long-termLiabilities G. lnterfund Balances H. lnterfundTransactions

NOTE 4. OTHER NOTES

A. Retirement Systems B. Due To/From Component Unit C. Related Party Transactions D. Risk Management E. Commitments and Contingencies F. New GovernmentalAccounting Standards Board (GASB) Standards

-46-

Note 1 Summary of Significant Accounting Policies

Reporting Entity

The City of Cedar Falls is a municipal corporation governed by an elected mayor and seven-member council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The discretely presented component units are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the City. The discretely presented electric, gas, water, and communications utilities each have a December 31 year end.

Discretely Presented Component Unls. The electric, gas, water, and communications utilities serve all the citizens of the City and are governed by a five-member board appointed by the mayor of the City of Cedar Falls. The rates for user charges and bond issuance authorizations are approved by the City Council, and the legal liability for the general obligation portion of the Utilities' debt remains with the City.

Complete financial statements for the Utilities may be obtained at the administrative offices Cedar Falls Utilities Utility Parkway Cedar Falls, lowa 50613

Jointly Governed Organizations. The City also participates in several jointly governed organizations for which the City is not financially accountable or that the nature and significance of the relationship with the City are such that exclusion does not cause the City's financial statements to be misleading or incomplete. City officials are members of the following boards and commissions: Black Hawk County Consolidated Public Safety Communications Center, Black Hawk County Solid Waste Management Commission, Black Hawk County Criminal Justice lnformation Systems and Metropolitan Transit Authority.

Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component uníts. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business{ype activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of net position presents the assets and liabilities, with the difference reported as net position. Net position are reported in three categories.

Net investment in capital assefs consists of capital assets, net of accumulated depreciation and reduced by outstanding balances for bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement of those assets.

Restricted net position result when constraints placed on net asset use are either externally imposed or imposed by law through constitutional provisions or enabling legislation.

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Unrestricted net position consist of net position that do not meet the definition of the two preceding categories. Unrestricted net position often have constraints on resources that are imposed by management, but can be removed or modified.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual proprietary funds are reported as separate columns in the fund financial statements. All remaining governmental funds are aggregated and reported as other governmental funds.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financíal statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and avaílable. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal períod. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchíse taxes, licenses, interest, fines and forfeitures, and special assessments are susceptible to accrual. Sales taxes collected and held by the state at year-end on behalf of the City are also recognized as revenue. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as revenue at that time.

Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred, all other grant requirements have been met, and the criteria for accrual has been met.

The City reports the following major governmental funds:

The general fund is the City's primary operating fund. lt accounts for all financial resources of the general government, except those required to be accounted for in another fund.

48-

The hospiúal fund accounts for the lease income derived from Sartori Memorial Hospital.

The TIF fund accounts for property taxes received through tax increment financing.

The sfreef repair fund accounts for local option sales tax received from the state to be used to repair streets.

The sfreef construction fund accounts for state revenues allocated to the City to be used to maintain and improve the City's streets.

The debf service fund accounts for the servicing of general long-term debt not being financed by proprietary funds.

The FEMA fund accounts for the proceeds and expenditures related to disaster assistance and recovery.

Ihe bond fund accounts for all bond proceeds not related to proprietary funds and all the related capital projects associated with the bond sales.

The City reports the following major proprietary funds:

The setøer fund accounts for the operations and maintenance of the City's sanitary sewer system.

The refuse fund accounts for the operations and maintenance of the City's garbage collection.

The sform water fund accounts for the operations and maintenance of the city's storm water system.

Additionally, the City reports the following fund type:

lnternal service funds account for operations that provide services to other departments or agencies of the City, or to other governments, on a cost-reimbursement basis. These include data processing, vehicle maintenance, health insurance, health insurance severance, payroll, and risk management activities.

As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments between the government's refuse and sewer functions and various other functions of the government. Elimination of the charges would distort the direct costs and program revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. lnternally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the refuse fund, sewer fund, and the government's internal service funds are charges to customers for services. Operating expenses for enterprise funds and internal service funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed.

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D. Assets, Liabilities, and Net position or Equity

1. Deposr'fs and lnvestments The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

State statutes authorize the City and the Utility to invest publíc funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured depository institutions approved by the City Council; prime eligible bankers acceptances; certain high-rated commercial paper; perfected repurchase agreements; certain registered open-end management investment companies; certain joint investment trusts; and warrants or improvement certificates of a drainage district. lnvestments of the City and the Utility are reported at fair value. Due to legal and budgetary reasons, the General Fund is assigned a portion of the investment earnings associated with the other funds. These funds are Street Construction, Debt Service, and the Cemetery Perpetual Care Funds.

2. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans).

All trade and property tax receivables are shown net of an allowance for uncollectibles.

The County Treasurer bills and collects taxes for the City. Taxes for the year ended June 30, 2013, were certified with the County during the preceding fiscal year and were due in two equal installments by September 30, 2012 and March 31,2013. Property tax receivable is recognized on the levy or lien date, which is the date the tax asking is certified by the City to the County Board of Supervisors. Any County collections on the 2012-2013 tax levy remitted to the City within sixty days subsequentto June 30,2013, are recorded as propertytax revenues. Taxes notcollected and remitted to the City within sixty days subsequent to June 30, 2013, are delinquent and have been recorded as receivables and deferred revenue.

By statute, the City is required to certify its budget in March of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, the related revenue is deferred and will not be recognized as revenue until the year for which it is levied.

3. Inventories and Prepaíd ltems lnventories in the governmental fund types are valued at cost using the first-in/first-out method. The costs of governmental fund type inventories are recognized as expenditures when purchased. lnventories in the proprietary fund types and component unit are valued at the lower of first-in/first- out cost or market, except for fuel inventories of the Electric Utility, which are valued at the lower of last-in/first-out method cost or market. The cost of proprietary fund type and component unit inventories are recognized as expenses when consumed.

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Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

4. Restricted Assefs

Certain assets of the component units are restricted because of applicable bond provisions

5. Capital Assefs Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business- type activities columns in the government-wide statement of net position. Capital assets are defined by the government as equipment with initial, individual cost of $2,500 or greater or a purchase of land, land improvements, building, or infrastructure with a value of $5,000 or greater and an estimated useful life of greater than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded as estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. lnterest incurred during the construction phase of capital assets of business{ype activities is included as part of the capitalized value of the assets constructed.

Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Computer Equipment 5 years Streets 30 years Equipment 10-30 years Buildings 40-50 years Office Equipment 10-30 years Land lmprovements 20-40 years Vehicles 10-20 years Storm Water 40 years Parking Lots 15 years Bridges 45 years Furniture 20 years Lift Stations 50 years Large Vehicles 20-40 years Sewer 50 years Traffic Signals 20 years Historic Buildings 100 years

6. Compensated Absences City employees accumulate vacation, sick leave, and comp-time hours for subsequent use or for payment upon termination, death, or retirement. Earned vacation pay and a maximum of one-half of all unused sick leave may be paid upon termination of employment.

All severance is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental fund financial statements

only for employees that have resigned or retired. The compensated absence liability has been computed based on rates of pay in effect on June 30, 2013.

7. Long-term Obligations ln the government-wide financial statements and proprietary fund financiaf statements, long{erm debt and other long{erm obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight- line method. Bonds payable are reported net of the applicable bond premium or discount.

ln the fund financial statements, governmentalfund types recognize bond premium and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. lssuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

8. Fund Balance Policies Beginning with fiscal year 2011, the City implemented GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions." This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balances more transparent. The following classifications describe the relatíve strength of the spending constraints: ¡ Nonspendable fund balance - amounts that are not in spendable form (such as inventory) or

are required to be maintained intact.

Restrícted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation.

Committed fund balance - amounts constrained to specific purposes by the City itself, using its highest level of decision-making authority (i.e., City Council by adoption of an ordinance prior to the end of the fiscal year). To be reported as commítted, amounts cannot be used for any other purpose unless the City takes the same highest level action to remove or change the constraint.

Assigned fund balance - amounts the City intends to use for a specific purpose. lntent can be expressed by the City Council or by an official or body to which the City Council delegates the authority. The City Council has by resolution authorized the Finance Manager to asiign fund balance.

o Unassigned fund balance - amounts not included in other spendable classifications reported. The City would typically use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reseryes the right to selectively spend Unassigned resources first to defer the use of these other classified funds.

As of June 30,2013, fund balances are composed of the following:

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Fund Balance Classification

Non spen dable lnventory

Restricted

Puroose

TIF Debt Street Repair Road Use Tax Debt Service Community Block Gmnt Housing Assistance Employee Retireme nt S ystems Visitors & Tourism Cemetery Perpetual Care

Health Services Parking

Cultural Services Recreational Services Capital Projects

Fund

General Street Construction Non-major Governmenta I Funds

TIF Street Repair Street Construction Debt Service Non-major Governmental Funds Non-major Governmental Funds Non-major Governmenta I Fu nds Non-major Governmental Funds Non-major Governmental Funds

Hospital

Non-major Governmental Funds

General General Non-major Governmental Funds

Amount

241,612 283,206

23,407

$ sqa,zzs $ ts,+es

12,609,671 5,729,570

318,846 103,007

567,201 5,284,684

450,481 356,214

$ 25,435,109 $ t 5,71 8,8s 1

832,264 $ t6,s51,11s $ 140,093

1,676,991 14,559,803

$ 16,376,887

The City Council has adopted a mínimum cash reserve policy. Those amounts are as follows General Fund: 15-25% and preferably at the 2l-25o/olevel Refund Fund: 20-30%, but no less than $500,000. Sewer Fund: 65-75%, but no less than $1,500,000. Street Fund: 20-30%, but no less than $1,000,000. Storm Water Fund: 10-20%, but no less than $200,000

Note 2. Stewardship, Gompliance, and Accountability

Budgetary information

The City prepares and adopts an annual budget on a function basis for the City as a whole, rather than at the fund level, as prescribed by lowa statutes. The state of lowa mandates that annual budgets for the fiscal year beginning July 1 be certified to the County Auditor no later than March 15 preceding the beginning of the fiscal year. The review and adoption of the budget for the City is in accordance with state laws and City budget procedures as stated in City Code, recodified November 1971, and amended by ordinance adoption thereafter. Budget proposals for all operating department requests are conducted by the Department of Administrative Services who prepares, for the Mayor's consideration, a preliminary budget by January 1 of each year for the coming fiscal year. The budget proposal presented to the City Council by the Mayor and Director of Administrative Services is a complete financial plan for the upcoming fiscal year. The proposal is submitted on or before the first Monday of February. The City Council holds various budget meetings with the Mayor, Director of Administrative Services, department heads, and boards and commissions, as well as holding a public hearing prior to adopting the budget. The Council adopts the budget by resolution and certifies it to

Committed

Assigned

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the County Auditor by the 1Sth of March preceding the beginning of the fiscal year. This budget becomes the appropriation for operations of the City.

The adopted budget presents expenditures in nine functions- Public Safety, Public Works, Health and Social Services, Culture and Recreation, Community and Economic Development, General Government, Debt Service, Capital Projects, and Business-type Activities. The legal level of control (the level on which expenditures may not legally exceed appropriations) is the function level. Appropriations as adopted lapse at the end of the fiscal year.

Amendments to the City budget are considered annually as funding sources are availabfe. Management is not authorized to amend the budget or to make budgetary transfers between functions without the approval of the City Council. An additional levy of property taxes is not allowed by state law. The City budget for the current year may be amended for any of the following purposes:

. To permit the appropriation and expenditure of unexpended, unencumbered fund balances on hand at the end of the preceding fiscal year.

. To permit the appropriation and expenditure of amounts anticipated being available from sources other than property taxation.

To permit transfers between funds as prescribed by state law

To permít transfers between functions.

The Council adopts the amended budget by resolution and certifies it to the County Auditor by May 31 of the budget year. The amended budget becomes the appropriation for operations of the City. The City Council adopted two budget amendment resolutions during the year ended June 30, 2013.

Encumbrance accounting is employed in governmentalfunds. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end are reported as reservations of fund balance and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year.

Due to the emphasis placed on monitoring budgets, as a result of limited resources to provide City services, major classifications such as personal services, capital outlays, contractual services, and commodities are monitored throughout the year by the Department of Administrative Services.

Monthly reports are prepared by department and activity. Any major deviations must be approved by the Department of Administrative Services and the Mayor. While the legal level of control is the program level of expenditure, departments are responsible for not expending more than the amount of the appropriation for each activity within their area of responsibility, unless approved by the Department of Administrative Services and the Mayor.

The City budgets all receipts, disbursements, and interfund and intrafund transfers on the cash basis plus recorded accounts payable. The budget amounts included in this report are the final cash basis budget for the year for all funds excluding the trust and agency funds, which are not budgeted for by the City. Budgeted interfund transfers and intrafund transfers have been eliminated in the following statement of program disbursements - budget and actual.

lndividual fund budgets are, in all cases where appropriations are required, the same as the appropriation amounts. ln the case of the General Fund and most of the special revenue funds, unexpended budgeted amounts lapse at the end ofthe budget year.

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B. Deficit Fund Balances The FEMA fund, a major capital projects fund, has a deficit fund balance of $529,170. The deficit fund balance is expected to be recovered through future federal and state reimbursements. The Bond fund, a major capital projects fund, has a deficit fund balance of $644,688. This deficit fund balance is expected to be recovered through future bond sales. The Sidewalk Assessment fund, a non-major capital projects fund, has a deficit fund balance of $19,433. The deficit fund balance is expected to be recovered through future property tax special assessments.

Note 3. Detailed Notes On All Funds

Deposits and Investments

The City's deposits in banks and credit unions at June 30, 2013 were entirely covered by federal depository insurance, collateralized with securities or letters of credít held by the City or the City's agent in the City's name or by the State Sinking Fund in accordance with Chapter 12C of the Code of lowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds.

The City is authorized by statute to invest public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evídences of deposit at federally insured depository institutions approved by the City Council; prime eligible bankers acceptances; certain high rated commercial paper; perfected repurchase agreements; certain registered open-end management investment companies; certain joint investment trusts; and warrants or improvement certificates of a drainage district.

Cash balances as of June 30, 2013, consist of the following:

Cash - unrestricted $ 70,749,522

The City had no investments meeting the disclosure requirements of Governmental Accounting Standards Board Statement No. 3, as amended by Statement No. 40.

A reconciliation of cash as shown on the combined balance sheet for the primary government follows:

Carrying amount of deposits $ 70,749,522

Cash - Governmental Activities Cash - Business-type Activities

Total

$ 61,017,101 9,732,421

$ 70,749,522

lnterest Rafe Rrsk: The City's investment policy limits the investments of operating funds (funds expected to be expended in the current budget year or within fifteen months of receipt) in instruments that mature within 397 days. Funds not identified as operating funds may be invested in instruments with maturities longer than 397 days, but the maturities shall be consistent with the needs and use of the City.

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Credit Rrsk: The City's investment policy limits investments in commercial paper and other corporate debt to the top two highest classifications. The City did not invest in any commercial paper or other corporate debt during the year.

Concentration of credit risk: The City's investment policy does not allow for a prime bankers' acceptance or commercial paper and other corporate debt balances to be greater than ten percent of its total deposits and investments. The policy also limits the amount that can be invested in a single issue to five percent of its total deposits and investments. The City held no such investments during the year.

Custodial credit risk - deposifs: ln the case of deposits, this is the risk that in the event of a bank failure, the government's deposits may not be returned to it. The City's deposits are entirely covered by federal depository insurance or by the State Sinking Fund in accordance with Chapter 12C of the Code of lowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds.

Custodial credit risk - investmenfs: For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outsíde party. The City did not hold any investments during the year.

The component units' deposits were entirely covered by Federal depository insurance, collateralized with securities or letters of credit held by the entity or its agent in the entity's name, or by a multiple financial institution collateral pool in accordance with Chapter 12C of the Code of lowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds.

Cash balances as of December 31,2012, consist of the following:

Cash - unrestricted Cash - restricted

$ 25,140,464 $ 3,416,021

7,782,233

163,206

Communications Utility

$ 2,341,894

259,544

Electric Utility

Gas Utility

$ 28,556,485 $ 7,945,439 $ 3,776,504 $ 2,601,439

A reconciliation of cash and investments as shown on the statement for net position for the com ponent units follows:

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Carrying amount of deposits

Carrying amount of certificates

Carrying amount of investments Total

Electric Utilitv

$ 28,556,485 1 1,583,370

2,743,250

Gas Utilitv

$ 7,945,439 $

Water Utilitv

3,776,504

Communications Utilitv

$ 2,601,438 340,000

1 ,321,858 $ 42,883,105 $ 7,945,439 $ 3,776,504 $ 4,263,296

Cash

Cash - Restricted

lnvestments:

Certificates of deposit

Certificates of deposit -

restricted

U.S. government and agency

securitie s - restricted Total

$ 25,140,464 $ 3,416,021

7,782,233 $ 163,206

3,704,010 $ 72,494

2,341,894

259,544

4,863,620

6,719,750 340,000

2,743,250 I ,321,858 $ 42,883,105 $ 7,945,439 $ 3,776,504 $ 4,263,296

B. Receivable On June 30, 2013, the City has recorded a $3,925,645 receivable for library, recreation, and cultural contributions held by the Cedar Falls Civic Foundation. The funds will be used to support library services, recreation services, and the cultural center, therefore is reported as an asset to the General Fund.

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c. CapitalAssets

Capital asset activity for the year ended June 30, 2013 was as follows

Primary Government

Beginning

Balance lncreases Decreases

Ending

Balance

Governmental activities:

Capital assets, not being

depreciated:

Land

Construction in progress

Total capital assets, not

being depreciated

Capitalassets, being

depreciated:

Buildings

Land improvements

Machinery and equipment

lnfrastructure

Total capital assets, being

depreciated

$ 28,703,869 $ 12,264,028

164,106 $ 3,917,060

$ 28,867,975 11,425,4674,755,621

$ 40,967,897 $ 4,081,166 $ 4,755,621 g 40,293,42

$ 27,802,237 $ 13,116,321

16,799,232

154,932,742

16,403 $ 39,035

713,847

8,565,202

$ 27,818,640 13,155,356

17,153,865

163,497,944

359,214

I 212,650.532 $e 3U,487 $ 359,214 $ 221,625,805 Less accumulated depreciation for:

Buildings $ Land improvements

Machinery and equipment

lnfrastructure

8,724,999 $ 4,450,179

9,844,417

68,024,412

674,590 $ 509,380

910,322

5,119,721

$ 9,399,589 4,959,559

10,479,138

73,14ø',133

275,600

Totalaccumulateddepreciation $ 91,044,007 $7 013 $ 275,600 $ 97,982,420 Total capital assets, being

depreciated, net $ 121,606,52s $ 2,120,474 $ gg,Or+ $ 123,643,385 Governmental activities cap ital

asset, net $ 162,574,422 $ 6,201,640 $ 4,839,235 $ 163,936,827

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B usiness-type activities: Capital assets, not being

depreciated:

Land

Construction in progress

Total capital assets, not being

depreciated

Capital assets, being depreciated

Buildings

Machinery and equipment lnfrastructure

Total capital assets, being depreciated

Less accumulated depreciation for Buildings

Machinery and equipment lnfrastructure

Total accum ulated depreciation

Beginning

Balance lncreases Decreases

$ t ,612,581 $ $ $ t ,612,581 27,958,97017, 725,246 10,332,560 98,836

$ 1s,337,827 $ 10,332,560 $ ge,ss6 $ 29,571,s51

Ending

Balance

$ 23,873,450 $ 7,784,472

44,949,632

60,333 $ 182,670

908,211

$ 23,933,783 7,964,022

45,857,843

3,120

$ 76,607,554 $ 1,151 ,214 $ 3,120 $ 77,755,648

3,120

$ 21,853,311 $ 1,761,801 $ 3,120 $ 23,611,992 Total capital assets, being

depreciated, net 54 754,243 $ (610,587) $ $ s4,143,656 B usiness-type activities capital

assets, net $ 74,092,070 $ 9,721,973 $ 98,836 $ 83,715,207

Depreciation expense was charged to functions/programs of the primary government as follows:

G overnmental a ctivities: Public safety $ 103,320 Public works 5,202,955 Health and social services 148,578 Culture and recreation 1,102,432 Community and economic development 79,678 General government 158,969 Capital assets held by government's internal service funds are charged to

the various functions based on their usage of the assets 418,081 Total depreciation expense - governmental activities $ 7,214,013

$ 5,451,780 $ 2,326,543

14,074,988

493,846 $ 316,225

951,730

$ 5,945,626 2,639,648

15,026,718

B usine ss-type activ ities

Sewer

Refuse

Storm Water Total depreciation expense - business-type activities

$ 954,O72

417,246

390,483

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$ t ,761 ,801

Construction Com m itments

The City has active construction projects as of June 30,2013. At year-end the City's commitments with contractors are as follows:

Project Expended Remaining Authorization to Date Commitment

Big Woods Campground Bluff St. Liftstation Center St. Bridge Disinfection

Downtown Levee lmprovements Dry Run Creek Watershed E. Seerly Bridge

Hwy 58 Pedestrian Bridge Leversee Rd. & Lonetree Rd. Northern lndustrial Park Prairie Parkway Extension Sewer Rehab

Street Reconstruction Street Restoration

Traffic Signal Traffíc Study Union Rd. Trail

UNlWetlands West Viking Road

$ zg,88z 7,229,500

800,661

22,345,155 256,000

112,478 112,959

2,812,546 1,064,388

1,205,000

104,009

329,539

2,287,375 1,599,965

254,763 52,500

328,971

6s,000

302,300

$ l+,381 6,928,358

114,444

19,920,951

224,391

4,434 76,451

1,585,773

442,299

1,131,023 94,038

764,762 791,182 216,025 36,678

24,906 260,210

$ 5,500 301,142

686,217

2,424,204

31,619

108,044

36,508

1,226,773

622,099

73,977

9,970

329,539

1,522,613

808,683

38,738

15,822

328,971

40,094

42,090

$ 41,341,894 $ 32,690,302 $ 8,651,592

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Discretelv Presented Comoonent Units

Activity for the Electric Utility for the year ended December 31, 2012, was as follows

Beginning Bala nce lncreases Decreases

Ending Balance

Capital assets, not being depreciated:

Land

Construction in progress Total capital assets, not

being depreciated

Capital assets, being depreciated: Buildings Land improvements Machinery and equipment lnfrastructure Total capital assets, being

depreciated

Less accumulated depreciation for: Buildings Land improvements Machinery and equipment I nfrastru cture

Total capital assets, being depreciated, net

Electric Utility capital assets, net

$ t ,326,855 I,787 ,180

$ 11,114,035

$ $ t ,326,855 19,422,33616,439,850 6,804,694

$ 16,439,850 $ 6,804,694 $ 20J49,191

$ 24,821,423 $ 4,683

21 ,031,550 141 ,291,960

1,043,433

1,384,816 4,918,137

$ r19,661 $ 25,745,195 4,683

1,554,215 20,862,151 1,030,742 145,179,355

$ 187,149,616 $ 7,346,386 $ 2,704,618 $ 191,791 384

$ $ 232,380 $ 21

1,760,562

9,844,430 4,550

11,342,420 55,226,371 2,891 647

117,235

I ,554,166 650,311

$ 9,959,575 4,571

11,548,816 57 ,467,707

$ 76,417,771 $+, 884,610 $ 2,321,712 $ 78,980,669

$ I 10,731 ,845 g 121,845,880

ç 2,461,776 $ 382,906 * $ 112.81 0,715 $ 18,901,626 $ 7,187,600 $ 133 906

*Cedar Falls Utilities uses FERC utility accounting which allows for depreciation calculated using the composite straight-line method. Under this method it is common for accumulated depreciation deletions to exceed the cost removed.

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Activity for the Gas Utility for the year ended December 31,2012 was as follows:

Beginning

Balance lncreases Decreases Capital assets, not being

depreciated:

Land

Construction in progress

Total capital assets, not being depreciated

Capital assets, being depreciated:

Buildings

Machinery and equipment lnfrastru cture

Total capital assets, being depreciated

Less accumulated depreciation

Buildings

Machinery and equipment

lnfrastru cture

Ending

Balance

$ 39,835

397,197

1 ,313,761 564,617

$ 437,032 $ 1,313,761 $ SO+,0r7 $ 1,186,176

$ $ gg,egs 1 ,146,341

$ 1,968,345 $ 733,725

18,034,690

61,216 $ 8,234

495,168

$ 2,029,561 652,81 5

18,388,514

89,144 141,344

$ 20,736,760 $ 564,618 $ 230,48S $ 21,070,890

$ 317,608 $ 326,980

8,655,529

47,685 $ 40,854

673,310

$ 365,294 278,690

9,180,620

89,144

148,219

$ 9,300,117 $ 761 ,849 $ 237,363 $ 9,824 ,603 Total capital assets, being

depreciated, net

Gas Utility capital assets, net

$ 11,436,643 $ (197,231 ) $ (6,875) .$ 11,246,287

$ 11,873,675 $ 1,116,530 ç 557,742 $ 12,432,463

*Cedar Falls Utilities uses FERC utility accounting which allows for depreciation calculated using the composite straighlline method. Under this method it is common for accumulated depreciation deletions to exceed the cost removed.

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Activity for the Water Utility for the year ended December 31,2012 was as follows

Begin ning

Balance lncreases Decreases Ending

Balance

Capital assets, not being depreciated:

Land

Construction in progress

Total capital assets, not being depreciated

Capital assets, being depreciated:

Buildings

Machinery and equipment

lnfrastru cture

Total capital assets, being depreciated

Less accumu lated depreciation Buildings

Machinery and equipment

lnfrastructure

Total accum ulated depreciation

63,466 $ -- 193,142 1,765,502

$ $ $ 63,466

572,6061,386 ,038

$ 256,608 $ 1,765,502 $ 1,386,038 $ 636,072

$ 807,702 $ 430,338

27,042,778

31,171 $ 24,803

1,342,270

$ 838,873 376,977

28,285,949

78,164

99,099

$ 28,280,818 $ 1,398,244 $ 177,263 $ 29,501,799

$ 128,684 $ 236,496

8,179,228

18,501 $ 21,942

570,384

78,164

95,385

147,185

180,274

8,654,227

$ 8,544,408 $ 610,827 $ 173,549 $ g,g8 r ,686 Total capital assets, being

depreciated, net $ 19,736,410 $ 787,417 $ 3,714*$20,520,113 Water Utility capital assets, net $ 19,993,018 $ 2,552,919 $ 1,389,752 $ 21,156,185

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Activity for the Communications Utility for the year ended December 31,2012 was as follows:

Beginning Ending Balance lncreases Decreases Balance

Capital assets, not being

depreciated:

Construction in progress

Total capital assets, not

being depreciated

$ 1,273,710 $ 7,382,169 $ 7,245,470 $ 1,410,409

s 1,273,710 $ 7,382,169 $ 7,245,470 $ 1,410,409 Capital assets, being depreciated

Machinery and equipment

lnfrastructure

Total capital assets, being depreciated

Less accumulated depreciation

Machinery and equipment

lnfrastructure

Total accumulated depreciation

$ 18,861,591 $ 1,204,555 3,026,616 17,906,062

$ 385,777 32,084,505

$ 18,042,81 3 17,205,059

$ 32,470,282 $ 21,888,207 $ 19,110,617 $ 35,247,872

$ 259,923 $ I,394,732

21,333 $ 2,269,939

78,575 $ 4,436,295

202,681

7,228,376

$ 9,654,655 $ 2,291,272 $ 4,514,870 $ 7,431,058 Total capital assets, being

depreciated, net $ 22,815,627 $ 19,596,935 $ 14,595, 747 * S 27.816,814 Com m unications U tility capital

assets, net $ 24,089,337 $ 26,979,104 $ 21,841,217 $ 29,227,223

"Cedar Falls Utilities uses FERC utility accounting which allows for depreciation calculated using the composite straight-line method. Under this method it is common for accumulated depreciation deletions to exceed the cost removed.

D. Leases Sartori Memorial Hospital

On January 1, 1997, the operations of Sartori Memorial Hospital (Hospital) were sold to Covenant Health Systems, lnc. As part of this sale, the City entered into a lease agreement with Sartori Memorial Hospital, lnc. (SMH), whereas the City will lease to SMH the land and buildings owned by the City and used in the Hospital's operations. The initial term of the lease shall be for a period of 25 years, with variable lease payments each year. The lease may be extended for up to three additional terms, with each additional term being for a period of five years. At the termination of this lease, Covenant Health Systems, lnc. will also pay to the City an amount of $660,378, which represents the liability arising from accrued vacation of Hospital personnel as of December 31, 1996. The present value of this liability as of June 30, 2013, is recorded as a receivable and deferred revenue in the Hospital Fund in the amount of $543,459.

Crystal Distribution Services

On November 12, 2001, the City entered into a lease agreement with Crystal Distribution Services, lnc. for the former Top Air building constructed in the City's industrial and technology park. The lease was amended on November 24,2003. The lease agreement is for a period of twelve years with various monthly payments ranging from $10,000 to $20,000 payable to the City. Crystal Distribution Services will have the option to purchase the building upon expiration of the lease.

The leases for the Hospital and with Crystal Distribution Services are both being treated as operating leases by the City. The future minimum lease payments for these leases are as follows:

Year Ending June 30 H ospita I Build ing

2014 2015 2016 2017

2018 2019-2021

Total

31,796

31,796 31,796

31,796 95,385

$ $ t 31,175

$ 254,365 $ 131,175

The capital assets being leased through the operating leases are as follows

G overnm ental Activities

Hospital Building

Land

B uilding

Less:

Accumu lated depreciation Total

$ 151,494

5,873,537 $

2,153,925

(2,210,765\ 892,981) $ 3,814,266 $ 1,260,944

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E. Long-term Debt General Obligation Bonds

Unmatured general obligation bonds totaling $2,320,626, net of unamortized discount of $14,374, are outstanding as of June 30, 2013. These bonds bear interest with rates ranging from 2.30o/o to 3.70%; mature in varying annual amounts through June 30,2018; and were originally issued for $4,310,000. Annual debt service requirements to maturity for general obligation bonds are as follows:

Year Ending June 30,

Busine Activities Principal lnterest

2014

2015

2016

2017

2018 Total

$ 435,000

450,000

465,000

485,000

s00,000 $ 2,335,000

$ 80,972

66,835

51,760

35,718

18,500 $ 253,785

Tax lncrement Financing Bonds

Unmatured tax increment financing bonds totaling $597,880 net of unamortized deferred amount on refunding of $22,880, are outstanding as of June 30, 2013. These bonds bear an interest rate of 3.00%; mature June 30, 2014; and were originally issued for 92,865,000. Annual debt service requirements to maturity for tax increment financing bonds are as follows:

Year E nding Governm ental Activities

June 30 P rincip al lnte rest

2014

Total

$ 5 75,000 $ 17,250

$ 575,00 0 $ 17,250

State Revolving Loan

ln July 2011, the City entered into a loan and disbursement agreement with the lowa Finance Authority for the issuance of $21 million in sewer revenue capital loan notes under the State Revolving Fund Program. These notes will finance the major renovation project at the City's water treatment facility related to disinfection compliance. As of June 30, 2013, only $2f 0,640 has been issued relating to the loan's administrative fees.

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CapitalLoan Notes

Unmatured capital loan notes totaling $8,646,063, net of unamortized discount and unamortized deferred amount on refunding of $53,937 are outstanding as of June 30,2013. These notes bear interest at rates of 1 .40% to 3.80%; mature in varying annual amounts through June 30, 2024; and were originally issued for $14,670,000. Annual debt service requirements to maturing for capital loan notes are as follows:

Year Ending

June 30,

Govenm ental Activities Bu siness{ype Activities

Principal lnterest Principal lnterest

2014

2015

2016

2017

2018

2019-2023

2024

Total

$ 2,200,000 $ 1,040,000

1,070,000

1 ,145,000

1,175,000

1,260,000

185,000

198,958 $ 156,875

134,515

109,555

81,278

147,407

7,030

200,000

215,000

210,000

$ 4,290

3,290

1,785

$ 8,075,000 $ 835,618 $ 62s,000 $ 9,365

As of June 30, 2013, the outstanding general obligation debt of the City did not exceed its legal debt margin computed as follows:

Estimated actual valuation of taxable property within the City $ 2,659,350,229

Debt limit - 5% of total actual valuation

Debt applicable to debt limit:

General obligation bonds

General obligation bonds - component unit

Legal debt margin

$ 132,967,511

I 1 ,610,000

1,595,000

$ t 19,762,511

All tax-exempt debt issued by the City is subject to IRS arbitrage rebate unless the City meets the $5 million small issuers exemption in a given year. As of June 30, 2013, the City had no arbitrage liability.

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Debt Summary

Following is a summary of the City's debt transactions for the year ended June 30,2013, and the total bonded indebtedness of the City as of that date.

D ate of lss ue

Bala nce

Beginning

of Year

lss u ed/

lncu rred

During Year

R edee med/

Paid

D uring Year

Ba lance

End of Year

Amount Due W ithin

One Year G overnm enta I Activities: Tax increment financing bonds

Tax increm ent finan cin g 2010 $ r,r25,000 $ $ 550,000 $ szs,ooo $ 575,000

Less una mortized deferred amount on refunding (51 ,7 81\ (28,901 ) (22,880\

$ 1 ,176 ,781 $ $ sze 901 $ SgZ 880 $ 5 75,00 0 CapitalLoan Notes:

Corporate Purpose Corporate Purpose Refunding Refunding

2008 2009 2010 2012

$ 3,04 5,000 $ 3,10 5,000

740,000 3 320 000

$ 10,21 0,000 $

$ 665,000 $ 20 5,000 36 5,000

2,380,000 2,900,000

375,000 2,420,000

$ 685,000 2 05,00 0 3 75,00 0

900 000 935 000 $ 2,t 35,000 $ 8,075,000 $ 2,200,000

4,043 31,166Less una mortized discou nt Less unamortized deferred

amount on refunding

Governmental activity total long-term debt

3 5,209

6,072 (3 ,406) 19,47 8 $ 10,168 719 $ $ 2.144 ,363 $ 8,024,356 $ 2,200,000

$ 2,723,264 $ 8,622,236 $ 2,775,000$ 11,345,500 $

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Date of

lssue

Balance

Beginning

of Year

lssued/

lncurred

During Year

Redeemed/

Paid

During Year

Balance

End of Year

Amount

Due Wihin

One Year

Bus iness-t¡rye activities

General obligation bonds:

Seuær

Less u namortized d íscount

Capital Loan Notes:

Ser¡¡er Refunding

Less u namortized d efened

amount on refunding

State Revolving Loan

Business{ype activity total

long{erm debt

$ 2,755,000 $ 17,U8

2008 $ 420,OOO $

2,974

2,335,000 $

14,374

435,000

$ 2,737,652 $ $ 417,026 $ 2,320,626 $ 435,000

2012 $ 820,000 $

4,421

$ 195,000 $ 625,000 $ 200,000

1,128 3,293

$ 815,579 $ 193,872 $ 621 707 $ 200,000

$ 210,64 $ $ $ 210,640 $

$ 3,763,871 $ 610,898 $ 3,152,973 $ 635,000

Revenue Bonds and lnstallment Agreements - Electric Utility The Series 2005 and 2007 revenue bonds require annual principal payments, due December 1, and semiannual interest payments, due June 1 and December 1. lnterest rates throughout the term of the bonds are in a range between 3.75o/o and 4.375%. The bonds are secured by the future net revenues of the Utility. Long-term debt matures and bears interest as follows:

Component Unit -

Revenue Bonds

Year Ending Principal lnterest

2013

2014

2015

2016

2017

2018-2022

2023-2026

2,135,000

2,225,000

2,320,000

2,420,000

2,525,000

14,350,000

9,450,000

1,461,318

1,379,344

1,290,343

1,197,544

1,100,744

3,877,969

861,125

$ $

$ 35,425,000 $ rr 387

The bond resolution provides certain covenants relating to the collection, segregation, and distribution of revenues from customers; places certain restrictions on the future of borrowing and leasing or disposition of assets; and requires that minimum insurance coverage be maintained.

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Gapital Loan Notes - Electric Utility The 20104 and 20108 revenue capital loan notes require annual principal payments, due December 1, and semiannual interest payments, due June 1 and December 1. lnterest rates are in a range between 2.50% and 4.75o/o The capital loan notes are secured by the future net revenues of the Utility.

Component Unit -

Capital Loan Notes

Year Princioal lnterest

2013

2014

2015

2016

2017

2018-2022

2023-2027

2028-2030

455,000 $ 460,000

1,070,000

1,100,000

1,120,000

6,160,000

3,640,000

1,960,000

563,068

549,667

536,1 18

507,267

477,618

1,868,932

865,303

187,250

$ t 5,965,000 $ 5,555,223

Debt Summary - Electric Utility Long-term debt activity for the year ended December 31,2012 was as follows:

Beginning

Balance Addilions Reductions Ending

Balance

Amounts

Due Wihin One Year

Revenue Bonds:

Series 2003 Series 2005

Series 2007

CapitalLoan Notes: Series 2010A

Series 20108 Totalbonds

Less: Unamortized

discount

Add: Unamortized

premium

Totallong-term debt

$ 1,430,000 $ 21,2Q,000 15,610,000

9,590,000

6,820,000

$ 1,430,000 $ 690,000

735,000

$ 20,550,000

14,875,000

1,370,000

765,000

395,000

50,000

3,300,000

9,195,000 405,000

50,0006,770,000 51,390,000 2,590,00054,690,000

8ß,751

374,586

47,539 799,212

14,074 360,512

$ 54,217,835 $ $ 3,266,535 $ 50,951,300 $ 2,590,000

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General Obligation Capital Loan Notes - Communications Utility All general obligation (G O ) bonds and notes have been issued by the City on behalf of the Utility. The G.O. notes require annual principal payments, due December 1, and semiannual interest payments, due June 1 and December 1. lnterest rates throughout the term of the notes are in a range between 1.30% and 3.80%. The total debt service obligations over the remaining term of the notes are as follows:

Component Unit - G.O. Capital Loan Notes

Year Ending Principal lnterest

2013

2014

2015

2016

2017

2018-2022

2023-2024

$ 155,000

165,000

105,000

110,000

I 15,000

650,000

295,000

$ 47,878

45,242

41,860

39,340

36,370

124,600

16,765

$ t,595,000 $ 3s2,055

Revenue Capital Loan Notes - Gommunications Utility The Series 2009 and 2010 revenue capital loan notes require annual principal payments, due December 1, and semiannual interest payments, due June 1 and December 1. lnterest rates throughout the term of the notes are in a range between 3.0% and 4.3o/o. The notes are secured by the future net revenues of the Utility. The bonds mature and bear interest as follows:

Component Unit - Revenue Ca pital Loan Notes

Year Ending Principal lnterest

2013

201 4

2015

2016

2017

2018-2022

2023-2024

$ 1,440,000

1,475,000

1,525,000

1,570,000

1,630,000

5,700,000

460,000

$ 434,310

391,110

346,860

301,110

252,310

51 1,500

29,773

$ t 3,800,000 $ 2,266,973 The bond resolution provides certain covenants relating to the collection, segregation, and distribution of revenues from customers; places certain restrictions on the future of borrowing and leasing or disposition of assets; and requires that minimum insurance coverage be maintained.

The Board of Trustees of the Municipal Electric Utility authorized a loan to be extended to the Utility under Resolution No. 2759, 2840, 2939, 2994, and 3086. The December 31 , 2012 outstanding balance on this loan was $738,090, bearing interest as 3.1%. The Board of Trustees of the Municipal Gas Utility approved a loan to be extended to the Utility under Resolution No. 5077. The December 31,2012 outstanding balance on this loan was $3,000,000, bearing interest a|2.0%.

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Debt Summary - Gommunications Utility Long-term debt activity for the year ended December 31,2012 was as follows

Beginning Balance

Ending Balance

Amounts Due Within One YearAdditions Reductions

Capital loan notes

Series 2009 Revenue capital loan notes

Series 2009

Revenue capital loan notes Series 2010

$ 1,7s0,000 $ $ 155,000 $ 1,595,000 $ 155,000

2,990,000 335,000 2,655,000 345,000

12,210,000 1 ,065,000 11,145,000 1,095,000 $ 16,950,000 $ $ 1,ss5,000 $ 1s,395,000 $ 1,s9s,000

Less: unamortized discount on debt

Add: unamortized premium on debt

145,009 13,714 131,295

494,381

$ 17,299,372 44,065 450,316

$ $ 1,585,351 $ 15,714,021 $ 1,595,000

F. Long-term Liabilities Accrued Compensated Absences

Following is a summary of the City's activity for accrued compensated absences for the year-ended June 30, 2013, and the total liability of the City as of that date as reported on the government-wide statement of net position:

Balance Beginning

of Year lncreases Decreases

Balance End of Year

Amount Payable Within

One Year

Governmental activities $ 2,685,552 $ 270,448 $ 252,012 $ 2,703,988 $ 841 ,88e

Business-type activities $ 454,212 $ ¡a,soo $ 1,738 $ 491,274 $ 13s,633

The majority of compensated absences expenditures are paid for out of the General Fund

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Other Postemployment Benefits (OPEB)

The City implemented GASB Statement No. 45, Accountinq and Financial Reoortinq bv Emolovers for Postemplvolment Benefits other Than Pensions during the year ended June 30, 2009.

Plan Description - The City operates a single-employer health benefit plan, which provides self- insured medical/prescription drug benefits for all full{ime active and retired employees and their eligible dependents. Eligible retirees receive health care coverage through the same plan that is available to active employees. To be eligible for these benefits, participants must be receiving a pension benefit from the lowa Public Employee Retirement System (IPERS), receiving a Social Security Disability Benefit, or retired under Code Chapter 411 of the lowa Code. There were twenty retirees participating in the plan as of June 30th. Retirees pay the same premium for the health benefit plan as active employees, which results in an implicit subsidy and an OPEB liability. The Plan does not issue a stand-alone financial report.

Fundinq Policv - The contribution requirements of plan members are established and may be amended by the City. The City currently finances the benefit plan on a pay-as-you-go basis. The majority of expenditures are paid for out of the General Fund.

Annual OPEB Cost and Net OPEB Oblioation - The City's annual OPEB cost ís calculated based on the annual require contribution (ARC) of the City, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs 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 ended June 30,2013, the amount actually contributed to the plan and changes in the City's net OPEB obligation:

Annual required contribution lnterest on net OPEB obligation Adjustment to annual required contribution Annual OPEB Cost Net contributions - retirees lncrease in net OPEB obligation Net OPEB obligation beginning of year Net OPEB obligation end of year

$ 47,124 14,945

(13,239)

48,830 18.980 67,810

275.329

$343,139

For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, 2011 . The end of year net OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding requirements and the actual contributions for the year ended June 30,2013.

For the year ended June 30, 2013, the City paid $93,141 for retiree health claims. Plan members eligible for benefits contributed $112,121 or 100% of the premium costs. The net resulted in a $18,980 contribution for retirees

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The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation as of June 30, 2013 are summ arized as follows:

Year Ended Annual

OPEB Cost Percentage of Annual

OPEB Cost Contributed from City

Net OPEB Obligation

June 30,2013 $48,830 (38.87%) $343,139 June 30, 2012 $ 48,830 148.3o/o $275,329

June 30, 201 1 $ 52,149 4.60/0 $298,903

Funded Status and Fundino Prooress - As of July 1, 2011,ïhe most recent actuarial valuation date for the period July 1 , 2012 through June 30, 2013, the actuarial accrued liability was $525,162, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $525,162. The covered payroll (annual payroll of active employees covered by the plan) was $1 1,619,949 and the ratio of the UAAL to covered payroll was 4.5%. As of June 30, 2013, there were no trust fund assets.

Actuarial Methods and Assumptions - 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 assumption about future employments, mortality and the health care cost trend. Actuarially determined amounts are subject to continual review 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 in the section following the Notes to Financial Statements, will present 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.

Projections of benefits for financial reporting purposes are based on the plan as understood by the employer and the plan members and include 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.

As of the July 1, 2011 actuarial valuation date, the projected unit credit actuarial cost method was used. The actuarial assumption includes a 5% discount rate based on the City's funding policy. The projected annual medical trend rate is 9%. The ultimate medical trend rate is 6%. The medical trend rate is reduced 0.5% each year until reaching the 6% ultimate trend rate. An inflation rate of 0% is assumed for purposes of this computation.

Mortality rates are from the RP2000 Group Annuity Mortality Table, applied on a gender-specific basis Annual retirement and termination probabilities were developed from a combination of the retirement probabilities from MFPRS|Actuarial Report, the IPERS Actuarial Report, and the City's experience.

Projected claim costs of the health plan are $675.42 per month for retirees less than age 65 and $443.17 per month for retirees who have attained age 65. The salary increase rate was assumed to be 3% per year. The UAAL is being amortized as a level percentage of projected payroll expense on an open basis over 30 years.

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G. lnterfund Balances

lndividual interfund receivable and payable balances by fund type as of June 30,2013, were stated in the fund financial statements as follows:

Due to/from other funds: Total

Fund lnterfund

Receivables lnterfund Payables

FEMA Fund Bond Fund

N onm ajo r Governm ental Funds Total

The balances are due to the elimination of reporting negatíve cash

Advances from/to other funds:

$ 1,413,731 $ r,413,731

Total

$ $

1.413 ,731

392,035

1,000,904

20,792

Advance to

Other Funds

Advance from

Other FundsFund

HospitalFund

Nonmajor Govemmental Funds

Sewer Fund Total

$ 11,255,000 4,085,000

15,340,000

$ 15,340,000 $ 15,340,000

The amount payable from the Sewer Fund to the Hospital Fund and the Capital lmprovements Fund relates to internal financing for the large disinfection project at the City's water treatment facility.

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H. lnterfund Transactions The following transfers represent individual fund interfund transfers as stated in the Fund Financial Statements. General Fund Street Construction Fund

Non-m ajor Governm enta I Fund s Sewer Fund Refuse Fund lnternal Service Funds

$ 633,942 TIF Fund

1 39,160 1 01,350 101,220 1 33,4s0 158,762

Street Construction F und

Debt Service Fund

FEMA Fund

Bond Fund

N on-m ajor G overn me ntal Fu nds

Sewer Fund

Refuse Fund

Bond Fund Sewer Fund

lnternal Service Funds

General Fund TIF Fund

TIF Fu nd Street Repair Fund

General Fund TIF Fund Street Repair Fund FEMA Fund Non-m ajor Gove rnm enta I Fund s

FEMA Fund

Street Construction Fund FEMA Fund Sewer Fund

$ 211,957 555,033

$ 766,990 $ 5,49 5

$ 1,580,000 s83,750

$ 2,163,750 $ 75,881

3,498,784 3 74,665

$ 488,283 572,421

$ 1,060,704 $ 927,164

3,879,919 241,959

33,106 10 00

5,092,148

$ 2,431,073 $ 141,730

60,332 141 ,730

$ s+sJsz Total -s--lEF.72F5E-

Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move debt service payments from proprietary or special revenue funds to the debt service fund as debt service payments come due and, (3) to move receipts from user fee generated funds to the general fund for certain administrative and custodial costs in the generalfund.

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Note 4. Other Notes

A. Retirement Systems

IPERS

The City contributes to the lowa Public Employees Retirement System (IPERS) which is a cost- sharing multiple-employer defined benefit pension plan administered by the State of lowa. 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, lowa, 50306-91 17.

Plan members are required to contribute 5.78% of their annual covered salary and the City is required to contribute 8.67% of annual covered payroll. Contribution requirements are established by State statute. The City's contributions to IPERS for the years ended June 30, 2013, 2012 and 2011 were $822,374, $771,437 and $619,003 respectively, equal to the required contributions for each year.

Municipal Fire and Police Retirement System of lowa

The City contributes to the Municipal Fire and Police Retirement System of lowa (the Plan), which is a cost-sharing, multiple-employer defined benefit pension plan administered by a Board of Trustees. The Plan provides retirement, disability and death benefits, which are established by State statute to plan members and beneficiaries. The Plan issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to Municipal Fire and Police Retirement System of lowa, 7155 Lake Dr., West Des Moines, lowa 50266.

Plan members are required to contribute 9.40Yo of earnable compensation and the Gity's contribution rate may not be less than 26J2% of earnable compensation. Contribution requirements are established by State statute. The City's contributions to the Plan for the years ended June 30, 2013, 2012, and 2011 were $1,144,556, $1,080,516 and $798,970 respectively, which met the required minimum contribution for each year.

Due To/From Gomponent Unit

Amounts due from the component unit to the general fund at June 30, 2013, were as follows

Due from

Component Unit: Electric utility Gas utility Total

$ 750,000 100.000

$ 850J00

This amount differs from the amount reported as due to primary government since the Electric Utility and Gas utility component units have a calendar year end of December 31,2012.

Related Party Transactions

During the fiscal year ended June 30, 2003, the Black Hawk County Solid Waste Management Commission, which is a jointly governed organization, passed a resolution for annual distributions of its excess funds. The prorated share for the City of Cedar Falls was at.$564,721to be received each year. However, in 2012,the commission decided to reduce the payments to $29g,534for FY2O13 &

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FY2O14. The payments received in fiscalyears ended June 30, 2003,2004,2005, 2006, 2OO7,2OOB, 2009,2010,2011,2012 and 2013 have been recorded in the Refuse Fund as other operating revenue.

Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the government has established various funds to account for and finance its uninsured risks of loss.

The City has established a Health lnsurance Reserve Fund for insuring benefits provided to City employees and covered dependents, which is included in the internal service fund type. Health benefits were self-insured up to a specific stop loss amount of $85,000 and an aggregate stop loss of approximately $3,344,144for 2013. Coverage from a private insurance company is maintained for losses in excess of the stop loss amounts. All claims handling procedures are performed by a third- party claims administrator. lncurred but not reported claims have been accrued as a liability based upon the claims administrator's estimate.

All funds of the City participate in the program and make payments to the Health lnsurance Reserve Fund based on actuarial estimates of the amounts needed to pay prior-year and current-year claims. The City has also established reserve funds for insuring workers' compensation, liability, and long- term disability claims which are included in the general fund type. Liability benefits were self-insured up to a specific stop loss amount of $100,000 and an aggregate stop loss amount of $260,000. Long- term disability benefits are self funded for the first six months, and the maximum benefit per individual is $18,000. Workers'compensation benefits were self-insured up to an aggregate stop loss amount of $350,000 with no specific stop loss amount. Coverage from private insurers is maintained for losses in excess of the stop loss amounts. An independent claims administrator performs all claims handling procedures. Settled claims for the above funds have not exceeded commercial coverage in any of the last three fiscal years.

Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (lBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims.

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Changes in reported liabilities for the fiscal year ended June 30, 2013, are summarized as follows:

Risk Manaqement Fund

Claim liabilities

June 30, 201 1

Claims and changes

in estimates during

fiscal year 2012

Claim payments

Claim liabilities

June 30, 2012

Claims and changes

in estimates during

fiscal year 2013

Claim payments

Claim liabilities June 30, 2013

$ 404,998 $ 301 ,881 $

Health ln sura nce

Reserve Fund

Workers' Compensation

Reserve Liability

Reserve

Long-Term Disability

Reserve

Total

$ 706,879

2,681 ,146 (2,830,757)

2,596,371

(2,60e,886) 84,775

(220,871)

$ 39r,483 $ 165,785 $ $ $ ssz,zoa

2,741,637

(2,719,041)

2,541,207

(2,550,165)

200,430

(168,876)

$ 382,525 $ 197,33e $ 579,864

Gommitments and Contingencies

Legal counsel has reported that as of June 30, 2013, there were claims and losses that are on file against the City. The City has the authority to levy additional taxes outside the regular limit to fund any uninsured judgment against the City. However, it is estimated that all of these claims and losses will be covered by insurance when exceeding stop loss limits, and the amounts prior to reaching these limits would not materially affect future financial statements of the City.

New Governmental Accounting Standards Board (GASB) Standards

The Governmental Accounting Standards Board (GASB) has issued six statements not yet implemented by the City. The statements which might impact the City are as follows:

Statement No. 65, ltems Previously Reported as Assefs and Liabilities, issued March 2012, will be effective for the fiscal year ending June 30, 2014. The objective of this Statement is to establish accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities.

StatementNo.66, Technical Corrections-anamendmentof G,ASBSfafemenfs No. 10andNo.62, issued March 2O12, will be effective for the fiscal year ending June 30, 2014. The objective of this Statement is to improve accounting and financial reporting for a governmentalfinancial reporting entity by resolving conflicting guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.

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Statement No. 67, Financial Reporting for Pension Plans - an amendment of GASB Statement No. 25, issued June 2012, will be effective for the fiscal year ending June 30, 2014. The objective of this Statement is to establish accounting and financial reporting requirements related to pensions for governments whose employees are provided with pensions through pension plans that are covered by the scope of this Statement, as well as for nonemployer governments that have a legal obligation to contribute to those plans.

Statement No. 68, Accounting and Financial Reporting for Pensions; an amendment of GASB Statement 27, issued June 2012, will be effective for the fiscal year ending June 30, 2015. The objectíve of this Statement is to improve information provided by state and local governmental employers about financial support for pensions that is provided by other entities.

Statement No. 69, Government Combinations and Disposa/s of Government Operationg issued January 2013, will be effective for the fiscal year ending June 30,2015. The objective of this statement is to improve financial reporting by addressing accounting and financial reporting for government combinations and disposals of government operations. The term government combinations is used in this Statement to refer to a variety of arrangements including mergers and acquisitions.

Statement No. 70, Accounting and Financiat Reporting for Nonexchange Financial Guarantees, issued April 2013, will be effective for the fiscal year ending June 30, 2014. The objective of this Statement is to improve the recognition, measurement, and disclosure guidance for state and local governments that have extended or received financial guarantees that are nonexchange transactions.

The City's management has not yet determined the effect these statements will have on the Cíty's financial statements.

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dar Falls Gateway Park Shelter

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City of Cedar Falls IJniversity of Northern lowa

Gity of Cedar Falls, lowa

Budgetary Comparison Schedule - Function Budget For the Year Ended June 30,2013

Revenues: Property taxes and assessments Other City taxes Licenses and permits Use of money and property lntergovernmental Charges for services Miscellaneous

Total revenues

Expenditures: Current:

Public safety Public works Health and social services Culture and recreation Community and economic development General government

Debt service Capital projects Business-type

Total expenditures

Excess (defíciency) of revenues over (under) expenditures

Other financing sources (uses): Proceeds from long-term debt Transfers in Transfers out

Total other financing sources (uses)

Excess (deficiency) of revenue and other financing sources over (under) expenditures and other financing uses

Fund balances, beginning

Fund balances, ending

Budgeted Amounts

Original Final

$ 24,909,307 5,504,911

990,450 1,155,130

17,001,000 11,732,015 4,957,372

$ 56,463,620 $ 66 140 085

$ 24,909,307 5,499,911

971,950 1,154,130

11,524,950 11,526,300

877,272

$ 9,125,770 11,496,110

203,250 7,067,140 2,524,330 4,837,030 3,221,690 5,570,090

17,874,290

$ 9,368,320 12,559,960 3,203,250 7,239,277 2,677,390 4,937,030 3,221,690

14,970,090 17,900,290

$61

$ 11,027,000 19,951,490

(19,951,490)

$ 11,027,000 19,951,490

(19,951,490)

919,680 $ 75,877 ,267 5,456 060 $(e ,737,192\

$ 11,027,000

$ 5,570,940 48,971,939

11 7 000

$ 1,2ïg,g1g 48,971,939

See notes to the required supplementary information

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$ 54,542,778 $ 50,261,656

Actual Amounts

Variance with Final Budget -

Positive (Neoative )

$ (200,621) 32,170 94,091

(11,546) (2,763,197)

(593,814) (2,507,669)

$60 189,509 $ (5,950 ,576)

$ 399,262 2,461,977 3,030,965

959,769 34,171

156,549 265,671

2,019,904 4,266,716

$ 62,282,394 $ 13,594,993 $ ,875) $ 7 644 307

$ $ (11,027,000) 5,415,207

(5,415,207) 25,366,697

(25,366,697)

$ n1.027 ,000)

24,709,696 5,536,991 1,074,541 1,143,594

14,237,913 11,138,201 2,349,703

$ 8,g6g,os8 10,097,993

172,295 6,279,509 2,643,209 4,690,491 2,956,009

12,850,296 13,633,564

$ (2,092,875) 57,552,947

$ (3,382,693) 8,591,109

$ 55,460,012 $ 5,19g,416

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City of Gedar Falls, lowa

Notes to Required supplementary lnformation - Budgetary Reporting For the Year ended June 30, 2013

Note A - Budgetary Reporting

The budgetary comparison is presented as Required Supplementary lnformation in accordance with Government Accounting Statement No. 41 for governments with signíficant budgetary perspective differences resulting from not being able to present budgetary comparisons for the General Fund and each major Special Revenue Fund.

ln accordance with the Code of lowa, the City Council annually adopts a budget on the cash basis plus recorded accounts payable following required public notíce and hearing for all funds. The annual budget may be amended during the year utilizing similar stãtutorily prescribed procedures. Encumbrances are not recognized on the cash basis budget and appropriations lapse at year end.

Formal and legal budgetary control is based upon 9 major classes of disbursements known as functions, not by fund or fund type. These g functions are: public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt seryice, capital projects, and business-type activities. Function disbursements required to be budgeted include disbursements for the General Fund, Special Revenue Funds, Debt Service Fund, Capital Project Funds, and Enterprise Funds. Although the budget document presents function disbursements by fund, the legal level of control is at the aggregated function level, not by fund. During the year, two budget amendments increased budgeted disbursements by $13,957,587. These budget amendments are reflected in the final budget amounts.

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City of Gedar Falls, lowa

Budgetary Comparison Schedule - Program Budget

Notes to RSI

Note B - Explanation of Differences between Budgetary Sources and Uses of funds and GAAP Revenues and Expenditures for the GAAP General Fund and Major Special Revenue Funds

Sources

Actual amounts (budgetary basis) "total revenues" from the budgetary comparison schedule - function budget

Adjustments: The city budgets for all receipts on the cash basis, rather than the modified accrual or accrual basis

Total revenues for the function budget on a GAAp basis of accounting

Reclassifications: The City reports sources of funds in the function budget as

revenues in other major and nonmajor funds for GAAp reporting Debt Service Fund FEMA Fund Bond capital projects Fund Nonmajor governmental GAAP funds Business-type enterprise funds

Total revenues for general fund and major speciar revenue funds

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds:

General Fund Hospital Fund TIF Fund Street Repair Fund Street Construction Fund

Total revenues for general fund and major special revenue funds

Function Budget

$ 60,189,509

262,gg}

$ 60,452,399

(849,229) (4,464,326) (1,937,653) (4,391,655) (8,461 ,470)

$ 40,349,056

$ 22,902,719 601,464

7,679,979 5,455,792 3,809,103

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$ 40,349,056

Uses

Actual amounts (budgetary basis) "total expenditures" from the budgetary comparison schedule - function budget

Adjustments The City budgets for expenditures on the cash basis, rather than on the

modified accrual or accrual basis on all items except payments to suppliers

The City does not budget for depreciation

Total uses for the function budget on a GAAp basis of accountÍng

Reclassifications: The City reports uses of funds in the function budget as expenditures in

other major and nonmajor funds for GAAp reporting: Debt Service Fund FEMA Fund Bond capital projects Fund Nonmajor governmental GAAp funds B usiness-type enterprise funds

Total expenditures for general fund and major special revenue funds

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds:

General Fund Hospital Fund TIF Fund Street Repair Fund Street Construction Fund

Total expenditures for general fund and major special revenue funds

Function Budget

$ 62,282,394

(10,032,949)

$ 52,249,435

(2,956,009) (1,764,779) (3,392,290) (8,063,920) (6,707,140)

$ 29,375,407

$ 20,826,499 157,534

5,702,990 2,699,394

$ 29,375,407

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City of Cedar Falls, lowa

Schedule of Funding Progress for the Gedar Falls Health plan

June 30,2013

Fiscal Year

Actuarial Valuation

Date

Actuarial Value of Assets

Actuarial Accrued

Liability (AAL)

Unfunded AAL Funded

Ratio Govered Payroll

UAAL As a Percentage of Covered

Payroll(UAAL ) 2011 July 1 ,2009

2012 July 1 ,2011 2013 July 1 ,2011

671,926 671,926 0.0% 10,976,7g5 6.1% 525,162 525,162 0.0% 11,327,306 4.6% 525,162 525,162 0.0o/o 11,019,949 4.5%

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dar Falls Hearst Center for

the Arts Garden

Gity of Gedar Falls, lowa Combining Balance Sheet

Nonmajor Governmental Funds June 30, 2013 (Page 1 oÍ 2l

Community Development

Fund

Housing Assistance

Fund

ASSETS Cash Receivables, net of allowance for uncollectible amounts:

Property taxes Other city taxes Accrued interest Special assessment Other

Due from other funds Advance to other funds Due from other governments lnventories

Totalassets

LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Accrued liabilities Unavailable revenue Due to other funds

Total liabilities

FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned

Totalfund balances

$ 13,451 $ s70,133

98,443

111 894 $ 570,133

6,301 2,596

$ 8,887 $ 2,932

$ $ 738 2,194

103,007 567,201

$ 103,007 $ 567,201 Total liabilities and fund balances $ 1111,gg4 $ 570,133

-87 -

Special Revenue

Parking Fund

Police Retirement

Fire Retirement

Visitor & Tourism

$ 836,804 $ 2,868,772 $ 2,478,404 $ 4g2,761

763,843 584,381

1,075 866 89,494

517

2 860 _ -- , __ 20,547 _$_3,633,s6e _$_3,063,65- -$---503319

954

$ 840,739

3,988 1,627

$ 65,884 $ 2,227 $ 761,797 582,629

$ 5,615 $ 82l.6all $ 584,8s5 122 291

2,860 20,547 450,4912,805,999 2,479,796

832,264

$ 835 124 $ 2.80s $ 2,478,796 471 028,888 _$_a40,r39 _$__a,ffi,569_ 063,651 $ 593,319$3.

(continued)

29,199 3,609

89,494

City of Cedar Falls, lowa Combining Balance Sheet

Nonmajor Governmental Funds June 30, 2013 (Page 2 of 2)

Special Revenue

ASSETS Cash Receivables, net of allowance for uncollectible amounts:

Property taxes Other city taxes Accrued interest Special assessment Other

Due from other funds Advance to other funds Due from other governments lnventories

Totalassets

LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Accrued liabilities Unavailable revenue Due to other funds

Total liabilities

FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned

Totalfund balances

Total liabílities and fund balances

$ 202,668 $ 116,328 $ 27,218

$ 202,668 $ 116,328 $ 37,219

Hillside Perpetual

Care

$ $ $

$ $

202,669 116,329 37,219

$ 202,668 $ 116,328 $ 37 218 $ 202,668 $ 116,329 $ 37,218

Greenwood Perpetual

Care

Fairview Perpetual

Care

-89

(continued)

Gaoital Proiects Washington

Park Renovation lmorovem ents

Sidewalk Assessment

Economic Development

Capital

Total

$ 30,624 $ 3,961,ss6 $

3,760 '18,971

8,997

$ 5,11s,736 $ 16,21 4,4ss

1,349,224 gg,4g4

13,390 44,163

g,gg7

1,413,731 4,095,000

103,527 23,407

$ 23,844,368

37 6,171 25,192

1,413,731 4,095,000

5,094

_$__gqgql_ $ 8,083,358 $ 25,192 $ 6,535.63;

$ 58,959 $ $ 18,970 23,933 11,925

20 792

$ $ 167,295 10,016

1,499,647 20 792

$ $ 77,929 $ 44,625 $ 11,925 $ I 686 740

30,661 8,005,429 6,523,713

23,407 6,761,597

932,264 14,559,903

(19.433)(19 ,433) $ 30,661 $ 8,005,429 (19 ,433) $ 6.523 ,713 $ 22157 ,628

25,192 $ 6,535,639 $ 23.944.368$ 30,661 $ 8,083,358

-90

City of Gedar Falls, lowa Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Governmental Funds For the Year Ended June 90,2019

(Page 1 of 2l

Revenues: Property taxes and assessments Other city taxes Use of money and property lntergovernmental Charges for services Fines and forfeitures Miscellaneous

Total revenues

Expenditures: Current:

Public safety Public works Culture and recreation Community and economic development

Capital projects

Total expenditures

Excess (deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out

Total other financing sources (uses)

Net change in fund balances Fund balances, beginning lncrease (decrease) in reserve for inventories

Fund balances, ending

Community Devefopment

Fund

Housing Assistance

Fund

376,306 4,315

1,210,129

7,674

$ 376 306 $r 117

369,492 1,373,739

$ 369.492 $ 1.373,739

b 814 $ (151 ,622\

$ 6,814 96,1 93

$ (151,622) 719,923

$ 103,007 _$_56r,201

-91 -

Special Revenue

Visitor & Tourism

3,457 307,911

5,729

38,511 166,091

14,544

$ 208,049 $ 621 150 $ 540.525 $ 328,183

$ 783,910 $ 550,653 $ 233,079

355,379

$233,078 $ 783,910 $ 550,653 $ 355,378

0,128) $ (27 ,195)

$ $ $ $ 55,424 (14,040)(13,320)

$ $ 41,394

$ $

Parking Fund

Police Retirement

Fire Retirement

$ 559,891 $ 476,405 $

59,301 63,866

1,959 254

$ (25,029) $ (162,760) $ (1

$ (162,760) 2,969,649

(10,128) 2,499,924

14,189 454,549

2,291

$ 835,124 $ 2,805,888 $ 2,478,796 $ 4l1,O2g

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(continued)

Gity of Cedar Falls, lowa Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Governmental Funds For the Year Ended June 90,2019

(Page 2 oÍ 2)

S I Revenue Gree

Revenues: Property taxes and assessments Other city taxes Use of money and property lntergovernmental Charges for services Fines and forfeitures Miscellaneous

Total revenues

Expenditures: Current:

Public safety Public works Culture and recreation Community and economic development

Capital projects

Total expenditures

Excess (deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out

Total other financing sources (uses)

Net change in fund balances Fund balances, beginning lncrease (decrease) in reserve for inventories

Fund balances, ending

Perpetual Care

5,870 3,630 980

r$ 5,870 $ 3,630 $ e8o

$ $ $

$ 5,870 $ 3,630 980

$ $ $

$ ego 36,239

Fairview Perpetual

Care

Hillside Perpetual

Care

$ s,BZo $ 196,799

3,630 112,699

_$ 2o¿qgg_ $_1_1_q.gæ_ $ 37,218

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(continued)

Capital Proiects Washington

Park Renovation

Capital Sidewalk Assessment

Economic Development

Capitallm Total

$ $ 5,409 $ 7,671 $ 121 204,360

57,143

246,157

196,994

$ 1,049,375 307,911 539,132

1,643,577 48,991

166,091 637,59911,622 355,379

$121$ 513,068 $ 19,293 $ 552,363 $ 4.3e1 ,655

$$$ $

22,516 4,108,165

$ t,334,s63 233,079 355,379

1,743,231 4,397,570266,ggg

$ $ 266,889 $ 22,516 4 108 165 $ 8,063,920

$ 121 $ 246,179 $ (3,223) 555,802)$ (3.

$ $ 1,096,905 (83,990)

$ 3,949,919

$ (3,672,165)

$ $ s,og2,i4g (111,350)

$ $ 1,002.815 $ $ 3.949 ,919 $ $121

30,540 1,249,994 6,756,435

$ (3,223) (16,21Q)

394,117 6,129,596

$ 30,661 $ 8,005,429

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City of Cedar Falls, lowa

Combining Statement of Net Position lnternal Service Funds

June 30,2013

ASSETS Current assets:

Cash Receivables, net of allowance for uncollectible amounts:

Accrued interest Other

lnventories Total current assets

Noncurrent assets: Capital assets:

Buildings Machinery and equipment Accumulated depreciation

Total noncurrent assets Total assets

LIABILITIES Current liabilitíes:

Accounts payable Accrued liabilities Compensated absences due within one year

Noncurrent liabilities: Compensated absences after

one year Total liabilities

NET POSITION Investment in capital assets Unrestricted

Total net position

$ 6,050,286 $ 17,457 $ 2,2OO,B77

7,395 6,807

2,695

$6. 064,479 $ 17,457 $ 2.203,564

$ $ $

$ $ $ 6,064,478 $ 17,457 $ 2,203,564

$ 5,162 382,525

$ 17,457 $ 388,642

Health lnsurance

$ sB7

$ 5 676 791

$ s,676,791

Health lnsurance Severance

687 $ 17,457 $ 388.642

$ $ 1,914,922

$ 1,814,922

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Risk Management

Data Processing

Vehicle Maintenance Total

$ 3,269,890 $ 902,450 $ 827,227 $ 13,268,1g9

3,791 3,690

1,O41 1,251 106

16,153 10,603

328,7973 833 324 954 3 7 371 $ 907 324$1 538 $ 13.623153 ,732

$ $ 1,253,735

90,302 6,395,626

90,302 7,649,361

$ $

$ $ 299,489 $ 2.390 ,081 $ 3,277 ,371 $ 1,206,913 3 543 619

$ 13,230 197,339

$ 3,402 8,042

$ 61,121 9,931

(4.095 ,847\ (5.050 ,0e3) 2 689 570

16 313 2

489,O14 597,837

(954,246)

26,359 18,247 44,606

25 710 29,444 55 154 210 56e $ 63,513 $ 118,743 $1 186 611

$ $ 299,489 $ 2,390,081 $ 2,699,570 066 802 843 811 1 034 795 12 7 121

$ 3,066,902 $ 1,143,300 $ 3,424,876 _$_1_5,126,691

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City of Cedar Falls, lowa Gombining Statement of Revenues, Expenses,

and Changes in Fund Net position lnternal Service Funds

For the Year Ended June 30, 2013

Operating revenues: Charges for services Other

Total operating revenues

Operating expenses: Personal services Contractual services Supplies and equipment Depreciation

Total operating expenses

Operating income (loss)

Nonoperating revenues (expenses): Use of money and property Loss on disposal of equipment

Nonoperating revenues (expenses)

lncome (loss) before transfers

Transfers out

Change in net position

Net position, beginning

Net position, ending

$ 2,783,954 $2r 750 $ 286

$ $ 697,819 2,814,529 27,750

2 814 528 $ 27,750 $ 697,819 $ (30,574) $ $ ø10,965)

$ 23,98s $ $ 8,869

$ 2,771,556 12,399

$ 27,Tso

Health lnsurance

Health lnsurance Severance Pa il

$ 278,170 9,694

854

$ 23,985 $ $ 8,869 $ (6,589) $ $ (402,096)

$ (6,s89) $ 5,683,390

$ (402,096) 2,217,019

$ 5,676,T91 $ $ 1.814,922

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Risk Management

Data Processinq

Vehicle Maintenance Total

$ 561,450 $ 129,413

$ 1,749,640 54,696

$ 6,311,469 204,351

922,902 160

$ 689,863 $ e23 062 $1 336 $ 6,515804

$ $ 352,739 264,592 63,569

105,509

,819

$ 363,336 269,732

1,093,767 312,574

$ 1,413,994 4,235,561 1,147,335

419,092

859,959

$ 859 $ n70 ,096) $ 136,655 $ Q2 4,0731

$ 7.21 4,872 699 053

959 $ 786,407 $ 2,029,409

$ 12,267 $ 3,502 $ (9,783)

4,134 $ (20,354)

52,757 (30,137)

$ 12,267 $ (6,281)

$ (157,829) $ 130,374 (5,495)

$ 22,620

$ (676,433) (164,257)

$ (163,324) $ 3,230,126

130,374

1,012,926

$ (399,055) $ 3,923,931

(840,690)

15,967,391

$3, 066,802 $ 1.143,300 $ 3.424 ,876 $ 15,126,691

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City of Cedar Falls, lowa Combining Statement of Gash Flows

lnternal Service Funds Forthe Year Ended June 30,2013

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from interfund services Payments to suppliers Payments to employees

Net cash províded by (used for) operating activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to other funds

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Net acquisition of property and equípment

CASH FLOWS FROM INVESTING ACTIVITIES lnterest received on investments

Net increase (decrease) in cash

CASH BALANCES, Beginning CASH BALANCES, Ending

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash

provided by (used for) operating activities: Depreciation Change in assets and liabilities: (lncrease) decrease in:

Other receivables lnventories

lncrease (decrease) in accounts payable, accrued and other liabilities Net cash provided by (used for) operating activities

$ 2,771,556 $ (2,914,120')

6,671

(9,603) $ (42,564) $ (2,e32\

$ $

$ 23.994 $

$ (18,570) $ (2,932) 20,3896,069,956

$ 6,oso,286 $ 17,4s7

$ (30,574) $

(3,032)

(8,958) e.%2\ $ 42,564\ $ (2,932)

Health lnsurance

Health lnsurance Severance

-99-

Risk Data Processinq

Vehicle MaintenancePayroll M ment ïotal

$e4

$ 278,170 $ 302

561,450 $ (494,643)

922,902 $ (331,225)

1,749$40 (1,399,796)

,257)

ß41 ,0421 351 475 ,20Ð $ 66,807 $ 250 635 $ 9,369

$ $ (s,49s )$ $ (158,762) $ n64

071 $eß$ $ $ Í07 ,646) 1 ,7171 $ 82e $ 12,199 $ 3,320 S 4.267 $I 52,608 $ (15,373)

565 $66 807

$ 146,309 $ (2s1,197) 756 141 1 078 424

$ (68,253) 13,336,4422,216,252$ 2,200,979

386,763 $ (24,202\

$ 902,450 $ 827,227 $13 189

$ (410,965) $ (1 70,096)$136,655$(224,073)$(699,053)

105,509 312,574 418,092

236,339 (1,083)

I 555 $ 250,635

(58) (90,932)

11 858

233,249 (92,015)

396 851 I 369 $ 257.113

- 100 -

City of Gedar Falls, lowa GapitalAssets used in the operation of Governmental Funds

Gomparative Schedules by Source* June 30,2013 and 2012

2013

Governmental fund capital assets: Land

Land improvements

Buíldings

Machinery and equipment lnfrastructure

Construction in progress

Total governmental funds capital assets

2012

$ 28,703,969 13,116,321

27,711,935

9,120,292

154,932,742

12,264,029

8 254,179,594 245,949 187

$ 23þ15,754 45,791,071

145,667,441

225,195

30,659,726

$ 28,867,975 13,155,356

27,729,339

9,504,504

163,497,944

11,425,467

lnvestments in governmental funds capital assets by source: General fund $ 23,T07,691 Special revenue funds 49,456,210 Capital projects funds 14g,S2},gg1 lnternal service 22í,1gs Donations 31,269,597

Total governmental funds capital assets $ 254,179,594 $ 245

This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental actívíties in the statement of net assets.

-101-

City of Gedar Falls, lowa Gapital Assets used in the operation of Governmental Funds

Schedule by Function and Activity " June 30,2013

Function and Activitv Land

1,842,041

69,599

10,883,674

360,042

Buildings

Public Safety

Public Works

Health & Social Services

Culture and Recreation

Community and Economic Development

General Government

$ 12,500 290,326

151,494

2,906,049

25,553,706

53,901

$ $ 1,024,831 1,513,123

5,973,537

12,992,115

2,165,425

4,169,307

$ 28,867,975 $ 13,155,356 $ 27,72g,399

-102-

Machinery and

Equipment

Construction tn

lnfrastructure Progress Total

$ 1,143,269 3,717,204

3,289,069

130,907

1,224,061

$$ $ 2,1go,sg4 169,953,163

6,094,630

36,519,522

34,995,406

5,447,269

157,511,134 4,079,335

5,986,910 570,906

6,775,326

$e, 504,504 $ 163,497,944 $ 11,425,467 $ 254.179.594

-103-

Gity of Gedar Falls, lowa capital Assets used in the operation of Governmental Funds

Schedule of Changes by Function and Activity " For the Fiscal Year Ended June 30, 2013

Governmental Funds Capital

Assets July 1 ,2012 Additions Deletions June 30 2013

Public Safety

Public Works

Health & Social Services

Culture and Recreation

Community and

Economic Development

General Government

$ 2,184,644 161,493,409

6,094,630

36,165,632

34,541,937

5,379,035

$ 90,094 12,144,993

369,293

476,065

148,175

$ 94,744

4,675,229

16,403

32,496

79,941

Governmental Funds Capital

Assets

$ 2,180,594 168,953,163

6,094,630

36,519,522

34,995,406

5,447,269

$ 245,849,187 $ 13,229,210 $ 4,g98,g13 $ 254,179,5g4:

This schedule presents only the capital asset balances related to governmentalfunds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal servíce funds are íncluded as governmental activities in the statement of net assets.

-104-

City of Cedar Falls, lowa Statistical Section

This part of the City's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city's overall financial health.

Gontents Paqe

Debt Gapacity 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 124

Demographic and Economic lnformation These schedules offer demographic and economic indicators to help the reader understand the environment within which the city's financial activities take place. 136

Financial Trends These schedules contain trend information to help the reader understand how the city's financial performance and well-being have changed over tíme.

Revenue Capacity These schedules contain information to help the reader assess the city's most significant local revenue source, the property tax.

Operating lnformation 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 othen¿vise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented GASB Statement 34 in 2003; therefore the first four tables include information beginning in that year.

106

116

141

- 10s -

City of Cedar Falls, lowa Net Position by Gomponent

Last Ten Fiscal Years (Accrual basis of accounting)

FiscalYear 2004 2005 2006 2007

Governmental activities Net investment in capitalassets Restricted Unrestricted

Total governmental activities net position

Business-type activities Net investment in capitalassets Restricted Unrestricted

Total business{ype activities net position

Primary government Net investment in capitalassets Restricted Unrestricted

ïotal primary government net position

s 144,878,688 $ 1

$ 94,619,419 15,944,416 34,315,853

$ 100,950,333 16,699,109 36,569,953

$ 108,3s9,511 17,167,913 37,686,372

$ 1 13,859,357 18,571,430 42,994,411

54,107,394

$ 26,644,501 $ 809,500

6,340,472

28,566,202 $ 809,500

6,179,451

30,991,450 $ 808,500

6,285,467

36,487,952 808,500

5,569,366

$ 33,793,473 $ 35,554,153 $ 38,085,417 $ 42,865,718

$ t2t,262,920 16,752,916 40,656,325

$ 129,416,535 $ 139,350,961 17,496,609 17,976,413 42,749,404 43,971,939

$ 150,347,209 19,379,930 49,563,777

$ 178,672,161 $ 189,661,547 g 201,299,213 $ 21g,290,916

- 106 -

Fiscal Year 2008 2009 2010 2011 2012 2013

$ 118,688,310 $ 123,367,386 $ 131 ,237,132 g 145,480,365 $ tSt,13O,O97 $ t 20,491 ,013 21,421,340 22,341 ,338 24,OgO,2oO 24,405,g2g 45,657,412 49,697,913 52,747,529 50,939,2g9 50,704,056

55,314,591 24,150,307 54,889,657

_q_1_e4,æA, ?35 _q_1_93,486,539 _q 206,325,99S _$ 220,509,853 Å 226,239, 981 $ 234 555

$ ¿t,521,531 $ 449,500

4,019,315

44,414,522 $ 449,500

4,522,039

46,273,076 $ 9,500

4,897,575

52,510,319 $ 9,500

6,729,994

70,328,202 $ 9,500

(76,329)

79,677,940 9,500

(5,621,533)

$ 45,989,346 $ 49,386,060 $ St ,17O,151 $ 59,248,703 $ 70,261 ,373 $ 74,065,907

$ 167,781,909 ç 177,510,209 g 197,990,684 $ 221,458,2gg g 234,992,531 21,870,840 22,350,838 24,099,700 24,415,328 24,159,807

$ 160,209,941 20,940,513 49,675,727 53,219,951 57,635,103 57,668,172 50,627,727 49,267,124

$ 230,826,081 $ 242,8?2,599 S_25r,496,149 _q_2r9,r5S,556 _q 296501,354 _$_A08,41 9,462

-107-

City of Cedar Falls, lowa Ghanges in Net Position

Last Ten Fiscal Years (Accrual basis of accounting)

(Page I of2)

Fiscal Year

2004 2005 2006 Expenses

Governmental activities: Public safety Public works Health and social services Culture and recreation Community and economic development General government Debt service Capital projects

Total governmental activities expenses

Business-type activities: Sewer Refuse Storm Water

Total business-type activities expenses

Total primary government expenses

Program Revenues Governmental activities:

Charges for services: Public Safety Public Works Culture and Recreation General Government

Operating grants and contributions Capital grants and contributions

Total governmental activities program revenues

Business-type activities: Charges for services:

Sewer Refuse Storm Water

Capital grants and contributions: sewer and storm water Tota I busi ness-type activities prog ram revenues

Total primary government program revenues

Net (Expense)/Reven ues Governmental activities Business-type activities

Total primary government net expense

26,544,816 28.5 76,734

$ 6,378,906 8,083,107

177,236 4,788,464 2,641,914 3,309,062 1,046,548

119,579

$ 6,786,083 $ 8,121,486

261,476 5,350,058 3,345,487 3,751 ,183

960,961

6,920,986 9,291,307

325,479 5,911,073 4,353,658 3,972,891

968,298

31,743,692

2,656,015 1,699,546

2,777,820 2,176,174

3,212,254 1,797,655

4,3s5,561 4,953,994 909 $ 30,e00,377 $ 33.530 ,728 $ 36. 753,601

$ sot,zsa 311,932

1,356,978 1,147,836 2,207,574 4,210,176

602,800 209,424

1,550,008 1,242,703 3,143,285

$ 715,066 344,195

1,841,570 I ,323,816 2,533,024 3,622,803

10,380,478

2.759,995 9,796 ,284 9,508,215

3,747,185 2,471,886

3,777,236 2,460,525

3,862,562 2,576,395

11,687 820,264 1,553,151

$ 16,027,042 $ 16.s66 ,240 758 7.058 ,025 7,992,108

$ 18,372,586

(16,748,532) (19,068,519) (2't,363,214) _ 1,875,197 2,104,031 $ (14,873,335ì $ (16,964,488I

2 982 199

- 108 -

Fiscal Year 2007 2008 2009 2010 2011 2012 2013

$ 6,602,108 $ 9,390,405

147,O07 5,894,494 4,341,611 3,918,s50

930,278

8,065,013 $ 9,696,327

234,124 6,736,108 4,346,385 4,244,545

831 ,315

7,192,846 $ 13,938,703

310,365 6,836,437 5,677,705 4,619,221

754,989

7,725,740 $ 10,699,831

164,836 6,864,804 7,019,195 4,797,762

741,933

8,62s,520 $ 10,949,200

326,666 7,104,212 7,291,549 4,493,885

551,543

8,462,143 $ 12,971,278

316,339 7,098,908 7,815,848 4,333,403

452,378

9,491,677 11,909,568

320,864 7,262,110 8,357,058 4,890,409

228,173

31,224,453 34,153,817 39,330 ,266 38,014,101 39.342 ,575 41,450,297 42,459,859

3,359,111 2,011,573

61 192 5, 989,876

$ 37,214,325

3,009,639 2,142,679

652,999

3,178,3s4 2,355,999

620 460

3,187,378 2,410,813

732,218

3,223,476 2,537,735

3,336,990 2,492,305

722,991

3,617,688 2,770,264

075 728 713 5,805,317

$ 39,959,134 6,1 54,813 6,330,409

$ 44,344,510 6,454,286

$ 4s,796,861 6,552 ,286 7,116,665

$ 49,576,524$ 45, 485,079 $ 48.002 ,583

$ 534,722 249,903

2,028,869 1,466,523 2,365,608 4,395,714

11.422 ,844 11,041,339

567,948 $ 282,146

2,024,082 1 ,1 65,048 2,461,032 4,922,588

$ 538,3e8 259,569

2,184,620 1,'19'1,151

2,153,921 7,183,972

13,51 1,631

$ s97,348 240,997

2,170,036 1,587,244 1,606,798 8,928,178

661,784 217,172

2,206,722 1,588,066 2,360,697

$ 748,246 199,648

2,469,465 1,682,397 1,695,117

11,s29,905 18,324,778

$ 673,860 204,592

2,400,747 1,632,567 2,098,639 6,479,932

337

15,0 73,637 1 5,1 30 ,601 22,108,078

3,794,631 2,746,393

731,844

3,775,728 2,833,449

780,666

3,999,239 3,148,295

780,837 983,243

4,015,527 3,186,384

787,942 128.795

4,138,346 3,318,008

806,364 460,559

4,313,923 3,328,306

826,986 140,450

4,574,181 2,996,396

890,893 577.4113.221 ,140 950

10,494,008

$ 21 ,916,8s2 7,723,793 8,911 ,614 8,118,648

$ 23,249,249 8,609,66s

$ 26,934,443 9. 038,881

$ 30,831 ,355 $ 22,529,218

(22,883,s00) (17,234,497) (23,125,s19) (28,969,522) 788 239

8, 723,277

$ 18. 765j32 $ 22,423,245

(19,801,609) 4,504,132

@ (23,112,478)

918 76 (25,818,635)

2,756,801 S?3F61€-34-i-

2,268,991 2,057,379 F-Jî4Fdsso-6l5-J21^0-68-140I

- 109 -

(continued)

City of Gedar Falls, lowa Changes in Net Position

Last Ten Fiscal Years (Accrual basis of accounting)

(Page 2 of 2)

Fiscal Year

2004 2005 2006 General Revenues and Other Changes in Net position

Governmental activities: General revenues:

Property taxes and assessments Other city taxes Use of money and property lntergovernmental Miscellaneous Gain on sale of assets UtiliÇ contribution in lieu of taxes

Transfers Total governmental activities

Business-type activities: General revenues:

Property taxes and assessments Use of money and property

Transfers Total business-type activities

Total primary government

Ghange in Net Position Governmental activities Business-type activities

Total primary government

190,965 (343,351) 1450 ,93s)

$ 27,273,439 g 27,953,874 $ 30.01 8,681

$ 10,333,942 $ 9,228,706 $ 9,106,402 1,760,680 2,531,264

ElõF8e¡-silT-f TF--?,666-

$ 14,110,761 4,169,362 2,618,556 3,785,710

946,12',1

72,034 1,400,000

(2O,070',)

$ 16,034,121 4,349,790 1,874,497 3,809,479

207,661 65,215

1,400,000 556,462

28,297,225

$ 17,163,242 4,709,758 2,425,140 3,527,541

491,847

1,400,000

30,469,616

301 ,153

27.082 ,474

54,475 116,420 20,070

149 212,962

4621 (752,088)

2 162

-110-

(continued)

Fiscal Year 2007 2008 2009 2010 2011 2012 2013

$ 18,931 ,378 $ 4,582,479 2,924,080 3,5s1,69s

474,249

19,468,413 5,060,324 2,868,337 3,728,669

850,716

$ 20,994,332 $ 5,308,296 2,421,181 3,693,255

965,194

1,500,000 (413,819)

34,468,439

22,066,237 5,022,500 1,640,456 4,2s8,253 1,127,964

1,524,990 82,s59

$ 23,373,676 5,291,546 1,344,936 4,269,554 1,324,189

5,668 1,57s,010

(5,771,627\

g 23,802,'t24 5,754,706 1,275,402 4,256,073 1,014,890

6,606 1,625,000

(8,91 9,1 54)

$ 24,695,940 5,544,604 1,268,202 4,40s,345 1,375,437

1,637,000 (1,843,4321 37,083,096

1,400,000 1 49,1 30

1,400,000 ß52,444\

32.01 3,011 32,524,015 35,722,959 31.41 8,352 28,85s ,647

1,287 424,012

(149,130)

1,609 351,099 852,444

1,961 224,133 413.819

36,137 38,886 8,91 9,154

276,169

$ 32,289,180 't,205,152

$ 33,729,167 639,913 8,955,291 1 ,882,318

$ 38,965,414$ 3s.108 ,3s2 $ 35.71 8,811 $ 37.227 ,913 $ 37,810 ,938

$ 12,211,402 $ 9,411,s37 $ 8,649,304 $ 12,83s,45s $ 14,183,855 $ s,730,1284,780,301 Wry __Æ:4! _ 1,784,0s1 8,078,552 11,012,670F]6-B%?-?0r FlæEf5_ 5læ46m- Fl4sr3s--sl @ ffi $ 8,1 13,574

534

-111-

City of Gedar Falls, lowa Fund Balances, Governmental Funds,

Last Ten Fiscal years (modified accrual basis of accounting)

Fiscal Year 2004 2005 2006 2007

General Fund Nonspendable Assigned Unassigned

ïotal general fund

All Other Governmental Funds Nonspendable Restricted Committed Assigned Unassigned

ïotal all other governmental funds

$5. 808,422 $ 6.375,134 $ 7 342 $ 7. 565,592

$ $ $ $78,299 896,147

4,833,976

86,234 841,776

5,447,124

119,589 695,321

6,251,432

147,220 1,196,550 6,221,822

$ 143,013 $ 21,379,781 12,179,838

7,984,681 (2,458)

140,490 22,7'12,063 12,689,217 8,982,080 (50e,6e0)

$ 133,443 24,404,192 13,199,514 7,020,781 (se8,e88)

$ lsr,sro 24,333,854 13,069,761 9,382,350 (701,s32)

$41 s 44.014,160 $ 44.1 63,942 $ 46,23s,s43

-112-

Fiscal Year 2008 2009 2010 2011 2012 2013

$ $ $ $131,466 1,122,010 6,291,771

132,803 1,246,712 6,473,074

178,147 1,620,436 6,489,104

181,341 1,445,007 6,498,932

$ 180,689 1,722,948 7,045,817

241,612 1,817,084 6,978,807

$ 7,545,247 $ 7,8s2,589 $ 8.287 ,687 $ 8.12 5,280 $ 8.949 ,454 $ 9.037 ,503

$ 83,341 27,182,248 13,723,684 9,700,146 (358,297)

$ e¿,zgt 25,967,407 14,395,783 9,526,406 (186,530)

$ 126,2ss 26,841,011 15,163,647 11,201,701 (1,740,555)

$ 201,20s $ 27,037,209 15,697,718 10,758,664 (2,840,288)

256,912 25,892,197 16,145,534 12,916,571 (4,343,889)

$ 306,613 25,435,109 1ô,551 ,1 1 5 14,559,803 (1 ,193,291)

$ 50,331,122 $ 49,787,857 $ 51.592 ,ose $ $ s0,867 ,325 $ 55.659 ,349

-113-

City of Gedar Falls, lowa Changes in Fund Balances, Governmental Funds,

Last Ten Fiscal years (modified accrual basis of accounting)

Fiscal Year 2004 2005 2006 2007

Revenues: Property taxes and assessments Other city taxes Licenses and permits Use of money and property lntergovernmental Charges for services Fines and forfeitures Miscellaneous Utility contribution in lieu of taxes

Total revenues

Expenditures: Current:

Public safety Public works Health and social services Culture and recreation Community and economic

development General government

Debt service Principal lnterest

Capital projects Total expenditures

Excess (deficiency) of revenues over (under) expenditures

Other financing sources (uses): lssuance of long-term debt Premium on long-term debt lssuance of refunding debt Discount on long-term debt Land contract Payments on refunding bonds Transfers in ïransfers out

Total other financing sources (uses)

Net change in fund balances

Debt service as a percentage of noncapital expenditures

1 400,000 '1,400 000 000 $ 34,436 ,522 34,556 ,421 $ 37.221 ,187 $ 39,554,090

$ 14,085,403 $ 4,169,362

947,159 2,619,556 6,324,293 1,994,119

547,257 2,460,394

16,033,559 $ 4,210,659

923,727 1,874,497 6,457,295 2,244,467

436,741 975,479

17,186,164 4,712,426

982,954 2,425,140 6,834,940 2,599,376

652,321 437,966

1,400,000

$ 18,931,049 4,564,009

785,116 2,924,090 7,047,600 2,797,909

466,199 649,1 1g

$ 6,288,812 $ 6,997,749

50,921 4,246,929

2,600,174 3,075,636

4,025,954 1,067,520 6,656,971

6,692,529 $ 7,364,214

135,160 4,756,551

2,523,565 3,455,372

3,409,713 1,029,414

7,173,967 $ 7,595,353

I gg,1 64 5,277,697

2,394,359 3,814,373

2,920,000 937,274

7,373,926 7,929,949

838,195 5,330,492

2,345,966 3,929,549

3,040,000 916,414

5,392,9998,257 ,673 I 612 287 $3s 6$ 37,623j90 $ 39,914,464 $ 37,096,269

$ (564 ,044\ ,066 769 $ (2,693,277) $ 2,457,a12

$ 2,355,000 $ 5,45o,ooo $ 2,g3s,ooo $

(14,130) 1,200,000

3,777,372 (3,822,938)

(17,594)

7,349,961 (6,924,992)

5,650,000 (43,274)

(5,650,000) 5,999,757

(5,289,524) 5,914,949

(5,942,507)

$ 3,495,304 $ 5 957,375 $ 3 5e$ 72,341 2,890,606 $ 809,682 $ 2,s30,1s3$ 2,931,260 $

18.0o/o

-114-

16.9o/o 13.8% 14.60/o

Fiscal Year 2008 2009 2010 2011 2012 2013

$ 19,459,594 $ 5,032,799 1,031,667 2,969,337 9,1 53,1 04 2,927,076

421,274 803,161

20,994,332 $ 5,339,099

767,939 2,421,181

10,199,992 2,969,223

436,578 994,537

22,066,237 $ 5,029,677 1,106,716 1,640,456

12,351,723 3,115,157

373,752 1,057,446 1,524,990

23,379,676 5,292,406 1,093,024 1,344,936

21,764,416 3,179,755

400,965 1,370,497 1 ,575,010

$ 23,766,946 $ 5,755,920 1,162,401 1,275,402

19,920,930 3,507,339

430,016 1,052,265

24,696,793 5,519,022 1 ,076,196 1,268,202

12,599,954 3,386,415

449,165 1 ,359,1921,400 000 1,500 ,000

$+z 997,0'11 $ 1,625,000 1 637,000

45,611,979 $ ¿e, 266j54 $ 59 389,695 $ 57,496,119 $51 990 919

$ 7,996,188 $ 7,292,523

97,296 5,536,493

7,551,507 $ 7,793,997

163,528 6,065,699

2,253,049 4,381,790

2,910,000 739,841 486,565

7,922,903 $ 8,816,279

87,304 6,076,259

8,155,206 $ 9,027,992

17g,Og4 6,557,554

8,375,159 $ 10,910,336

167,759 6,410,049

8,ggg,g42 10,099,252

172,284 6,449,626

2,646,490 4,694,063

2,529,313 4,1 69,1 61

2,850,000 806,181

9,857 ,325 13

2,291,961 4,613,694

2,930,000 728,057

16,357,596

2,602,604 4,316,949

3,235,000 596,048

2 00 053

2,447,212 4,775,991

3,415,000 503,383

11,390,660

2,685,000 271,009

9,544,629 $ 41,113,460 45,335 ,875 $ 49,823,931 $ 54,669 ,490 $ 48,295,538 $ 45,542,295

$ 1,883,551 $ 276,004 $ (1.557 ,777\ $ 4 720,195 $ g,2oo,sg1 $ 6,449,624 $ 4,B2o,ooo $

(1,645,000) (30,1 25)

8,359,264 (9,227,533)

10,291,922 (10,906,635)

$ 3,44o,ooo $ 227,162

5,135,000 (28,724)

(5,325,000) 11 ,017,106

(10,755,275) 9,806,376

(15,504,674)

3,320,000 (8,300)

(3,295,000) 11,275,219

(19,720,563) 13,297,694

(14,976,969)

$ $

$ 2,275,606 $ (51 4,713t $ 3,710,269 $ (5,699,299 $ (8,41S ,644') $_l,1sg z_ _q__(238,r0Ð. S__2,ß2,4e2_ $_ (er8,l_q!l

11.4% 10.1o/o 10.3o/o 10.7%

$ zer,ggz

-115-

10.2% 8.0%

City of Gedar Falls, lowa Assessed and Taxable Value of property

Last Ten Fiscal Years (Unaudited)

Real and Personal Pro perty Reqular Aqricultural Land

Levy Year

For Fiscal Year

Endíng June 30,

Taxable Value

Assessed Value

Taxable Value

Assessed Value

2003 2004$g17,g96,gg0$1,420,200,646$6,926,500$6,926,500

2004 2005 903,439,479 1,669,493,277 5,419,730 5,418,730 2005 2006 920,739,030 1,732,109,902 5,347,650 5,347,650 2006 2007 985,250,969 1,925,997,344 5,771,140 5,771,140 2007 2008 1,019,530,694 2,00g,35g,g26 5,453,530 5,453,530 2008 2009 1,099,295,277 2,246,395,915 5,439,677 6,036,1 10 2009 2010 1 ,150,079,051 2,330,760,1 55 5,525,129 5,886,760 2010 2011 1,195,969,161 2,393,911,221 5,3g1,329 8,196,740 2011 2012 1,254,921,347 2,450,027,999 5,572,605 8,292,560 2012 2013 1,393,51 1,204

Source: Black Hawk County Auditor's Office 2,609,407,333 5,671,067 9,912,510

Note: Property in the city is reassessed every other year. Tax rates are per $1,000 of assessed value.

-116-

Taxable Value

Assessed Value

Total Taxable Value as a

Percentage of Assessed

Value

Total Total Direct Tax Rate

$ 824,823,480 $ 1,427,127,146 57.g0 % $ 14.10410 908,959,209 1,673,902,007 54.30 13.65325 926,096,690 1,737,456,552 53.30 14.05084 991,022,009 1,931 ,759,494 51.30 13.84420

1,023,994,214 2,013,912,356 50.g5 13.60793

1,103,733,954 2,252,421,925 49.00 13.26327

1 ,155,603,179 2,336,646,915 49.46 13.O2110 1,191,350,490 2,402,107,961 49.60 12.99252

1,260,393,952 2,459,320,459 51.27 12.86369

1,399,192,271 2,619,319,g43 53.44 12.20300

-117 -

City of Gedar Falls, lowa Property Tax Rates

Direct and Overlapping Governments Last Ten Fiscal Years

(Unaudited)

City of Cedar Falls

Overlappinq Rates

Black Hawk County

Fiscal Year

Operating Millaqe

Debt Service

Total City Millage

Operating Millage

Debt Service

Total County Millage

2004 $ 11.93225 $ 2.17185 $ 14.10410 $ 7.15152 $ 0.59469 $ 7.74621 2005 11 .85492 1 .79833 13.65325 6.90953 0.58284 7.49237 2006 12.39156 1.65928 14.05084 7.04780 0.56052 7.60832 2007 12.51746 L32674 13.84420 6.83182 0.55784 7.38966 2008 12.41427 1 .19366 13.60793 6.82613 0.58407 7.41020 2009 1 1 .94886 1 .31441 13.26327 6.35616 0.57975 6.93591 2010 11 .82625 1 .19485 13.02110 6.12831 0.57689 6.70520 2011 11.81700 1.17552 12.99252 6.22972 0.44212 6.67184 2012 11.79924 1.06445 12.86369 5.92415 0.67322 6.59737 2013 11.68479 0.51821 12.20300

Source: Department of Management website 5.59849 0.64144 6.23993

Note: The city's general fund maximum property tax rate may only be $g.1o per $1 ,000 of valuation. The remaining portion of the operating rate and the rate for debt service are set based on each year's requirements.

-118-

Overlapp ing Rates

Schools

Operating Millaqe

Debt Service

Total School Millage Other

$ 13.91234 $ 13.00577

13.02846

13.02447

13.13283

13.73251

13.73228

14.15215

13.78651

1337802

Total

$ 13.91234 $ 1.13876 $ 36.90141

13.OO577 1.36743 35.51882

13.02846 1.42197 36.1 0959

13.02447 1.34392 35.60225

13.13283 1.18405 35.33501

13.73251 1.36422 35_29591

13.73228 1.33721 34.79579

14.15215 1.38794 35.20445

13.78651 1.28109 34.52866

13.37802 1.3377 33.15865

-119-

City of Cedar Falls, lowa Pri ncipal Property Taxpayers

Current Year and Nine Years Ago

2004

Taxpaver

Assessed

Valuation for Fiscal Year

2003 -2004 Rank

Percentage

of Total

Assessed

Valuation

Target Corporation

College Square Mall Assoc. LLC

R and N lnvestments

Walmart Re Business Trust

WB CF Assoc LTD Partners

Twenty Seventh Street Assoc, LLC

Cedar Falls lnvestments, LLC

Gold Falls Villa Apart LLC

Standard Distribution Co.

Harvest Mallard Point Retirement

Quest Corporation (US West, lnc)

Davenport Farm & Fleet, lnc.

Cedar Falls Retirement Residence

Christopherson, Jerry

Lockard Blackhawk LC

SUH Northern lowa, LLC

$ 29,994,090

5,140,960

6,818,405

5,833,160

6,855,470

5,322,420

6,134,500

5,269,390

2.10 %

0.36

0.49

0.48

0.41

0.48

0.37

0.43

0.37

5"49 o/o

6,987,210 2

I $ 78,354,595

Source: Black Hawk County Auditor's Office

Note: There was only data available for the top nine taxpayers for 2004.

-120-

2013

Assessed

Valuation for Fiscal Year

2012 - 2013 Rank

Percentage

of Total

Assessed

Valuation

$ 85,871,200

30,224,620

13,909,090

13,574,740

12,739,950

11,533,470

9,243,740

8,964,160

8,326,900

8,164,470

3.28 o/o

1.15

0.53

0.52

0.49

0.44

0.35

0.34

0.32

0.31

I I 10

$ 202,550,240 7.73 %

-121-

City of Gedar Falls, lowa Property Tax Levies and Gollections

Last Ten Fiscal Years (Unaudited)

Levy

Year

For Fiscal

Year Endíng

June 30, Total

Tax Lew

Current

Tax

Collection

Percentage

of Current

Taxes

Collected

Delinquent

Tax

Collectíons

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012 2013 17,297,169 Source: Black Hawk County Auditor's Office.

2OO4 $ 11,796,749 $ 11,924,764 100.24% $ 1O4 2005 12,646,619 12,643,423 gg.g7

2006 13,267,496 13,396,021 100.97 1,479 2007 13,963,307 14,007,952 100.32 108 2008 14,161,591 14,114,301 99.67 6,972

2009 14,989,920 14,915,373 99.50 1,464 2010 15,398,267 15,370,354 gg.g2 2,009

2011 15,871,931 15,850,623 gg.g7 7,350

2012 16,552,935 16,576,996 100.1 5 15,223

17,091,764 gg.g7 3,967

-122-

Total Tax

Collections

Total Tax Collections as a Percentage

of Total

Tax Lew

Outstanding

Delinquent

Taxes

Delinquent

Taxes as a Percentage

of Total

Tax Levy

$ 11,924,969 100.24 % $ g4,733

12,643,423 gg.g7

13,397,500 100.99

14,007,960 100.32

14,121,273 99.72

14,916,937 99.51

15,372,363 gg.g3

15,857,973 gg.g1

16,592,219 100.24

17,095,731 98.89

0.72 o/o

84,230 0.67

56,511 0.43

49,550 0.35

47,296 0.33

45,039 0.30

39,266 0.26

38,390 0.24

22,693 0.14

25,924 0.15

-123-

City of Cedar Falls, lowa Ratios of Outstanding Debt by Type

Last Ten Fiscal Years

Governmental Activities Business-Type Activities

Fiscal

Year

General

Obligation

Bonds

Tax lncrement Financing

Bonds

General Obligation

Capital Loan

Note

General

Obligation

Bonds

Revenue

Debt

2004 $ 19,210,000 $ 3,115,000 $ 2,850,000 $ 4,705,000 2005 16,115,000 7,225,000 2,160,000 4,075,000 2006 16,960,000 6,395,000 2,980,000 3,420,000 2007 14,670,000 5,545,000 2,270,000 2,740,000 2008 11,055,000 4,665,000 4,820,000 5,925,000 1,005,000 2009 9,435,000 3,760,000 4,435,000 5,295,000 765,000 2010 5,360,000 2,865,000 9,725,000 4,735,000 2011 4,340,000 2,015,000 8,360,000 4,160,000 2012 1,125,000 10,210,000 2,755,000 210,640 2013 575,000 g,075,000 2,335,000 210,640

Note: Details regarding the city's outstanding debt can be found in the notes to the financÍal statements.

1 Population and personal income data can be found on page 136

-124-

Busine SS- Activities

Capital

Loans

Total

Primary

Government

Percentage

of Personal lncomel

Per

Capital

795

813

814

692

728

619

588

481

385

$ 28,890,000 2.96 o/o

29,575,000 2.95

29,655,000 2.60

25,225,000 2.15

27,370,O00 2.15

23,690,000 1.89

22,695,000 1.66

18,875,000 1.32

820,000 15,120,640 1.O4

625,000 11,920,640 0.77 301

-125-

City of Cedar Falls, Iowa Ratios of General Bonded Debt Outstanding

Last Ten Fiscal Years

Fiscal

Year

General

Obligation

Debt

Taxable

Value of Percentage

Taxable Value

of Property

Assessed

Value of P

2004 $ 24,175,000 $ 924,923,490 2.93 % $ 1,427,127,146 2005 25,500,000 908,859,209 2.81 1,673,902,007

2006 26,235,O00 926,096,690 2.83 1,737,456,552

2007 22,485,O00 991,022,009 2.27 1,931 ,759,494

2008 26,365,000 1,023,994,214 2.57 2,013,912,356

2009 22,915,000 1,103,733,954 2.08 2,252,421,925

2010 22,685,000 1 ,155,603,179 1.96 2,336,646,915

2011 18,875,000 1,191,350,490 1.58 2,402,107,961

2012 14,090,000 1,260,393,952 1.12 2,458,320,459

2013 10,995,000 1 ,399,1 92,271 0.79 2,619,319,g43 Note: Detaíls regarding the city's outstanding debt can be found in the notes to the financial statements.

1 lncludes only general obligation debt supported by property tax dollars.

-126-

Percentage

Assessed

Value

of Property

1.69 %

1.52

1.51

1.16

1.31

1.02

0.97

0.79

0.57

0.42

665.19

700.93

720.41

617.23

701.51

599.01

588.33

480.77

358.89

279.80

Per

-127 -

City of Cedar Falls, lowa Direct and Overlapping Debt

As ofJune 30,2013

Jurisdiction

Net General Obligation

Bonded Debt

Outstanding

Percentage Applicable

to City 1

Amount Applicable

Government

Direct, City of Cedar Falls, lowa $ 8,650,000 100.00 % $ 9,650,000

Overlapping:

Black Hawk County $ 39,020,000 32.01 g 12,490,302 Cedar Falls Public School District

Area Vll Hawkeye Community College 4,770,O00 19.04 908,208

Total Overlapping $ 43,790,000 $ 13,398,510

Total $ 52,440,000 $ 22,048,510

Source: Black Hawk County Audítor

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 Cedar Falls. 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.

t' 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.

-128-

City of Cedar Falls, lowa Legal Debt Margin lnformation

Last Ten FiscalYears

FiscalYear

Debt Limit

Total net debt applicable to limit

Legal debt margin

Total net debt applicable to the limit as a percentage of of debt limit

2004 2005 2006 2007 2008

$ 71,356,357 $ 83,695,100 $ 86,872,828 $ 96,5A7,924 $ 100,g07,511

27,265,000 29,260,000 29,660,000 24,555,000 2g,070,000 $ 44,091,3s7 $ 55,435,100 $ 58,212,929 g ?2,032,9% $ ?2,13?,511

38.21% 33.77o/o 32.99% 25.42o/o 27.85o/o

Note: Under lowa code, the cíty's outstanding general obligation debt should not exceed 5 percent of total assessed property value.

-129-

2009 2010 2011 2012 2013

$ 114,324,931 $ 118,846,750 $ 122,094,381 $ 125,016,901 g 132,967,511

24,235,000 25,005,000 20,770,000 16,660,000 13,205,000

$ 90,089,931 $ 93,841,750 $ 101,324,381 $ 108,356,901_ S__119J62þ11

21.20o/o 21.04o/o 17.01o/o 13.33% 9.93%

Legal Debt Margin Galculation for Fiscal year 2013 Estimated actualvaluation $ 2,659,g50,229

Debt limit - 5o/o of total actual valuation Debt applicable to debt limit: General obligation bonds General obligation bonds - component unit

Legal debt margin

$ 132,967,511

1 1,610,000 1,595,000

$ 119,762,511

- 130 -

City of Gedar Falls, lowa Revenue Bond Coverage

Sewer Authority Last Ten Fiscal Years

Fiscal Year

Gross Revenues

Less: Operating

Expenses 1

Net Revenue Available for Debt Servíce

Debt Service Requirements 2

Principal lnterest

2004 $3,935,712 $1,533,995 92,301,927 $ 395,000 $ 172,735 2005 3,943,396 1,622,996 2,320,510 630,000 212,069 2006 4,118,235 2,021,641 2,096,594 655,000 175,227

2007 4,157,339 2,350,397 1,906,941 680,000 146,799

2008 4,070,619 1 ,977 ,204 2,093,415 1 ,735,000 1 16,36g

2009 4,169,965 2,077,597 2,092,379 240,000 28,583

2010 4,066,1 10 2,076,699 1,999,421 765,000 22,103

2011 4,162,150 2,113,293 2,049,967

2012 4,333,859 1,902,799 2,431,060 5,108

2013 4,596,372 2,254,091 2,342,291 6,319 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.

t Net of depreciation, interest, and debt service transfers. 2 tncludes principal and interest of revenue bonds only.

-131 -

Debt Service Requirements2

Total Coverage

$ 567,735 4.05

842,069 2.76

830,227 2.53

826,798 2.19

1,851,369 1.13

268,583 7.79

787,103 2.53

5,109 475.93

6,319 370.67

-132-

Fiscal Year

2003 - 04

2004 - 05

2005 - 06

2006 - 07

2007 - 08

2008 - 09

2009 - 10

2010 - 11

2011 - 12

2012 - 13

City of Cedar Falls, lowa Sales History and Total Sewer Gharges

Last Ten Fiscal years

Water Sales (CCF)

1,969,675

1,700,179

1,737,946

1,695,516

1,765,541

1,873,290

1,523,693

1,664,699

1 ,750,015

1,826,799

Source: Cedar Falls Utilities

Sewer Charqes

$ 3,686,991 3,603,779

3,644,514

3,694,725

4,492,230

4,666,695

4,665,753

4,735,793

4,953,594

5,239,056

- 133 -

Gity of Cedar Falls, lowa Water Meter by Rate Glass

Last Ten Fiscal Years

Fiscal Year Residential Commercial lndustrial Government Other Total

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

10,365

10,764

11,057

11,237

11,445

11,259

11,529

11,914

11,957

12,329

890

909

936

955

983

972

984

991

995

1,002

173

177

183

190

195

197

196

200

208

211

11,470

11,890

12,214

12,420

12,664

12,465

12,746

13,041

13,196

13,576

Source: Cedar Falls Utilities

-134-

City of Gedar Falls, lowa Largest Sewer Customers

Fiscal Yea¡ 2O13

Water Sales

Percent of TotalWater

Sales Sewer

Charges

Percent of TotalSewer

ChargesCustomer

Uníversity of Northern lowa

Nazareth Lutheran Church

Western Home Communities

Country Terrace MHP LLC-700 W Ridgeway

Target Corporation

Metokote Corporation

College Park Mills

CF Schools

Newaldaya Lifescapes

Sartori Memorial Hospital, lnc.

Gold Falls Villa Apts.

Clark Enterprises LLC

ïotal2013 CCF Total 2013 Sewer Billings

I I

95,943

30,323

24,686

20,230

17,471

16,495

10,569

9,736

9,311

8,714

8,353

6,193

1,826,799 $5,238,056

5.25 %

1.66

1.35

1.11

0.96

0.90

0.58

0.53

0.51

0.48

0.46

0.34

251,099

65,136

97,795

85,340

57,012

35,986

36,271

29,406

31,739

'18,874

49,251

38,364

4.79 %

1.24

1.87

1.63

1.09

0.69

0.56

0.61

0.36

0.94

0.73

Source: Cedar Falls Utilities, Finance Dept. special lS report

- 135 -

City of Cedar Falls, lowa Demographic and Economic Statistics

Last Ten Galendar Years

Year Population Personal

lncome

Per Capita Personal

tncomel Median

Age

School

Enrollment

Unemployment

Rate

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

36,343

36,390

36,417

36,429

37,593

38,255

38,559

39,260

26,846

27,531

31,331

32,239

33,839

32,705

35,409

36,376

36,903

39,195

26.0

25.7

25.4

26.8

4,437

4,393

4,435

4,502

4,501

4,515

4,679

4,645

5,069

5,121

$ 975,664,179 $ 1,001 ,577,790

1,140,991,027

1,174,399,102

1,271,771,137

1,251,129,775

1,365,261,664

1,428,121,760

1,449,911,790

1,539,795,700

4.0

3.7

2.9

2.3

2.6

3.2

4.2

5.9

3.8

3.5

Sources: Population provided by the US Census Bureau. School enrollment is supplied by the Cedar Falls Board of Education. Unemployment data provided by the lowa Workforce.

Note: Population and median age information are based on surveys conducted during the last quarter of the calendar year. Personal income information is a total for the year. Unemployment rate information is an adjusted yearly average. School enrollment is based on the census at the start of the school year.

1 Per Capita lncome is based on Metropolitan Waterloo/Cedar Falls and based on figures from Bureau of Economic Analysis

- 136 -

City of Cedar Falls, lowa Principal Employers

Gurrent Year and Nine Years Ago

2004

Employees Empl

Number of Percentage of Total City

20.660/0

10.53o/o

2.99o/o

2.91%

1.94%

2.15o/o

1.600/0

1.31o/o

131%

1.29o/o

oyees'l Rank Empl oyment John Deere Product Engineer Center 2

Wheaton Franciscan Healthcare 2

University of Northern lowa

Hy-Vee Food Stores 2

Area Education Agency 267

Wal-Mart Super Center 2

Cedar Falls Communíty School District

Target Distribution

City of Cedar Falls/Municipal Utilities

Viking Pump lnc, Unit of lndex Corp.

Martin Brothers Distributing Co., lnc

The Western Home

Principal Financial Group

Cedar Falls Lutheran Home

Total

4,265

2,173

617

600

400

443

330

271

267

I 10

9,637 46.69%

source: official Bond statements from public Financial Management, lnc.

1 Number of employees includes all full{ime, part-time and seasonal employees.

2 Number of employees includes multiple locations in both Cedar Falls and Waterloo.

-137 -

2013

Number of Emp loyeesl Rank Em

6,739

3,027

2,586

1 ,155

1 ,150

750

572

540

466

I I 10

Percentage of Total City

28.43o/o

12.77o/o

10.91%

4.87%

4.85%

3.16%

2.41o/o

2.28o/o

1.s7%

17,735 74.81%

- 138 -

City of Gedar Falls, lowa Full-Time Equivalent Gity Government Employees by Function/Department

Last Ten Fiscal Years

Full-Time Equivalent Employees as of June 30 2004 2005 2006 2007 2008

Public Safety Police Fire lnspection Services

Public Works Streets Parking Meter Engineering

Culture and Recreation Human & Leisure Administration Cultural Services Library Cemetery Golf Parks Recreation Visitor & Tourism Senior Services

Community & Economic Development Developmental Services Admin. Economic Development Planning Services Block Grant Housing Vouchers Section I Housing

General Government Mayor's Office Administrative Services Admin. Financial Services Legal Services Personnel Public Records Cable TV Print Shop Public Buildings

lnternal Service lnformation Systems Vehicle Maintenance

Sewer Refuse Storm Water

Total 305.75 307 .62 313.50 317.65 320.20

49.89 34.60 6.00

24.82 3.10

13.60

2.00 9.05

14.80 4.40 6.40

16.20 31.05 2.40

'1.50

1.85 3.43 2.20 2.50

1.50 1.50 4.95 3.00 2.00 3.50 4.00 1.00

11.31

3.00 6.40

17.30 16.50

49.89 34.60 6.00

24.35 3.10

11.60

50.89 35.60 6.50

25.35 3.10

11.60

2.25 8.81

16.20 4.60 7.15

18.68 31.05 2.60

1.50 1.85 3.43 2.20 2.50

1.50 1.50 4.95 2.00 2.00 3.50 4.00 1.00

14.1"1

4.00 6.40

16.88 15.80

5't.49 35.65 6.50

24.37 3.66

11.57

2.25 8.00

17.53 4.60 5.s0

18.48 3O.BB

2.90 0.50

1.50 1.77 3.68 2.17 1.79

1.50 1.50 5.95 3.00

3.45 4.30 1.00

14.71

4.00 6.10

16.30 17.80 3.25

51.69 35.65 6.40

24.37 3.61

11.42

2.25 8.00

17.25 4.60 4.70

18.90 32.23 2.90 0.50

1.50 2.10 3.68 1.84 1.79

1.50 1.50 6.45 3.00

3.70 4.50 1.00

15.25

4.00 6.10

16.72 17.80 3.30

2.00 8.81

16.20 4.60 7.15

18.68 31.05 2.60

1.50 1.85 3.43 2.20 2.50

1.50 1.50 4.95 3.00 2.00 3.50 3.00 1.00

12.11

3.00 6.40

16.75 16.80

Source: City's Financial Plans

- 139 -

Full-Time Equivalent Employees as of June 30 2009 2010 ry1 2012 2013

53.44 35.65 6.40

20.56 3.61

11.42

52.69 35.65

7.40

20.56 3.61

11.42

51.74 33.80

7.40

21.56 3.61

11.42

2.25 8.48

17.73 4.60 5.00

20.65 35.26 3.20 0.78

1.50 2.00 3.68 1.67 1.87

1.50 1.50 6.45 3.00

50.87 33.80

7.40

22.26 3.61

11.42

50.77 35.20 9.s0

22.06 3.81

11.52

1.50 2.02 3.68 1.79 1.93

1.50 1.50 5.95 3.00

2.25 8.00

17.25 4.60 4.90

20.10 33.50

3.20 1.23

2.25 8.20

17.55 4.60 5.30

20.10 34.26 3.20 1.23

1.50 2.00 3.68 1.69 1.84

2.25 8.50

18.56 4.60 5.00

20.65 35.26 3.20 0.78

1.50 2.12 3.68 1.69 1.92

2.25 8.52

19.84 4.60 5.00

21.45 35.26

3.20 0.78

1.50 2.26 3.68 1.68 1.79

1.50 1.50 6.45 3.00

3.70 4.50 1.00

15.25

4.00 6.10

18.38 19.30 3.30

1.50 1.50 6.45 3.00

3.70 4.50 1.00

15.25

1.50 1.50 6.45 3.00

3.70 4.50 1.00

15.84

4.00 6.10

18.38 21.35

4.30

4.10 4.50 1.00

't5.84

4.00 6.10

18.38 21.35 4.30

3.70 4.50 1.00

15.84

4.00 6.10

18.38 22.35 4.30

4.00 6.10

18.38 19.30 3.30

325.00 326.71 3s0.82 330.69 335.98

-140-

Gity of Gedar Falls, lowa Operating lndicators by Function

Last Ten Fiscal Years

Fiscal Year

2004 2005 2006

Public Safety

Police

Physical arrests

Traffic violations

Parking violations

Fire

Number of calls answered

lnspections conducted

Sewer

Sewage System

Daily average treatment in gallons

Maximum daily capacity of treatment plant in gallons

Water System

Daily average consumption in gallons

Maximum daily capacity of plant in gallons

Refusel

Solid Waste

32 Gallon Containers

68 Gallon Containers

95 Gallon Containers

Yard Waste

95 Gallon Containers

Sources: Various city departments

1,672

5,453

37,260

1,511

2,166

4,120,000

21,600,000

1,616

6,007

34,056

1,452

1,807

4,600,000

21,600,000

1,670

4,705

29,952

1,599

2,517

4,550,000

21,600,000

3,900,209

21,600,000

3,439,943

21,600,000

3,636,259

21,600,000

3,155

5,679

1,093

3,299

5,903

1,294

3,344

5,997

1,464

5,2904,499 4,924

' Statistícs begin in Fy04

-141 -

Fiscal Year 2007 2008 2009 2010 2011 2012 2013

1,421

2,562

25,575

1,925

2,331

5,730,000

21,600,000

1,353

7,267

26,354

1,936

2,470

6,510,000

21,600,000

1,501

3,544

25,267

2,016

2,076

5,130,000

21,600,000

1,403

3,237

21,726

1,937

3,750

5,726,000

21,600,000

1,199

2,966

18,646

1,924

1,854

5,210,000

21,600,000

1,099

2,939

18,619

2,166

1,929

4,100,000

21,600,000

1,179

5,554

20,ggg

2,190

2,943

4,100,000

21,600,000

3,379,709

21,600,000

3,660,000

21,600,000

4,110,000

21,600,000

4,135,000

22,913,0OO

3,400,000

23,400,000

3,400,000

23,400,000

3,400,000

23,400,000

3,392

6,169

1,652

3,529

6,273

1,760

3,735

6,337

1,876

4,047

6,490

1,999

4,343

6,790

2,163

4,572

6,990

2,301

4,600

6,ggg

2,307

5,575 5,769 5,ggg 6,281 6,554 6,741 6,916

-142-

City of Cedar Falls, lowa Gapital Asset Statistics by Function

Last Ten Fiscal Years

FiscalYear

Public safety

Police

Stations

Patrol Units Fire

Stations

Fire apparatus Public works

Streets

Miles

Street lights Health and social services

Hospital

Number of patient beds Cultural and Recreation

Hearst Center for the Arts Library

Cemeteries

Acreage

Golf

Miniature golf course Parks

Acreage

Recreation

Recreation Center Swimming pools

Softballfields Baseballfields Tennis courts

Sewer

Sewage System

Miles of sanitary sewer Miles of storm sewers Number of treatment plants

Number of service connectors Water Systems

Miles of water mains Number of service connectors Number of city owned fire hydrants

2004 2005 2006 2007 2oO8

569 3

56.9

200

2,670

101

203

2,695

101

56.9

1,116

162

161

11,039

175.30

11,407

1,593

205

2,705

101

1,116

163

162

11,649

184.70

11,682

1,717

210

2,856

101

1,116

169

167

1 1,966

181.80

12,041

1,771

215

2,998

101

1,136

177

168

11,975

192.90

12,212

1,951

I 2

56.9

1,116

56.9

I 3

I 2

160

11,039

169.00

10,967

1,503

Sources: Various city departments

-143-

FiscalYear 2009 2010 2011

1 1

20't2

217

3,088

101

1,131

180.47

172.33

12,544

199.00

12,544

2,067

2013

217

3,025

101

1,136

178.62

171.2

12,145

195.70

12,169

1,892

217

3,048

101

1j36

178.99

171.4

12,187

198.24

12,328

1,923

217

3,080

101

1,136

180.11

172.13

12,544

199.00

12,544

2,067

I 2

956

56.9

56.9 569 22

I56. 2

217

3,"t04

101

1,132

185.94

176.18

12,544

201.50

11,996

2,011

I 2

-144-

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