HomeMy WebLinkAbout2018-11-19-G02 Presentation_FY2018 AuditAGENDA ITEM:
CITY OF WAUKEE, IOWA
CITY COUNCIL MEETING COMMUNICATION
MEETING DATE: November 19, 2018
AGENDA ITEM:Independent Auditor’s Final Report for the fiscal year ending June 30, 2018
FORMAT:Presentation
SYNOPSIS INCLUDING PRO & CON: City staff met with David Ellis of Denman & Company on
11/07/2018 to review the draft audit report. A representative of Denman &
Company, LLP will attend the Council meeting to present the audit.
FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS:
COMMISSION/BOARD/COMMITTEE COMMENT:
STAFF REVIEW AND COMMENT:
RECOMMENDATION:
ATTACHMENTS: I. FY2018 Audit Report
PREPARED BY:Becky Schuett
REVIEWED BY:
G2
November 7, 2018
Honorable Mayor and
Members of the City Council
Waukee, Iowa
We have audited the financial statements of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City of Waukee (the City) for the year ended June 30,
2018. Professional standards require that we provide you with information about our responsibilities under
auditing standards generally accepted in the United States of America, Government Auditing Standards and the
Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our presentation about planning matters on August 6, 2018. Professional
standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City of Waukee are described in Note 1 to the financial statements. As described
in Note 19 to the financial statements, the City adopted Statement of Governmental Accounting Standards Board
(GASB Statement) No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions, during the year ended June 30, 2018. No other new accounting policies were adopted and the
application of existing policies was not changed during the year. We noted no transactions entered into by the
City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions
have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected. The most
sensitive estimates affecting the financial statements were:
Management's estimate of depreciation expense is based on the City's estimated useful life of assets using the
straight line method.
Management's estimate of net pension liability and pension related deferred inflows and outflows of resources
is based upon actuarial assumptions and the City’s proportionate share of the Plan’s total net pension liability.
We evaluated the key factors and assumptions used to develop the depreciation and net pension liability
estimates in determining that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosures affecting the financial statements were:
The disclosure of long-term liabilities in Note 6 to the financial statements and the pension plan disclosure
in Note 7 to the financial statements.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are clearly trivial, and communicate them to the appropriate level of management. The
attached schedules summarize uncorrected misstatements of the financial statements. Management has
determined that their effects are immaterial, both individually and in the aggregate, to the financial statements
taken as a whole. Corrected misstatements identified during the audit were related to the conversion from the cash
basis to the accrual basis of accounting. These adjustments were prepared from information provided by City
personnel and had a significant effect on the City's financial statements.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing
matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the
auditor's report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation
letter dated November 7, 2018.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an
accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may
be expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
retention.
Other Matters
We applied certain limited procedures to the required supplementary information (RSI) that supplements the basic
financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on supplementary information which accompanies the financial statements but are not
RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the
form, content, and methods of preparing the information to determine that the information complies with
accounting principles generally accepted in the United States of America, the method of preparing it has not
changed from the prior period, and the information is appropriate and complete in relation to our audit of the
financial statements. We compared and reconciled the supplementary information to the underlying accounting
records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the use of the City of Waukee Council and management, and is not
intended to be, and should not be, used by anyone other than these specified parties.
DENMAN & COMPANY, LLP
West Des Moines, Iowa
November 7, 2018
City of Waukee, Iowa
INDEPENDENT AUDITOR'S REPORTS
BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
June 30, 2018
TABLE OF CONTENTS
Page
OFFICIALS 3
INDEPENDENT AUDITOR'S REPORT 4-5
MANAGEMENT'S DISCUSSION AND ANALYSIS 6-13
BASIC FINANCIAL STATEMENTS 14
Government-wide financial statements
Statement of net position 15-16
Statement of activities 17-18
Governmental fund financial statements
Balance sheet 19
Reconciliation of the balance sheet—governmental funds to the statement of net position 20
Statement of revenues, expenditures and changes in fund balances 21
Reconciliation of the statement of revenues, expenditures and changes in
fund balances—governmental funds to the statement of activities 22
Proprietary fund financial statements
Statement of net position 23
Statement of revenues, expenses and changes in fund net position 24
Statement of cash flows 25-26
Notes to financial statements 27-55
REQUIRED SUPPLEMENTARY INFORMATION 56
Schedule of changes in the City’s total OPEB liability, related ratios and notes 57
Budgetary comparison schedule of revenues, expenditures/expenses and changes in
balances—budget and actual—governmental funds and proprietary funds 58-59
Note to required supplementary information—budgetary reporting 60
Schedule of the City’s proportionate share of the net pension liability 61
Schedule of City contributions 62-63
Notes to required supplementary information—pension liability 64
SUPPLEMENTARY INFORMATION 65
Nonmajor Governmental Funds
Combining balance sheet 66
Combining schedule of revenues, expenditures and changes in fund balances 67
Nonmajor Proprietary Funds
Combining statement of net position 68
Combining statement of revenues, expenses and changes in fund net position 69
Combining statement of cash flows 70-71
Schedule of revenues by source and expenditures by function—all governmental funds 72-73
Schedule of expenditures of federal awards 74
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 75-76
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED
BY THE UNIFORM GUIDANCE 77-78
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 79-84
-3-
City of Waukee, Iowa
OFFICIALS
Before January 2018
Term expires
MAYOR AND MEMBERS OF CITY COUNCIL
William Peard, Mayor January 2020
Rachelle Hughes, Council Member January 2020
Brian Harrison, Council Member January 2018
Larry Lyon, Council Member January 2020
Anna Bergman, Council Member January 2018
Charlie Bottenberg, Council Member January 2018
CITY ADMINISTRATOR
Tim Moerman Indefinite
CITY CLERK
Rebecca D. Schuett Indefinite
DIRECTOR OF FINANCE
Linda Burkhart Indefinite
CITY ATTORNEY
Steven P. Brick January 2018
After January 2018
Term expires
MAYOR AND MEMBERS OF CITY COUNCIL
William Peard, Mayor January 2020
Rachelle Hughes, Council Member January 2020
Courtney Clarke, Council Member January 2022
Larry Lyon, Council Member January 2020
Anna Bergman, Council Member January 2022
Charlie Bottenberg, Council Member January 2022
CITY ADMINISTRATOR
Tim Moerman Indefinite
CITY CLERK
Rebecca D. Schuett Indefinite
DIRECTOR OF FINANCE
Linda Burkhart Indefinite
CITY ATTORNEY
Steven P. Brick January 2019
-4-
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and
Members of the City Council
Waukee, Iowa
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business type
activities, each major fund, and the aggregate remaining fund information of the City of Waukee, Iowa (the City),
as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively
comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We 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 material 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 fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the City’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.
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, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business type activities, each major fund, and the aggregate
remaining fund information of the City of Waukee, Iowa, as of June 30, 2018, and the respective changes in its
financial position, and, where applicable, cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 19 to the financial statements, the City adopted new accounting guidance related to
Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions. Our opinions are not modified with respect to this matter.
-5-
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, the budgetary comparison information, the schedule of changes in the City’s total OPEB
liability, related ratios and notes, the schedule of the City’s proportionate share of the net position liability, and the
schedule of City contributions on pages 6 through 13 and 56 through 64 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 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Waukee, Iowa’s basic financial statements. We previously audited, in accordance with the
standards referred to in the third paragraph of this report, the financial statements for the nine years ended June
30, 2017 (which are not presented herein) and expressed unmodified opinions on those financial statements.
The combining and individual nonmajor fund financial statements and schedule of revenues by source and
expenditures by function, are presented for purposes of additional analysis and are not a required part of the
basic financial statements. The schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the
basic financial statements.
The combining and individual nonmajor fund financial statements, schedule of revenues by source and
expenditures by function, and schedule of expenditures of federal awards 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 and individual
nonmajor fund financial statements, schedule of revenues by source and expenditures by function, and schedule
of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 7, 2018 on
our consideration of the City of Waukee, Iowa’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 to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City of Waukee, Iowa’s internal control over
financial reporting and compliance.
DENMAN & COMPANY, LLP
West Des Moines, Iowa
November 7, 2018
-6-
_______________________________________________________________________________________
MANAGEMENT’S DISCUSSION AND ANALYSIS
____________________________________________________________________________________________
The City of Waukee provides this Management’s Discussion and Analysis of its financial statements. This narrative overview and
analysis of the financial activities is for the fiscal year ended June 30, 2018. We encourage readers to consider this information in
conjunction with the City’s financial statements, which follow.
2018 FINANCIAL HIGHLIGHTS
• Revenues of the City’s Governmental Funds increased 16.75 %, or $ 3,455,653, from fiscal 2017 to fiscal 2018. Property
and other City Taxes increased $ 1,974,037, Tax Increment Financing increased $ 135,347, Licenses and Permits decreased
$ 307,214, Intergovernmental increased $ 1,671,142, Charges for Services increased $ 6,673, Use of Money/Property increased
$199,916 and Miscellaneous decreased $ 224,248.
• Program expenditures of the City’s Governmental Funds increased 48.66 %, or $ 14,598,960 in fiscal 2018 from fiscal
2017. Public Safety expenses increased $ 604,213, Community and Economic Development increased $ 181,030, Culture and
Recreation increased $ 201,309, Public Works decreased $ 61,898, General Government increased $ 255,452, Debt Service
decreased $ 1,703,189 and Capital Projects increased $ 15,121,343.
• The City has a net position of $ 186,595,756 on June 30, 2018 as compared to $ 170,071,178 on June 30, 2017. Of this
amount, the net position of the Governmental Activities was $ 122,726,022 and the net position of the Business Type Activities was
$ 63,869,734.
USING THIS ANNUAL REPORT
The annual report consists of a series of financial statements and other information, as follows:
Management’s Discussion and Analysis introduces the basic financial statements and provides an analytical overview of the City’s
financial activities.
Government-wide Financial Statements consist of a Statement of Net Position and a Statement of Activities. These provide
information about the activities of the City of Waukee as a whole and present an overall view of the City’s finances.
The Fund Financial Statements tell how governmental services were financed in the short term as well as what remains for future
spending. Fund financial statements report the City’s operations in more detail than the government-wide financial statements by
providing information about the 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 Information further explains and supports the financial statements with a comparison of the City’s budget
for the year, the City’s proportionate share of net pension liability and related contributions, as well as presenting the schedule of
changes in the City’s OPEB liability, related ratios and notes.
Supplementary Information provides detailed information about the non-major Governmental and Proprietary Funds, and Schedule
of Revenues by Source and Expenditures by Function. In addition, the Schedule of Expenditures of Federal Awards provides details
of various federal programs benefiting the City.
-7-
REPORTING THE CITY’S FINANCIAL ACTIVITIES
Government-wide Financial Statements
One of the most important questions asked about the City’s finances is, “Is the City as a whole better or worse off as a result of the
year’s activities?” The Statement of Net Position and the Statement of Activities report information which helps to answer this
question. These statements include all assets, deferred outflows of resources, liabilities, and deferred inflows of resources using the
accrual basis of accounting and the economic resources measurement focus, which is similar to the 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, deferred outflows of resources, liabilities, and deferred inflows of
resources with the difference reported as “net position”. Over time, increases or decreases in the City’s net position may serve as a
useful indicator of whether the financial position of the City is improving or deteriorating.
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 until future fiscal years.
The Statement of Net Position and the Statement of Activities report two kinds of activities:
• Governmental activities include public safety, public works, health and social services, culture and recreation, community
and economic development, general government, debt service and capital projects. Property tax, state and federal grants, and
license and permit fees finance most of these activities.
• Business type activities include the water, sewer, gas and storm water utilities, the municipal golf course and the City’s
sanitation department. These activities are financed primarily by user charges.
Fund Financial Statements
The City has two kinds of funds:
(1) Governmental funds account for most of the City’s basic services. These focus on how money flows into and out of those funds
and the balances at year-end that are available for spending. Governmental funds include: 1) the General Fund, 2) the Special
Revenue Funds, such as Tax Increment Financing Revenues, and Employee Benefits Levy, 3) the Debt Service Fund and 4) the
Capital Projects Fund. These funds are reported using the current financial resources measurement focus and the modified accrual
basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental
fund financial statements provide a detailed, short-term view of the City’s general governmental operations and the basic services it
provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in
the near future to finance the City’s programs.
The required financial statements for governmental funds include a Balance Sheet and a Statement of Revenues, Expenditures and
Changes in Fund Balances.
2) Proprietary funds account for the City’s Enterprise and Internal Service Funds. These funds report services for which the City
charges customers for the service it provides. Proprietary funds are reported in the same way all activities are reported in the
Statement of Net Position and the Statement of Activities. The major difference between the proprietary funds and the business type
activities included in the government-wide statements is the detail and additional information, such as cash flows, provided in the
proprietary fund statements. The Enterprise Funds include the Water, Sewer, Gas, Storm Water, Golf Course and Sanitation Funds.
The City is responsible for ensuring the assets reported in these funds are used only for their intended purposes and by those to
whom the assets belong.
The financial statements required for proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses and
Changes in Fund Net Position and a Statement of Cash Flows.
Reconciliations between the government-wide financial statements and the fund financial statements follow the fund financial
statements.
-8-
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 changes in the net assets for governmental and business type activities.
Net Position at Year End
Governmental Activities Business Type Activities Total
2018 2017 2018 2017 2018 2017
(not restated) (not restated) (not restated)
Current and Other Assets $59,487,483 $ 51,365,630 $23,849,420 $ 15,691,377 $83,336,903 $ 67,057,007
Capital Assets 160,538,037 140,836,978 66,528,570 53,693,742 227,066,607 194,530,720
Total Assets 220,025,520 192,202,608 90,377,990 69,385,119 310,403,510 261,587,727
Deferred Outflows of Resources 1,793,966 1,510,012 393,784 331,288 2,187,750 1,841,300
Non-Current Liabilities 71,513,848 57,176,093 23,748,534 9,938,088 95,262,382 67,114,181
Current Liabilities 9,764,561 7,747,123 3,112,626 2,683,225 12,877,187 10,430,348
Total Liabilities 81,278,409 64,923,216 26,861,160 12,621,313 108,139,569 77,544,529
Deferred Inflows of Resources 17,815,055 15,796,510 40,880 16,810 17,855,935 15,813,320
Net Assets:
Net investment in Capital Assets 111,034,371 102,028,507 47,877,027 44,742,913 158,911,398 146,771,420
Restricted 9,191,198 6,748,446 419,252 231,413 9,610,450 6,979,859
Unrestricted 2,500,453 4,215,941 15,573,455 12,103,958 18,073,908 16,319,899
Total Net Position $ 122,726,022 $ 112,992,894 $ 63,869,734 $ 57,078,284 $ 186,595,756 $ 170,071,178
Prior to restatement, net position of governmental activities increased $ 10,138,822, or 8.97%, over fiscal year 2017. Net position of
business type activities increased $ 6,747,379, or 11.82%, over fiscal year 2017. The largest portion of the City’s net position is the
investment in capital assets (e.g., land, infrastructure, buildings and equipment), less the related debt excluding unspent debt
proceeds. The debt related to the investment in capital assets is liquidated with resources other than capital assets. Restricted net
position represents resources subject to external restrictions, 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-to-day operations without constraints
established by debt covenants, legislation or other legal requirements, is $ 18,073,908 at the end of this year.
-9-
Changes in Net Position for the Year Ended June 30, 2018
Governmental Activities Business Type Activities Total
2018 2017 2018 2017 2018 2017
Revenues: (not restated) (not restated) (not restated)
Property Tax Levied and Other City Tax $ 11,994,930 $ 10,020,893 $ – $ – $ 11,994,930 $ 10,020,893
Tax Increment Financing 3,549,942 3,414,595 – – 3,549,942 3,414,595
Commercial/Industrial Tax Replacement 226,258 219,822 – – 226,258 219,822
Unrestricted Interest 393,568 197,423 221,844 108,440 615,412 305,863
Operating Grants and Contributions 5,428,263 3,978,072 – – 5,428,263 3,978,072
Charges for Services 2,235,366 2,505,488 21,072,018 18,139,322 23,307,384 20,644,810
Capital Grants and Contributions 1,410,212 3,561,867 – – 1,410,212 3,561,867
Gain from Disposal Capital Assets 3,977,080 – 35,853 – 4,012,933 –
Miscellaneous 255,234 1,178,397 200,332 570,432 455,566 1,748,829
Total Revenues 29,470,853 25,076,557 21,530,047 18,818,194 51,000,900 43,894,751
Transfers 709,471 709,422 (709,471) (709,422) – –
Total Revenues and Transfers $ 30,180,324 $ 25,785,979 $ 20,820,576 $ 18,108,772 $ 51,000,900 $ 43,894,751
-10-
Governmental Activities Business Type Activities Total
2018 2017 2018 2017 2018 2017
Program Expenses (not restated) (not restated) (not restated)
Public Safety $ 5,890,603 $ 5,185,820 $ – $ – $ 5,890,603 $ 5,185,820
Public Works 7,232,422 6,879,021 – – 7,232,422 6,879,021
Health and Social Services 700 – – – 700 –
Culture and Recreation 2,386,942 2,143,529 – – 2,386,942 2,143,529
Community and Economic Development 1,412,314 1,220,343 – – 1,412,314 1,220,343
General Government 1,310,342 979,503 – – 1,310,342 979,503
Interest on Long-Term Debt 1,808,179 1,569,190 – – 1,808,179 1,569,190
Business Type Activities – – 14,073,197 12,041,728 14,073,197 12,041,728
Total Expenses 20,041,502 17,977,406 14,073,197 12,041,728 34,114,699 30,019,134
Increase in Net Position 10,138,822 7,808,573 6,747,379 6,067,044 16,886,201 13,875,617
Net Position Beginning
of Year, as restated 112,587,200 105,184,321 57,122,355 51,011,240 169,709,555 156,195,561
Net Position End of Year $ 122,726,022 $ 112,992,894 $ 63,869,734 $ 57,078,284 $186,595,756 $ 170,071,178
-11-
The City maintained the $ 13.50 property tax levy for FY18, while recognizing an increase of $ 2,109,384 in property tax revenue
due to increase in residential property valuation. Revenues for operating and capital grants, contributions restricted and unrestricted
interest, decreased by $ 391,915, charges for services increased by $ 2,662,574, gain from disposal of capital assets increased $
4,012,933 and miscellaneous revenues decreased by $ 1,293,263.
Overall revenues for governmental activities increased approximately $ 4,394,300 from the prior year.
The cost of all governmental activities this year was approximately $20 million compared to approximately $18 million last year.
However, as shown in the Statement of Activities on pages 17 and 18, the amount taxpayers ultimately financed for these activities
was approximately ($ 11) million as some of the cost was paid by those directly benefited from the programs ($ 2,235,366) or by
other governments and organizations which subsidized certain programs with grants and contributions ($ 6,838,475).
Overall revenues for business type activities increased approximately $ 2,711,900 over the prior year.
The cost of all business activities this year was approximately $14.1 million compared to approximately $ 12 million last year.
INDIVIDUAL MAJOR FUND ANALYSIS
Governmental Fund Highlights
As the City of Waukee completed the year, its governmental funds reported a combined fund balance of $ 38,774,716 at June 30,
2018, compared to $ 32,889,510 combined fund balance at June 30, 2017, prior to restatement.
The General Fund showed a decrease of $ 1,431,152 from the prior year to $ 5,278,853.
The Tax Increment Financing Urban Renewal Funds account for revenues from the tax authorized by ordinance in the urban
renewal districts which are used to pay the principal and interest on indebtedness incurred for urban renewal redevelopment
projects. These funds ended fiscal 2018 with a $ 2,372,435 balance compared to the prior year ending balance of $ 2,448,863.
The Employee Benefits Tax Levy Fund is used to account for the property tax levied to finance the payment of employee benefits.
This fund ended fiscal 2018 with a $ 96,953 balance compared to the prior year ending balance of $ 82,723. Transfers out to
operating funds totaled $ 1,802,000 in fiscal 2018.
The Debt Service Fund ended fiscal 2018 with a $ 1,216,447 balance compared to the prior year ending balance of $ 1,028,384.
Bond principal and interest payments decreased by $ 1,693,133 in fiscal 2018.
The Capital Projects Fund ended fiscal 2018 with a $ 29,063,112 balance compared to the prior year ending balance of
$ 22,367,502.
Proprietary Fund Highlights
The Water Fund, which accounts for the operation and maintenance of the City’s water system, ended fiscal 2018 with a net position
of $19,563,983 compared to the prior year ending net position balance of $ 18,046,005.
The Sewer Fund, which accounts for the operation and maintenance of the City’s wastewater treatment and sanitary sewer system,
ended fiscal 2018 with a net position of $ 28,347,399, compared to the prior year ending net position balance of $ 25,016,450.
The Gas Fund, which accounts for the operations and maintenance of the City’s gas utility, ended fiscal 2018 with a $ 13,020,723
net position balance, compared to the prior year ending net position balance of $ 11,298,959.
-12-
The Golf Course Fund, which accounts for the operations and maintenance of the City's municipal golf course, ended fiscal 2018
with a net position of $ 467,272, compared to the prior year ending net position balance of $ 457,110.
BUDGETARY HIGHLIGHTS
Over the course of the year, the City of Waukee amended its budget once. This amendment was done in May 2018, and was needed
to cover unplanned disbursements, including program expenditures associated with increases to Public Safety, Culture and
Recreation, Community and Economic Development, General Government, Debt Service, Capital Projects and Enterprise
Activities; while also increasing revenue sources for Licenses and Permits, Use of Money and Property, Intergovernmental, Charges
for Services, Miscellaneous and Other Financing Sources.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City’s capital assets include land, buildings and improvements, equipment, streets, sewer systems, lighting systems, traffic
signals and other infrastructure. Capital assets for governmental activities totaled $ 160,538,037 (net of accumulated depreciation)
at June 30, 2018. Capital assets for business type activities totaled $ 66,528,570 (net of accumulated depreciation) at June 30, 2018.
See Note 5 to the financial statements for more information about the City’s capital assets.
The major capital outlays for governmental activities during the year included the completion of Traffic Signals at
Hickman/Westgate, Phase 2 of Southfork Street Light Replacement, RRVT Trailhead Art project, SE Westown Parkway from
Grand Prairie Pkwy to LA Grant, Grand Prairie Greenbelt and developer lane additions; continued construction of Esker
Ridge/RISE project, Alice’s Road Phase 4 & Phase 5 improvements, construction of a Dog Park, Heart of Warrior trail extension,
Windfield/High School trail connection, Little Walnut Creek Road paving, Golf Course replacement water source and planning for
the Broderick Rec Complex.
For business type activities, the major additions included the fees associated with the Wastewater Reclamation Authority (WRA),
completion of the Waco Place water main extention, completion of several sewer projects including Rehab Phase 2, Fox Creek
Phase 3, NW Area Phase 1 and the SW Area trunk projects, Southfork Dam Stabilization; continued construction on several major
sewer projects including, South Outfall, Little Walnut Creek Trunk, Fox Creek phase 2, NW Area phase 2 & 3/Copeland, and water
projects including I80 West Industrial extension and NW Water phase 1 & 2 extension,and one gas project to relocate the main
along the Alice’s Road corridor in conjunction with the paving project, as well as engineering for sewer expansion projects.
Construction in progress at June 30, 2018 for the City consists primarily of the Alice’s Road Widening Phase 4 & Phase 5 projects,
Broderick Rec Complex planning, and planning & engineering for Ashworth Road improvements, 10th Street Realignment, a Dog
Park, and the Walnut Creek Drive Paving project.
Long-Term Debt
At June 30, 2018, the City had $ 71,513,848 in total non-current debt outstanding for governmental activities. Total non-current
debt outstanding for business type activities was $ 23,748,534 at June 30, 2018. During the year ended June 30, 2018, the City
issued $19,775,000 in general obligation bonds and $ 15,017,027 in revenue bonds.
The City maintained their general obligation bond rating of Aa2, assigned by national rating agency, Moody’s Investors Services, on
April 10, 2018. The Constitution of the State of Iowa limits the amount of general obligation debt cities can issue to 5 percent of the
assessed value of all taxable property within the City’s corporate limits. The City’s outstanding general obligation debt of
$ 72,423,137 or 79%, is below its constitutional debt limit of $ 92,216,747. Other obligations include accrued vacation pay, net
OPEB liability and net pension liability. Additional information about the City’s long-term debt is presented in Note 6 to the
financial statements.
-13-
ECONOMIC FACTORS BEARING ON THE CITY’S FUTURE
Several economic factors affected decisions made by the City in setting its fiscal 2019 budget. The City of Waukee will experience
a significant increase in General Fund revenues and expenditures from fiscal 2018 to fiscal 2019. The major factors that will play a
role in this change are the increase in property tax revenues from increased valuations for fiscal 2019, and the new revenue
generated by the Local Sales Tax approved by voters in November 2017.
The General Fund is projected to end fiscal 2019 with a fund balance of approximately $ 5,655,600, or a planned increase of $
376,760 from fiscal 2018. The tax levy rates per $1,000 of taxable valuation for fiscal 2019 were reduced by $0.10 and are provided
below:
General levy $8.00
Debt Service levy 3.32
Employee Benefits Levy 2.08
Total $13.40
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to present our citizens, taxpayers, customers, investors and creditors with a general overview of the
City’s finances and operating activities. If you have any questions or require additional information, please contact the City
Administrator or the Finance Director, at Waukee City Hall, 230 W Hickman Road, Waukee, Iowa.
-14-
BASIC FINANCIAL STATEMENTS
See Notes to Financial Statements.
-15-
City of Waukee, Iowa
STATEMENT OF NET POSITION
June 30, 2018
Primary Government
Governmental Business Type
Activities Activities Total
ASSETS
Current assets
Cash and investments $ 39,939,611 $ 21,053,531 $ 60,993,142
Receivables
Property tax
Delinquent 25,883 – 25,883
Succeeding year 17,366,185 – 17,366,185
Special assessments 291,720 25,716 317,436
Customer accounts – 1,477,797 1,477,797
Other 287,764 – 287,764
Due from other governments 697,710 – 697,710
Internal balances 730,998 (730,998) –
Inventories 147,612 246,848 394,460
Total unrestricted current assets 59,487,483 22,072,894 81,560,377
Restricted assets – cash and investments – 1,776,526 1,776,526
Noncurrent assets
Capital assets, net of accumulated depreciation 160,538,037 66,528,570 227,066,607
Total assets 220,025,520 90,377,990 310,403,510
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows 1,767,885 383,572 2,151,457
OPEB related deferred outflows 26,081 10,212 36,293
Total deferred outflows of resources 1,793,966 393,784 2,187,750
LIABILITIES
Current liabilities
Accounts payable 2,927,198 1,354,115 4,281,313
Accrued interest payable 185,000 63,256 248,256
Customer deposits payable – 264,544 264,544
Compensated absences 63,271 57,693 120,964
General obligation bonds/notes 6,383,092 – 6,383,092
Tax increment financing (TIF) bonds 160,000 – 160,000
Special assessment notes payable 46,000 – 46,000
Revenue notes payable – 1,373,018 1,373,018
Total current liabilities 9,764,561 3,112,626 12,877,187
Noncurrent liabilities
Compensated absences 269,408 – 269,408
General obligation bonds/notes, net 67,092,107 – 67,092,107
Tax increment financing (TIF) bonds 345,000 – 345,000
Revenue notes payable, net – 22,872,116 22,872,116
Net OPEB liability 288,451 112,940 401,391
Net pension liability 3,518,882 763,478 4,282,360
Total noncurrent liabilities 71,513,848 23,748,534 95,262,382
Total liabilities 81,278,409 26,861,160 108,139,569
See Notes to Financial Statements.
-16-
City of Waukee, Iowa
STATEMENT OF NET POSITION (continued)
June 30, 2018
Primary Government
Governmental Business Type
Activities Activities Total
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Succeeding year property taxes 17,366,185 – 17,366,185
Special assessments 291,720 – 291,720
Pension related deferred inflows 118,290 25,665 143,955
OPEB related deferred inflows 38,860 15,215 54,075
Total deferred inflows of resources 17,815,055 40,880 17,855,935
NET POSITION
Net investment in capital assets 111,034,371 47,877,027 158,911,398
Restricted for
Debt service 1,314,995 419,252 1,734,247
Other purposes 7,876,203 – 7,876,203
Unrestricted 2,500,453 15,573,455 18,073,908
Total net position $122,726,022 $ 63,869,734 $186,595,756
See Notes to Financial Statements.
-17-
City of Waukee, Iowa
STATEMENT OF ACTIVITIES
Year ended June 30, 2018
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
FUNCTIONS/PROGRAMS
Primary Government
Governmental activities
Public safety $ 5,890,603 $ 1,368,522 $ – $ –
Public works 7,232,422 439,872 5,428,263 1,315,712
Health and human services 700 – – –
Culture and recreation 2,386,942 203,881 – 94,500
Community and economic development 1,412,314 – – –
General government 1,310,342 223,091 – –
Interest on long-term debt 1,808,179 – – –
Total governmental activities 20,041,502 2,235,366 5,428,263 1,410,212
Business-type activities
Water 3,470,940 5,115,805 – –
Sewer 2,320,471 5,649,536 – –
Gas 5,622,668 7,360,721 – –
Golf 552,998 533,973 – –
Other 2,106,120 2,411,983 – –
Total business-type activities 14,073,197 21,072,018 – –
Total Primary Government $34,114,699 $23,307,384 $5,428,263 $1,410,212
GENERAL REVENUES
Property and other city tax levied for
General purposes
Debt service
Employee benefits
Tax increment financing
Commercial/Industrial tax replacement
Unrestricted interest on investments
Gain from disposal of capital assets
Miscellaneous
TRANSFERS
Total general revenues and transfers
CHANGE IN NET POSITION
NET POSITION BEGINNING OF YEAR
(as restated)
NET POSITION END OF YEAR
See Notes to Financial Statements.
-18-
Net Revenue (Expense) and Changes in Net Position
Primary Government
Governmental Business-type
Activities Activities Total
$ (4,522,081) $ – $ (4,522,081)
(48,575) – (48,575)
(700) – (700)
(2,088,561) – (2,088,561)
(1,412,314) – (1,412,314)
(1,087,251) – (1,087,251)
(1,808,179) – (1,808,179)
(10,967,661) – (10,967,661)
– 1,644,865 1,644,865
– 3,329,065 3,329,065
– 1,738,053 1,738,053
– (19,025) (19,025)
– 305,863 305,863
– 6,998,821 6,998,821
(10,967,661) 6,998,821 (3,968,840)
6,954,362 – 6,954,362
3,272,991 – 3,272,991
1,767,577 – 1,767,577
3,549,942 – 3,549,942
226,258 – 226,258
393,568 221,844 615,412
3,977,080 35,853 4,012,933
255,234 200,332 455,566
709,471 (709,471) –
21,106,483 (251,442) 20,855,041
10,138,822 6,747,379 16,886,201
112,587,200 57,122,355 169,709,555
$122,726,022 $63,869,734 $186,595,756
See Notes to Financial Statements.
-19-
City of Waukee, Iowa
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2018
Other
Special Revenue Nonmajor
Capital Debt Urban Employee Governmental
General Projects Service Renewal TIF Benefits Funds Total
ASSETS
Cash and investments $ 4,831,567 $30,528,911 $1,211,649 $2,363,717 $ 94,780 $ 781,323 $39,811,947
Receivables
Property tax
Delinquent 8,460 – 4,798 10,452 2,173 – 25,883
Succeeding year 7,596,904 – 3,672,661 4,124,530 1,972,090 – 17,366,185
Special assessments – – – – – 291,720 291,720
Other 287,631 – – – – 133 287,764
Due from other funds 730,998 – – – – – 730,998
Due from other governments – 697,710 – – – – 697,710
Inventory 122,110 – – – – 25,502 147,612
Total assets $13,577,670 $31,226,621 $4,889,108 $6,498,699 $2,069,043 $1,098,678 $59,359,819
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES
Accounts payable $ 701,913 $ 2,163,509 $ – $ 1,734 $ – $ 60,042 $ 2,927,198
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenues
Succeeding year property tax 7,596,904 – 3,672,661 4,124,530 1,972,090 – 17,366,185
Special assessments – – – – – 291,720 291,720
Total deferred inflows of
resources 7,596,904 – 3,672,661 4,124,530 1,972,090 291,720 17,657,905
FUND BALANCES
Nonspendable 768,108 – – – – 25,502 793,610
Restricted for
Capital projects – 29,063,112 – – – – 29,063,112
Debt service – – 1,216,447 – – 98,548 1,314,995
Urban renewal and
development – – – 2,372,435 – – 2,372,435
Other purposes 243,370 – – – 96,953 622,866 963,189
Committed 522,191 – – – – – 522,191
Unassigned 3,745,184 – – – – – 3,745,184
Total fund balances 5,278,853 29,063,112 1,216,447 2,372,435 96,953 746,916 38,774,716
Total liabilities, deferred
inflows of resources
and fund balances $13,577,670 $31,226,621 $4,889,108 $6,498,699 $2,069,043 $1,098,678 $59,359,819
See Notes to Financial Statements.
-20-
City of Waukee
RECONCILIATION OF THE BALANCE SHEET—
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
June 30, 2018
Total governmental fund balances $ 38,774,716
Amounts reported for governmental activities in the
Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds. 160,538,037
Long-term liabilities, including bonds/notes payable, bond premiums and discounts,
other post employment benefits payable, net pension liability, compensated
absences and accrued interest payable, are not due and payable in the current
period and, therefore, are not reported as liabilities in the governmental funds. (78,351,211)
Pension and OPEB related deferred outflows of resources and deferred inflows of
resources are not due and payable in the current year and, therefore, are not
reported in the governmental funds, as follows:
Deferred outflows of resources 1,793,966
Deferred inflows of resources (157,150) 1,636,816
The Internal Service Fund is used by management to charge the costs of
future equipment purchases to individual funds. The assets of the Internal
Service Fund are allocated between governmental and proprietary
activities in the Statement of Net Position. 127,664
Net position of governmental activities $122,726,022
See Notes to Financial Statements.
-21-
City of Waukee, Iowa
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year ended June 30, 2018
Other
Special Revenue Nonmajor
Capital Debt Urban Employee Governmental
General Projects Service Renewal TIF Benefits Funds Total
REVENUES
Property tax $ 6,894,962 $ – $3,272,991 $ – $1,767,577 $ – $11,935,530
Tax increment financing – – – 3,549,942 – – 3,549,942
Other city tax 596 3,292 – – – 55,512 59,400
Licenses and permits 1,267,487 14,650 – – – 5,319 1,287,456
Use of money and property 225,077 194,780 12,038 60,256 15,247 17,733 525,131
Intergovernmental 396,943 3,138,658 54,375 8,283 33,406 2,289,605 5,921,270
Charges for services 542,749 – – – – 3,925 546,674
Miscellaneous 130,686 – – – – 124,547 255,233
Total revenues 9,458,500 3,351,380 3,339,404 3,618,481 1,816,230 2,496,641 24,080,636
EXPENDITURES
Operating
Public safety 5,442,783 – – – – 785 5,443,568
Public works 486,146 – – – – 1,449,257 1,935,403
Health and social services 700 – – – – – 700
Culture and recreation 1,975,248 – – – – 64,378 2,039,626
Community and economic
development 815,166 – – 572,296 – – 1,387,462
General government 1,074,305 – – – – – 1,074,305
Debt service
Principal – – 5,336,334 – – 44,000 5,380,334
Interest – – 1,640,592 – – 3,006 1,643,598
Bond issuance and other costs – 196,701 6,499 – – – 203,200
Capital projects 7,986,142 17,150,410 – – – 354,070 25,490,622
Total expenditures 17,780,490 17,347,111 6,983,425 572,296 – 1,915,496 44,598,818
Excess (deficiency) of
revenues over (under)
expenditures (8,321,990) (13,995,731) (3,644,021) 3,046,185 1,816,230 581,145 (20,518,182)
OTHER FINANCING SOURCES
(USES)
Bond proceeds – 19,775,000 – – – – 19,775,000
Bond premium – 916,341 – – – – 916,341
Sale of capital assets 5,104,202 – – – – 13,525 5,117,727
Operating transfers in 1,802,000 – 3,832,084 – – – 5,634,084
Operating transfers out (15,364) – – (3,122,613) (1,802,000) – (4,939,977)
Total other financing
sources (uses) 6,890,838 20,691,341 3,832,084 (3,122,613) (1,802,000) 13,525 26,503,175
CHANGE IN FUND BALANCES (1,431,152) 6,695,610 188,063 (76,428) 14,230 594,670 5,984,993
FUND BALANCES, beginning,
as restated 6,710,005 22,367,502 1,028,384 2,448,863 82,723 152,246 32,789,723
FUND BALANCES, ending $ 5,278,853 $29,063,112 $1,216,447 $2,372,435 $ 96,953 $ 746,916 $38,774,716
See Notes to Financial Statements.
-22-
City of Waukee
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES—
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Year ended June 30, 2018
Change in fund balances—Total governmental funds $ 5,984,993
Amounts reported for governmental activities in the
Statement of Activities are different because:
Governmental funds reported capital outlays as expenditures while governmental
activities report depreciation expense to allocate those expenditures over the
life of the assets. Capital outlay expenditures exceeded depreciation expense
in the current year, as follows:
Capital outlays, including contributed capital $26,841,261
Depreciation expense (5,999,554) 20,841,707
Governmental funds do not report capital assets and therefore do not report gains
or losses on the disposal of those assets (1,140,647)
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 Position. 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 issues exceeded repayments, as follows:
Issued (19,775,000)
Repaid 5,380,334 (14,394,666)
Governmental funds report the effect of premiums, discounts and similar items
when debt is first issued, whereas these amounts are deferred and
amortized in the Statement of Activities. (830,722)
The City’s current year IPERS contributions are reported as expenditures in the
governmental funds but are reported as deferred outflows of resources in the
Statement of Net Position. 527,023
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 (83,841)
Other postemployment benefits (31,377)
Pension expense (704,936)
Interest on long-term debt (47,000) (867,154)
The Internal Service Fund is used by management to charge the costs of
future equipment purchases to individual funds. The change in net position
of the Internal Service Fund is allocated to governmental and proprietary activities. 18,288
Change in net position of governmental activities $10,138,822
See Notes to Financial Statements.
-23-
City of Waukee, Iowa
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
June 30, 2018
Internal
Enterprise Funds Service Fund
Nonmajor Equipment
Water Sewer Gas Golf Funds Total Revolving
ASSETS
Current assets
Cash and investments $ 7,909,848 $ 8,189,174 $ 3,378,691 $ – $1,474,634 $20,952,347 $ 228,848
Receivables, net of allowances
Customer accounts 608,215 536,531 144,212 – 188,839 1,477,797 –
Special assessments – 25,716 – – – 25,716 –
Due from other funds 100,000 – – – – 100,000 –
Inventories 72,848 – 158,139 15,861 – 246,848 –
Total current assets 8,690,911 8,751,421 3,681,042 15,861 1,663,473 22,802,708 228,848
Noncurrent assets
Restricted assets – cash and investments
Customer deposits 154,394 – 110,150 – – 264,544 –
Revenue note and interest sinking account 27,973 135,145 36,993 8,403 73,480 281,994 –
Revenue note reserve account 613,555 559,091 – 57,342 – 1,229,988 –
Capital assets, net of accumulated
depreciation 17,206,423 35,130,148 11,129,266 1,729,620 1,333,113 66,528,570 –
Total noncurrent assets 18,002,345 35,824,384 11,276,409 1,795,365 1,406,593 68,305,096 –
Total assets 26,693,256 44,575,805 14,957,451 1,811,226 3,070,066 91,107,804 228,848
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows 69,334 86,767 108,343 42,246 76,882 383,572 –
OPEB related deferred outflows 2,420 2,459 2,888 698 1,747 10,212 –
Total deferred outflows of resources 71,754 89,226 111,231 42,944 78,629 393,784 –
LIABILITIES
Current liabilities
Accounts payable 269,993 913,484 83,676 21,339 65,623 1,354,115 –
Compensated absences 14,334 10,000 19,457 827 13,075 57,693 –
Due to other funds – – – 830,998 – 830,998 –
Customer deposits payable 154,394 – 110,150 – – 264,544 –
Revenue notes payable 325,000 555,000 377,000 56,018 60,000 1,373,018 –
Interest payable 16,969 40,758 3,537 1,272 720 63,256 –
Total current liabilities 780,690 1,519,242 593,820 910,454 139,418 3,943,624 –
Noncurrent liabilities
Revenue notes payable, net 6,247,320 14,589,025 1,195,000 380,771 460,000 22,872,116 –
Net OPEB liability 26,767 27,191 31,937 7,717 19,328 112,940 –
Net pension liability 138,005 172,705 215,651 84,089 153,028 763,478 –
Total noncurrent liabilities 6,412,092 14,788,921 1,442,588 472,577 632,356 23,748,534 –
Total liabilities 7,192,782 16,308,163 2,036,408 1,383,031 771,774 27,692,158 –
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Pension related deferred inflows 4,639 5,806 7,249 2,827 5,144 25,665 –
OPEB related deferred inflows 3,606 3,663 4,302 1,040 2,604 15,215 –
Total deferred inflows of resources 8,245 9,469 11,551 3,867 7,748 40,880 –
NET POSITION
Net investment in capital assets 12,229,344 23,776,712 9,557,266 1,292,831 1,020,874 47,877,027 –
Restricted for bond retirement 299,559 98,478 – 8,455 12,760 419,252 –
Unrestricted 7,035,080 4,472,209 3,463,457 (834,014) 1,335,539 15,472,271 228,848
Total net position $19,563,983 $28,347,399 $13,020,723 $ 467,272 $2,369,173 63,768,550 $ 228,848
Amounts reported for business type activities in the
Statement of Net Position are different because
The Internal Service Fund is used by management to charge the costs of future equipment
purchases to individual funds. The assets of the Internal Service Fund are allocated between
business and governmental type activities in the Statement of Net Position. 101,184
Net assets of business type activities $63,869,734
See Notes to Financial Statements.
-24-
City of Waukee, Iowa
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
Year ended June 30, 2018
Internal
Enterprise Funds Service Fund
Nonmajor Equipment
Water Sewer Gas Golf Funds Total Revolving
OPERATING REVENUES
Charges for service $ 5,115,805 $ 5,649,536 $ 7,360,721 $ 533,973 $2,411,983 $21,072,018 $ –
Miscellaneous 17,842 675 28,975 23,547 57,530 128,569 –
Total operating revenues 5,133,647 5,650,211 7,389,696 557,520 2,469,513 21,200,587 –
OPERATING EXPENSES
Business type activities
Cost of sales and services 2,680,302 1,391,980 5,204,602 487,942 2,026,044 11,790,870 –
Depreciation and amortization 608,636 729,290 366,014 48,239 77,076 1,829,255 –
Total operating expenses 3,288,938 2,121,270 5,570,616 536,181 2,103,120 13,620,125 –
Operating income 1,844,709 3,528,941 1,819,080 21,339 366,393 7,580,462 –
NONOPERATING REVENUES
(EXPENSES)
Interest income 81,854 73,667 43,273 – 23,050 221,844 2,924
Rental income 69,363 – – 2,400 – 71,763 –
Gain on disposal of capital assets 16,881 11,222 7,750 – – 35,853 –
Interest expense and fiscal charges (182,002) (199,201) (52,052) (16,817) (3,000) (453,072) –
Total nonoperating revenues
(expenses) (13,904) (114,312) (1,029) (14,417) 20,050 (123,612) 2,924
Income before transfers 1,830,805 3,414,629 1,818,051 6,922 386,443 7,456,850 2,924
Transfers in (out) (323,373) (94,335) (109,632) – (182,131) (709,471) 15,364
CHANGE IN NET POSITION 1,507,432 3,320,294 1,708,419 6,922 204,312 6,747,379 18,288
NET POSITION, beginning, as restated 18,056,551 25,027,105 11,312,304 460,350 2,164,861 57,021,171 210,560
NET POSITION, ending $19,563,983 $28,347,399 $13,020,723 $ 467,272 $2,369,173 $63,768,550 $ 228,848
See Notes to Financial Statements.
-25-
City of Waukee, Iowa
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
Year ended June 30, 2018
Internal
Enterprise Funds Service Fund
Nonmajor Equipment
Water Sewer Gas Golf Funds Total Revolving
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $5,222,111 $ 5,615,422 $7,360,646 $ 533,973 $2,387,640 $21,119,792 $ –
Cash received from other revenues 17,842 675 28,975 188,132 57,530 293,154 –
Cash paid for personal services (761,272) (780,003) (909,513) (220,777) (546,235) (3,217,800) –
Cash paid to suppliers (1,871,167) (682,198) (4,442,445) (294,223) (1,471,573) (8,761,606) –
Net cash provided by operating activities 2,607,514 4,153,896 2,037,663 207,105 427,362 9,433,540 –
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Payments made on interfund accounts – – – (132,741) – (132,741) –
Transfers to other funds (323,373) (94,335) (109,632) – (182,131) (709,471) –
Transfers from other funds – – – – – – 15,364
Net cash provided by (used in) noncapital
financing activities (323,373) (94,335) (109,632) (132,741) (182,131) (842,212) 15,364
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets (1,882,249) (10,650,215) (1,522,577) (5,483) (373,508) (14,434,032) –
Proceeds from sale of capital assets 16,881 11,222 7,750 – – 35,853 –
Principal paid on revenue notes (220,000) (283,000) (368,000) (53,904) (60,000) (984,904) –
Interest and fiscal charges paid (175,522) (170,282) (52,880) (16,975) (3,060) (418,719) –
Proceeds from bond issuance 3,438,221 11,709,540 – – – 15,147,761 –
Net cash provided by (used in) capital
and related financing activities 1,177,331 617,265 (1,935,707) (76,362) (436,568) (654,041) –
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 81,854 73,667 43,273 – 23,050 221,844 2,924
Purchase of investments (280,920) – – – – (280,920) –
Cash received from property rental 69,363 – – 2,400 – 71,763 –
Net cash provided by (used in) investing activities (129,703) 73,667 43,273 2,400 23,050 12,687 2,924
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,331,769 4,750,493 35,597 402 (168,287) 7,949,974 18,288
CASH AND CASH EQUIVALENTS, beginning 4,760,446 4,012,051 3,490,237 8,001 1,716,401 13,987,136 210,560
CASH AND CASH EQUIVALENTS, ending $8,092,215 $ 8,762,544 $3,525,834 $ 8,403 $1,548,114 $21,937,110 $ 228,848
See Notes to Financial Statements.
-26-
City of Waukee, Iowa
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS (continued)
Year ended June 30, 2018
Internal
Enterprise Funds Service Fund
Nonmajor Equipment
Water Sewer Gas Golf Funds Total Revolving
RECONCILIATION OF OPERATING
INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Operating income $1,844,709 $3,528,941 $1,819,080 $ 21,339 $ 366,393 $ 7,580,462 $ –
Adjustments to reconcile operating
income to net cash provided by
operating activities
Depreciation expense 608,636 729,290 366,014 48,239 77,076 1,829,255 –
Change in assets, deferred outflows,
liabilities and deferred inflows
Customer accounts receivable 106,306 (34,114) (75) – (24,343) 47,774 –
Due from other governments – – – 164,585 – 164,585 –
Inventories 25,970 – (32,582) (155) – (6,767) –
Accounts payable, net of capital assets (9,988) (87,189) (128,621) (29,095) (12,353) (267,246) –
Customer deposits 28,129 – 10,500 – – 38,629 –
Compensated absences 1,453 (5,203) 513 (872) 4,513 404 –
Net pension liability 2,030 39,051 6,925 6,730 23,184 77,920 –
Deferred outflows of resources (6,046) (24,639) (10,367) (5,561) (15,883) (62,496) –
Deferred inflows of resources 4,911 6,192 6,433 1,970 4,564 24,070 –
OPEB liability 1,404 1,567 (157) (75) 4,211 6,950 –
Net cash provided by operating activities $2,607,514 $4,153,896 $2,037,663 $ 207,105 $ 427,362 $ 9,433,540 $ –
RECONCILIATION OF CASH AND CASH
EQUIVALENTS AT YEAR END TO SPECIFIC
ASSETS INCLUDED ON THE STATEMENT
OF NET POSITION
Current assets
Cash and investments $7,909,848 $8,189,174 $3,378,691 $ – $1,474,634 $20,952,347 $ 228,848
Restricted assets – cash and investments
Customer deposits 154,394 – 110,150 – – 264,544 –
Revenue note and interest sinking account 27,973 135,145 36,993 8,403 73,480 281,994 –
Revenue note reserve account 613,555 559,091 – 57,342 – 1,229,988 –
8,705,770 8,883,410 3,525,834 65,745 1,548,114 22,728,873 228,848
Less items not meeting the definition of
cash equivalent
Certificates of deposit (613,555) (120,866) – (57,342) – (791,763) –
Cash and cash equivalents at year end $8,092,215 $8,762,544 $3,525,834 $ 8,403 $1,548,114 $21,937,110 $ 228,848
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-27-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Waukee is a political subdivision of the State of Iowa located in Dallas County. It was first incorporated in
1869 and operates under the Home Rule provisions of the Constitution of Iowa. The City operates under the Mayor-
Council-Clerk/Administrator form of government with the Mayor and Council Members elected on a non-partisan basis.
The City of Waukee provides numerous services to citizens, including public safety, public works, health and social
services, culture and recreation, community and economic development and general government services. It also
operates the water, sewer, gas, storm water and solid waste utilities and the public golf course.
The financial statements of the City of Waukee, Iowa, have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) as applied to government units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting
and financial reporting principles. The more significant of the government's accounting policies are described below:
Reporting Entity
For financial reporting purposes, the City of Waukee has included all funds, organizations, agencies, boards,
commissions and authorities. The City 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 the City are such
that exclusion would cause the City'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 the City to impose
its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific
financial burdens on the City.
These financial statements present the City of Waukee (the primary government) and its component units. The
component units discussed below are included in the City's reporting entity because of the significance of their
operational or financial relationship with the City.
Component Units
The Waukee Public Library Foundation has been incorporated under the provisions of the Iowa Nonprofit Corporation
Act to operate exclusively for charitable, educational and literary purposes for the enhancement and improvement of the
Waukee Public Library. In accordance with criteria set by the Governmental Accounting Standards Board, the
Foundation meets the definition of a component unit which should be blended. The financial activity of the component
unit has been blended as a special revenue fund of the City.
Jointly Governed Organizations
The City participates in several jointly governed organizations that provide goods or services to the citizenry of the City
but do not meet the criteria of a joint venture since there is no ongoing financial interest or responsibility by the
participating governments. City officials are members of the following boards and commissions: Des Moines Area
Metropolitan Planning Board, Central Iowa Regional Drinking Water Commission, Dallas County Housing Trust Fund
Board, Dallas County Emergency Management Commission, Metro Advisory Council, Westcom, Wastewater
Reclamation Authority and Waukee Economic Development Corporation.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-28-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation
Government-wide Financial Statements
The Statement of Net Position and the Statement of Activities report information on all of the nonfiduciary activities of
the primary government and its component units. For the most part, the effect of interfund activity has been removed
from these statements. Governmental activities, which are supported by property tax and intergovernmental
revenues, are reported separately from business type activities, which rely to a significant extent on fees and charges
for service.
The Statement of Net Position presents the City's nonfiduciary assets, deferred outflows of resources, liabilities and
deferred inflows of resources, with the difference reported as net position. Net position is reported in three
categories:
Net investment in capital assets consists of capital assets, net of accumulated depreciation and reduced by
outstanding balances for bonds, notes and other debt attributable to the acquisition, construction or improvement
of those assets. The related debt excludes unspent debt proceeds of $30,120,695.
Restricted net position results when constraints placed on net position use are either externally imposed or
imposed by law through constitutional provisions or enabling legislation. Enabling legislation did not result in any
restricted net position.
Unrestricted net position consists of net position not meeting the definition of the preceding categories.
Unrestricted net position often has constraints on resources imposed by management which can be removed or
modified.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by
program revenues. Direct expenses are those clearly identifiable with a specific function. 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 and 2) grants, contributions and interest restricted to meeting the operational or capital
requirements of a particular function. Property tax and other items not properly included among program revenues
are reported instead as general revenues.
Fund Financial Statements
Separate financial statements are provided for governmental and proprietary funds. Major individual governmental
and proprietary funds are reported as separate columns in the fund financial statements. All remaining governmental
funds and proprietary funds are aggregated and reported as nonmajor governmental and nonmajor proprietary funds.
The City reports the following major governmental funds:
General Fund
The General Fund is the general operating fund of the City. All general tax revenues from general and emergency
levies and other revenues not allocated by law or contractual agreement to some other fund are accounted for in
this fund. From the fund are paid the general operating expenditures, the fixed charges and the capital
improvement costs not paid from other funds.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-29-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
Special Revenue
Urban Renewal Tax Increment Financing Fund is used to account for revenues from the tax authorized by
ordinance in the City’s urban renewal districts and to pay the principal and interest on the general obligation capital
loan notes and other indebtedness incurred for urban renewal projects.
The Employee Benefits Fund is used to account for property tax levied to finance the payment of employee
benefits.
Capital Projects Fund
The Capital Projects Fund is used to account for all resources used in the acquisition and construction of capital
facilities and other capital assets.
Debt Service Fund
The Debt Service Fund is used to account for property tax and other revenues to be used for the payment of
interest and principal on the City's general long-term debt.
The City reports the following major proprietary funds:
Enterprise
The Water Fund is used to account for the operation and maintenance of the City's water system.
The Sewer Fund is used to account for the operation and maintenance of the City's sewer system.
The Gas Fund is used to account for the operation and maintenance of the City's gas system.
The Golf Fund is used to account for the operation and maintenance of the City's municipal golf course.
Measurement Focus and Basis of Accounting
The government-wide and proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property tax is recognized as
revenue in the year for which it is levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been satisfied.
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 available.
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 City considers revenues to be available if they are collected
within 60 days after year end.
Property tax, intergovernmental revenues (shared revenues, grants and reimbursements from other governments) and
interest are considered to be susceptible to accrual. All other revenue items are considered to be measurable and
available only when cash is received by the City.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-30-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Measurement Focus and Basis of Accounting (continued)
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, principal and
interest on long-term debt, claims and judgments and compensated absences are recognized as expenditures only
when payment is due. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of
general long-term debt are reported as other financing sources.
When an expenditure is incurred in governmental funds which can be paid using either restricted or unrestricted
resources, the City’s policy is generally to first apply the expenditure toward restricted fund balance and then to less-
restrictive classifications - committed, assigned and then unassigned fund balances.
Under terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement
grants, categorical block grants and general revenues. Thus, when program expenses are incurred, there are both
restricted and unrestricted net position available to finance the program. It is the City’s policy to first apply cost-
reimbursement grant resources to such programs, followed by categorical block grants and then by general revenues.
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 City's Enterprise Funds is charges to
customers for sales and services. Operating expenses for Enterprise Funds include the cost of sales and services,
administrative expenses and depreciation/amortization on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
The City maintains its financial records on the cash basis. The financial statements of the City are prepared by making
memorandum adjusting entries to the cash basis financial records.
Cash and Pooled Cash Investments
The cash balances of most City funds are pooled and invested. Interest earned on investments is recorded in the
General Fund unless otherwise provided by law.
For purposes of the statement of cash flows, all short-term cash investments that are highly liquid (including restricted
assets) are considered to be cash equivalents. Cash equivalents are readily convertible to known amounts of cash and,
at the day of purchase, have a maturity date no longer than three months.
Property Tax Receivable, Including Tax Increment Financing
Property tax, including tax increment financing, in governmental funds are accounted for using the modified accrual
basis of accounting.
Property tax receivable is recognized in these funds on the levy or lien date, which is the date that the tax asking is
certified by the City Council to the County Board of Supervisors. Delinquent property tax receivable represents taxes
collected by the County but not remitted to the City at June 30, 2018 and unpaid taxes. The succeeding year property
tax receivable represents taxes certified by the City Council to be collected in the next fiscal year for the purposes set
out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by
March 15 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for
the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax
receivable has been recorded, the related revenue is deferred in both the government-wide and fund financial
statements and will not be recognized as revenue until the year for which it is levied.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-31-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property Tax Receivable, Including Tax Increment Financing (continued)
Property tax revenues recognized in these funds become due and collectible in September and March of the current
fiscal year with a 1½% per month penalty for delinquent payments; is based on January 1, 2016 assessed property
valuations; is for the tax accrual period July 1, 2017 through June 30, 2018 and reflects the tax asking contained in the
budget certified to the County Board of Supervisors in March 2017.
Special Assessments Receivable
Special assessments receivable represents the amounts due from individuals for work done which benefits their
property. These assessments are payable by individuals in not less than ten nor more than twenty annual installments.
Each annual installment with interest on the unpaid balance is due on September 30 and is subject to the same interest
and penalties as other taxes.
Customer Accounts and Unbilled Usage
Accounts receivable are recorded in the Enterprise Funds at the time the service is billed. Unbilled usage for service
consumed between periodic scheduled billing dates is not estimated or recorded to the financial statements per City
policy.
Due from and Due to Other Funds
During the course of its operations, the City has numerous transactions between funds. To the extent certain
transactions between funds had not been paid or received as of June 30, 2018, balances of interfund amounts
receivable or payable have been recorded in the fund financial statements.
Due from Other Governments
Due from other governments represents amounts due from the State of Iowa and various shared revenues, grants and
reimbursements from other governments.
Inventories
Inventories are valued at cost using the first-in/first-out method. Inventories consist of materials and supplies.
Inventories are recorded as expenses when consumed rather than when purchased.
Restricted Assets
Funds set aside for payment of Enterprise Fund revenue notes are classified as restricted assets since their use is
restricted by applicable note indentures. Other restricted assets include customer deposits restricted for application to
unpaid customer accounts or for refund to customers.
Capital Assets
Capital assets, which include property, equipment and vehicles and infrastructure assets acquired after July 1, 1980
(e.g. roads, bridges, curbs, gutters, sidewalks and similar items which are immovable and of value only to the City) are
reported in the applicable governmental or business type activities columns in the government-wide Statement of Net
Position and in the Proprietary Funds Statement of Net Position. Capital assets are recorded at historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repair not adding to the value of the asset or materially extending asset lives are
not capitalized. Capital assets are defined by the City as assets with initial, individual cost in excess of $5,000 and
estimated useful lives in excess of two years.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-32-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Capital Assets (continued)
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during
the construction phase of capital assets of business-type activities is included as part of the capitalized value of the
assets constructed. During the year ended June 30, 2018 the City capitalized the following interest payments:
Sanitary Sewer Fund $ 180,051
Water Fund 8,778
Storm Water Utility Fund 3,900
Total $ 192,729
Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives:
Estimated
Asset Class useful lives
Buildings 40-50 years
Improvements other than buildings 20-50 years
Vehicles 5-10 years
Equipment 5-30 years
Infrastructure 20-40 years
Deferred Outflows of Resources
Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and will not be
recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources consist of
unrecognized items not yet charged to pension expense and contributions from the City after the measurement date but
before the end of the City’s reporting period.
Compensated Absences
City employees accumulate a limited amount of earned but unused vacation for subsequent use. A liability is recorded
when incurred in the government-wide and proprietary fund financial statements. For governmental fund types, the
amount of earned but unused vacation is recorded as a liability of the respective fund only if they have matured, for
example, as a result of employee retirement. The compensated absences liability has been computed based on rates
of pay in effect at June 30, 2018. The compensated absences liability attributable to the governmental activities will be
paid primarily by the General Fund.
Long-Term Liabilities
In the government-wide and proprietary fund financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental or business type activities column in the Statement of Net Position
and the proprietary fund Statement of Net Position.
In the governmental fund financial statements, the face amount of debt issued is reported as other financing sources.
Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-33-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the Iowa Public Employees’
Retirement System (IPERS) and additions to/deductions from IPERS’ fiduciary net position have been determined on
the same basis as they are reported by IPERS. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at
fair value. The net position liability attributable to the governmental activities will be paid primarily by the General Fund.
Deferred Inflows of Resources
Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and will not be
recognized as an inflow of resources (revenue) until that time. Although certain revenues are measurable, they are not
available. Available means collected within the current year or expected to be collected soon enough thereafter to be
used to pay liabilities of the current year. Deferred inflows of resources in the governmental fund financial statements
represent the amount of assets that have been recognized, but the related revenue has not been recognized since the
assets are not collected within the current year or expected to be collected soon enough thereafter to be used to pay
liabilities of the current year. Deferred inflows of resources consist of property tax receivable and other receivables not
collected within sixty days after year end.
Deferred inflows of resources in the Statement of Net Position consist of succeeding year property tax and tax
increment financing receivable that will not be recognized as revenue until the year for which they are levied and the
unamortized portion of the net difference between projected and actual earnings on IPERS’ investments.
Total OPEB Liability
For purposes of measuring the total OPEB liability, deferred outflows of resources related to OPEB and OPEB expense,
information has been determined based on the City’s actuary report. For this purpose, benefit payments are recognized
when due and payable in accordance with the benefit terms. The total OPEB liability attributable to the governmental
activities will be paid primarily by the General Fund.
Fund Balances
In the governmental fund financial statements, fund balances are classified as follows:
Nonspendable – Amounts which cannot be spent either because they are in a nonspendable form or because they
are legally or contractually required to be maintained intact.
Restricted – Amounts restricted to specific purposes when constraints placed on the use of the resources are either
externally imposed by creditors, grantors or state or federal laws or imposed by law through constitutional provisions
or enabling legislation.
Committed – Amounts which can be used only for specific purposes pursuant to constraints formally imposed by the
City Council through ordinance or resolution approved prior to year-end. Those committed amounts cannot be used
for any other purpose unless the City Council removes or changes the specified use by taking the same action it
employed to commit those amounts.
Unassigned – All amounts not included in the preceding classifications. The General Fund is the only fund which
would report a positive amount in unassigned fund balance. Residual deficit amounts of other governmental funds
would also be reported as unassigned.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-34-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Budgets and Budgetary Accounting
The budgetary comparison and related disclosures are reported as Required Supplementary Information. During the
year ended June 30, 2018, disbursements exceeded the amount budgeted in the community and economic
development function.
NOTE 2 CASH AND POOLED CASH INVESTMENTS
The City's deposits in banks at June 30, 2018 were entirely covered by federal depository insurance or by the State
Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments
against the depositories to ensure 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 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.
In addition, the Waukee Public Library Foundation, a blended component unit of the City, holds endowment funds with
the Community Foundation of Greater Des Moines totaling approximately $140,000.
The City has no other investments meeting the disclosure requirements of Governmental Accounting Standards Board
Statement No. 72.
Interest rate risk
The City's investment policy limits the investment of operating funds (funds expected to be expended in the current
budget year or within 15 months of receipt) in instruments that mature within 397 days. Funds not identified as
operating funds may be invested in investments with maturities longer than 397 days but the maturities shall be
consistent with the needs and use of the City.
NOTE 3 ALLOWANCES FOR COLLECTION LOSSES
Allowances have been made for estimated collection losses on the following receivable amounts:
Allowance
for
Gross collection Net
receivables losses receivables
Customer accounts
Water fund $ 609,065 $ 850 $ 608,215
Sewer fund 536,931 400 536,531
Gas fund 145,962 1,750 144,212
Nonmajor proprietary funds 188,839 – 188,839
Totals $1,480,797 $ 3,000 $1,477,797
Other
General fund $ 334,631 $ 47,000 $ 287,631
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-35-
NOTE 4 LEASING ACTIVITIES
The City, as lessor, has entered into various leases with outside parties.
The City leases office space under an operating lease agreement dated September 12, 2011 expiring August 31, 2021,
with termination rights with 24 months written notice and with one ten year renewal option at the same terms and
conditions. Lessee is responsible for the payment of all utilities, real estate taxes and special assessments. The lease
calls for monthly payments of $2,340.
The City leases space on a water tower under two operating lease agreements expiring in March 2022 and September
2026. The leases call for annual payments of approximately $30,000 and $33,000, respectively, with annual 3%
escalating increases.
The total minimum future lease payments receivable under the operating leases at June 30, 2018 are as follows:
Water Tower
Year ending June 30 Office Space Space Total
2019 $ 28,075 $ 62,174 $ 90,249
2020 28,075 64,039 92,114
2021 28,075 65,960 94,035
2022 4,679 67,939 72,618
2023 – 33,433 33,433
Thereafter – 106,440 106,440
$ 88,904 $ 399,985 $ 488,889
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-36-
NOTE 5 CAPITAL ASSETS
Capital assets activity for the year ended June 30, 2018 was as follows:
Balance Balance
beginning end
of year Increases Decreases of year
Primary Government
Governmental activities
Capital assets not being depreciated
Land $ 11,802,528 $ 7,667,275 $ 1,140,647 $ 18,329,156
Construction in progress 14,154,001 16,533,052 13,061,352 17,625,701
Total capital assets not being depreciated 25,956,529 24,200,327 14,201,999 35,954,857
Capital assets being depreciated
Buildings 8,823,592 91,661 – 8,915,253
Improvements other than buildings 158,279,963 14,779,934 – 173,059,897
Equipment 6,592,665 830,690 52,694 7,370,661
Total capital assets being depreciated 173,696,220 15,702,285 52,694 189,345,811
Less accumulated depreciation for
Buildings 3,060,643 277,069 – 3,337,712
Improvements other than buildings 51,609,625 5,199,675 – 56,809,300
Equipment 4,145,503 522,810 52,694 4,615,619
Total accumulated depreciation 58,815,771 5,999,554 52,694 64,762,631
Total capital assets being depreciated, net 114,880,449 9,702,731 – 124,583,180
Governmental activities capital assets, net $140,836,978 $33,903,058 $14,201,999 $160,538,037
Business type activities
Capital assets not being depreciated
Land $ 1,226,032 $ – $ – $ 1,226,032
Construction in progress 6,374,542 11,754,987 4,653,450 13,476,079
Total capital assets not being depreciated 7,600,574 11,754,987 4,653,450 14,702,111
Capital assets being depreciated
Buildings 557,486 – – 557,486
Equipment 4,159,164 535,119 100,191 4,594,092
Infrastructure 61,554,770 7,027,427 – 68,582,197
Total capital assets being depreciated 66,271,420 7,562,546 100,191 73,733,775
Less accumulated depreciation for
Buildings 223,769 13,192 – 236,961
Equipment 2,755,817 283,896 100,191 2,939,522
Infrastructure 17,198,666 1,532,167 – 18,730,833
Total accumulated depreciation 20,178,252 1,829,255 100,191 21,907,316
Total capital assets being depreciated, net 46,093,168 5,733,291 – 51,826,459
Business type activities capital assets, net $ 53,693,742 $17,488,278 $ 4,653,450 $ 66,528,570
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-37-
NOTE 5 CAPITAL ASSETS (continued)
Depreciation expense was charged to functions of the primary government as follows:
Governmental activities
Public safety $ 319,147
Public works 5,236,027
Culture and recreation 311,276
Community and economic development 804
General government 132,300
Total depreciation expense--governmental activities $5,999,554
Business type activities
Water $ 608,636
Sewer 729,290
Gas 366,014
Storm water 77,076
Golf 48,239
Total depreciation expense--business type activities $1,829,255
NOTE 6 LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2018 is as follows:
Balance Balance
beginning end Due within
of year Increases Decreases of year one year
(As restated)
Governmental activities
General obligation bonds/notes $58,050,812 $20,691,341 $ 5,266,954 $73,475,199 (1) $6,383,092
Urban Renewal Revenue bonds 660,000 – 155,000 505,000 160,000
Special assessment notes 90,000 – 44,000 46,000 46,000
Compensated absences 298,141 34,538 – 332,679 63,271
Net OPEB liability 269,853 18,598 – 288,451 –
Net pension liability 3,124,774 394,108 – 3,518,882 –
Totals $62,493,580 $21,138,585 $ 5,465,954 $78,166,211 $6,652,363
Business type activities
Revenue bonds/notes $10,087,576 $15,017,027 $ 859,469 $24,245,134 (2) $1,373,018
Compensated absences 57,289 404 – 57,693 57,693
Net OPEB liability 105,990 6,950 – 112,940 –
Net pension liability 685,558 77,920 – 763,478 –
Totals $10,936,413 $15,102,301 $ 859,469 $25,179,245 $1,430,711
(1) Included in balance are unamortized bond premiums and discounts totaling $2,006,388 and $104,326, respectively
at June 30, 2018.
(2) Included in balance are unamortized bond premiums and discounts totaling $224,770 and $20,452, respectively, at
June 30, 2018.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-38-
NOTE 6 LONG-TERM LIABILITIES (continued)
Bond/Note Issuance
Fourteen issues of unmatured general obligation bonds/notes, totaling $71,573,137, are outstanding at June 30, 2018.
General obligation bonds/notes bear interest at rates ranging from 1.0% to 5.0% and mature in varying annual amounts,
ranging from $63,092 to $2,265,000, with the final maturities due in the year ending June 30, 2038.
One issue of unmatured Urban Renewal revenue notes, totaling $505,000, is outstanding at June 30, 2018. The note
bears interest at 3.6% to 3.9% and matures in annual amounts of $160,000 to $175,000, with final maturity due in the
year ending June 30, 2021.
One issue of unmatured special assessment notes, totaling $46,000, is outstanding at June 30, 2018. The note bears
interest at 4.55% with final maturity due in the year ending June 30, 2019.
Details of general obligation and revenue bonds/notes payable and special assessment notes at June 30, 2018 are as
follows:
Amount of Outstanding
Interest Final Annual original June 30,
Governmental activities Date of issue rates due date payments issue 2018
General Obligation Bonds
and Notes
Golf Course Refunding February 19, 2016 2.75 June 1, 2020 $ 63,092 - $ 65,045 $ 279,990 $ 128,137
General Obligation 2010A June 2, 2010 3.13-3.50 June 1, 2022 125,000 - 140,000 1,435,000 530,000
General Obligation 2010B June 2, 2010 3.20-3.60 June 1, 2021 170,000 - 185,000 1,745,000 535,000
General Obligation 2012A June 14, 2012 2.00 June 1, 2020 100,000 - 105,000 2,680,000 205,000
General Obligation 2012B June 14, 2012 3.00 June 1, 2021 340,000 - 695,000 4,220,000 1,705,000
Urban Renewal 2012D December 28, 2012 2.00 June 1, 2021 425,000 - 445,000 3,745,000 1,305,000
General Obligation 2013B May 28, 2013 2.00-3.00 June 1, 2028 100,000 - 350,000 3,280,000 1,760,000
General Obligation
Refunding 2013C May 28, 2013 1.15-1.35 June 1, 2020 280,000 - 285,000 2,265,000 565,000
General Obligation 2013D December 12, 2013 3.00-5.00 June 1, 2033 110,000 - 930,000 8,740,000 4,425,000
General Obligation 2014A December 10, 2014 2.00-3.50 June 1, 2034 510,000 - 2,265,000 23,295,000 20,940,000
General Obligation 2015C November 19, 2015 2.00-4.00 June 1, 2030 365,000 - 495,000 7,340,000 5,105,000
General Obligation
Refunding 2016C September 20, 2016 1.00-1.30 June 1, 2022 200,000 - 315,000 1,720,000 1,135,000
General Obligation 2017A May 24, 2017 2.00-4.00 June 1, 2036 100,000 - 1,900,000 13,940,000 13,460,000
General Obligation 2018A June 19, 2018 3.00-5.00 June 1, 2038 690,000 - 1,310,000 19,775,000 19,775,000
Revenue Bonds
Urban Renewal 2010C June 2, 2010 3.60-3.90 June 1, 2021 160,000 - 175,000 1,590,000 505,000
Special Assessment Notes
Sewer Improvements May 5, 2009 4.55 December 1, 2018 46,000 362,000 46,000
The City has pledged future tax increment revenues to repay the $1,590,000 of bonds issued June 2, 2010. The Urban
Renewal revenue bonds were issued for the purpose of defraying a portion of the cost of an urban renewal project. The
bonds are payable solely from the proceeds of the tax increment revenues received by the City and are payable through
2021. The bonds are not a general obligation of the City. However, the debt is subject to the constitutional debt
limitation of the City. Annual principal and interest payments on the bonds are expected to require approximately four
percent of the tax increment revenues. The total principal and interest remaining to be paid on the notes is $544,155.
For the current year, $179,315 of principal and interest was paid on the bonds and total tax increment revenues were
$3,618,481.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-39-
NOTE 6 LONG-TERM LIABILITIES (continued)
The covenants providing for the issuance of the Urban Renewal Revenue Bond include the following provisions.
a) The City must maintain the urban renewal project area and the ordinance implementing the tax increment
mechanism in force and will annually cause the incremental taxes thereof to be levied in an amount not less than
the principal and interest coming due within the year.
b) The City must maintain proper books and prepare special bond reports, which are to be audited within 210 days of
the City’s fiscal year end and made available to bondholders.
c) The City must comply with the Constitution and laws of Iowa related to each bond issue.
The Revenue bond also has a stated reserve requirement that is calculated as the lesser of (a) 10 percent of the stated
principal amount on the bonds and parity obligations or (b) the maximum annual debt service coming due on the bonds
and other parity obligations, or (c) 125 percent of the average annual principal and interest coming due on the bonds.
The City has established a reserve amount of $159,000.
A summary of the bond/note principal and interest maturities by type of bond/note is as follows:
Year ending General Obligation Special Assessment
June 30 Principal Interest Total Principal Interest Total
2019 $ 6,383,092 $ 2,242,520 $ 8,625,612 $ 46,000 $ 1,046 $ 47,046
2020 6,340,045 2,101,634 8,441,679 – – –
2021 6,260,000 1,918,093 8,178,093 – – –
2022 3,310,000 1,735,147 5,045,147 – – –
2023 3,185,000 1,632,897 4,817,897 – – –
2024-2028 16,990,000 6,467,188 23,457,188 – – –
2029-2033 18,570,000 3,560,949 22,130,949 – – –
2034-2038 10,535,000 869,412 11,404,412 – – –
Subtotal 71,573,137 20,527,840 92,100,977 46,000 1,046 47,046
Plus unamortized
premium 1,902,062 – 1,902,062 – – –
Totals $73,475,199 $20,527,840 $94,003,039 $ 46,000 $ 1,046 $ 47,046
Year ending Revenue
June 30 Principal Interest Total
2019 $ 160,000 $ 19,045 $ 179,045
2020 170,000 13,285 183,285
2021 175,000 6,825 181,825
Totals $ 505,000 $ 39,155 $ 544,155
Ten issues of unmatured revenue notes, totaling $24,040,816, are outstanding at June 30, 2018. These notes bear
interest at rates ranging from 1.30% to 5.00% and mature in varying annual amounts, ranging from $56,018 to
$809,000, with the final maturities due in the year ending June 30, 2038.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-40-
NOTE 6 LONG-TERM LIABILITIES (continued)
The resolutions providing for the issuance of the revenue notes and bonds include the following provisions:
(1) The notes/bonds will only be redeemed from the future earnings of the enterprise activity and the note/bondholders
hold a lien on the future earnings of the funds.
(2) Sufficient monthly transfers shall be made to water, sewer, gas and golf course note/bond and interest sinking
funds for the purpose of making the note/bond principal and interest payments when due.
(3) Additional monthly transfers shall be made to sewer, water, gas and golf course reserve funds until specific
minimum balances have been accumulated. These accounts are restricted for the purpose of paying note/bond
principal and interest payments due when insufficient money is available in the sinking funds.
During the year ended June 30, 2018, the City was in compliance with the revenue bond provisions.
The City has pledged future sewer, water, golf, and gas customer revenues, net of specified operating expenses, to
repay the $31,301,339 in revenue notes issued from 2012 to 2018. Proceeds from the notes provided financing for
construction of improvements to the facilities and infrastructure and purchase capacity. The notes are payable solely
from customer net revenues and are payable through 2038. Annual principal and interest payments on the notes are
expected to require less than net revenues. The total principal and interest remaining to be paid on the notes is
$30,215,144. For the current year, principal and interest paid and total customer net revenues were $1,335,458 and
$7,496,745, respectively.
Details of revenue notes and bonds payable at June 30, 2018 are as follows:
Amount of Outstanding
Interest Final Annual original June 30,
Business Type activities Date of issue rates due date payments issue 2018
Revenue Notes and Bonds
Water
Revenue Capital Loan
2012C September 5, 2012 2.00 - 4.10 June 1, 2032 $110,000 - 185,000 $2,625,000 $2,005,000
Revenue Note Series
2015B July 21, 2015 3.00 June 1, 2027 115,000 - 140,000 1,450,000 1,120,000
Revenue Note Series
2018B June 19, 2018 3.00 June 1, 2038 100,000 - 265,000 3,410,000 3,410,000
Sewer
Revenue Capital Loan
2013A March 1, 2013 2.00 - 2.50 June 1, 2024 110,000 - 120,000 1,185,000 685,000
Revenue Capital Loan
2016C December 20, 2016 3.00 - 3.125 June 1, 2036 100,000 - 205,000 2,685,000 2,685,000
Revenue Capital Loan
2018C June 19, 2018 3.00 – 5.00 June 1, 2038 125,000 - 250,000 3,565,000 3,565,000
Capital Loan Note 2017 September 1, 2017 2.00 June 1, 2038 335,000 - 809,000 12,537,000 8,042,027
Golf Course
Revenue refunding bond February 19, 2016 3.50 December 1, 2020 56,018 - 322,567 572,339 436,789
Gas
Revenue Note March 18, 2015 2.70 June 1, 2022 377,000 - 409,000 2,632,000 1,572,000
Stormwater
Revenue Note Series
2016A June 1, 2016 1.30 - 2.00 June 1, 2026 60,000 - 70,000 640,000 520,000
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-41-
NOTE 6 LONG-TERM LIABILITIES (continued)
Year ending Revenue Notes/Bonds
June 30 Principal Interest Total
2019 $ 1,373,018 $ 659,085 $ 2,032,103
2020 1,525,995 636,840 2,162,835
2021 1,905,776 589,886 2,495,662
2022 1,634,000 541,660 2,175,660
2023 1,249,000 497,206 1,746,206
2024-2028 6,782,000 1,940,275 8,722,275
2029-2033 6,551,027 1,014,800 7,565,827
2034-2038 3,020,000 294,576 3,314,576
Subtotal 24,040,816 6,174,328 30,215,144
Plus unamortized premium 204,318 – 204,318
Totals $24,245,134 $6,174,328 $30,419,462
As of June 30, 2018, the general obligation debt issued by the City did not exceed its legal debt limit computed as
follows:
Actual valuation $1,844,334,937
Debt limit - 5% of total actual valuation $92,216,747
Debt applicable to debt limit
General obligation bonded debt outstanding $71,573,137
Urban Renewal revenue bonds outstanding 505,000
Tax increment financing debt outstanding 345,000
Total debt subject to debt limit $72,423,137
Percentage of debt limit 78.54%
NOTE 7 PENSION PLAN
Plan Description
IPERS is a cost-sharing multiple employer defined benefit pension plan administered by Iowa Public Employees’
Retirement System. Membership is mandatory for employees of the City, except for those covered by another
retirement system. IPERS issues a stand-along financial report which is available to the public by mail at P.O. Box
9117, Des Moines, Iowa 50306-9117 or at www.ipers.org.
IPERS benefits are established under Iowa Code Chapter 97B and the administrative rules thereunder. Chapter 97B
and the administrative rules are the official plan documents. The following brief description is provided for general
informational purposes only. Refer to the plan documents for more information.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-42-
NOTE 7 PENSION PLAN (continued)
Pension Benefits
A Regular member may retire at normal retirement age and receive monthly benefits without an early-retirement
reduction. Normal retirement age is age 65, any time after reaching age 62 with 20 or more years of covered
employment, or when the member’s years of service plus the member’s age at the last birthday equals or exceeds 88,
whichever comes first. These qualifications must be met on the member’s first month of entitlement to benefits.
Members cannot begin receiving retirement benefits before age 55. The formula used to calculate a Regular member’s
monthly IPERS benefit includes:
A multiplier based on years of service.
The member’s highest five-year average salary. For members with service before June 30, 2012, the highest
three-year average salary as of that date will be used if it is greater than the highest five-year average salary.
Protection occupation members may retire at normal retirement age which is generally at age 55. The formula used to
calculate a protection occupation members’ monthly IPERS benefit includes:
60% of average salary after completion of 22 years of service, plus an additional 1.5% of average salary for
years of service greater than 22 but not more than 30 years of service.
The member’s highest three-year average salary.
If a member retires before normal retirement age, the member’s monthly retirement benefit will be permanently reduced
by an early-retirement reduction. The early-retirement reduction is calculated differently for service earned before and
after July 1, 2012. For service earned before July 1, 2012, the reduction is 0.25 percent for each month that the
member receives benefits before the member’s earliest normal retirement age. For service earned starting July 1,
2012, the reduction is 0.50 percent for each month that the member receives benefits before age 65.
Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the same for the rest of
the member’s lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July
1990 receive a guaranteed dividend with their regular November benefit payments.
Disability and Death Benefits
A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible
to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies
before retirement, the member’s beneficiary will receive a lifetime annuity or a lump-sum payment equal to the present
actuarial value of the member’s accrued benefit or calculated with a set formula, whichever is greater. When a member
dies after retirement, death benefits depend on the benefit option the member selected at retirement.
Contributions
Contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS’ Contribution
Rate Funding Policy and Actuarial Amortization Method. State statute limits the amount rates can increase or decrease
each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires the actuarial contribution rate be
determined using the “entry age normal” actuarial cost method and the actuarial assumptions and methods approved by
the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability
payment based on a 30-year amortization period. The payment to amortize the unfunded actuarial liability is
determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment
Board.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-43-
NOTE 7 PENSION PLAN (continued)
Contributions (continued)
In fiscal year 2018, pursuant to the required rate, Regular members contributed 5.95 percent of covered payroll, and the
City contributed 8.93 percent of covered payroll, for a total rate of 14.88 percent. Protection occupation members
contributed 6.56 percent of covered payroll, and the City contributed 9.84 percent of covered payroll, for a total rate of
16.40 percent.
The City’s total contributions to IPERS for the year ended June 30, 2018 were $723,166.
Net Pension Liability, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
At June 30, 2018, the City reported a liability of $4,282,360 for its proportionate share of the net pension liability. The
net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was
based on the City’s share of contributions to IPERS relative to the contributions of all IPERS participating employers.
The following table summarizes the change in the City’s proportionate share:
June 30
2017 2016 Change
City’s proportionate share 0.064287% 0.060546% 0.003741%
For the year ended June 30, 2018, the City recognized pension expense of $935,570. At June 30, 2018, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions from the following
sources:
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
Difference between expected and actual experience $ 45,260 $ 64,193
Change in assumptions 1,027,176 327
Net difference between projected and actual earnings
on IPERS’ investments – 68,691
Change in proportion and difference between
City contributions and proportionate share
of contributions 355,855 10,744
City contributions subsequent to the
measurement date 723,166 –
Totals $2,151,457 $ 143,955
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-44-
NOTE 7 PENSION PLAN (continued)
$723,166 reported as deferred outflows of resources related to pensions resulting from the City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Year ending June 30, Total
2019 $ 254,381
2020 558,995
2021 330,718
2022 57,729
2023 82,513
Totals $1,284,336
There were no non-employer contributing entities at IPERS.
Actuarial Assumptions
The total pension liability in the June 30, 2017 actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Rate of inflation (effective June 30, 2017) 2.60 percent per annum.
Rates of salary increase (effective June 30, 2017) 3.25 to 16.25 percent average, including inflation. Rates vary
by membership group.
Long-term investment rate of return 7.00 percent, compounded annually, net of investment
(effective June 30, 2017) expense, including inflation
Wage growth (effective June 30, 2017) 3.25 percent per annum based on 2.60 percent inflation and
0.65 percent real wage inflation.
The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience
study dated March 24, 2017.
Mortality rates were based on the RP-2000 Mortality Table for Males or Females, as appropriate, with adjustments for
mortality improvements based on Scale AA.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-45-
NOTE 7 PENSION PLAN (continued)
The long-term expected rate of return on IPERS’ investments was determined using a building-block method in which
best-estimate ranges of expected future real rates (expected returns, net of investment expense and inflation) are
developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by
weighting the expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Long-Term Expected
Asset Class Asset Allocation Rate of Return
Core Plus Fixed Income 27.0% 2.25%
Domestic Equity 24.0 6.25
International Equity 16.0 6.71
Public Credit 3.5 3.46
Public Real Assets 7.0 3.27
Private Equity 11.0 11.15
Private Real Assets 7.5 4.18
Private Credit 3.0 4.25
Cash 1.0 (0.31)
Total 100.0%
Discount Rate
The discount rate used to measure the total pension liability was 7.0 percent. The projection of cash flows used to
determine the discount rate assumed that employee contributions will be made at the contractually required rate and
contributions from the City will be made at contractually required rates, actuarially determined. Based on those
assumptions, IPERS’ fiduciary net position was projected to be available to make all projected future benefit payments
of current active and inactive employees. Therefore, the long-term expected rate of return on IPERS’ investments was
applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.0
percent, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a
discount rate that is 1-percentage-point lower (6.0 percent) or 1-percentage-point higher (8.0 percent) than the current
rate.
1% Discount 1%
Decrease Rate Increase
(6.0%) (7.0%) (8.0%)
City’s proportionate share of the net pension liability $8,301,177 $4,282,360 $ 907,105
IPERS’ Fiduciary Net Position
Detailed information about IPERS’ fiduciary net position is available in the separately issued IPERS financial report
which is available on IPERS’ website at www.ipers.org.
Payables to IPERS
At June 30, 2018, the City did not report any amounts payable to IPERS for either legally required employer
contributions or legally required employee contributions.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-46-
NOTE 8 INTERFUND TRANSFERS
The detail of interfund transfers for the year ended June 30, 2018 is as follows:
Transfer to Transfer from Amount
General Employee Benefits $1,802,000
Debt Service Governmental funds
Urban Renewal TIF 3,122,613
Enterprise funds
Water 323,373
Sewer 94,335
Gas 109,632
Nonmajor Enterprise funds 182,131
3,832,084
Equipment Revolving General 15,364
Total $5,649,448
Transfers generally move resources from the fund statutorily required to collect the resources to the fund statutorily
required to expend the resources.
NOTE 9 DUE FROM AND DUE TO OTHER FUNDS
The detail of interfund receivables and payables at June 30, 2018 is as follows:
Payable Fund Receivable Fund Amount
Enterprise-Golf Course General $ 730,998
Enterprise-Water 100,000
Total $ 830,998
Amounts due from Golf Course result from interfund loans to finance the Golf Course’s operations. Repayments will be
made from future revenues over the next several years.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-47-
NOTE 10 RISK MANAGEMENT
The City of Waukee is a member in the Iowa Communities Assurance Pool, as allowed by Chapter 670.7 of the Code of
Iowa. The Iowa Communities Assurance Pool (Pool) is a local government risk-sharing pool whose 775 members
include various governmental entities throughout the State of Iowa. The Pool was formed in August 1986 for the
purpose of managing and funding third-party liability claims against its members. The Pool provides coverage and
protection in the following categories: general liability, automobile liability, automobile physical damage, public officials
liability, police professional liability, property, inland marine and boiler/machinery. There have been no reductions in
insurance coverage from prior years.
Each member's annual casualty contributions to the Pool fund current operations and provide capital. Annual casualty
operating contributions are those amounts necessary to fund, on a cash basis, the Pool's general and administrative
expenses, claims, claims expenses and reinsurance expenses estimated for the fiscal year, plus all or any portion of
any deficiency in capital. Capital contributions are made during the first six years of membership and are maintained at
a level determined by the Board not to exceed 300 percent of the basis rate.
The Pool also provides property coverage. Members who elect such coverage make annual property operating
contributions which are necessary to fund, on a cash basis, the Pool's general and administrative expenses,
reinsurance premiums, losses and loss expenses for property risks estimated for the fiscal year, plus all or any portion
of any deficiency in capital. Any year end operating surplus is transferred to capital. Deficiencies in operations are
offset by transfers from capital and, if insufficient, by the subsequent year's member contributions.
The City's property and casualty contributions to the risk pool are recorded as expenditures from its operating funds at
the time of payment to the risk pool. The City's contributions to the Pool for the year ended June 30, 2018 were
$185,652.
The Pool uses reinsurance and excess risk-sharing agreements to reduce its exposure to large losses. The Pool
retains general, automobile, police professional, and public officials' liability risks up to $500,000 per claim. Claims
exceeding $500,000 are reinsured through reinsurance and excess risk-sharing agreements up to the amount of risk-
sharing protection provided by the City’s risk-sharing certificate. Property and automobile physical damage risks are
retained by the Pool up to $250,000 each occurrence, each location. Property risks exceeding $250,000 are reinsured
through reinsurance and excess risk-sharing agreements up to the amount of risk-sharing protection provided by the
City’s risk-sharing certificate.
The Pool's intergovernmental contract with its members provides that in the event a casualty claim, property loss, or
series of claims or losses exceeds the amount of risk-sharing protection provided by the City’s risk-sharing certificate, or
in the event a casualty claim, property loss or series of casualty claims or losses exhausts the Pool’s funds and any
excess risk-sharing recoveries, then payment of such claims or losses shall be the obligation of the respective individual
member against whom the claim was made or the loss was incurred.
The City does not report a liability for losses in excess of reinsurance or excess risk-sharing recoveries unless it is
deemed probable that such losses have occurred and the amount of such loss can be reasonably estimated.
Accordingly, at June 30, 2018, no liability has been recorded in the City's financial statements. As of June 30, 2018,
settled claims have not exceeded the risk pool or reinsurance coverage since the Pool's inception.
Members agree to continue membership in the Pool for a period of not less than one full year. After such period, a
member who has given 60 days' prior written notice may withdraw from the Pool. Upon withdrawal, payments for all
casualty claims and claims expenses become the sole responsibility of the withdrawing member, regardless of whether
a claim was incurred or reported prior to the member's withdrawal. Upon withdrawal, a formula set forth in the Pool’s
intergovernmental contract with its members is applied to determine the amount (if any) to be refunded to the
withdrawing member.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-48-
NOTE 10 RISK MANAGEMENT (continued)
The City also carries commercial insurance purchased from other insurers for coverage associated with workers'
compensation. The City assumes liability for any deductibles, and claims in excess of coverage limitations. Settled
claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal
years.
NOTE 11 EMPLOYEE HEALTH INSURANCE PLAN
The Iowa Governmental Health Care Plan was established to account for the partial self-funding of the City’s health
insurance benefit plan. The plan is funded by both employee and City contributions and is administered through a
service agreement with Iowa Governmental Health Care Plan. The agreement is subject to automatic renewal
provisions. The City assumes liability for claims up to the deductible of $5,000/$10,000 per single/family plan with a
maximum out of pocket expense of $6,350/$12,700 per single/family plan. The deductible and maximum out of pocket
expense for the City is reduced by the deductible amount paid by the employee of $200/$400 per single/family plan and
employee maximum out of pocket expense of $500/$1,000 per single/family plan. Claims in excess of deductibles are
covered by Iowa Governmental Health Care Plan.
Monthly payments of service fees and plan contributions to the Iowa Governmental Health Care Plan Fund are recorded
as expenditures from the operating funds. Under the administrative services agreement, monthly payments of service
fees and claims processed are paid to Employee Benefit Systems, who administers the plan. The City records the Plan
assets and related liabilities of the health plan in the General Fund. The City’s contribution to the plan for the year
ended June 30, 2018 was $281,047.
Amounts payable from the Iowa Governmental Health Care Plan at June 30, 2018 total $20,344, which is for incurred
but not reported (IBNR) and reported but not paid claims, which is included in accounts payable in these financial
statements. The amounts are based on actuarial estimates of the amounts necessary to pay prior year and current year
claims and to establish a reserve for catastrophic losses. A liability has been established based on the requirements of
Governmental Accounting Standards Board Statement No. 10, which requires a liability for claims be reported if
information prior to the issuance of the financial statements indicates it is probable a liability has been incurred at the
date of the financial statements and the amount of the loss can be reasonably estimated. Settlements have not
exceeded the stop-loss coverage in any of the past three years.
A reconciliation of changes in the aggregate liabilities for claims for the years ended June 30, 2018 and 2017 is as
follows:
2018 2017
Unpaid claims as of beginning of year $ 22,444 $ 8,533
Incurred claims (including claims incurred but
not reported as of June 30) 196,642 183,948
Payments on claims (198,742) (170,037)
Unpaid claims as of year end $ 20,344 $ 22,444
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-49-
NOTE 12 COMMITMENTS
The City entered into contract commitments with contractors for the completion of several infrastructure construction
projects. The total contract commitments are approximately $29,000,000 of which approximately $19,000,000 has been
incurred as of June 30, 2018. The unpaid commitment balance is approximately $10,000,000 which will be funded by
current reserves in the capital projects funds and other sources.
The City, in equal partnership with a neighboring city, has entered into an agreement with the Iowa Department of
Transportation (IDOT) where the cities have agreed to reimburse in equal shares the IDOT’s construction cost for a new
interstate interchange which straddles the shared border of the two cities. The construction project was nearly complete
but not finalized at June 30, 2018. As a results, final repayment amounts and terms have not yet been formalized.
However, the cities and IDOT have agreed that payments will be made in ten annual equal principal-only installments
beginning in 2020. It is currently estimated that each city’s share of the total project cost will be approximately $9
million. No liability for this obligation has been recognized.
NOTE 13 URBAN RENEWAL DEVELOPMENT AGREEMENTS
The City has entered into development agreements for urban renewal projects. The agreements require the City to
rebate portions of the incremental property tax paid by the developer in exchange for development of commercial
projects by the developer. The total to be paid by the City under the agreements is not to exceed $9,755,000. During
the year ended June 30, 2018, the City rebated $411,865 of incremental property tax to developers. The outstanding
balance of the agreements at June 30, 2018 was $7,489,900.
The agreements are not a general obligation of the City and, due to their nature, are not recorded as a liability in the
City’s financial statements.
The agreements include an annual appropriation clause and, accordingly, only the amount payable in the succeeding
year on the agreements is subject to the constitutional debt limitation. The entire outstanding principal balance of
agreements not including an annual appropriation clause would be subject to the constitutional debt limitation.
In August 2017, the Waukee City Council approved a development agreement with a developer for the construction of
data centers. The agreement calls for property tax abatements to the developer equal to approximately 71 percent of
the taxable value added by the development over a twenty year period beginning with the year each data center is first
assessed for taxation. In addition, the City has committed to performing certain infrastructure improvements with an
estimated cost of $6,000,000. In consideration of the property tax abatements, the developer has made certain
commitments, including maintaining certain employment levels and achieving a minimum assessed value for each data
center of $200,000,000. In addition, the developer has committed to contributing to a public improvements fund
$500,000 annually for each data center constructed for a twenty year period, not to exceed $100,000,000 in total.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-50-
NOTE 14 TAX ABATEMENTS
Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues
that results from an agreement between one or more governments and an individual or entity in which (a) one or more
governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises
to take a specific action after the agreement has been entered into that contributes to economic development or
otherwise benefits the governments or the citizens of those governments.
City Tax Rebates
The City provides tax rebates for urban renewal and economic development projects with tax increment financing as
provided for in Chapter 15A and 403 of the Code of Iowa. For these types of projects, the City enters into agreements
with developers which require the City, after developers meet the terms of the agreements, to rebate a portion of the
property tax paid by the developers, to pay the developers an economic development grant or to pay the developers a
predetermined dollar amount. No other commitments were made by the City as part of these agreements.
For the year ended June 30, 2018, the City rebated $165,098 of property tax under the urban renewal and economic
development projects.
NOTE 15 OTHER POST EMPLOYMENT BENEFITS
Plan Description
The City administers a single-employer benefit plan which provides medical and prescription drug benefits to retired
employees and their dependents under certain conditions. 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.
OPEB Benefits
Individuals who are employed by the City and are eligible to participate in the group health plan are eligible to continue
healthcare benefits upon retirement. Retirees under age 65 pay the same premium for the medical and prescription
drug benefits as active employees, which results in an implicit rate subsidy and an OPEB liability.
Retired participants must be age 55 or older at retirement. At June 30, 2018, the following employees were covered by
the benefit terms.
Inactive employees or beneficiaries currently receiving benefit payments 0
Active employees 97
Total 97
OPEB Liability
The City’s total OPEB liability of $401,391 was measured as of June 30, 2018, and was determined by an actuarial
valuation as of July 1, 2017.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-51-
NOTE 15 OTHER POST EMPLOYMENT BENEFITS (continued)
Actuarial Assumptions
The OPEB liability as of June 30, 2018 was determined using the following actuarial assumptions and the entry age
normal actuarial cost method, applied to all periods included in the measurement.
Rate of inflation 3.0% per annum
Rates of salary increase 3.25% per annum
Discount rate 3.58% per annum
Healthcare cost trend rate 6.5% initial rate decreasing by .25% annually to
an ultimate rate of 5%
The discount rate used to measure the OPEB liability was 3.58% which reflects the index rate for 20-year tax-exampt
general obligation numicipal bonds with an average rating of AA/Aa or higher as of the measurement date.
Mortality rates were based on the RP-2000 Employee and Healthy Annuitant Mortality Tables projected generationally
using Scale AA.
Annual retirement probabilities are based on varying rates by age and turnover probabilities which mirror those used by
IPERS.
Changes in OPEB Liability
OPEB
Liability
OPEB liability, July 1, 2017, as restated $ 375,843
Changes for the year
Service cost 35,135
Interest on the OPEB liability 13,952
Changes in benefit terms –
Differences between expected and actual experience 38,762
Changes in assumptions or other inputs (57,754)
Benefit payments (4,547)
OPEB liability, June 30, 2018 $ 401,391
Changes in assumptions or other inputs includes a change in the discount rate from 4.5% in fiscal year 2017 to 3.58%
in fiscal year 2018.
Sensitivity of the City’s OPEB Liability to Changes in the Discount Rate
The following presents the OPEB liability of the City, as well as what the City’s OPEB liability would be if it were
calculated using a discount rate that is 1% lower (2.58%) or 1% higher (4.58%) than the current discount rate.
1% Discount 1%
Decrease Rate Increase
(2.58%) (3.58%) (4.58%)
City’s OPEB liability $ 441,406 $ 401,391 $ 384,957
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-52-
NOTE 15 OTHER POST EMPLOYMENT BENEFITS (continued)
Sensitivity of the City’s OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the OPEB liability of the City, as well as what the City’s OPEB liability would be if it were
calculated using healthcare cost trend rates that are 1% lower (5.5% to 4%) or 1% higher (7.5% to 6%) than the current
healthcare cost trend rates.
Healthcare
1% Cost 1%
Decrease Trend Rate Increase
(5.5% to 4%) (6.5% to 5%) (7.5% to 6%)
City’s OPEB liability $ 347,569 $ 401,391 $ 466,228
OPEB Expense and Deferred Inflows or Resources Related to OPEB
For the year ended Jun 30, 2018, the City recognized OPEB expense of $47,877. At June 30, 2018, the City reported
deferred inflows of resources and deferred outflows of resources related to OPEB from the following sources:
Deferred Deferred
Inflows of Outflows of
Resources Resources
Differences between expected and actual experience $ – $ 36,293
Changes in assumptions or other inputs 54,075 –
Totals $ 54,075 $ 36,293
The amount reported as deferred inflows of resources and deferred outflows of resources related to OPEB will be
recognized net of OPEB expense as follows:
Year ending June 30
2019 $ (1,210)
2020 (1,210)
2021 (1,210)
2022 (1,210)
2023 (1,210)
Thereafter (11,732)
$ (17,782)
NOTE 16 JOINT VENTURE
The City is a participating community in the Des Moines Metropolitan Wastewater Reclamation Authority joint venture.
This joint venture provides primary and secondary treatment of the sewer flows for the participating communities. The
Amended and Restated Agreement for the Des Moines Metropolitan Wastewater Reclamation Authority (WRA) was
effective on July 1, 2004, with the second amended and restated agreement becoming effective June 11, 2014. This
agreement amended and restated the previous Integrated Community Area (I.C.A.) Agreement to provide continued
operation, improvements and expansion. The WRA Agreement establishes the WRA as a separate legal entity with its
own Board. The WRA Agreement creates an independent governance structure, establishes an independent bonding
authority for the WRA and provides a framework for additional communities to participate.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-53-
NOTE 16 JOINT VENTURE (continued)
Annually, the WRA establishes an allocation to all participating communities based on operations, maintenance, debt
service and reserve requirements. Allocations are based on wastewater reclamation facility flows and are adjusted
prospectively for differences in budgeted flows and actual flows.
The City retains an ongoing financial responsibility to the WRA since it is obligated in some manner for the debts of the
joint venture through the annual allocation. Although the debt of the WRA is to be paid solely and only from WRA
revenues, the participating communities in the joint venture cannot withdraw from the joint venture while any of the
bonds issued during the time the entity was a participating community are still outstanding. The WRA Sewer Revenue
Bonds Series 2013B and 2015E include provisions that place the WRA debt service requirements on the same parity as
other debts of the participating communities.
In May of 2013, the WRA issued Sewer Revenue Bonds Series 2013B for the purpose of refunding Series 2004B. The
WRA Agreement requires the debt service of these bonds to be allocated to the participating communities based on the
WRA flows of the core communities and expansion communities of each calendar year. As of June 30, 2018, the
Series 2013B bonds had a balance of $48,730,000 and the City of Waukee's estimated future allocation based on the
WRA flows is currently $1,706,463.
In May of 2015, the WRA issued Sewer Revenue Bonds Series 2015E for the purpose of refunding Series 2006A. The
WRA Agreement requires the debt service of these bonds to be allocated to the participating communities based on the
WRA flows of the core communities and expansion communities of each calendar year. As of June 30, 2018, the
Series 2015E bonds had a balance of $29,665,000 and the City of Waukee's estimated future allocation based on the
WRA flows is currently $1,081,836.
The WRA Agreement requires the debt service on all State Revolving Loans issues after July 1, 2004 to be allocated to
the participating communities on the WRA flows of the core communities and expansion communities of each calendar
year. As of June 30, 2018, the outstanding balance of State Revolving Loans issues after July 1, 2004 totaled
$279,527,264 and the City of Waukee’s estimated future allocation is currently $8,804,949.
The WRA Agreement does not provide for the determination of an equity interest for the participating communities.
Withdrawing from the joint venture is a forfeit of all reversionary interest and no compensation will be paid. Since there
is no specific and measurable equity interest in the WRA Agreement, no investment in the joint venture has been
reported by the City.
The WRA issues separate financial statements that may be obtained at 3000 Vandalia Road, Des Moines, Iowa 50317-
1346.
NOTE 17 SUBSEQUENT EVENTS
In July 2018, the Waukee City Council approved the issuance of $2,948,000 in State Revolving Fund loans which will be
used for sewer utility improvements.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-54-
NOTE 18 NEW GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENTS
The Governmental Accounting Standards Board (GASB) has issued statements not yet implemented by the City. The
statements which may impact the City are as follows:
GASB Statement No. 87 Leases will be effective for the City beginning with the year ending June 30, 2021. The
standard establishes new financial reporting requirements for state and local governments which enter into lease
agreements, either as a lessor or lessee. The standard also requires additional note disclosures regarding the
government’s lease agreements.
GASB Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements will be
effective for the City beginning with the year ending June 30, 2019. The standard improves the information that is
disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements
and clarifies which liabilities governments should include when disclosing information related to debt
GASB Statement No. 89 Accounting for Interest Cost Incurred before the End of a Construction Period will be effective
for the City beginning with the year ending June 30, 2021. This statement establishes accounting requirements for
interest costs incurred before the end of a construction period. The statement requires that interest cost incurred before
the end of a construction period be recognized as an expense in the period for financial statements prepared using the
economic resources measurement focus.
The City’s management has not yet determined the effect these Statements will have on the City’s financial statements.
NOTE 19 ACCOUNTING CHANGE/RESTATEMENT
Governmental Accounting Standards Board Statement No. 75 Accounting and Financial Reporting for Postemployment
Benefits Other than Pensions (OPEB), was implemented during fiscal year 2018. The revised requirements established
new financial reporting requirements for state and local governments which provide their employees with OPEB
benefits, including additional note disclosure and required supplementary information. In addition, GASB Statement
No. 75 requires a state or local government employer to use the entry age normal actuarial cost method, and requires
deferred outflows of resources and deferred inflows of resources which arise from other types of events related to OPEB
to be recognized. During the transition year, as permitted, beginning balances for deferred outflows of resources and
deferred inflows of resources are not reported. Beginning net position for governmental and business type activities
was restated to retroactively report the change in valuation of the beginning total OPEB liability.
In addition, the Waukee Foundation has been previously reported by the City as a blended component unit of the City
and presented as a special revenue fund. In fiscal year 2018, due to changes in the Foundation’s operating structure,
the Foundation no longer meets the definition of a component unit as defined by the Governmental Accounting
Standards Board. As such, beginning net position has been restated to exclude the assets and liabilities of the Waukee
Foundation.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-55-
NOTE 19 ACCOUNTING CHANGE/RESTATEMENT (continued)
Enterprise Funds
Nonmajor
Water Sewer Gas Golf Funds
Net position June 30, 2017,
as previously reported $18,046,005 $25,016,450 $11,298,959 $ 457,110 $ 2,158,576
Net OPEB obligation measured
under previous standards 35,909 36,279 45,439 11,032 21,402
Total OPEB liability at June 30, 2017 (25,363) (25,624) (32,094) (7,792) (15,117)
$18,056,551 $25,027,105 $11,312,304 $ 460,350 $ 2,164,861
Governmental
Funds
Nonmajor Business-Type Governmental
Governmental Activities Activities
Net position June 30, 2017,
as previously reported $ 252,033 $57,078,284 $112,992,894
Net OPEB obligation measured under
previous standards – 150,061 382,061
Total OPEB liability at June 30, 2017 – (105,990) (269,853)
Waukee Foundation (99,787) – (517,902)
$ 152,246 $57,122,355 $112,587,200
-56-
REQUIRED SUPPLEMENTARY INFORMATION
See accompanying independent auditor's report.
-57-
City of Waukee, Iowa
SCHEDULE OF CHANGES IN THE CITY’S TOTAL OPEB LIABILITY, RELATED RATIOS AND NOTES
Required Supplementary Information
Year ended June 30, 2018
2018
Service cost $ 35,135
Interest cost 13,952
Differences between expected and actual experience 38,762
Changes in assumptions or other inputs (57,754)
Benefit payments (4,547)
Net change in OPEB liability 25,548
OPEB liability, beginning of year, as restated 375,843
OPEB liability, end of year $ 401,391
Covered-employee payroll $6,661,636
OPEB liability as a percentage of covered-employee payroll 6.03%
NOTES TO SCHEDULE
Changes in benefit terms
There were no significant changes in benefit terms.
Changes in assumptions or other inputs
Changes in assumptions or other inputs reflect the effects of changes in the discount rate each period. The
following are the discount rates used in each period.
Year ended June 30, 2017 4.5%
Year ended June 30, 2018 3.58%
See accompanying independent auditor's report.
-58-
City of Waukee, Iowa
BUDGETARY COMPARISON SCHEDULE OF REVENUES,
EXPENDITURES/EXPENSES AND CHANGES IN BALANCES - BUDGET AND ACTUAL -
GOVERNMENTAL FUNDS AND PROPRIETARY FUNDS
Required Supplementary Information
Year ended June 30, 2018
Governmental Proprietary Accrual Total
funds actual funds actual adjustments actual
REVENUES
Property taxes $11,935,530 $ – $ – $11,935,530
Tax increment financing 3,549,942 – – 3,549,942
Other city tax 59,400 – – 59,400
Licenses and permits 1,287,456 – – 1,287,456
Use of money and property 525,131 293,607 (11,852) 806,886
Intergovernmental 5,921,270 – – 5,921,270
Charges for services 546,674 21,072,018 – 21,618,692
Miscellaneous 255,233 164,422 (42,985) 376,670
Total revenues 24,080,636 21,530,047 (54,837) 45,555,846
EXPENDITURES/EXPENSES
Public safety 5,443,568 – – 5,443,568
Public works 1,935,403 – – 1,935,403
Health and social services 700 – – 700
Culture and recreation 2,039,626 – (64,378) 1,975,248
Community and economic development 1,387,462 – – 1,387,462
General government 1,074,305 – 7,472,775 8,547,080
Debt service 7,227,132 – (170,674) 7,056,458
Capital projects 25,490,622 – (7,302,101) 18,188,521
Business type activities – 14,073,197 12,793,387 26,866,584
Total disbursements 44,598,818 14,073,197 12,729,009 71,401,024
Excess (deficiency) of revenues over (under)
expenditures/expenses (20,518,182) 7,456,850 (12,783,846) (25,845,178)
OTHER FINANCING SOURCES (USES), NET 26,503,175 (709,471) – 25,793,704
Excess (deficiency) of revenues and other
financing sources over disbursements and
other financing uses 5,984,993 6,747,379 (12,783,846) (51,474)
BALANCES, beginning of year, as restated 32,789,723 57,021,171 (4,521,463) 85,289,431
BALANCES, end of year $38,774,716 $63,768,550 $(17,305,309) $85,237,957
-59-
Budgeted amounts Final to actual
Original Final variance
$11,863,538 $11,863,538 $ 71,992
3,513,475 3,521,755 28,187
96,798 134,498 (75,098)
1,186,450 1,353,690 (66,234)
231,070 483,150 323,736
4,603,565 4,628,425 1,292,845
16,761,160 21,254,550 364,142
308,000 421,990 (45,320)
38,564,056 43,661,596 1,894,250
6,155,900 5,795,740 352,172
3,090,388 2,786,468 851,065
7,500 7,500 6,800
2,086,187 2,251,087 275,839
1,023,475 1,152,715 (234,747)
1,246,988 8,852,618 305,538
6,132,740 7,056,915 457
12,640,000 20,640,000 2,451,479
29,999,452 31,985,465 5,118,881
62,382,630 80,528,508 9,127,484
(23,818,574) (36,866,912) 11,021,734
9,650,000 22,746,000 3,047,704
(14,168,574) (14,120,912) 14,069,438
56,079,107 56,079,107 29,210,324
$41,910,533 $41,958,195 $43,279,762
-60-
City of Waukee, Iowa
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION - BUDGETARY REPORTING
Year ended June 30, 2018
The budgetary comparison is presented as Required Supplementary Information in accordance with Government
Accounting Standards Board Statement No. 41 for governments with significant budgetary perspective differences
resulting from not being able to present budgetary comparisons for the General Fund and each major Special Revenue
Fund.
In accordance with the Code of Iowa, the City Council annually adopts a budget on the cash basis following required
public notice and hearing for all funds. The annual budget may be amended during the year utilizing similar statutorily
prescribed procedures. Encumbrances are not recognized on the budget and appropriations lapse at year end.
Formal and legal budgetary control is based upon nine major classes of disbursements known as functions, not by fund.
These nine functions are: public safety, public works, health and social services, culture and recreation, community and
economic development, general government, debt service, capital projects and business type activities. Function
disbursements required to be budgeted include disbursements for the General Fund, Special Revenue Funds, Debt
Service Fund, Capital Projects Fund 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, one
budget amendment increased budgeted disbursements by $18,145,878. This budget amendment is reflected in the
final budgeted amounts.
During the year ended June 30, 2018, disbursements in the community and economic development function exceeded
the amount budgeted.
-61-
City of Waukee, Iowa
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Iowa Public Employees’ Retirement System
For the Last Four Years *
(In Thousands)
Required Supplementary Information
June 30
2018 2017 2016 2015
City’s proportion of the net pension liability 0.064287% 0.060546% 0.053387% 0.046117%
City’s proportionate share of the net pension liability $4,282 $3,810 $2,638 $1,829
City’s covered-employee payroll $7,814 $6,949 $6,412 $6,005
City’s proportionate share of the net pension liability
as a percentage of its covered-employee payroll 54.80% 54.83% 41.14% 30.49%
Plan fiduciary net position as a percentage of the
total pension liability 82.21% 81.82% 85.19% 84.61%
Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full ten-
year trend is compiled, the City will present information for those years for which information is available.
* In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of June
30 of the preceding fiscal year.
See accompanying notes to required supplementary information – pension liability.
-62-
City of Waukee, Iowa
SCHEDULE OF CITY CONTRIBUTIONS
Iowa Public Employees’ Retirement System
Last 10 Fiscal Years
(In Thousands)
Required Supplementary Information
Year ended June 30
2018 2017 2016 2015
Statutorily required contribution $ 723 $ 641 $ 578 $ 550
Contributions in relation to the statutorily
required contribution 723 641 578 550
Contribution deficiency (excess) $ – $ – $ – $ –
City’s covered-employee payroll $7,814 $6,949 $6,412 $6,005
Contributions as a percentage of covered-employee payroll 9.3% 9.2% 9.0% 9.2%
See accompanying notes to required supplementary information – pension liability.
-63-
Year ended June 30
2014 2013 2012 2011 2010 2009
$ 497 $ 423 $ 374 $ 328 $ 288 $ 246
497 423 374 328 288 246
$ – $ – $ – $ – $ – $ –
$5,339 $4,633 $4,491 $4,144 $3,866 $3,738
9.3% 9.1% 8.3% 7.9% 7.4% 6.6%
See accompanying notes to required supplementary information – pension liability.
-64-
City of Waukee, Iowa
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – PENSION LIABILITY
Year ended June 30, 2018
CHANGES OF BENEFIT TERMS
Legislation passed in 2010 modified benefit terms for current Regular members. The definition of final average salary
changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four
years of service to seven years. The early retirement reduction increased from 3 percent per year measured from the
member’s first unreduced retirement age to a 6 percent reduction for each year of retirement before age 65.
CHANGES OF ASSUMPTIONS
The 2017 valuation implemented the following refinements as a result of an experience study dated March 24, 2017:
Decreased the inflation assumption from 3.00% to 2.60%.
Decreased the assumed rate of interest on member accounts from 3.75% to 3.50% per year.
Decreased the discount rate from 7.50% to 7.00%.
Decreased the wage growth assumption from 4.00% to 3.25%.
Decreased the payroll growth assumption from 4.00% to 3.25%.
The 2014 valuation implemented the following refinements as a result of a quadrennial experience study:
Decreased the inflation assumption from 3.25 percent to 3.00 percent.
Decreased the assumed rate of interest on member accounts from 4.00 percent to 3.75 percent per year.
Adjusted male mortality rates for retirees in the Regular membership group.
Reduced retirement rates for sheriffs and deputies between the ages of 55 and 64.
Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL beginning
June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate
closed 20 year period.
The 2010 valuation implemented the following refinements as a result of a quadrennial experience study:
Adjusted retiree mortality assumptions.
Modified retirement rates to reflect fewer retirements.
Lowered disability rates at most ages.
Lowered employment termination rates.
Generally increased the probability of terminating members receiving a deferred retirement benefit.
Modified salary increase assumptions based on various service duration.
-65-
SUPPLEMENTARY INFORMATION
See accompanying independent auditor's report.
-66-
City of Waukee
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2018
Special Revenue Funds Debt service
Road Library Special
Use Tax Foundation Forfeitures Assessments Total
ASSETS
Cash and investments $ 479,817 $ 198,630 $ 4,328 $ 98,548 $ 781,323
Receivables
Special assessments – – – 291,720 291,720
Other 133 – – – 133
Inventory 25,502 – – – 25,502
Total assets $ 505,452 $ 198,630 $ 4,328 $ 390,268 $1,098,678
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES
Accounts payable $ 60,042 $ – $ – $ – $ 60,042
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenues
Special assessments – – – 291,720 291,720
FUND BALANCES
Nonspendable 25,502 – – – 25,502
Restricted for
Debt service – – – 98,548 98,548
Other 419,908 198,630 4,328 – 622,866
Total fund balances 445,410 198,630 4,328 98,548 746,916
Total liabilities, deferred
inflows of resources
and fund balances $ 505,452 $ 198,630 $ 4,328 $ 390,268 $1,098,678
See accompanying independent auditor's report.
-67-
City of Waukee
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Year ended June 30, 2018
Special Revenue Funds Debt service
Road Library Special
Use Tax Foundation Forfeitures Assessments Total
REVENUES
Other city taxes $ – $ – $ – $ 55,512 $ 55,512
Licenses and permits 5,319 – – – 5,319
Use of money and property – 11,852 – 5,881 17,733
Intergovernmental 2,289,605 – – – 2,289,605
Charges for services – – 3,925 – 3,925
Miscellaneous 81,562 42,985 – – 124,547
Total revenue 2,376,486 54,837 3,925 61,393 2,496,641
EXPENDITURES
Operating
Public safety – – 785 – 785
Public works 1,449,257 – – – 1,449,257
Culture and recreation – 64,378 – – 64,378
Debt service
Principal – – – 44,000 44,000
Interest – – – 3,006 3,006
Capital projects 354,070 – – – 354,070
Total expenditures 1,803,327 64,378 785 47,006 1,915,496
Excess (deficiency) of revenues
over (under) expenditures 573,159 (9,541) 3,140 14,387 581,145
OTHER FINANCING SOURCES (USES)
Sale of capital assets 13,525 – – – 13,525
Total other financing sources (uses) 13,525 – – – 13,525
NET CHANGES IN FUND BALANCES 586,684 (9,541) 3,140 14,387 594,670
FUND BALANCES, beginning, as restated (141,274) 208,171 1,188 84,161 152,246
FUND BALANCES, ending $ 445,410 $ 198,630 $ 4,328 $ 98,548 $ 746,916
See accompanying independent auditor's report.
-68-
City of Waukee, Iowa
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
June 30, 2018
Enterprise Funds
Solid Utility Storm
Waste Billing Water Total
ASSETS
Current assets
Cash and investments $ 351,392 $ 127,044 $ 996,198 $1,474,634
Receivables
Customer accounts 110,943 – 77,896 188,839
Total current assets 462,335 127,044 1,074,094 1,663,473
Noncurrent assets
Restricted assets – cash and investments – – 73,480 73,480
Capital assets, net of accumulated depreciation – 4,571 1,328,542 1,333,113
Total noncurrent assets – 4,571 1,402,022 1,406,593
Total assets 462,335 131,615 2,476,116 3,070,066
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows – 32,891 43,991 76,882
OPEB related deferred outflows – 502 1,245 1,747
Total deferred outflows of resources – 33,393 45,236 78,629
LIABILITIES
Current liabilities
Accounts payable – 49,649 15,974 65,623
Compensated absences – 7,893 5,182 13,075
Revenue notes payable – – 60,000 60,000
Interest payable – – 720 720
Total current liabilities – 57,542 81,876 139,418
Noncurrent liabilities
Revenue notes payable – – 460,000 460,000
Net OPEB liability – 5,557 13,771 19,328
Net pension liability – 65,467 87,561 153,028
Total noncurrent liabilities – 71,024 561,332 632,356
Total liabilities – 128,566 643,208 771,774
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Pension related deferred inflows – 2,201 2,943 5,144
OPEB related deferred inflows – 749 1,855 2,604
Total deferred inflows of resources – 2,950 4,798 7,748
NET POSITION
Net investment in capital assets – – 1,020,874 1,020,874
Unrestricted 462,335 33,492 852,472 1,348,299
Total net position $ 462,336 $ 33,492 $1,873,346 $2,369,173
See accompanying independent auditor’s report.
-69-
City of Waukee, Iowa
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
NONMAJOR PROPRIETARY FUNDS
Year ended June 30, 2018
Enterprise Funds
Solid Utility Storm
Waste Billing Water Total
OPERATING REVENUES
Charges for service $1,308,838 $ 209,412 $ 893,733 $2,411,983
Miscellaneous 4,539 37,345 15,646 57,530
Total operating revenues 1,313,377 246,757 909,379 2,469,513
OPERATING EXPENSES
Business type activities
Cost of sales and services 1,195,694 282,364 547,986 2,026,044
Depreciation and amortization – 2,195 74,881 77,076
Total operating expenses 1,195,694 284,559 622,867 2,103,120
Operating income (loss) 117,683 (37,802) 286,512 366,393
NONOPERATING REVENUES (EXPENSES)
Interest income 4,134 1,889 17,027 23,050
Interest expense and fiscal charges – – (3,000) (3,000)
Total nonoperating revenues 4,134 1,889 14,027 20,050
Income (loss) before transfers 121,817 (35,913) 300,539 386,443
Transfers (out) – – (182,131) (182,131)
CHANGE IN NET POSITION 121,817 (35,913) 118,408 204,312
NET POSITION, beginning, as restated 340,518 69,405 1,754,938 2,164,861
NET POSITION, ending $ 462,335 $ 33,492 $1,873,346 $2,369,173
See accompanying independent auditor’s report.
-70-
City of Waukee, Iowa
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
Year ended June 30, 2018
Enterprise Funds
Solid Utility Storm
Waste Billing Water Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customer and users $1,295,738 $ 209,412 $ 882,490 $2,387,640
Cash received from other revenues 4,539 37,345 15,646 57,530
Cash paid for personal services – (155,344) (390,891) (546,235)
Cash paid to supplies (1,196,042) (115,113) (160,418) (1,471,573)
Net cash provided by (used in) operating activities 104,235 (23,700) 346,827 427,362
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfer to other funds – – (182,131) (182,131)
Net cash (used in) noncapital financing activities – – (182,131) (182,131)
CASH LFOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets – – (373,508) (373,508)
Principal paid on revenue notes – – (60,000) (60,000)
Interest and fiscal charges paid – – (3,060) (3,060)
Net cash (used in) capital and related financing activities – – (436,568) (436,568)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 4,134 1,889 17,027 23,050
Net cash provided by investing activities 4,134 1,889 17,027 23,050
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 108,369 (21,811) (254,845) (168,287)
CASH AND CASH EQUIVALENTS, beginning 243,023 148,855 1,324,523 1,716,401
CASH AND CASH EQUIVALENTS, ending $ 351,392 $ 127,044 $1,069,678 $1,548,114
See accompanying independent auditor’s report.
-71-
City of Waukee, Iowa
COMBINING STATEMENT OF CASH FLOWS (continued)
NONMAJOR PROPRIETARY FUNDS
Year ended June 30, 2018
Enterprise Funds
Solid Utility Storm
Waste Billing Water Total
RECONCILATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income (loss) $ 117,683 $ (37,802) $ 286,512 $ 366,393
Adjustments to reconcile operating income (loss) to net cash
provided by (used in) operating activities
Depreciation expense – 2,195 74,881 77,076
Change in assets, deferred outflows, liabilities and
deferred inflows
Customer accounts receivable (13,100) – (11,243) (24,343)
Accounts payable, net of capital assets (348) 4,941 (16,946) (12,353)
Compensated absences – 3,010 1,503 4,513
Net pension liability – 8,262 14,922 23,184
Deferred outflows of resources – (5,749) (10,134) (15,883)
Deferred inflows of resources – 1,547 3,017 4,564
OPEB liability – (104) 4,315 4,211
Net cash provided by (used in) operating activities 104,235 (23,700) 346,827 427,362
RECONCILIATION OF CASH AND CASH EQUIVALENTS
AT YEAR END TO SPECIFIC ASSETS INCLUDED ON
THE COMBINING STATEMENT OF NET POSITION
Current assets
Cash and investments 351,392 127,044 996,198 1,474,634
Restricted assets – cash and investments
Revenue note and interest sinking account – – 73,480 73,480
Cash and cash equivalents at year end $ 351,392 $ 127,044 $1,069,678 $1,548,114
See accompanying independent auditor’s report.
-72-
City of Waukee, Iowa
SCHEDULE OF REVENUES BY SOURCE AND EXPENDITURES BY FUNCTION -
ALL GOVERNMENTAL FUNDS
For the last ten years
Modified Accrual Basis
2018 2017 2016 2015
REVENUES
Property tax $11,935,530 $ 9,985,457 $ 9,436,301 $ 8,385,843
Tax increment financing 3,549,942 3,414,595 3,229,861 3,204,146
Other city tax 59,400 35,436 27,921 133,216
Licenses and permits 1,287,456 1,594,670 1,288,941 1,391,499
Use of money and property 525,131 325,215 195,336 182,503
Intergovernmental 5,921,270 4,250,128 5,241,337 5,602,222
Charges for services 546,674 540,001 351,341 414,059
Miscellaneous 255,233 479,481 405,168 385,164
Totals $24,080,636 $20,624,983 $20,176,206 $19,698,652
EXPENDITURES
Operating
Public safety $ 5,443,568 $ 4,839,355 $ 4,281,395 $ 3,543,201
Public works 1,935,403 1,997,301 2,297,252 2,281,384
Health and social services 700 – 5,100 4,800
Culture and recreation 2,039,626 1,838,317 1,763,428 1,599,802
Community and economic development 1,387,462 1,206,432 1,211,082 760,100
General government 1,074,305 818,853 817,880 872,753
Debt service 7,227,132 8,930,321 7,507,909 6,421,577
Capital projects 25,490,622 10,369,279 11,339,024 19,067,964
Totals $44,598,818 $29,999,858 $29,223,070 $34,551,581
See accompanying independent auditor’s report.
-73-
Modified Accrual Basis
2014 2013 2012 2011 2010 2009
$ 7,666,911 $ 7,133,514 $ 6,811,607 $ 6,397,893 $ 5,934,368 $ 5,318,576
3,017,853 3,427,898 3,186,693 3,051,143 3,032,038 2,824,039
60,988 39,355 462,040 62,895 70,367 1,301,852
1,057,350 639,233 507,344 531,196 353,777 673,103
222,405 210,762 204,505 215,266 173,419 128,470
2,539,186 3,713,932 1,762,542 4,495,541 2,898,776 4,641,902
597,042 728,310 253,692 239,040 184,230 209,664
281,147 1,058,091 813,998 440,669 144,913 1,142,477
$15,442,882 $16,951,095 $14,002,421 $15,433,643 $12,791,888 $16,240,083
$ 3,286,146 $ 2,912,583 $ 3,040,673 $ 2,821,515 $ 2,528,267 $ 2,391,927
2,241,516 1,580,884 1,381,993 1,192,453 1,133,462 1,099,806
16,500 12,750 15,175 16,909 12,180 11,000
1,457,105 2,010,987 1,338,835 1,312,158 1,173,584 1,211,373
910,021 618,937 885,864 1,023,639 892,553 848,245
757,317 785,443 868,324 787,974 855,172 982,213
5,996,633 4,642,544 6,111,183 3,919,273 3,441,710 8,379,401
9,226,292 5,976,606 3,501,963 7,768,712 7,021,544 10,807,450
$23,891,530 $18,540,734 $17,144,010 $18,842,633 $17,058,472 $25,731,415
See accompanying independent auditor’s report.
-74-
City of Waukee, Iowa
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended June 30, 2018
Federal
Federal Grantor/Pass-Through CFDA Agency or Federal
Grantor/Program Title number Pass-through Number expenditures
U.S. Department of Justice
Direct
Bulletproof Vest Partnership Program 16.607 $ 398
U.S. Department of Transportation
Indirect
Iowa Department of Transportation
Highway Planning and Construction 20.205 4-16-STP-U-18 1,314,898
Highway Planning and Construction 20.205 4-18-ICAAP-02 65,191
Highway Planning and Construction 20.205 4-17-STP-U-10 364,965
Total Highway Planning and Construction 1,745,054
Total U.S. Department of Transportation 1,745,054
Total Federal Awards $1,745,452
NOTE A BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards includes the federal award activity of the City under
programs of the federal government for the year ended June 30, 2018. The information in this Schedule is presented in
accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the
schedule presents only a selected portion of the operations of the City it is not intended to and does not present the
financial position, change in net position, or cash flows of the City.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported in the schedule are reported on the accrual basis of accounting. Such expenditures are
recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local and
Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of
expenditures are not allowable or are limited as to reimbursement. The City has elected to use the 10% de minimus
indirect costs rate as allowed under the Uniform Guidance.
-75-
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
Honorable Mayor and
Members of the City Council
Waukee, Iowa
We have audited in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business type activities, each major fund, and the aggregate remaining fund information
of City of Waukee, Iowa (the City), as of and for the year ended June 30, 2018, and the related notes
to the financial statements, which collectively comprise the City's basic financial statements, and have
issued our report thereon dated November 7, 2018.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we
do not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the City'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 may exist that have not been identified.
-76-
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters
that are required to be reported under Government Auditing Standards. However, we noted certain
immaterial instances of noncompliance or other matters which are described in Part IV of the
accompanying schedule of findings and questioned costs.
Comments involving statutory and other legal matters about the City's operations for the year ended
June 30, 2018 are based exclusively on knowledge obtained from procedures performed during our
audit of the financial statements of the City. Since our audit was based on tests and samples, not all
transactions that might have had an impact on the comments were necessarily audited. The
comments involving statutory and other legal matters are not intended to constitute legal interpretations
of those statutes.
City of Waukee’s Response to the Finding
The City of Waukee's response to the finding identified in our audit is described in the accompanying
schedule of findings and questioned costs. The City's response was not subjected to the auditing
procedures applied in the audit of the financial statements, and accordingly, we express no opinion
on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
DENMAN & COMPANY, LLP
West Des Moines, Iowa
November 7, 2018
-77-
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED
BY THE UNIFORM GUIDANCE
Honorable Mayor and
Members of City Council
Waukee, Iowa
Report on Compliance for Each Major Federal Program
We have audited the City of Waukee, Iowa’s (the City) compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material
effect on the City’s major federal program for the year ended June 30, 2018. The City’s major federal
program is identified in the summary of independent auditor’s results section of the accompanying
schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for the City’s major federal program based on
our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America;
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we
plan and perform the audit to obtain reasonable assurance about whether noncompliance with the
types of compliance requirements referred to above that could have a direct and material effect on a
major federal program occurred. An audit includes examining, on a test basis, evidence about the
City’s compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major
federal program. However, our audit does not provide a legal determination of the City’s compliance.
Opinion on Each Major Federal Program
In our opinion, the City of Waukee, Iowa complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on its major
federal program for the year ended June 30, 2018.
-78-
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing
our audit of compliance, we considered the City’s internal control over compliance with the types of
requirements that could have a direct and material effect on its major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion
on compliance for the major federal program and to test and report on internal control over compliance
in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such
that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal
program that is less severe than a material weakness in internal control over compliance, yet important
enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
DENMAN & COMPANY, LLP
West Des Moines, Iowa
November 7, 2018
-79-
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
-80-
City of Waukee, Iowa
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended June 30, 2018
SECTION I - SUMMARY OF INDEPENDENT AUDITOR’S RESULTS
Financial Statements
(a) The auditor's report expresses unmodified opinions on whether the financial statements of the City of Waukee,
Iowa, were prepared in accordance with accounting principles generally accepted in the United States of America.
(b) No significant deficiencies or material weaknesses in internal control over financial reporting were disclosed by the
audit of the financial statements.
(c) The audit did not disclose any noncompliance which is material to the financial statements.
Federal Awards
(d) No significant deficiencies or material weaknesses in internal controls over the major federal award program were
reported.
(e) The auditor's report on compliance for the major program expresses an unmodified opinion.
(f) The audit disclosed no audit findings which are required to be reported in accordance with Uniform Guidance
section 200.516.
(g) The major program was CFDA Number 20.205 – Highway Planning and Construction.
(h) The dollar threshold used for distinguishing between Types A and B programs was $750,000.
(i) The City of Waukee did not qualify as a low-risk auditee.
-81-
City of Waukee, Iowa
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
Year ended June 30, 2018
SECTION II – FINANCIAL STATEMENT FINDINGS
INTERNAL CONTROL DEFICIENCIES
No matters were noted.
INSTANCES OF NONCOMPLIANCE
No matters were noted.
-82-
City of Waukee, Iowa
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
Year ended June 30, 2018
SECTION III – FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
INTERNAL CONTROL DEFICIENCIES
No material weaknesses in internal control over the major program were noted.
INSTANCES OF NONCOMPLIANCE
No matters were noted.
-83-
City of Waukee, Iowa
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
Year ended June 30, 2018
SECTION IV—OTHER FINDINGS RELATED TO REQUIRED STATUTORY REPORTING
IV-A-18 CERTIFIED BUDGET
Disbursements during the year ended June 30, 2018 exceeded the amounts budgeted in the community and
economic development function. In addition, disbursements in the general government and capital projects
functions exceeded amounts budgeted prior to the budget being amended in May, 2018. Chapter 384.20 of
the Code of Iowa states, in part, “Public monies may not be expended or encumbered except under an
annual or continuing appropriation.”
Recommendation
The budget should have been amended in accordance with Chapter 384.18 of the Code of Iowa before
disbursements were allowed to exceed the budget.
Response
The budget will be amended in the future, as applicable.
Conclusion
Response accepted.
IV-B-18 QUESTIONABLE EXPENDITURES
No expenditures were noted that may not meet the requirements of public purpose as defined in an Attorney
General’s opinion dated April 25, 1979.
IV-C-18 TRAVEL EXPENSE
No expenditures of City money for travel expenses of spouses of City officials and/or employees were noted.
IV-D-18 BUSINESS TRANSACTIONS
We noted no business transactions between the City and City officials or employees in excess of $1,500.
IV-E-18 BOND COVERAGE
Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount
of coverage should be reviewed annually to ensure that the coverage is adequate for current operations.
IV-F-18 COUNCIL MINUTES
No transactions were found that we believe should have been approved in the Council minutes but were not.
-84-
City of Waukee, Iowa
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
Year ended June 30, 2018
SECTION IV—OTHER FINDINGS RELATED TO REQUIRED STATUTORY REPORTING (continued)
IV-G-18 DEPOSITS AND INVESTMENTS
No instances of noncompliance with the deposit and investment provisions of Chapters 12B and 12C of the
Code of Iowa and the City's investment policy were noted.
IV-H-18 REVENUE BONDS AND NOTES
No instances of noncompliance with the City’s revenue bond and note provisions were noted.