HomeMy WebLinkAbout2023-05-01 J01C_01 Receipt-File_Westcom FY2022 Financial Report and AuditAGENDA ITEM:
CITY OF WAUKEE, IOWA
CITY COUNCIL MEETING COMMUNICATION
MEETING DATE: May 1, 2023
AGENDA ITEM:Consideration of approval of receipt and file of Westcom Emergency
Communications Financial Report for Fiscal Year Ending June 30, 2022,
and Report to the Westcom Management Committee, Results of 2022
Financial Statement Audit
FORMAT:Consent Agenda
SYNOPSIS INCLUDING PRO & CON: Westcom Emergency Communications underwent a
fiscal review and audit for FY2022. As a member agency, the City of
Waukee was provided a copy of the final reports.
FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS:
COMMISSION/BOARD/COMMITTEE COMMENT:
STAFF REVIEW AND COMMENT:
RECOMMENDATION: Receipt and file the reports.
ATTACHMENTS: I. FY2022 Westcom Financial Report
II. FY2022 Westcom Audit Report
PREPARED BY:Becky Schuett
REVIEWED BY:
J1C1
WESTCOM
EMERGENCY COMMUNICATIONS
Financial Report
Fiscal year ending June 30, 2022
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WESTCOM
FINANCIAL REPORT
June 30, 2022
Prepared by the Finance Department
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WESTCOM
2022 FINANCIAL REPORT
Table of Contents
Page
FINANCIAL SECTION
Independent Auditor’s Report 6-8
Management’s Discussion and Analysis (Unaudited) 9-13
Basic Financial Statements
Exhibit
Statement of net position A 16
Statement of activities B 17
Statement of cash flows C 18
Notes to financial statements 19-26
SUPPLEMENTARY INFORMATION
Combining statement of net position D 28
Combining statement of activities E 29
OTHER INFORMATION (Unaudited)
Ownership and cost share by year F 32
Capital assets by equity member G 33
FY23 payment calculation H 34
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 35-36
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FINANCIAL SECTION
Independent Auditor’s Report
Management Committee
Westcom
West Des Moines, Iowa
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Westcom, as of and for the year ended June 30, 2022, and
the related notes to the financial statements, which collectively comprise Westcom’s basic financial
statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material
respects, the financial position of Westcom, as of June 30, 2022, and the changes in financial position
and its cash flows for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States (Government Auditing Standards).
Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the
Audit of the Financial Statements” section of our report. We are required to be independent of Westcom
and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating
to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Responsibilities of Management 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 and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about Westcom’s ability to continue as a
going concern for 12 months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government
Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Westcom’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about Westcom’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, be presented to supplement the basic financial statements. Such information is
the responsibility of management and, 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 GAAS, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our inquiries,
the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
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Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise Westcom’s basic financial statements. The combining financial statements are
presented for purposes of additional analysis and are not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. The 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 GAAS. In our
opinion, the combining financial statements are fairly stated, in all material respects, in relation to the
basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises ownership and cost share by year, capital assets by equity member and the FY23 payment
calculation but does not include the basic financial statements and our auditor’s report thereon. Our
opinion on the basic financial statements does not cover the other information, and we do not express an
opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 28,
2023, on our consideration of Westcom’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements, and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of Westcom’s internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
Westcom’s internal control over financial reporting and compliance.
West Des Moines, Iowa
March 28, 2023
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9
WESTCOM
Management’s Discussion and Analysis
For Fiscal Year Ended June 30, 2022
The management of Westcom is pleased to offer readers of the financial statements this narrative overview
and analysis of the financial position and activities for the fiscal year ended June 30, 2022, with selected
comparative information for the fiscal year ended June 30, 2021. We encourage readers to consider this
information in conjunction with the financial statements, which follow.
OVERVIEW OF WESTCOM
Westcom operates a consolidated public safety dispatch facility located within the Des Moines, Iowa
Metropolitan Area serving almost 180,000 residents in the fast-growing western suburban cities of Clive,
Norwalk, Urbandale, Waukee, West Des Moines, and Windsor Heights. The Westcom operations and
management team are located at 8055 Mills Civic Parkway, West Des Moines, Iowa. The communities
share a percentage of Westcom’s expenses based on their population from the most recent Census data.
Westcom is governed by a management committee that consists of representatives from each equity
authority member.
Westcom was established on August 7, 2000, with the execution of an intergovernmental agreement
between the founding cities of Clive, Urbandale, and West Des Moines to provide continued operation,
improvements to, and expansion of a consolidated dispatch center. The City of West Des Moines has been
the contracting and hiring authority for the joint venture since inception. The Westcom Agreement
established a management committee structure and framework for additional communities to participate.
Since its creation, the Agreement has been amended to include the cities of Norwalk and Waukee in 2012
and 2015, respectively, and on June 7, 2021, the agreement was amended to add the City of Windsor
Heights as a participant effective July 1, 2021.
The Westcom agreement is tiered to establish an equity interest for the authority member cities as well as
allowing for contracted user cities who receive no equity interest. Clive, Urbandale, and West Des Moines
have been classified as authority member cities beginning with the original agreement. On June 3, 2021, a
Memorandum of Understanding was executed to establish Norwalk as an authority member. Each authority
member maintains an undivided interest in the assets contributed to the Westcom operations. As of June
30, 2022, the percentages of ownership for each authority member city, based on historical contributions,
are as follows:
City
Equity
Percentage
West Des Moines 52.14%
Urbandale 30.74%
Clive 14.64%
Norwalk 2.48%
100.00%
Each participating city (including the contract user Cities of Waukee and Windsor Heights) have an ongoing
financial responsibility to fund the operations of Westcom based on annual budgeted operations and capital
expenditures as approved by the management committee.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to Westcom’s basic financial
statements. Westcom’s basic financial statements comprise three components: 1) basic financial
statements, 2) notes to the financial statements and 3) required supplementary information. This report also
contains other supplementary information.
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WESTCOM
Management’s Discussion and Analysis
For Fiscal Year Ended June 30, 2022
BASIC FINANCIAL STATEMENTS
The basic financial statements are designed to provide readers with a broad overview of Westcom’s
finances similarly to a private-sector business. The basic financial statements are prepared using the same
basis of accounting as private-sector business enterprises. Under this method of accounting, an accrual
basis of accounting is used. Revenue is recorded when earned and expenses are recorded when incurred.
The basic financial statements include a statement of net position, a statement of revenues, expenses,
changes in net position, and statement of cash flows, followed by notes to the financial statements and
supplementary information.
The statement of net position presents information on all the Westcom’s assets and liabilities with the
difference between them reported as net position. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position of Westcom is improving or deteriorating.
The statement of revenues, expenses and changes in net position reports the operating revenues and
expenses and non-operating revenues and expenses of Westcom for the fiscal year which determines the
change in net position for the fiscal year.
The statement of cash flows reports cash and cash equivalents for the fiscal year resulting from operating
activities, capital and related financing activities, investing activities, and noncash activities.
The basic financial statements include only Westcom. There are no other organizations or agencies whose
financial statements should be combined and presented with the financial statements of Westcom. The
notes to the financial statements provide additional information that is essential to a full understanding of
the data provided in the basic financial statements.
2022 FINANCIAL HIGHLIGHTS
Westcom received its first stand-alone financial statement audit performed by FORVIS LLP, an
independent firm of licensed certified public accountants. The results are on pages 6-8 and 35-37
and include an unmodified opinion on the financial statements.
Assets of Westcom exceeded total liabilities (net position) by $1,943,780 as of June 30, 2022. At
June 30, 2022, Westcom showed $185,104 respectively, as unrestricted net position, which were
available to meet current and future obligations of Westcom.
Westcom implemented Governmental Accounting Standards Board Statements (GASBS) No. 87,
Leases, during fiscal year 2022. Adoption of GASB 87 had no effect on net position as of July 1,
2021 since Westcom does not have any lease arrangements.
Revenues of Westcom totaled $5,424,426 and program expenses totaled $6,323,979 for the year
ended June 30, 2022.
Westcom’s net position decreased $899,553 from July 1, 2021 to June 30, 2022.
FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.
At the end of the current fiscal year, Westcom reports positive balances in all categories of net position.
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WESTCOM
Management’s Discussion and Analysis
For Fiscal Year Ended June 30, 2022
Net Position
Table 1
2022
2021
(Unaudited)
Assets
Current and other assets 705,443$ 772,729$
Noncurrent and other assets - -
Capital assets, net of depreciation 1,758,676 2,463,728
Total assets 2,464,119 3,236,457
Liabilities
Current liabilities 520,339 393,124
Long-term liabilities - -
Total liabilities 520,339 393,124
Net position
Net investment in capital assets 1,758,676 2,463,728
Restricted net position - -
Unrestricted net position 185,104 379,605
Total net position 1,943,780$ 2,843,333$
The largest portion of Westcom’s net position (90% of the total) is net investment in capital assets
(intangibles, equipment, vehicles, and improvements other than buildings). Westcom uses the capital
assets to provide services to its users; consequently, these assets are not available for future spending.
Overall, the net investment in capital assets decreased by $705,052. Unrestricted net position (10%) can
be used to finance the day-to-day operations of Westcom without constraints established by enabling
legislation or other legal requirements. Unrestricted net position decreased by $194,501 during the fiscal
year ended June 30, 2022.
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WESTCOM
Management’s Discussion and Analysis
For Fiscal Year Ended June 30, 2022
Changes in Net Position
Table 2
2022
2021
(Unaudited)
OPERATING REVENUES
Charges for service 4,258,501$ 3,853,537$
Operating grants and contributions 1,162,135 1,268,316
Other operating revenues 1,500 14,563
Total operating revenues 5,422,136 5,136,416
OPERATING EXPENSES
Cost of sales and services 5,579,846 5,012,878
Depreciation 744,133 1,025,835
Total operating expenses 6,323,979 6,038,713
Operating (loss) (901,843) (902,297)
NONOPERATING REVENUES
Investment earnings 2,290 1,570
Total nonoperating revenues 2,290 1,570
(Loss) before capital contributions (899,553) (900,727)
OTHER FINANCING SOURCES
Capital contributions - 309,316
Total other financing sources - 309,316
Change in net position (899,553) (591,411)
Net position, beginning of year 2,843,333 3,434,744
Net position, end of year 1,943,780 2,843,333
For the year ended June 30, 2022, total revenues were $5,424,426 and total expenses were $6,323,979.
Westcom’s net operating loss was $901,843 for the year ended June 30, 2022. The decrease in net position
during the year ended June 30, 2022, was anticipated and was primarily due to non-cash depreciation
expense. Cities contribute towards operations and towards the purchase of capital assets on a cash basis,
so seeing an operating loss is not uncommon.
Westcom receives contributions from two primary sources to fund capital and operations costs.
Contributions for the year ended June 30, 2022 from the participating cities totaled $4,258,501 (79%) and
contributions from the 911 surcharge fund through the Polk County 911 Service Board totaled $1,162,135
(21%). The 911 funds are collected by telephone service providers as a surcharge (wireline, wireless, and
Voice over IP [VoIP]). The service providers remit their collected surcharge funds to the State of Iowa, and
the State formulaically distributes the funds to each county. The 911 Service Board then distribute funds to
Public Safety Answering Points (PSAPs) such as Westcom. Other revenue for the year ended June 30,
2022 totaled $1,500 and includes charges for records requests.
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WESTCOM
Management’s Discussion and Analysis
For Fiscal Year Ended June 30, 2022
Capital contributions decreased by $309,316 due to one-time contributions collected in the previous fiscal
year including a tower provided by a new equity member and a contribution for analog radio expenses
provided by a neighboring school district. Expenses increased $285,266, or 5% from the prior fiscal year.
This was primarily due to rising personnel costs.
BUDGETARY HIGHLIGHTS
In fiscal year 2022, Westcom’s actual receipts were $508,645 less than budgeted receipts and actual
disbursements were $387,998 more than budgeted disbursements. Actual receipts were lower than
expected due to operating expenses subject to reimbursement being lower than budget. Actual
disbursements were more than budgeted since non-cash depreciation is not included in the annual budget.
CAPITAL ASSETS
Westcom’s capital assets consist of intangibles, equipment, vehicles, and improvements other than
buildings. See Note 3 to the financial statements for more information about the capital assets.
LONG-TERM LIABILIITES
Westcom does not currently have long-term liabilities. All employees of Westcom are employed by the City
of West Des Moines as outlined in the Agreement. Therefore, all long-term liabilities related to employee
costs (including other post-employment benefits payable, pension liability, and compensated absences)
are not included in Westcom’s financial statements.
ECONOMIC FACTORS BEARING ON WESTCOM’S FUTURE
Westcom is almost entirely dependent upon local 911 surcharge funds and contributions from participant
cities to fund its operations. A decrease in the allocation of 911 funding from Polk County 911 Service Board
is expected in the future. Westcom intends to reduce staffing and other expenditures to cover the shortfall.
In addition, the contributing Cities have agreed to increase contributions to close the gap in funding from
Polk County.
CONTACTING WESTCOM’S FINANCIAL MANAGEMENT
This financial report is designed to provide citizens, members, and grantor agency with a general overview
of Westcom’s finances and operating activities. If you have any questions or require additional information
please contact the coordinating agency’s Finance Director, 4200 Mills Civic Parkway, West Des Moines,
Iowa 50265.
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BASIC FINANCIAL STATEMENTS
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Exhibit A
WESTCOM
STATEMENT OF NET POSITION
June 30, 2022
ASSETS
Current assets
Pooled cash-due from coordinating agency 158,436$
Due from other governmental units
Polk county 911 fund 242,671
Participating cities 304,336
Total current assets 705,443
Noncurrent assets
Capital assets:
Intangibles 2,505,833
Equipment 9,744,831
Vehicles 95,343
Improvements other than buildings 557,246
Accumulated depreciation (11,144,577)
Capital assets, net 1,758,676
Total noncurrent assets 1,758,676
Total assets 2,464,119
LIABILITIES
Current liabilities
Due to coordinating agency-accounts payable 25,250
Due to coordinating agency-accrued wages 49,369
Unearned revenue 445,720
Total current liabilities 520,339
Total liabilities 520,339
NET POSITION
Net investment in capital assets 1,758,676
Unrestricted 185,104
Total net position 1,943,780
Total liabilities and net position 2,464,119$
See Notes to Financial Statements.
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Exhibit B
WESTCOM
STATEMENT OF ACTIVITIES
Year ended June 30, 2022
OPERATING REVENUES
Intergovernmental
Charges for service-equity members 3,550,966$
Charges for service-contract users 707,535
Operating grants and contributions-911 fund 1,162,135
Other 1,500
Total operating revenues 5,422,136
OPERATING EXPENSES
Salary and personal services 3,520,645
Supplies and services 150,953
Contractual services 1,866,867
Utilities 40,633
Miscellaneous equipment 748
Depreciation 744,133
Total operating expenses 6,323,979
Operating (loss) (901,843)
NONOPERATING REVENUES
Investment earnings 2,290
Total nonoperating revenues 2,290
Change in net position (899,553)
Net position, beginning of year 2,843,333
Net position, end of year 1,943,780
See Notes to Financial Statements.
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Exhibit C
WESTCOM
STATEMENT OF CASH FLOWS
Year ended June 30, 2022
Cash flows from operating activities:
Receipts from customers and users 4,213,297$
Receipts from Polk county 1,171,640
Payments to coordinating agency (3,585,636)
Payments to suppliers (2,038,714)
Net cash (used) by operating activities (239,413)
Cash flows from investing activities:
Investment earnings 2,290
Net cash provided by investing activities 2,290
Cash flows from capital and related financing activities:
Purchase of capital assets (39,082)
Net cash (used) by capital and related financing activities (39,082)
(Decrease) in pooled cash (276,205)
Pooled cash, beginning of year 434,641
Pooled cash, end of year 158,436
Operating income (loss)(901,843)
Depreciation 744,133
(Increase) decrease in due from other governmental units (208,919)
Increase (decrease) in accounts payable, due to coordinating agency (48,357)
Increase (decrease) in accrued wages payable, due to coordinating agency 3,853
Increase (decrease) in unearned revenue 171,720
Net cash (used) in operating activities (239,413)$
Reconciliation of operating income to net cash (used) in operating activities:
Adjustments to reconcile operating income to net cash (used) in operating activities:
See Notes to Financial Statements.
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WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
Westcom is a consolidated public safety dispatch facility with its own management committee consisting of
representatives from each authority member. The joint venture was formed on August 7, 2000, with the
execution of an intergovernmental agreement between the founding cities of Clive, Urbandale, and West
Des Moines to provide continued operation, improvements to, and expansion of a consolidated dispatch
center. The Agreement established the management committee structure and framework for additional
communities to participate. Since its creation, the Agreement has been amended to include the cities of
Norwalk and Waukee in 2012 and 2015, respectively, and on June 7, 2021, the agreement was amended
to add the City of Windsor Heights as a participant effective July 1, 2021. The communities share a
percentage of Westcom’s expenses based on their population from the most recent Census data.
The City of West Des Moines (West Des Moines) has been designated as the coordinating agency
responsible for the contracting and hiring authority for the joint venture since inception. The employees
assigned to Westcom are West Des Moines employees. The Westcom agreement is tiered to establish an
equity interest for the authority member cities as well as allowing for contracted user cities who receive no
equity interest. Clive, Urbandale, and West Des Moines have been classified as authority member cities
beginning with the original agreement. On June 3, 2021, a Memorandum of Understanding was executed
to establish Norwalk as an authority member. As of June 30, 2022, the percentages of ownership for each
authority member city, based on historical contributions, are as follows:
City
Equity
Percentage
West Des Moines 52.14%
Urbandale 30.74%
Clive 14.64%
Norwalk 2.48%
100.00%
Each authority equity member maintains an undivided interest in the assets contributed to the Westcom
operations. To become an authority equity member, the city must be a partial authority member for 3 years
and meet the financial threshold (achieving the % of the eligible city’s share of assets based on the current
share of expenses through the application of a 25% operations credit for each dollar contributed to the
operations of Westcom). Each participating city has an ongoing financial responsibility to fund the
operations of Westcom based on annual budgeted operations and capital expenditures as approved by the
management committee.
For financial reporting purposes, Westcom has included all funds, organizations, agencies, boards,
commissions, and authorities. Westcom has also considered all potential component units for which it is
financially accountable, and other organizations for which the nature and significance of their relationship
with Westcom are such that exclusion would cause Westcom's financial statements to be misleading or
incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in
determining financial accountability. These criteria include appointing a voting majority of an organization's
governing body, and (1) the ability of Westcom to impose its will on that organization or (2) the potential for
Westcom to provide specific benefits to or impose specific financial burdens on Westcom. Westcom has
no component units which meet the Governmental Accounting Standards Board criteria.
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WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF ACCOUNTING POLICIES (continued)
Basis of Presentation
These financial statements have been prepared in conformity with the accounting principles generally
accepted in the United States of America (GAAP) that apply to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles.
The accrual basis of accounting is used by Westcom. Under this basis of accounting, assets and liabilities
associated with the operation of Westcom are included on the statement of net position. Revenues are
recorded when earned which is when the service is provided, and expenses are recorded at the time
liabilities are incurred. Westcom charges the participating communities for operations including
maintenance and operations in accordance with the Agreement, primarily based on budgeted expenses
and population data based on the most recent census. Annually, the actual costs are compared to budgeted
collections from participating cities. Any differences are automatically rolled into the next year collection
calculation in accordance with the agreement.
Operating and nonoperating revenues and expenses: Operating revenues result from exchange
transactions of Westcom for charges to participating communities.
Under the terms of the operating agreement, population is the preferred metric used to allocate expenses
among the participating communities. The population estimates are obtained annually from the US Census
Bureau; when actual census data is available either through the decennial census or a special census
conducted by a community, those numbers are to be used. Below is the allocation used in the current fiscal
year.
City
Population
Estimates as of
July 1, 2021
Share of
Expenses
(Operating
Revenues)
Clive 18,814 10.46%
Norwalk 13,609 7.57%
Urbandale 45,923 25.54%
Waukee 26,495 14.74%
West Des Moines 69,792 38.82%
Windsor Heights 5,170 2.88%
179,803 100.00%
Nonoperating revenues and expenses result from nonexchange transactions such as investment earnings.
Expenses associated with operating Westcom and providing services are considered operating.
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WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
The following is a summary of accounting policies used in preparation of the financial statements:
Pooled cash: Westcom maintains deposits with the City of West Des Moines as the coordinating agency,
which invests these deposits on a short-term basis. West Des Moines allocates investment income to
Westcom based upon West Des Moines' rate of return on pooled cash and investments and Westcom's
average annual deposit balance.
Investments: West Des Moines purchases investments on behalf of Westcom. As of June 30, 2022, there
were no investments.
Due from other governments: Westcom accrues any unpaid balances from participating communities at
year-end and the 911 fund revenues owed by Polk County. As of June 30, 2022, the total amount due from
Polk County was $242,671 and the total due from participating communities was $304,336. As previously
disclosed, Polk County’s allocation is expected to decrease in future years. An allowance for doubtful
accounts has not been accrued as Westcom feels these balances will be collected.
Capital assets: Intangibles, equipment, vehicles, and improvement other than buildings are stated at cost.
The cost of renewals and material improvements that extend asset lives more 1 year and cost more than
$5,000 are capitalized. The cost and accumulated depreciation of assets disposed are deleted, with any
gain or loss recorded in current operations.
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized. Donated capital assets are recorded at acquisition value at the date of
donation.
Depreciation has been provided using the straight-line method over the estimated useful lives of the
respective assets. The estimated useful lives for each capital asset type are as follows:
Asset class
Estimated useful
lives (in years)
Intangibles 5
Equipment 5-20
Vehicles 5-7
Improvements other than buildings 15
Net position: Net position represents the difference between assets and liabilities. Net investment in capital
assets consists of capital assets, net of accumulated depreciation, reduced by any outstanding balances
of any borrowings used for the acquisition, construction or improvement of those assets and adjusted for
any deferred charges on refunding’s. Net investment in capital assets excludes unspent bond proceeds.
There were no unspent bond proceeds as of June 30, 2022. Net position is reported as restricted when
there are limitations imposed on their use either through the enabling legislation or through external
restrictions imposed by creditors, grantors or laws or regulations of other governments. Westcom first
applies restricted resources when an expense is incurred for purposes for which both restricted and
unrestricted net position are available. As of June 30, 2022, there were no restrictions.
22
WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
Use of estimates: The preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities in the financial statements and
accompanying notes. Actual results may differ from those estimates.
As part of Westcom’s contractual services, Westcom contributes to West Des Moines (the Coordinating
Agency) reimbursement for indirect costs based on a consistent allocation methodology using measurable
metrics and actual expenses incurred in the prior fiscal year. Indirect cost allocations include costs of
accounting, human resources, information technology, city clerk, facilities maintenance, building
depreciation, vehicle fleet maintenance management, and insurance. The calculation is performed by an
independent contractor, Cost Advisory Services. The total indirect costs allocated to Westcom based on
the previous fiscal year was $663,470 for the year ended June 30, 2022.
Compensated absences and deferred compensation plan: Employees assigned to Westcom are
employees of West Des Moines, the Coordinating Agency. Wages and benefits are paid by West Des
Moines as a direct allocation. Employee benefits are provided under the policies of West Des Moines.
Under these policies, employees accumulate vacation and sick leave hours for subsequent use or for
payment upon termination, death, or retirement. If paid upon death or retirement, the total accumulated
hours are paid at one-half of the then effective hourly rate for that employee, with a maximum of 960 hours
per employee. These accumulations are reimbursed to the Coordinating Agency through monthly billings.
Westcom has no liability for these benefits.
Employees assigned to Westcom also participate in West Des Moines' deferred compensation plan created
in accordance with Internal Revenue Code, Section 457 and Section 401(a). The Section 457 plan, and the
Section 401(a) plan are available to salaried full time West Des Moines employees, permits them to defer
a portion of their salary until future years. The deferred compensation is available to employees at
termination, retirement, death, unforeseeable emergency. The plan was amended to comply with IRC
Section 457 (g) which allowed for the plan to hold its assets in trust. Under these requirements, the assets
of the plan are no longer subject to the general creditors of the Westcom.
During the fiscal year ended June 30, 2022, contributions totaled approximately $2,100 paid through the
allocation of expenses to participating cities.
NOTE 2 RELATED PARTY TRANSACTIONS
Westcom shares certain expenses with West Des Moines in accordance with the provisions of Westcom
Agreement. Westcom incurred wages and employee benefit costs of approximately $3,520,645 for
employees working for Westcom and incurred vehicle replacement charges of approximately $6,394 during
the fiscal year ended June 30, 2022.
23
WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 3 DEPOSITS AND INVESTMENTS
Authorized investments: Westcom appointed the Finance Director of West Des Moines as Westcom
Treasurer. The investment policy of Westcom directs the funds to be invested in the same manner as West
Des Moines Funds are invested under the West Des Moines investment policy. West Des Moines is
authorized by statute to invest public funds in obligations of the United States government, its agencies and
instrumentalities; certificates of deposit or other evidences of deposit at federally insured depository
institutions approved by 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 drainage districts.
However, the City’s investment policy additionally limits investments in commercial paper to obligations at
the time of purchase rated within the two highest ratings issued by nationally recognized statistical rating
organizations with a maturity less than 270 days.
Interest rate risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity
the fair value is to changes in market interest rates. In accordance with Westcom’s investment policy,
Westcom minimizes the interest rate risk of investments in the portfolio by structuring its investment portfolio
so that investments mature to meet cash requirements for operations. Westcom investment policy defines
operating funds as those funds that can be reasonably expended during a current budget year or within 15
months of receipt. Operating funds are limited to a maturity of 397 days. Non-operating funds are to be
invested to coincide with the expected use of the funds. Westcom’s investment policy requires that
nonoperating funds not exceed a five-year maturity.
Credit Risk: Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Westcom’s investment policy limits investments in commercial paper and
other corporate debt to the top two highest classifications. Westcom did not invest in any commercial paper
or other corporate debt during the year. Westcom adheres to investment policies established in the State
of Iowa code.
Concentration of Credit Risk: Westcom’s investment policy seeks diversification to reduce overall
portfolio risk while attaining market rates of return to enable Westcom to meet all anticipated cash
requirements. The policy limits Westcom to holding a minimum of 5% of the total portfolio in highly
marketable short-term treasuries, short-term federal government agencies, checking with interest,
government pooled account or a combination of all four. The policy limits investments to avoid over-
concentration in securities of a specific issuer and limits certificates of deposit to the amount approved by
City Council for each financial institution in accordance with the Code of Iowa.
Custodial Credit Risk-Deposits: Custodial credit risk for deposits is the risk that, in the event of the failure
of a depository financial institution, a government will not be able to recover its deposits or will not be able
to recover collateral securities that are in the possession of an outside party. It is Westcom’s policy to
require that time deposits above FDIC insurance limits be secured by collateral or private insurance to
protect public deposits in a single financial institution if it were to default. Chapter 12C of the Code of Iowa
requires all Westcom funds be deposited into an approved depository and be either insured or
collateralized. As of June 30, 2022, Westcom’s deposits with financial institutions were entirely covered by
federal depository insurance or insured by the state through pooled collateral, state sinking funds and by
the state’s ability to assess for lost funds.
24
WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 3 DEPOSITS AND INVESTMENTS (continued)
Custodial Credit Risk-Investments: For an investment, this is the risk that, in the event of the failure of
the counterparty, Westcom will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party. Westcom had no custodial risk with regards to investments
since all investments were held by West Des Moines.
NOTE 4 CAPITAL ASSETS
The following table shows the changes in capital assets for the year ended June 30, 2022:
Beginning
Balance Additions Deletions
Ending
Balance
Capital assets, being depreciated
Intangibles 2,505,833 - - 2,505,833
Equipment 9,705,749 39,082 - 9,744,831
Vehicles 95,343 - - 95,343
Improvements other than buildings 557,246 - - 557,246
Total capital assets, being depreciated 12,864,171 39,082 - 12,903,253
Less accumulated depreciation for
Intangibles 2,436,908 36,056 - 2,472,964
Equipment 7,433,199 666,607 - 8,099,806
Vehicles 84,538 4,322 - 88,860
Improvements other than buildings 445,799 37,148 - 482,947
Total accumulated depreciation 10,400,444 744,133 - 11,144,577
Net capital assets 2,463,727$ (705,051)$ -$ 1,758,676$
Intangibles primarily include software. Equipment includes radios, computer-aided dispatch equipment, a
tower, and telephone system. Improvements other than buildings include modifications to the Westcom
building located at Public Safety Station 19 located at 8055 Mills Civic Parkway, West Des Moines, Iowa.
NOTE 5 RISK MANAGEMENT
Westcom is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets;
errors and omissions, and natural disasters. Westcom carries commercial insurance for general liability
claims. Settled claims did not exceed commercial coverage in the past year.
West Des Moines is self-insured for medical benefits. Westcom makes monthly contributions to West Des
Moines’ Self Insurance Fund for medical claims based on a budgeted per-member amount.
25
WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 5 RISK MANAGEMENT (continued)
The COVID-19 outbreak is disrupting business across a range of industries in the United States and
financial markets have experienced a significant decline. As a result, local, regional, and national
economies, including that of Westcom, may be adversely impacted. The extent of the financial impact of
COVID-19 will depend on future developments, including the duration and spread, which are uncertain and
cannot be predicted. Due to the uncertainties surrounding the outbreak, management cannot presently
estimate the potential impact of Westcom’s operation and finances.
NOTE 6 RETIREMENT SYSTEM
As a direct allocation from West Des Moines, Westcom contributes the current required contributions as
stated in the operating contractor agreement for the employees working for Westcom related to the Iowa
Public Employees’ Retirement System (IPERS). IPERS is a cost-sharing multiple-employer defined benefit
pension plan administered by the State of Iowa. IPERS provides retirement and death benefits, which are
established by State statute to plan members and beneficiaries. IPERS issues a publicly available financial
report that includes financial statements and required supplementary information. The report may be
obtained by writing to IPERS, P.O. Box 9117, Des Moines, Iowa 50306-9117.
In fiscal year 2022, regular members were required to contribute 6.29% of their annual covered salary and
West Des Moines was required to contribute 9.44% for a total rate of 15.73%. Protection occupation
members contributed 6.21% of pay and the City contributed 9.31% for a total rate of 15.52%. Contribution
requirements are established by State statute. Westcom reimburses the Coordinating Agency for these
costs through monthly billings for the employees that are allocated to Westcom operations. Westcom has
no liability for these benefits.
NOTE 7 OTHER POSTEMPLOYMENT BENEFITS
As a direct allocation from West Des Moines, Westcom contributes the current required contributions as
stated in the Agreement for the employees working for Westcom related to West Des Moines single-
employer health care plan that provides medical, prescription drugs and dental benefits to all active and
retired employees and their eligible dependents including employees working for Westcom. Group
insurance benefits are established under Iowa Code Chapter 509A. 13. No assets are accumulated in a
trust that meets the criteria in paragraph 4 of GASB Statement No. 75. The Plan does not issue a separate
stand-alone financial report. The healthcare benefit plans are self-insured and are administered by a third
party.
Individuals who have attained age 65 and retire from active employment are eligible for retiree benefits at
a rate of 102% of the full active employee premium rates. Contributions are required for both retiree and
dependent coverage.
West Des Moines establishes and amends contribution requirements, which currently is to pay health
claims as they occur. Westcom’s direct allocation of the contribution based on pay as you go financing to
the other postemployment benefits plan for the years ended June 30, 2022, was $0. Westcom reimburses
the Coordinating Agency for these costs through monthly billings for the employees that are allocated to
Westcom operations. Westcom has no liability for these benefits.
26
WESTCOM
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 8 NEW PRONOUNCEMENTS
The Governmental Accounting Standards Board has issued Statement No. 96, Subscription-Based
Information Technology Arrangements. This statement will be implemented for the fiscal year ending June
30, 2023. The requirements of this statement will require reporting of certain potentially significant
arrangements that are not currently reported.
27
SUPPLEMENTARY INFORMATION
28
Exhibit D
WESTCOM
COMBINING STATEMENT OF NET POSITION
Year ended June 30, 2022
Polk County
911
Participating
Cities Total
ASSETS
Current assets
Pooled cash-due from coordinating agency (41,559)$ 199,995$ 158,436$
Due from other governmental units
Polk county 911 fund 242,671 - 242,671
Participating cities - 304,336 304,336
Total current assets 201,112 504,331 705,443
Noncurrent assets
Intangibles - 2,505,833 2,505,833
Equipment - 9,744,831 9,744,831
Vehicles - 95,343 95,343
Improvements other than buildings - 557,246 557,246
Accumulated depreciation - (11,144,577) (11,144,577)
Total noncurrent assets - 1,758,676 1,758,676
Total assets 201,112 2,263,007 2,464,119
LIABILITIES
Current liabilities
Due to coordinating agency-accounts payable 16,009 9,241 25,250
Due to coordinating agency-accrued wages - 49,369 49,369
Unearned revenue - 445,720 445,720
Total current liabilities 16,009 504,330 520,339
Total liabilities 16,009 504,330 520,339
NET POSITION
Net investment in capital assets - 1,758,676 1,758,676
Unrestricted 185,104 - 185,104
Total net position 185,104 1,758,676 1,943,780
Total liabilities and net position 201,113 2,263,006 2,464,119
See accompanying independent auditor’s report.
29
Exhibit E
WESTCOM
COMBINING STATEMENT OF ACTIVITIES
Year ended June 30, 2022
Polk County
911
Participating
Cities Total
OPERATING REVENUES
Intergovernmental
Charges for service-equity members -$ 3,550,966$ 3,550,966$
Charges for service-contract users - 707,535 707,535
Operating grants and contributions-911 fund 1,162,135 - 1,162,135
Other 1,500 1,500
Total operating revenues 1,162,135 4,260,001 5,422,136
OPERATING EXPENSES
Salary and personal services - 3,520,645 3,520,645
Supplies and services 13,897 137,056 150,953
Contractual services 1,097,500 769,367 1,866,867
Utilities - 40,633 40,633
Miscellaneous equipment 127 621 748
Depreciation - 744,133 744,133
Total operating expenses 1,111,524 5,212,455 6,323,979
Operating income (loss) 50,611 (952,454) (901,843)
NONOPERATING REVENUES
Investment earnings - 2,290 2,290
Total nonoperating revenues - 2,290 2,290
Income (loss) before contributions and transfers 50,611 (950,164) (899,553)
Change in net position 50,611 (950,164) (899,553)
Net position, beginning of year 134,493 2,708,840 2,843,333
Net position, end of year 185,104 1,758,676 1,943,780
See accompanying independent auditor’s report.
30
This page is intentionally blank.
31
OTHER INFORMATION
(UNAUDITED)
32
Exhibit F
WESTCOM
OWNERSHIP AND COST SHARE BY YEAR
Last Ten Fiscal Years
2013* 2014* 2015* 2016 2017 2018 2019 2020 2021 2022
Equity Ownership
Clive 16.32% 16.83% 15.33% 15.17% 14.98% 14.89% 14.69% 14.63% 14.77% 14.64%
Norwalk 2.04% 2.48%
Urbandale 29.77% 29.40% 28.79% 29.11% 29.85% 30.04% 29.97% 30.34% 30.70% 30.74%
West Des Moines 53.91% 53.77% 55.88% 55.72% 55.17% 55.07% 55.34% 55.03% 52.49% 52.14%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Population
Clive n/a n/a n/a 17,052 17,419 17,172 17,097 17,242 18,601 18,814
Norwalk n/a n/a n/a 9,859 10,135 10,896 11,517 11,938 12,799 13,609
Urbandale n/a n/a n/a 43,150 44,062 43,592 43,949 44,379 45,580 45,923
Waukee 17,705 18,990 20,649 22,810 24,089 23,940 26,495
West Des Moines n/a n/a n/a 63,325 64,113 65,608 66,641 67,899 68,723 69,792
Windsor Heights 4,809 5,170
151,091 154,719 157,917 162,014 165,547 174,452 179,803
Cost Share
Clive 20.98% 13.13% 12.78% 11.29% 11.26% 10.87% 10.55% 10.42% 10.66% 10.46%
Norwalk 5.56% 5.33% 7.39% 6.53% 6.55% 6.90% 7.11% 7.21% 7.34% 7.57%
Urbandale 22.93% 33.07% 32.35% 28.56% 28.48% 27.60% 27.13% 26.81% 26.13% 25.54%
Waukee 11.72% 12.27% 13.08% 14.08% 14.55% 13.72% 14.74%
West Des Moines 50.53% 48.47% 47.47% 41.91% 41.44% 41.55% 41.13% 41.01% 39.39% 38.82%
Windsor Heights 2.76% 2.88%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
*Prior to FY16, the cost share allocation was determined by calls for service. In FY16, the allocation methodology was changed to population.
33
Exhibit G
WESTCOM
CAPITAL ASSETS BY EQUITY MEMBER
Year Ended June 30, 2022
Clive Norwalk Urbandale
West Des
Moines Total
14.64% 2.48% 30.74% 52.14%100.00%
Capital assets, being depreciated
Intangibles 366,854 62,145 770,293 1,306,541 2,505,833
Equipment 1,426,643 241,672 2,995,561 5,080,955 9,744,831
Vehicles 13,958 2,365 29,308 49,712 95,343
Improvements other than buildings 81,581 13,820 171,297 290,548 557,246
Total capital assets, being depreciated 1,889,036 320,001 3,966,460 6,727,756 12,903,253
Less accumulated depreciation for
Intangibles 362,042 61,330 760,189 1,289,403 2,472,964
Equipment 1,185,812 200,875 2,489,880 4,223,239 8,099,806
Vehicles 13,009 2,204 27,316 46,332 88,860
Improvements other than buildings 70,703 11,977 148,458 251,809 482,947
Total accumulated depreciation 1,631,566 276,386 3,425,843 5,810,782 11,144,577
Net capital assets 257,470$ 43,615$ 540,617$ 916,974$ 1,758,676$
34
Exhibit H
WESTCOM
FY23 Payment Calculation
Year Ended June 30, 2022
RECONCILIATION Total Clive Norwalk Urbandale Waukee
West Des
Moines
Windsor
Heights*
Budgeted Operating Expenses 4,762,981.00
Actual Expenses (Per NWS Report) 5,212,454.77
Reconciling Items
Credit for Depreciation Expense (744,133.04)
Addition for Net Adjustment to Capital Assets 39,081.80
Credit for Enterprise Fund Interest Revenue (2,290.20)
Credit for Miscellaneous Revenue (1,500.00)
Allocation of Net Expenses 4,503,613.33 471,243.42 340,871.25 1,150,255.75 663,633.17 1,748,114.22 129,495.51
Percentage of Population (per below) 100.00% 10.46% 7.57% 25.54% 14.74% 38.82% 2.88%
Add: Prior Year (Over) Payment Credit (above) (197,173.79) (20,166.41) (14,395.30) (52,356.47) (29,316.59) (80,939.03) -
Subtotal 4,306,439.54 451,077.01 326,475.95 1,097,899.28 634,316.58 1,667,175.19 129,495.51
Payments Billed for FY 21/22 (4,564,220.96) (487,217.76) (334,726.26) (1,190,940.66) (623,700.78) (1,793,635.50) (134,000.00)
Initial Under (Over) Payment (to Reduce FY 22/23 Pmts) (257,781.42) (36,140.75) (8,250.31) (93,041.38) 10,615.80 (126,460.31) (4,504.49)
Prior years correction, credited on April '23 invoice (47,938.38) 3,586.03 (14,296.07) 12,758.28 (53,391.63) 6,290.11 (2,885.08)
Total (Over) Payment, Unearned Revenue (305,719.80) (32,554.72) (22,546.38) (80,283.10) (42,775.83) (120,170.20) (7,389.57)
Calculation of FY 22/23 Payment
Initial (Over) Payment Carried Over from 6/30/22 (257,781.44) (36,140.75) (8,250.31) (93,041.38) 10,615.80 (126,460.31) (4,504.49)
FY 22/23 Budget 4,758,571.00 497,921.36 360,168.59 1,215,373.80 701,202.64 1,847,078.12 136,826.48
Budget Share based on population 10.46% 7.57% 25.54% 14.74% 38.82% 2.88%
Estimated Payments Needed FY 22/23 461,780.61 351,918.28 1,122,332.43 711,818.44 1,720,617.81 132,321.99
FY 22/23 Monthly Payment Amount 38,481.72 29,326.52 93,527.70 59,318.20 143,384.82 -
US Census Bureau
Population by City
Estimated 2021 Estimated 2021
Population %
Clive 18,814 10.46%
Norwalk 13,609 7.57%
Urbandale 45,923 25.54%
Waukee 26,495 14.74%
WDM 69,792 38.82%
Windsor Heights 5,170 2.88%
179,803 100.00%
https://www.census.gov/quickfacts/IA
*Windsor
Heights to
be included
in the FY23
True Up
after 2 year
prepayment
has been
earned.
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
Independent Auditor’s Report98F
Management Committee
Westcom
West Des Moines, Iowa
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States (Government Auditing Standards), the financial
statements of Westcom, which comprise Westcom’s statement of financial position as of June 30, 2022,
and the related statement of revenues, expenses and changes in net position and cash flows for the year
then ended, and the related notes to the financial statements, and have issued our report thereon dated
March 28, 2023.
Report on Internal Control Over Financial Reporting104F
In planning and performing our audit of the financial statements, we considered Westcom’s internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinion on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of Westcom’s internal control.
Accordingly, we do not express an opinion on the effectiveness of Westcom’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that were not identified.
35
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Westcom’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
West Des Moines, Iowa
March 28, 2023
36
Report to the Westcom
Management Committee
Westcom
Results of the 2022 Financial Statement
Audit, Including Required Communications
West Des Moines, Iowa
Year End June 30, 2022
www.forvis.com
Required Communications
Westcom 2 March 28, 2023
Required Communications Regarding Our Audit Strategy &
Approach (AU-C 260)
The following matters are required communications we must make to you, including these responsibilities:
Overview & Responsibilities
Matter Discussion
Scope of Our
Audit
This report covers audit results related to your financial statements and supplementary
information:
As of and for the year ended June 30, 2022
Conducted in accordance with our contract dated July 11, 2022
Our
Responsibilities
FORVIS is responsible for forming and expressing an opinion about whether the financial
statements that have been prepared by management, with the oversight of those charged
with governance, are prepared in accordance with accounting principles generally accepted in
the United States of America (GAAP).
Audit Scope &
Inherent
Limitations to
Reasonable
Assurance
An audit performed in accordance with auditing standards generally accepted in the United
States of America (GAAS) is designed to obtain reasonable, rather than absolute, assurance
about the financial statements. The scope of our audit tests was established in relation to the
financial statements taken as a whole and did not include a detailed audit of all transactions.
Required Communications
Westcom 3 March 28, 2023
Matter Discussion
Extent of Our
Communication
In addition to areas of interest and noting prior communications made during other phases of
the engagement, this report includes communications required in accordance with GAAS that
are relevant to the responsibilities of those charged with governance in overseeing the
financial reporting process, including audit approach, results, and internal control. The
standards do not require the auditor to design procedures for the purpose of identifying other
matters to be communicated with those charged with governance.
Independence The engagement team, others in our firm, as appropriate, and our firm, have complied with all
relevant ethical requirements regarding independence.
Your
Responsibilities
Our audit does not relieve management or those charged with governance of your
responsibilities. Your responsibilities and ours are further referenced in our contract.
Distribution
Restriction
This communication is intended solely for the information and use of the following and is not
intended to be, and should not be, used by anyone other than these specified parties:
Members of Management Committee
Others within Westcom
Other Information
[Client Name] 4 March 28, 2023
Other Information Accompanying the Audited Financial Statements
The audited financial statements are presented along with management’s annual report. Management, or those
charged with governance, is responsible for preparing the annual report.
We were not engaged to audit the information contained in the annual report, and as a result, our opinion does not
provide assurance as to the completeness and accuracy of the information contained therein.
As part of our procedures, we read the entire report to determine if financial information discussed in sections
outside the financial statements materially contradicts the audited financial statements. If we identify any such
matters, we bring them to management’s attention and review subsequent revisions.
Auditor Objectives Related to Other Information
Our objectives related to the other information accompanying the audited financial statements were to:
Consider whether a material inconsistency exists between the other information and the financial statements
Remain alert for indications that:
o A material inconsistency exists between the other information and the auditor’s knowledge obtained in
the audit, or
o A material misstatement of fact exists or the other information is otherwise misleading
Respond appropriately when we identify that such material inconsistencies appear to exist or when we
otherwise become aware that other information appears to be materially misstated. Potential responsive
actions would include requesting management to correct the identified inconsistency
Other Information
[Client Name] 5 March 28, 2023
Include the appropriate communication in our auditor’s report, disclosing the procedures performed on the
Other Information, as well as the results obtained
o No material inconsistencies were identified
Qualitative Accounting Matters
Westcom 6 March 28, 2023
Qualitative Aspects of Significant Accounting Policies & Practices
The following matters are detailed in the following pages and included in our assessment:
Significant Accounting Policies
Significant accounting policies are described in Note 1 of the audited financial statements.
With respect to new accounting standards adopted during the year, we call to your attention the following topics
detailed in the following pages:
No matters are reportable
Unusual Policies or Methods
With respect to significant unusual accounting policies or accounting methods used for significant unusual
transactions (significant transactions outside the normal course of business or that otherwise appear to be unusual
due to their timing, size, or nature), we noted the following:
No matters are reportable
Alternative Accounting Treatments
We had discussions with management regarding alternative accounting treatments within GAAP for policies and
practices for material items, including recognition, measurement, and disclosure considerations related to the
accounting for specific transactions as well as general accounting policies, as follows:
No matters are reportable
Qualitative Accounting Matters
Westcom 7 March 28, 2023
Management Judgments & Accounting Estimates
Accounting estimates are an integral part of financial statement preparation by management, based on its
judgments. Significant areas of such estimates for which we are prepared to discuss management’s estimation
process and our procedures for testing the reasonableness of those estimates include:
Depreciation of capital assets
Financial Statement Disclosures
The following areas involve particularly sensitive financial statement disclosures for which we are prepared to
discuss the issues involved and related judgments made in formulating those disclosures:
No matters are reportable
Our Judgment About the Quality of the Agency’s Accounting Principles
During the course of the audit, we made the following observations regarding the Agency’s application of accounting
principles:
No matters are reportable
Qualitative Accounting Matters
Westcom 8 March 28, 2023
GASB 87, Leases
Effective July 1, 2021, Westcom adopted GASB 87, Leases. GASB 87 creates one model for recognizing leases for
both lessees and lessors. Substantially all leases are recognized on the lessee’s statement of net position.
In the activity statement, lessees no longer report rent expense for the previously classified operating leases but
instead report interest expense on the liability and amortization expense related to the asset. Lessors recognize a
lease receivable and corresponding deferred inflow of resources. Interest income associated with the receivable are
recognized using the effective interest method.
Adoption of GASB 87 required significant time to identify a complete list of lease contracts for consideration of
adoption and measure the lease assets and liabilities for recognition. Westcom determined there were no material
leases to record.
Other Matters
Westcom 9 March 28, 2023
Adjustments Identified by Audit
During the course of any audit, an auditor may propose adjustments to financial statement amounts. Management
evaluates our proposals and records those adjustments that, in its judgment, are required to prevent the financial
statements from being materially misstated.
A misstatement is a difference between the amount, classification, presentation, or disclosure of a reported financial
statement item and that which is required for the item to be presented fairly in accordance with the applicable
financial reporting framework.
Proposed & Recorded Adjustments
Auditor-proposed and management-recorded entries include the following:
No matters are reportable
Uncorrected Misstatements
No matters are reportable
Other Required Communications
Other Material Communications
Listed below are other material communications between management and us related to the audit:
Management representation letter (see Attachments)
Attachments
Wetscom 10 March 28, 2023
Attachments
Management Representation Letter
As a material communication with management, included herein is a copy of the representation letter provided by
management at the conclusion of our engagement.
Representation of:
Westcom
4200 Mills Civic Parkway
West Des Moines, Iowa
Provided to:
FORVIS, LLP
Certified Public Accountants
1401 50th Street, Suite 350
West Des Moines, Iowa
The undersigned (“We”) are providing this letter in connection with FORVIS’ audit of our financial
statements as of and for the year ended June 30, 2022.
Our representations are current and effective as of the date of FORVIS’ report: March 28, 2023.
Our engagement with FORVIS is based on our contract for services dated: July 11, 2022.
Our Responsibility and Consideration of Material Matters
We confirm that we are responsible for the fair presentation of the financial statements subject to FORVIS’
report in conformity with accounting principles generally accepted in the United States of America.
We are also responsible for adopting sound accounting policies; establishing and maintaining effective
internal control over financial reporting, operations, and compliance; and preventing and detecting fraud.
Certain representations in this letter are described as being limited to matters that are material. Items are
considered material, regardless of size, if they involve an omission or misstatement of accounting
information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable
person relying on the information would be changed or influenced by the omission or misstatement. An
omission or misstatement that is monetarily small in amount could be considered material as a result of
qualitative factors.
Confirmation of Matters Specific to the Subject Matter of FORVIS’ Report
We confirm, to the best of our knowledge and belief, the following:
1. We have fulfilled our responsibilities, as set out in the terms of our contract, for the preparation and
fair presentation of the financial statements in accordance with accounting principles generally
accepted in the United States of America.
2. We acknowledge our responsibility for the design, implementation, and maintenance of:
a. Internal control relevant to the preparation and fair presentation of financial statements that
are free from material misstatement, whether due to fraud or error.
b. Internal control to prevent and detect fraud.
3. We have everything we need to keep our books and records.
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4. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair
presentation of the financial statements, such as records, documentation, and other
matters.
b. Additional information that you have requested from us for the purpose of the audit.
c. Unrestricted access to persons within the entity from whom you determined it necessary
to obtain audit evidence.
d. All minutes of meetings of the governing body held through the date of this letter or
summaries of actions of recent meetings for which minutes have not yet been prepared.
All unsigned copies of minutes provided to you are copies of our original minutes approved
by the governing body, if applicable, and maintained as part of our records.
e. All significant contracts and grants.
5. All transactions have been recorded in the accounting records and are reflected in the financial
statements.
6. We have informed you of all current risks of a material amount that are not adequately prevented
or detected by our procedures with respect to:
a. Misappropriation of assets.
b. Misrepresented or misstated assets, deferred outflows of resources, liabilities, deferred
inflows of resources, or net position.
7. We have no knowledge of any known or suspected fraudulent financial reporting or
misappropriation of assets involving:
a. Management or employees who have significant roles in internal control, or
b. Others, where activities of others could have a material effect on the financial statements.
8. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received
in communications from employees, customers, regulators, suppliers, citizens, or others.
9. We have assessed the risk that the financial statements may be materially misstated as a result of
fraud and disclosed to you any such risk identified.
10. We have disclosed to you the identity of all of the entity’s related parties and all the related-party
relationships of which we are aware. In addition, we have disclosed to you all related-party
transactions of which we are aware..
Related-party relationships and transactions have been appropriately accounted for and disclosed
in accordance with accounting principles generally accepted in the United States of America.
We understand that the term related party refers to an affiliate, management and members of their
immediate families, component units, and any other party with which the entity may deal if the entity
can significantly influence, or be influenced by, the management or operating policies of the other.
The term affiliate refers to a party that directly or indirectly controls, or is controlled by, or is under
common control with, the entity.
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11. Interfund, internal, and intra-entity activity and balances have been appropriately classified and
reported.
12. We are not aware of any side agreements or other arrangements (either written or oral) that are in
place.
13. Except as reflected in the financial statements, there are no:
a. Plans or intentions that may materially affect carrying values or classifications of assets,
liabilities, and net position.
b. Material transactions omitted or improperly recorded in the financial records.
c. Material gain/loss contingencies requiring accrual or disclosure, including those arising
from environmental remediation obligations.
d. Events occurring subsequent to the statement of net position date through the date of this
letter requiring adjustment or disclosure in the financial statements.
e. Agreements to purchase assets previously sold.
f. Restrictions on cash balances or compensating balance agreements.
g. Guarantees, whether written or oral, under which the entity is contingently liable.
h. Known or suspected asset retirement obligations.
14. We have disclosed to you all known instances of noncompliance or suspected noncompliance with
laws and regulations whose effects should be considered when preparing financial statements.
15. We have no reason to believe the entity owes any penalties or payments under the Employer
Shared Responsibility Provisions of the Patient Protection and Affordable Care Act nor have we
received any correspondence from the IRS or other agencies indicating such payments may be
due.
16. We are not aware of any pending or threatened litigation or claims whose effects should be
considered when preparing the financial statements. We have not sought or received attorney’s
services related to pending or threatened litigation or claims during or subsequent to the audit
period. Also, we are not aware of any litigation or claims, pending or threatened, for which legal
counsel should be sought.
17. Adequate provisions and allowances have been accrued for any material losses from:
a. Uncollectible receivables.
b. Reducing obsolete or excess inventories to estimated net realizable value.
c. Sales commitments, including those unable to be fulfilled.
d. Purchase commitments in excess of normal requirements or above prevailing market
prices.
18. Except as disclosed in the financial statements, the entity has:
a. Satisfactory title to all recorded assets, and they are not subject to any liens, pledges, or
other encumbrances.
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b. Complied with all aspects of contractual and grant agreements, for which noncompliance
would materially affect the financial statements.
19. The financial statements disclose all significant estimates and material concentrations known to us.
Significant estimates are estimates at the statement of net position date that could change
materially within the next year. Concentrations refer to volumes of business, revenues, available
sources of supply, or markets for which events could occur that would significantly disrupt normal
finances within the next year. Significant assumptions used by us in making accounting estimates,
including those measured at fair value, are reasonable.
20. The fair values of financial and nonfinancial assets and liabilities, if any, recognized in the financial
statements or disclosed in the notes thereto are reasonable estimates based on the methods and
assumptions used. The methods and significant assumptions used result in measurements of fair
value appropriate for financial statement recognition and disclosure purposes and have been
applied consistently from period to period, taking into account any changes in circumstances. The
significant assumptions appropriately reflect market participant assumptions.
21. We have not been designated as a potentially responsible party (PRP or equivalent status) by the
Environmental Protection Agency (EPA) or other cognizant regulatory agency with authority to
enforce environmental laws and regulations.
22. With regard to deposit and investment activities:
a. All deposit, repurchase and reverse repurchase agreements, and investment transactions
have been made in accordance with legal and contractual requirements.
b. Investments, derivative instrument transactions, and land and other real estate held by
endowments are properly valued.
c. Disclosures of deposit and investment balances and risks in the financial statements are
consistent with our understanding of the applicable laws regarding enforceability of any
pledges of collateral.
d. We understand that your audit does not represent an opinion regarding the enforceability
of any collateral pledges.
23. The financial statements include all component units, appropriately present majority equity interests
in legally separate organizations and joint ventures with an equity interest, and properly disclose
all other joint ventures and other related organizations.
24. We have identified and evaluated all potential fiduciary activities. The financial statements include
all fiduciary activities required by GASB Statement No. 84, Fiduciary Activities, as amended.
25. Components of net position (net investment in capital assets, restricted, and unrestricted) are
properly classified and, if applicable, approved.
26. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported,
and, if applicable, depreciated or amortized.
27. We have appropriately disclosed the entity’s policy regarding whether to first apply restricted or
unrestricted resources when an expense is incurred for purposes for which both restricted and
unrestricted net position is available and have determined that net position is properly recognized
under the policy.
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28. The entity's ability to continue as a going concern was evaluated and that appropriate disclosures
are made in the financial statements as necessary under GASB requirements.
29. We are an entity subject to Government Auditing Standards and agreed that FORVIS was engaged
to perform and audit according to Generally Accepted Government Auditing Standards (GAGAS).
30. As an entity subject to Government Auditing Standards:
a. We acknowledge that we are responsible for compliance with applicable laws, regulations,
and provisions of contracts and grant agreements.
b. We have identified and disclosed to you all laws, regulations, and provisions of contracts
and grant agreements that have a direct and material effect on the determination of
amounts in our financial statements or other financial data significant to the audit
objectives.
c. We have identified and disclosed to you any violations or possible violations of laws,
regulations, including those pertaining to adopting, approving, and amending budgets, and
provisions of contracts and grant agreements, tax or debt limits, and any related debt
covenants whose effects should be considered for recognition and/or disclosure in the
financial statements or for your reporting on noncompliance.
d. We have taken or will take timely and appropriate steps to remedy any fraud, abuse, illegal
acts, or violations of provisions of contracts or grant agreements that you or other auditors
report.
e. We have a process to track the status of audit findings and recommendations.
f. We have identified to you any previous financial audits, attestation engagements,
performance audits, or other studies related to the objectives of your audit and the
corrective actions taken to address any significant findings and recommendations made in
such audits, attestation engagements, or other studies.
31. The supplementary information required by the Governmental Accounting Standards Board,
consisting of management’s discussion and analysis, has been prepared and is measured and
presented in conformity with the applicable GASB pronouncements, and we acknowledge our
responsibility for the information. The information contained therein is based on all facts, decisions,
and conditions currently known to us and is measured using the same methods and assumptions
as were used in the preparation of the financial statements. We believe the significant assumptions
underlying the measurement and/or presentation of the information are reasonable and
appropriate. There has been no change from the preceding period in the methods of measurement
and presentation.
32. With regard to supplementary information:
a. We acknowledge our responsibility for the presentation of the supplementary information
in accordance with the applicable criteria.
b. We believe the supplementary information is fairly presented, both in form and content, in
accordance with the applicable criteria.
c. The methods of measurement and presentation of the supplementary information are
unchanged from those used in the prior period.
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d. We believe the significant assumptions or interpretations underlying the measurement
and/or presentation of the supplementary information are reasonable and appropriate.
e. If the supplementary information is not presented with the audited financial statements, we
acknowledge we will make the audited financial statements readily available to intended
users of the supplementary information no later than the date such information and the
related auditor’s report are issued.
33. With regard to other information that is presented in the form of our annual report:
a. We confirm that the financial report comprises the annual report for the entity.
b. We have provided you with the final draft of the annual report.
c. We have exercised due care in the preparation of the other information sections included
in our annual report and are not aware of any information contained therein that is
inconsistent with the information contained in our basic financial statements.
34. In connection with the adoption of GASB Statement No. 87, we represent the following:
GASB Statement 87, Leases
In connection with the adoption of GASB Statement No. 87, Leases, (GASB 87), we represent the
following:
a. We have identified a complete population of potential leases as of the implementation date
and determined that there are no material leases.
35. We acknowledge the current economic volatility presents difficult circumstances and challenges for
our industry. Entities are potentially facing declines in the fair values of investments and other
assets, declines in the volume of business, constraints on liquidity, difficulty obtaining financing,
etc.. We understand the values of the assets and liabilities recorded in the financial statements
could change rapidly, resulting in material future adjustments to asset values, allowances for
accounts and notes receivable, net realizable value of inventory, etc., that could negatively impact
the entity’s ability to meet debt covenants or maintain sufficient liquidity.
We acknowledge that you have no responsibility for future changes caused by the current economic
environment and the resulting impact on the entity’s financial statements. Further, management
and governance are solely responsible for all aspects of managing the entity, including questioning
the quality and valuation of investments, inventory, and other assets; reviewing allowances for
uncollectible amounts; evaluating capital needs and liquidity plans; etc.
Tim Stiles, Director of Finance
tim.stiles@wdm.iowa.gov
Lesley Montgomery, Accounting Manager
lesley.montgomery@wdm.iowa.gov
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