HomeMy WebLinkAbout2016-11-21-G02 Presentation_FY2016 Audit Report AGENDA ITEM:
CITY OF WAUKEE, IOWA
CITY COUNCIL MEETING COMMUNICATION
MEETING DATE: November 21, 2016
AGENDA ITEM: Independent Auditor’s Final Report for the fiscal year ending June 30, 2016
FORMAT: Presentation
SYNOPSIS INCLUDING PRO & CON: Representatives of Denman & Company met with City
staff on 11/10/2016 to review the draft audit report. David Ellis with
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. FY2016 Audit Report
PREPARED BY: Becky Schuett
REVIEWED BY:
City of Waukee, Iowa
INDEPENDENT AUDITOR'S REPORTS
BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
SCHEDULE OF FINDINGS
June 30, 2016
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 27-52
REQUIRED SUPPLEMENTARY INFORMATION 53
Schedule of Funding Progress for the Retiree Health Plan 54
Budgetary comparison schedule of revenues, expenditures/expenses and changes in
fund balances—budget and actual—governmental funds and proprietary funds 55-56
Note to required supplementary information—budgetary reporting 57
Schedule of the City’s proportionate share of the net pension liability 58
Schedule of City contributions 59-60
Notes to required supplementary information—pension liability 61
SUPPLEMENTARY INFORMATION 62
Nonmajor Governmental Funds
Combining balance sheet 63
Combining schedule of revenues, expenditures and changes in fund balances 64
Nonmajor Proprietary Funds
Combining statement of net position 65
Combining schedule of revenues, expenses and changes in fund net position 66
Schedule of revenues by source and expenditures by function—all governmental funds 67-68
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 69-70
SCHEDULE OF FINDINGS 71-74
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City of Waukee, Iowa
OFFICIALS
Term expires
MAYOR AND MEMBERS OF CITY COUNCIL (Before January 2016)
William Peard, Mayor January 2016
Casey L. Harvey, Council Member January 2016
Rachelle Hughes, Council Member January 2016
Shane Blanchard, Council Member January 2018
Brian Harrison, Council Member January 2018
Rick Peterson, Council Member January 2018
CITY ADMINISTRATOR
Tim Moerman Indefinite
DEPUTY CITY CLERK
Rebecca D. Schuett Indefinite
DIRECTOR OF FINANCE
Linda Burkhart Indefinite
CITY ATTORNEY
Steven P. Brick January 2016
Term expires
MAYOR AND MEMBERS OF CITY COUNCIL (After January 2016)
William Peard, Mayor January 2020
Rachelle Hughes, Council Member January 2020
Shane Blanchard, Council Member Resigned June 2016
Brian Harrison, Council Member January 2018
Rick Peterson, Council Member January 2018
Larry Lyon, Council Member January 2020
CITY ADMINISTRATOR
Tim Moerman Indefinite
DEPUTY CITY CLERK
Rebecca D. Schuett Indefinite
DIRECTOR OF FINANCE
Linda Burkhart Indefinite
CITY ATTORNEY
Steven P. Brick January 2017
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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, 2016, and the related notes to 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, 2016, 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.
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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 funding progress for the retiree
health plan, 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 53 through 61 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, 2015 (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 combining and individual nonmajor fund financial statements and schedule of revenues by source and
expenditures by function 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 and schedule of
revenues by source and expenditures by function are fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 25, 2016 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 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
October 25, 2016
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_______________________________________________________________________________________
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, 2016. We encourage readers to consider this information in
conjunction with the City’s financial statements, which follow.
2016 FINANCIAL HIGHLIGHTS
• Revenues of the City’s Governmental Funds increased 2.42 %, or $ 477,554, from fiscal 2015 to fiscal 2016. Property and
other City Taxes increased $ 945,163, Tax Increment Financing increased $ 25,715, Licenses and Permits decreased $ 102,558,
Intergovernmental decreased $ 360,885, Charges for Services decreased $ 62,718 and Miscellaneous increased $ 20,004.
• Program expenditures of the City’s Governmental Funds decreased 15.42 %, or $ 5,328,511 in fiscal 2016 from fiscal
2015. Public Safety expenses increased $ 738,194, Community and Economic Development increased $ 450,982, Culture and
Recreation increased $ 163,626, Public Works increased $ 15,868, General Government decreased $ 54,873, Debt Service increased
$ 735,946 and Capital Projects decreased $ 7,378,554.
• The City has a net position of $ 156,007,505 on June 30, 2016 as compared to $ 135,358,530 on June 30, 2015. Of this
amount, the net position of the Governmental Activities was $ 104,996,265 and the net position of the Business Type Activities was
$ 51,011,240.
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
Funding Progress for the Retiree Health Plan.
Supplementary Information provides detailed information about the non-major Governmental and Proprietary Funds, and Schedule
of Revenues by Source and Expenditures by Function.
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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.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of financial position. The analysis that follows focuses on
the changes in the net position for governmental and business type activities.
Net Position at Year End
Governmental Activities Business Type Activities Total
2016 2015 2016 2015 2016 2015
Current and Other Assets $ 39,918,384 $ 36,768,249 $ 15,194,253 $ 14,143,009 $ 55,112,637 $ 50,911,258
Capital Assets 133,958,706 115,712,953 45,799,286 41,168,747 179,757,992 156,881,700
Total Assets 173,877,090 152,481,202 60,993,539 55,311,756 234,870,629 207,792,958
Deferred Outflows of Resources 849,708 748,646 202,822 184,387 1,052,530 933,033
Non-Current Liabilities 47,600,665 45,868,390 7,951,024 6,343,937 55,551,689 52,212,327
Current Liabilities 8,165,604 7,884,686 2,156,502 2,499,309 10,322,106 10,383,995
Total Liabilities 55,766,269 53,753,076 10,107,526 8,843,246 65,873,795 62,596,322
Deferred Inflows of Resources 13,964,264 10,521,993 77,595 249,146 14,041,859 10,771,139
Net Position:
Net investment in Capital Assets 96,837,304 82,818,151 38,623,530 33,961,532 135,460,834 116,779,683
Restricted 6,308,497 21,356,211 37,462 11,679 6,345,959 21,367,890
Unrestricted 1,850,464 (15,219,583) 12,350,248 12,430,540 14,200,712 (2,789,043)
Total Net Position $ 104,996,265 $ 88,954,779 $ 51,011,240 $ 46,403,751 $ 156,007,505 $ 135,358,530
Net position of governmental activities increased $ 16,041,486, or 18.03%, over fiscal year 2015. Net position of business type
activities increased $ 4,607,489, or 9.93%, over fiscal year 2015. The largest portion of the City’s net position is the invested 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 $ 14,200,712 at the end of this year.
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Changes in Net Position for the Year Ended June 30
Governmental Activities Business Type Activities Total
2016 2015 2016 2015 2016 2015
Revenues:
Property Tax Levied and Other City Tax $ 9,464,222 $ 8,519,059 $ – $ – $ 9,464,222 $ 8,519,059
Tax Increment Financing 3,229,861 3,204,146 – – 3,229,861 3,204,146
Unrestricted Interest 52,617 39,845 24,114 24,305 76,731 64,150
Operating Grants and Contributions 5,008,841 5,345,590 – – 5,008,841 5,345,590
Charges for Services 2,015,739 2,204,975 15,981,431 13,232,685 17,997,170 15,437,660
Capital Grants and Contributions 11,574,526 3,747,871 – – 11,574,526 3,747,871
Miscellaneous 437,308 408,137 249,038 1,200,651 686,346 1,608,788
Total Revenues 31,783,114 23,469,623 16,254,583 14,457,641 48,037,697 37,927,264
Transfers 725,317 618,332 (725,317 ) (618,332) – –
Total Revenues and Transfers $ 32,508,431 $ 24,087,955 $ 15,529,266 $ 13,839,309 $ 48,037,697 $ 37,927,264
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Governmental Activities Business Type Activities Total
2016 2015 2016 2015 2016 2015
Program Expenses
Public Safety $ 4,430,308 $ 3,735,807 $ – $ – $ 4,430,308 $ 3,735,807
Public Works 6,440,141 7,775,242 – – 6,440,141 7,775,242
Health and Social Services 4,966 4,800 – – 4,966 4,800
Culture and Recreation 1,979,815 1,687,064 – – 1,979,815 1,687,064
Community and Economic Development 1,178,569 760,100 – – 1,178,569 766,100
General Government 963,720 746,877 – – 963,720 746,877
Interest on Long-Term Debt 1,469,426 1,459,043 – – 1,469,426 1,459,043
Business Type Activities – – 10,921,777 11,379,485 10,921,777 11,379,485
Total Expenses 16,466,945 16,168,933 10,921,777 11,379,485 27,388,722 27,548,418
Increase in Net Position 16,041,486 7,919,022 4,607,489 2,459,824 20,648,975 10,378,846
Net Position Beginning of Year 88,954,779 81,035,757 46,403,751 43,943,927 135,358,530 124,979,684
Net Position End of Year $ 104,996,265 $ 88,954,779 $ 51,011,240 $ 46,403,751 $156,007,505 $ 135,358,530
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The City maintained the $ 13.50 property tax levy for FY16, while recognizing an increase of $ 970,878 in property tax revenue due
to increase in residential property valuation. Revenues for operating and capital grants, contributions restricted and unrestricted
interest, increased by approximately $ 7,502,700, charges for services decreased by $ 189,200 and miscellaneous revenues increased
by approximately $ 29,200.
Overall revenues for governmental activities increased approximately $ 8,420,500 from the prior year.
The cost of all governmental activities this year was approximately $16.5 million compared to approximately $16.2 million last
year. However, as shown in the Statement of Activities on pages 17 and 18, the amount taxpayers ultimately financed for these
activities was ($ 2.1) million as some of the cost was paid by those directly benefited from the programs ($ 2,015,739) or by other
governments and organizations which subsidized certain programs with grants and contributions ($ 16,583,367).
Overall revenues for business type activities increased approximately $ 1,690,000 over the prior year.
The cost of all business activities this year was approximately $10.9 million compared to approximately $ 11.4 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 $ 23,727,043 at June 30,
2016, compared to $ 24,477,402 combined fund balance at June 30, 2015.
The General Fund showed an increase of $ 640,806 from the prior year to $ 4,068,382.
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 2016 with a $ 1,390,647 balance compared to the prior year ending balance of $ 3,617,935.
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 2016 with a $ 73,750 balance compared to the prior year ending balance of $ 30,875. Transfers out to
operating funds totaled $ 1,343,400 in fiscal 2016.
The Debt Service Fund ended fiscal 2016 with a $ 1,017,597 balance compared to the prior year ending balance of $ 997,202. Bond
principal and interest payments increased by $ 972,507 in fiscal 2016, due to increased debt for capital improvement projects.
The Capital Projects Fund ended fiscal 2016 with a $ 16,647,422 balance compared to the prior year ending balance of
$ 15,520,555.
Proprietary Fund Highlights
The Water Fund, which accounts for the operation and maintenance of the City’s water system, ended fiscal 2016 with a net position
of $16,662,040 compared to the prior year ending net position balance of $ 15,652,883.
The Sewer Fund, which accounts for the operation and maintenance of the City’s wastewater treatment and sanitary sewer system,
ended fiscal 2016 with a net position of $ 22,167,784, compared to the prior year ending net position balance of $ 19,636,667.
The Gas Fund, which accounts for the operations and maintenance of the City’s gas utility, ended fiscal 2016 with a $ 10,206,367
net position balance, compared to the prior year ending net position balance of $ 9,384,128.
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The Golf Course Fund, which accounts for the operations and maintenance of the City's municipal golf course, ended fiscal 2016
with a net position of $ 134,864, compared to the prior year ending net position balance of ($ 31,233).
BUDGETARY HIGHLIGHTS
Over the course of the year, the City of Waukee amended its budget once. This amendment was done in May 2016, and was needed
to cover unplanned disbursements, including program expenditures associated with increases to Public Safety, Health and Social
Services, Culture and Recreation, Community and Economic Development, General Government, Debt Service, and Transfers Out;
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 $ 133,958,706 (net of accumulated depreciation)
at June 30, 2016. Capital assets for business type activities totaled $ 45,799,286 (net of accumulated depreciation) at June 30, 2016.
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 purchase of additional Westcom Equipment, and
the completion of Grand Prairie Pkwy/Esker Ridge Intersection, Windfield and Grant Park Improvements, City Hall Parking Lot
Repairs, Library HVAC Replacement and Roof Retrofit; continued construction of several Grand Prairie Pkwy projects including
section from Ashworth to University, University Intersection, Trails & Enhancements, the I-80 interchange project, as well as traffic
signal projects for Hickman/Dartmoor and LA Grant/Ashworth, construction of SE Westown Pkwy from Grand Prairie Pkwy to LA
Grant, and an extension of Douglas Pkwy; and started construction of Fox Creek Park Phase I, and a joint project with West Des
Moines for Waco/98th Street Improvements.
For business type activities, the major additions included the fees associated with the Wastewater Reclamation Authority (WRA),
completion of construction on the Grand Prairie Pkwy water and gas main installation, Bluestem Lift Station, water system purchase
from Xenia Rural Water District, construction on the Centennial Park Streambank Stabilization, as well as engineering for several
sewer expansion projects.
Construction in progress at June 30, 2016 for the City consists primarily of the Grand Prairie Pkwy construction projects including
the I-80 Interchange, traffic signal projects, Fox Creek Park Phase I, and the SE Westown and Douglas Pkwy construction projects.
Long-Term Debt
At June 30, 2016, the City had $ 47,600,665 in total non-current debt outstanding for governmental activities. Total non-current
debt outstanding for business type activities was $ 7,951,024 at June 30, 2016. During the year ended June 30, 2016, the City issued
$ 7,340,000 in general obligation bonds and $2,090,000 in revenue bonds.
The City maintained their general obligation bond rating of Aa3, assigned by national rating agency, Moody’s Investors Services, on
October 24, 2015. 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
$ 50,214,030 or 77.98%, is below its constitutional debt limit of $ 64,395,379. 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.
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ECONOMIC FACTORS BEARING ON THE CITY’S FUTURE
Several economic factors affected decisions made by the City in setting its fiscal 2017 budget. The City of Waukee will experience
a significant increase in General Fund revenues and expenditures from fiscal 2016 to fiscal 2017. The major factors that will play a
role in this change are the increase in property tax revenues from increased valuations for fiscal 2017.
The General Fund is projected to end fiscal 2017 with a fund balance of approximately $ 3,852,019, or a planned decrease of $
216,363 from fiscal 2016. The tax levy rates per $1,000 of taxable valuation for fiscal 2017 are provided below:
General levy $8.10
Debt Service levy 3.32
Employee Benefits Levy 2.08
Total $13.50
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.
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BASIC FINANCIAL STATEMENTS
See Notes to Financial Statements.
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City of Waukee, Iowa
STATEMENT OF NET POSITION
June 30, 2016
Primary Government
Governmental Business Type
Activities Activities Total
ASSETS
Current assets
Cash, cash equivalents and pooled investments $ 25,161,287 $ 13,575,347 $ 38,736,634
Receivables
Property tax
Delinquent 26,174 – 26,174
Succeeding year 13,316,659 – 13,316,659
Special assessments 322,527 49,001 371,528
Customer accounts – 1,232,982 1,232,982
Other 248,042 – 248,042
Due from other governments 10,629 – 10,629
Internal balances 729,105 (729,105) –
Inventories – 269,503 269,503
Prepaid insurance 103,961 – 103,961
Total unrestricted current assets 39,918,384 14,397,728 54,316,112
Restricted assets – cash, cash equivalents
and pooled investments – 796,525 796,525
Noncurrent assets
Capital assets (net of accumulated depreciation) 133,958,706 45,799,286 179,757,992
Total assets 173,877,090 60,993,539 234,870,629
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows 849,708 202,822 1,052,530
LIABILITIES
Current liabilities
Accounts payable 2,417,819 811,034 3,228,853
Accrued interest payable 100,000 18,700 118,700
Customer deposits payable – 206,735 206,735
Lease deposit payable 5,204 – 5,204
Compensated absences 41,843 50,821 92,664
General obligation bonds/notes 5,414,738 – 5,414,738
Tax increment financing (TIF) bonds 145,000 – 145,000
Special assessment notes payable 41,000 – 41,000
Revenue notes payable – 961,262 961,262
Des Moines Water Works bonds payable – 107,950 107,950
Total current liabilities 8,165,604 2,156,502 10,322,106
See Notes to Financial Statements.
-16-
City of Waukee, Iowa
STATEMENT OF NET POSITION (continued)
June 30, 2016
Primary Government
Governmental Business Type
Activities Activities Total
Noncurrent liabilities
Compensated absences 209,852 – 209,852
General obligation bonds/notes, net 44,142,829 – 44,142,829
Tax increment financing (TIF) bonds 660,000 – 660,000
Special assessment notes payable 90,000 – 90,000
Revenue notes payable, net – 7,337,337 7,337,337
Net OPEB liability 368,669 105,429 474,098
Net pension liability 2,129,315 508,258 2,637,573
Total noncurrent liabilities 47,600,665 7,951,024 55,551,689
Total liabilities 55,766,269 10,107,526 65,873,795
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Succeeding year property taxes 13,316,659 – 13,316,659
Special assessments 322,527 – 322,527
Pension related deferred inflows 325,078 77,595 402,673
Total deferred inflows of resources 13,964,264 77,595 14,041,859
NET POSITION
Net investment in capital assets 96,837,304 38,623,530 135,460,834
Restricted for
Debt service 1,112,923 37,462 1,150,385
Other purposes 5,195,574 – 5,195,574
Unrestricted 1,850,464 12,350,248 14,200,712
Total net position $104,996,265 $ 51,011,240 $156,007,505
See Notes to Financial Statements.
-17-
City of Waukee, Iowa
STATEMENT OF ACTIVITIES
Year ended June 30, 2016
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
FUNCTIONS/PROGRAMS
Primary Government
Governmental activities
Public safety $ 4,430,308 $ 1,101,265 $ – $ –
Public works 6,440,141 386,789 5,008,841 8,186,126
Health and social services 4,966 – – –
Culture and recreation 1,979,815 277,889 – 3,388,400
Community and economic development 1,178,569 – – –
General government 963,720 249,796 – –
Interest on long-term debt 1,469,426 – – –
Total governmental activities 16,466,945 2,015,739 5,008,841 11,574,526
Business type activities
Water 2,801,040 4,069,352 – –
Sewer 1,789,025 4,402,686 – –
Gas 4,172,893 5,079,975 – –
Golf 544,818 573,780 – –
Other 1,614,001 1,855,638 – –
Total business type activities 10,921,777 15,981,431 – –
Total Primary Government $27,388,722 $17,997,170 $5,008,841 $11,574,526
GENERAL REVENUES
Property and other city tax levied for
General purposes
Debt service
Employee benefits
Tax increment financing
Unrestricted interest on investments
Miscellaneous
TRANSFERS
Total general revenues and transfers
CHANGE IN NET POSITION
NET POSITION BEGINNING OF YEAR
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
$ (3,329,043) $ – $ (3,329,043)
7,141,615 – 7,141,615
(4,966) – (4,966)
1,686,474 – 1,686,474
(1,178,569) – (1,178,569)
(713,924) – (713,924)
(1,469,426) – (1,469,426)
2,132,161 – 2,132,161
– 1,268,312 1,268,312
– 2,613,661 2,613,661
– 907,082 907,082
– 28,962 28,962
– 241,637 241,637
– 5,059,654 5,059,654
2,132,161 5,059,654 7,191,815
5,433,012 – 5,433,012
2,646,303 – 2,646,303
1,384,907 – 1,384,907
3,229,861 – 3,229,861
52,617 24,114 76,731
437,308 249,038 686,346
725,317 (725,317) –
13,909,325 (452,165) 13,457,160
16,041,486 4,607,489 20,648,975
88,954,779 46,403,751 135,358,530
$104,996,265 $51,011,240 $156,007,505
See Notes to Financial Statements.
-19-
City of Waukee, Iowa
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2016
Other
Special Revenue Nonmajor
Capital Debt Urban Employee Governmental
General Projects Service Renewal TIF Benefits Funds Total
ASSETS
Cash, cash equivalents
and pooled investments $ 3,508,926 $18,485,941 $1,012,544 $1,385,664 $ 71,309 $ 609,614 $25,073,998
Receivables
Property tax
Delinquent 9,796 – 5,053 8,884 2,441 – 26,174
Succeeding year 5,722,316 – 2,776,658 3,351,300 1,466,385 – 13,316,659
Special assessments – – – – – 322,527 322,527
Other, net of allowances 236,098 – – – – 11,944 248,042
Due from other funds 729,105 – – – – – 729,105
Due from other governments – 10,629 – – – – 10,629
Prepaid insurance 85,711 – – – – 18,250 103,961
Total assets $10,291,952 $18,496,570 $3,794,255 $4,745,848 $1,540,135 $ 962,335 $39,831,095
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES
Accounts payable $ 457,401 $ 1,849,148 $ – $ 3,901 $ – $ 107,369 $ 2,417,819
Lease deposit payable 5,204 – – – – – 5,204
Compensated absences 38,649 – – – – 3,194 41,843
Total liabilities 501,254 1,849,148 – 3,901 – 110,563 2,464,866
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenues
Succeeding year property tax 5,722,316 – 2,776,658 3,351,300 1,466,385 – 13,316,659
Special assessments – – – – – 322,527 322,527
Total deferred inflows of
resources 5,722,316 – 2,776,658 3,351,300 1,466,385 322,527 13,639,186
FUND BALANCES
Nonspendable
Prepaid insurance 85,711 – – – – 18,250 103,961
Advances to other funds 724,067 – – – – – 724,067
Restricted for
Capital projects – 16,647,422 – – – – 16,647,422
Debt service – – 1,017,597 – – 95,326 1,112,923
Lease deposits 5,204 – – – – – 5,204
Police gifts and memorials 35,047 – – – – – 35,047
Urban renewal and
development – – – 1,390,647 – – 1,390,647
Other purposes – – – – 73,750 415,669 489,419
Committed for parkland
development 536,305 – – – – – 536,305
Unassigned 2,682,048 – – – – – 2,682,048
Total fund balances 4,068,382 16,647,422 1,017,597 1,390,647 73,750 529,245 23,727,043
Total liabilities, deferred
inflows of resources
and fund balances $10,291,952 $18,496,570 $3,794,255 $4,745,848 $1,540,135 $ 962,335 $39,831,095
See Notes to Financial Statements.
-20-
City of Waukee
RECONCILIATION OF THE BALANCE SHEET—
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
June 30, 2016
Total governmental fund balances (page 19) $ 23,727,043
Amounts reported for governmental activities in the
Statement of Net Position are different because:
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported in the governmental funds. The cost of capital
assets is $188,051,437 and the accumulated depreciation is $54,092,731. 133,958,706
Long-term liabilities, including bonds payable, bond premiums and discounts,
other post employment benefits payable, 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. (53,301,403)
Pension related deferred outflows of resources and deferred inflows of resources
are not due and payable in the current year and, therefore, are not reported in the
governmental funds, as follows:
Deferred outflows of resources 849,708
Deferred inflows of resources (325,078) 524,630
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. 87,289
Net position of governmental activities (page 16) $104,996,265
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, 2016
Other
Special Revenue Nonmajor
Capital Debt Urban Employee Governmental
General Projects Service Renewal TIF Benefits Funds Total
REVENUES
Property tax $5,405,091 $ – $2,646,303 $ – $1,384,907 $ – $ 9,436,301
Tax increment financing – – – 3,229,861 – – 3,229,861
Other city tax 1,680 7,286 – – – 18,955 27,921
Licenses and permits 1,277,105 – – – – 11,836 1,288,941
Use of money and property 147,154 26,927 2,778 8,340 1,368 8,769 195,336
Intergovernmental 232,496 3,298,740 – – – 1,710,101 5,241,337
Charges for services 351,341 – – – – – 351,341
Miscellaneous 159,141 56,099 – – – 189,928 405,168
Total revenues 7,574,008 3,389,052 2,649,081 3,238,201 1,386,275 1,939,589 20,176,206
EXPENDITURES
Operating
Public safety 4,281,395 – – – – – 4,281,395
Public works 405,504 – – – – 1,891,748 2,297,252
Health and social services 5,100 – – – – – 5,100
Culture and recreation 1,695,797 – – – – 67,631 1,763,428
Community and economic
development 698,371 – – 512,711 – – 1,211,082
General government 817,880 – – – – – 817,880
Debt service
Principal – – 5,913,084 – – 39,000 5,952,084
Interest – – 1,428,780 – – 6,160 1,434,940
Bond issuance and other costs – 113,108 7,777 – – – 120,885
Capital projects 341,032 10,687,015 – – – 310,977 11,339,024
Total expenditures 8,245,079 10,800,123 7,349,641 512,711 – 2,315,516 29,223,070
Excess (deficiency) of
revenues over (under)
expenditures (671,071) (7,411,071) (4,700,560) 2,725,490 1,386,275 (375,927) (9,046,864)
OTHER FINANCING SOURCES
(USES)
Bond proceeds – 6,830,000 510,000 – – – 7,340,000
Bond premium – 207,938 16,111 – – – 224,049
Sale of capital assets 10,226 – – – – 21,913 32,139
Operating transfers in 1,362,221 1,500,000 4,194,844 – – – 7,057,065
Operating transfers out (60,570) – – (4,952,778) (1,343,400) – (6,356,748)
Total other financing
sources (uses) 1,311,877 8,537,938 4,720,955 (4,952,778) (1,343,400) 21,913 8,296,505
CHANGE IN FUND BALANCES 640,806 1,126,867 20,395 (2,227,288) 42,875 (354,014) (750,359)
FUND BALANCES, beginning 3,427,576 15,520,555 997,202 3,617,935 30,875 883,259 24,477,402
FUND BALANCES, ending $4,068,382 $16,647,422 $1,017,597 $1,390,647 $ 73,750 $ 529,245 $23,727,043
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, 2016
Change in fund balances—Total governmental funds (page 21) $ (750,359)
Amounts reported for governmental activities in the
Statement of Activities are different because:
Governmental funds report 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:
Expenditures for capital assets, including contributed capital 23,185,954
Depreciation expense (4,940,200) 18,245,754
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 (7,340,000)
Repaid 5,952,084 (1,387,916)
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. (147,650)
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. 473,973
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 (32,698)
Other postemployment benefits (46,657)
Pension expense (348,203)
Interest on long-term debt 10,000 (417,558)
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 activities. 25,242
Change in net position of governmental activities (page 18) $16,041,486
See Notes to Financial Statements.
-23-
City of Waukee, Iowa
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
June 30, 2016
Internal
Enterprise Funds Service Fund
Nonmajor Equipment
Water Sewer Gas Golf Funds Total Revolving
ASSETS
Current assets
Cash, cash equivalents and
pooled investments $ 3,772,635 $ 5,512,752 $ 2,463,001 $ 800 $1,724,973 $13,474,161 $ 188,473
Receivables, net of allowances
Customer accounts 555,563 410,505 121,379 – 145,535 1,232,982 –
Special assessments – 49,001 – – – 49,001 –
Due from other funds 100,000 – – – – 100,000 –
Inventories 115,576 – 133,441 20,486 – 269,503 –
Total current assets 4,543,774 5,972,258 2,717,821 21,286 1,870,508 15,125,647 188,473
Noncurrent assets
Restricted assets – cash, cash equivalents
and pooled investments
Customer deposits 114,635 – 92,100 – – 206,735 –
Revenue note and interest sinking account 33,257 37,166 40,002 6,000 – 116,425 –
Revenue note reserve account 332,635 89,265 – 51,465 – 473,365 –
Capital assets (net of accumulated
depreciation) 15,761,793 17,846,270 9,939,969 1,543,469 707,785 45,799,286 –
Total noncurrent assets 16,242,320 17,972,701 10,072,071 1,600,934 707,785 46,595,811 –
Total assets 20,786,094 23,944,959 12,789,892 1,622,220 2,578,293 61,721,458 188,473
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows 39,988 40,719 55,907 29,527 36,681 202,822 –
LIABILITIES
Current liabilities
Accounts payable 213,750 417,825 40,946 36,699 101,814 811,034 –
Compensated absences 9,846 14,634 16,463 1,353 8,525 50,821 –
Due to other funds – – – 829,105 – 829,105 –
Customer deposits payable 114,635 – 92,100 – – 206,735 –
Revenue notes payable 215,000 276,000 358,000 52,262 60,000 961,262 –
Des Moines Water Works bonds payable 107,950 – – – – 107,950 –
Interest payable 9,100 2,011 5,171 1,583 835 18,700 –
Total current liabilities 670,281 710,470 512,680 921,002 171,174 2,985,607 –
Noncurrent liabilities
Revenue notes payable, net 3,357,777 968,873 1,940,000 490,687 580,000 7,337,337 –
Net OPEB liability 20,477 20,933 25,265 19,906 18,848 105,429 –
Net pension liability 100,208 102,040 140,098 73,992 91,920 508,258 –
Total noncurrent liabilities 3,478,462 1,091,846 2,105,363 584,585 690,768 7,951,024 –
Total liabilities 4,148,743 1,802,316 2,618,043 1,505,587 861,942 10,936,631 –
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Pension related deferred inflows 15,299 15,578 21,389 11,296 14,033 77,595 –
NET POSITION
Net investment in capital assets 12,970,291 16,601,397 7,641,969 1,000,520 409,353 38,623,530 –
Restricted for bond retirement 33,842 – – 3,620 – 37,462 –
Unrestricted 3,657,907 5,566,387 2,564,398 (869,276) 1,329,646 12,249,062 188,473
Total net position $16,662,040 $22,167,784 $10,206,367 $ 134,864 $1,738,999 50,910,054 $ 188,473
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. 101,186
Net assets of business type activities $51,011,240
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, 2016
Internal
Enterprise Funds Service Fund
Nonmajor Equipment
Water Sewer Gas Golf Funds Total Revolving
OPERATING REVENUES
Charges for service $ 4,069,352 $ 4,402,686 $ 5,079,975 $ 573,780 $1,855,638 $15,981,431 $ –
Miscellaneous 3,967 1,149 22,439 130,136 18,245 175,936 –
Total operating revenues 4,073,319 4,403,835 5,102,414 703,916 1,873,883 16,157,367 –
OPERATING EXPENSES
Business type activities
Cost of sales and services 2,078,159 1,151,883 3,736,909 449,571 1,565,545 8,982,067 –
Depreciation and amortization 551,772 607,532 353,163 53,789 39,474 1,605,730 –
Total operating expenses 2,629,931 1,759,415 4,090,072 503,360 1,605,019 10,587,797 –
Operating income 1,443,388 2,644,420 1,012,342 200,556 268,864 5,569,570 –
NONOPERATING REVENUES
(EXPENSES)
Interest income 11,052 7,720 3,364 – 1,978 24,114 242
Rental income 38,713 – – 7,800 – 46,513 –
Sale of capital assets 10,439 2,100 14,050 – – 26,589 –
Bond issuance and other costs (44,150) (663) (500) (21,107) (8,147) (74,567) –
Interest expense (126,959) (28,947) (82,321) (20,351) (835) (259,413) –
Total nonoperating revenues
(expenses) (110,905) (19,790) (65,407) (33,658) (7,004) (236,764) 242
Income before transfers 1,332,483 2,624,630 946,935 166,898 261,860 5,332,806 242
Transfers in (out) (323,326) (93,513) (124,696) (801) (182,981) (725,317) 25,000
CHANGE IN NET POSITION 1,009,157 2,531,117 822,239 166,097 78,879 4,607,489 25,242
NET POSITION, beginning 15,652,883 19,636,667 9,384,128 (31,233) 1,660,120 46,302,565 163,231
NET POSITION, ending $16,662,040 $22,167,784 $10,206,367 $ 134,864 $1,738,999 $50,910,054 $ 188,473
See Notes to Financial Statements.
-25-
City of Waukee, Iowa
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
Year ended June 30, 2016
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 $3,864,916 $4,365,447 $5,046,782 $ 573,780 $1,845,571 $15,696,496 $ –
Cash received from other revenues 3,967 1,149 22,439 130,136 18,245 175,936 –
Cash paid for personal services (631,058) (599,921) (807,642) (199,571) (330,530) (2,568,722) –
Cash paid to suppliers (1,315,243) (471,926) (2,961,170) (275,736) (1,242,403) (6,266,478) –
Net cash provided by operating activities 1,922,582 3,294,749 1,300,409 228,609 290,883 7,037,232 –
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Payments made on interfund accounts – – – (124,850) – (124,850) –
Transfers to other funds (323,326) (93,513) (105,875) (801) (182,981) (706,496) –
Transfers from other funds – – – – – – 25,000
Net cash provided by (used in) noncapital
financing activities (323,326) (93,513) (105,875) (125,651) (182,981) (831,346) 25,000
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets (2,916,920) (1,841,956) (721,128) (45,547) (386,887) (5,912,438) –
Principal paid on revenue notes (349,938) (269,000) (334,000) (52,309) – (1,005,247) –
Interest and fiscal changes paid (125,844) (30,749) (85,974) (22,935) – (265,502) –
Principal paid on Des Moines Water
Works bonds (281,475) – – – – (281,475) –
Principal paid on general obligation bonds – – – (30,829) – (30,829) –
Cash paid on refinancing of revenue note – – – (21,107) – (21,107) –
Proceeds from bond issuance 1,429,661 – – – 631,853 2,061,514 –
Net cash provided by (used in) capital and
related financing activities (2,244,516) (2,141,705) (1,141,102) (172,727) 244,966 (5,455,084) –
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 11,052 7,720 3,364 – 1,978 24,114 242
Proceeds from sale of investments – 29,000 – – – 29,000 –
Purchase of investments (137,760) – – – – (137,760) –
Cash received from property rental 38,713 – – 7,800 – 46,513 –
Net cash provided by (used in) investing activities (87,995) 36,720 3,364 7,800 1,978 (38,133) 242
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (733,255) 1,096,251 56,796 (61,969) 354,846 712,669 25,242
CASH AND CASH EQUIVALENTS, beginning 4,653,782 4,453,667 2,538,307 68,769 1,370,127 13,084,652 163,231
CASH AND CASH EQUIVALENTS, ending $3,920,527 $5,549,918 $2,595,103 $ 6,800 $1,724,973 $13,797,321 $ 188,473
See Notes to Financial Statements.
-26-
City of Waukee, Iowa
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS (continued)
Year ended June 30, 2016
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 $1,443,388 $2,644,420 $1,012,342 $ 200,556 $ 268,864 $5,569,570 $ –
Adjustments to reconcile operating
income to net cash provided by
operating activities
Depreciation expense 551,772 607,532 353,163 53,789 39,474 1,605,730 –
Change in assets, deferred outflows,
liabilities and deferred inflows
Customer accounts receivable (204,436) (37,239) (33,193) – (10,067) (284,935) –
Inventories 68,853 – 92,242 55 – 161,150 –
Accounts payable, net of capital assets 60,021 90,128 (147,860) (8,989) (3,712) (10,412) –
Customer deposits 18,930 – 10,250 – – 29,180 –
Compensated absences (1,669) (702) 979 22 927 (443) –
Net pension liability 22,271 27,137 58,516 11,245 27,649 146,818 –
Deferred outflows of resources (229) (2,507) (14,288) 2,483 (3,894) (18,435) –
Deferred inflows of resources (38,424) (36,054) (34,847) (31,956) (30,270) (171,551) –
OPEB liability 2,105 2,034 3,105 1,404 1,912 10,560 –
Net cash provided by operating activities $1,922,582 $3,294,749 $1,300,409 $ 228,609 $ 290,883 $ 7,037,232 $ –
RECONCILIATION OF CASH AND CASH
EQUIVALENTS AT YEAR END TO SPECIFIC
ASSETS INCLUDED ON THE STATEMENT
OF NET POSITION
Current assets
Cash and pooled investments $3,772,635 $5,512,752 $2,463,001 $ 800 $1,724,973 $13,474,161 $ 188,473
Restricted assets – cash and pooled investments
Customer deposits 114,635 – 92,100 – – 206,735 –
Revenue note and interest sinking account 33,257 37,166 40,002 6,000 – 116,425 –
Revenue note reserve account 332,635 89,265 – 51,465 – 473,365 –
4,253,162 5,639,183 2,595,103 58,265 1,724,973 14,270,686 188,473
Less items not meeting the definition of
cash equivalent
Certificates of deposit (332,635) (89,265) – (51,465) – (473,365) –
Cash and cash equivalents at year end $3,920,527 $5,549,918 $2,595,103 $ 6,800 $1,724,973 $13,797,321 $ 188,473
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.
The Waukee Foundation has been incorporated under the provisions of the Iowa Nonprofit Corporation Act to operate
exclusively for charitable purposes. In accordance with criteria set by the Governmental Accounting Standards Board,
the Waukee Foundation meets the definition of a blended component unit. The financial activity of the Waukee
Foundation has been presented 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, 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 $14,503,968.
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.
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.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-29-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
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.
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.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-30-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Measurement Focus and Basis of Accounting (continued)
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, Cash Equivalents and Pooled 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. Investments consist of non-negotiable certificates of deposit which are
stated at cost.
For purposes of the statement of cash flows, all short-term cash investments that are highly liquid (including restricted
assets) are considered to be cash equivalents. Cash equivalents are readily convertible to known amounts of cash and,
at the day of purchase, have a maturity date no longer than three months.
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, 2016 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, 2014 assessed property
valuations; is for the tax accrual period July 1, 2015 through June 30, 2016 and reflects the tax asking contained in the
budget certified to the County Board of Supervisors in March 2015.
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, 2016, 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 in the Enterprise Funds 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.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-32-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 the following
thresholds and estimated useful lives in excess of two years.
Fund Type Amount
Governmental $5,000
Proprietary 5,000
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 10-15 years
Equipment 5-30 years
Infrastructure 15-20 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. The compensated absences liability
has been computed based on rates of pay in effect at June 30, 2016. 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.
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.
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.
Budgets and Budgetary Accounting
The budgetary comparison and related disclosures are reported as Required Supplementary Information. During the
year ended June 30, 2016, disbursements exceeded the amount budgeted in the debt service and business type
activities functions.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-34-
NOTE 2 CASH, CASH EQUIVALENTS AND POOLED INVESTMENTS
The City's deposits in banks at June 30, 2016 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.
The City has no 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 $ 556,413 $ 850 $ 555,563
Sewer fund 410,905 400 410,505
Gas fund 123,129 1,750 121,379
Nonmajor proprietary funds 145,535 – 145,535
Totals $1,235,982 $ 3,000 $1,232,982
Other
General fund $ 268,098 $ 32,000 $ 236,098
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 $2,140 from September 1, 2011 through August 31, 2016 and $2,340 from September 1,
2016 through August 31, 2021.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-35-
NOTE 4 LEASING ACTIVITIES (continued)
The City leases space on a water tower under an operating lease agreement dated April 18, 2016 expiring September
30, 2026. The lease calls for annual payments of $28,000 with annual 3% escalating increases.
The City leases farm land under two operating lease agreements dated January 2016 and April 2016, and expiring in
December 2016. The City received $13,000 and $57,600, respectively, in lease income from the agreements during the
year ended June 30, 2016.
The total minimum future lease payments receivable under the operating leases at June 30, 2016 are as follows:
Water Tower
Year ending June 30 Office Space Space Farm Land Total
2017 $ 32,475 $ 28,000 $ 27,300 $ 87,775
2018 30,075 28,840 – 58,915
2019 28,075 29,705 – 57,780
2020 28,075 30,596 – 58,671
2021 28,075 31,514 – 59,589
Thereafter 4,679 172,333 – 177,012
$ 151,454 $ 320,988 $ 27,300 $ 499,742
NOTE 5 CAPITAL ASSETS
Capital assets activity for the year ended June 30, 2016 was as follows:
Balance Balance
beginning end
of year Increases Decreases of year
Primary Government
Governmental activities
Capital assets not being depreciated
Land $ 8,696,009 $ 3,388,400 $ – $ 12,084,409
Construction in progress 21,627,311 10,457,485 8,190,354 23,894,442
Total capital assets not being depreciated 30,323,320 13,845,885 8,190,354 35,978,851
Capital assets being depreciated
Buildings 8,360,745 453,382 – 8,814,127
Improvements other than buildings 33,949,316 7,888,850 – 41,838,166
Equipment 6,045,726 1,002,065 71,480 6,976,311
Infrastructure, road network 86,257,856 8,186,126 – 94,443,982
Total capital assets being depreciated 134,613,643 17,530,423 71,480 152,072,586
Less accumulated depreciation for
Buildings 2,511,188 274,285 – 2,785,473
Improvements other than buildings 6,479,367 1,527,511 – 8,006,878
Equipment 4,069,258 490,505 71,480 4,488,283
Infrastructure, road network 36,164,197 2,647,900 – 38,812,097
Total accumulated depreciation 49,224,010 4,940,201 71,480 54,092,731
Total capital assets being depreciated, net 85,389,633 12,590,222 – 97,979,855
Governmental activities capital assets, net $115,712,953 $26,436,107 $8,190,354 $133,958,706
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-36-
NOTE 5 CAPITAL ASSETS (continued)
Balance Balance
beginning end
of year Increases Decreases of year
Business type activities
Capital assets not being depreciated
Land $ 1,226,032 $ – $ – $ 1,226,032
Construction in progress 461,209 4,156,778 3,603,616 1,014,371
Total capital assets not being depreciated 1,687,241 4,156,778 3,603,616 2,240,403
Capital assets being depreciated
Buildings 557,486 – – 557,486
Equipment 3,868,918 292,756 74,367 4,087,307
Infrastructure, water and sewer network 52,419,600 5,390,351 – 57,809,951
Total capital assets being depreciated 56,846,004 5,683,107 74,367 62,454,744
Less accumulated depreciation for
Buildings 197,393 13,203 – 210,596
Equipment 2,664,610 318,446 74,367 2,908,689
Infrastructure, water and sewer network 14,502,495 1,274,081 – 15,776,576
Total accumulated depreciation 17,364,498 1,605,730 74,367 18,895,861
Total capital assets being depreciated, net 39,481,506 4,077,377 – 43,558,883
Business type activities capital assets, net $41,168,747 $ 8,234,155 $3,603,616 $ 45,799,286
Depreciation expense was charged to functions of the primary government as follows:
Governmental activities
Public safety $ 295,041
Public works 4,239,001
Culture and recreation 275,260
General government 130,899
Total depreciation expense--governmental activities $4,940,201
Business type activities
Water $ 551,772
Sewer 607,532
Gas 353,163
Storm water 37,234
Golf 53,789
Utility billing 2,240
Total depreciation expense--business type activities $1,605,730
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-37-
NOTE 6 LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2016 is as follows:
Balance Balance
beginning end Due within
of year Increases Decreases of year one year
Governmental activities
General obligation bonds/notes $47,843,001 $7,340,000 $5,625,434 $49,557,567 (1) $5,414,738
Urban Renewal Revenue bonds 945,000 – 140,000 805,000 145,000
Special assessment notes 170,000 – 39,000 131,000 41,000
Compensated absences 217,067 34,628 – 251,695 41,843
Net OPEB liability 322,012 46,657 – 368,669 –
Net pension liability 1,467,517 661,798 – 2,129,315 –
Totals $50,964,597 $8,083,083 $5,804,434 $53,243,246 $5,642,581
Business type activities
General obligation bonds/notes $ 30,829 $ – $ 30,829 $ – $ –
Des Moines Water Works bonds 524,363 – 416,413 107,950 107,950
Revenue bonds/notes 7,041,448 2,090,000 832,849 8,298,599 (2) 961,262
Compensated absences 51,264 – 443 50,821 50,821
Net OPEB liability 94,869 10,560 – 105,429 –
Net pension liability 361,440 146,818 – 508,258 –
Totals $ 8,104,213 $2,247,378 $1,280,534 $ 9,071,057 $1,120,033
(1) Included in balance are unamortized bond premiums and discounts totaling $1,259,464 and $161,107, respectively
at June 30, 2016.
(2) Included in balance are unamortized bond premiums of $13,650 at June 30, 2016.
Bond/Note Issuance
Fourteen issues of unmatured general obligation bonds/notes, totaling $48,459,210, are outstanding at June 30, 2016.
General obligation bonds/notes bear interest at rates ranging from 1.0% to 4.5% and mature in varying annual amounts,
ranging from $59,738 to $2,265,000, with the final maturities due in the year ending June 30, 2034.
One issue of unmatured Urban Renewal revenue notes, totaling $805,000, is outstanding at June 30, 2016. The note
bears interest at 3.2% to 3.9% and matures in annual amounts of $145,000 to $175,000, with final maturity due in the
year ending June 30, 2021.
One issue of unmatured special assessment notes, totaling $131,000, is outstanding at June 30, 2016. The note bears
interest at 3.80% to 4.55% and matures in annual amounts of $41,000 to $46,000, with final maturity due in the year
ending June 30, 2019.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-38-
NOTE 6 LONG-TERM LIABILITIES (continued)
Bond/Note Issuance (continued)
Details of general obligation and revenue bonds/notes payable and special assessment notes at June 30, 2016 are as
follows:
Amount of Outstanding
Interest Final Annual original June 30,
Governmental activities Date of issue rates due date payments issue 2016
General Obligation Bonds
and Notes
Golf Course Refunding February 19, 2016 2.75 June 1, 2020 $ 59,738 - $ 64,988 $ 279,990 $ 249,210
Sewer Project April 8, 2008 3.90-4.20 June 1, 2021 105,000 - 120,000 1,275,000 565,000
Urban Renewal 2008C December 15, 2008 3.90-4.50 June 1, 2022 170,000 - 215,000 2,200,000 1,155,000
Urban Renewal 2009A April 28, 2009 3.50 June 1, 2017 130,000 1,055,000 130,000
General Obligation 2010A June 2, 2010 3.00-3.50 June 1, 2022 120,000 - 140,000 1,435,000 775,000
General Obligation 2010B June 2, 2010 2.80-3.60 June 1, 2021 160,000 - 185,000 1,745,000 860,000
General Obligation 2012A June 14, 2012 2.00 June 1, 2020 100,000 - 450,000 2,680,000 855,000
General Obligation 2012B June 14, 2012 2.00-3.00 June 1, 2021 340,000 - 630,000 4,220,000 2,990,000
Urban Renewal 2012D December 28, 2012 2.00 June 1, 2021 415,000 - 445,000 3,745,000 2,140,000
General Obligation 2013B May 28, 2013 2.00-3.00 June 1, 2028 100,000 - 350,000 3,280,000 2,420,000
General Obligation
Refunding 2013C May 28, 2013 1.00-1.35 June 1, 2020 285,000 - 485,000 2,265,000 1,320,000
General Obligation 2013D December 12, 2013 3.00-4.125 June 1, 2033 110,000 - 930,000 8,740,000 6,140,000
General Obligation 2014A December 10, 2014 2.00-3.50 June 1, 2034 500,000 - 2,265,000 23,295,000 22,260,000
General Obligation 2015C November 19, 2015 2.00-4.00 June 1, 2030 365,000 - 1,010,000 7,340,000 6,600,000
Revenue Bonds
Urban Renewal 2010C June 2, 2010 3.20-3.90 June 1, 2021 145,000 - 175,000 1,590,000 805,000
Special Assessment Notes
Sewer Improvements May 5, 2009 3.80-4.55 December 1, 2018 41,000 - 46,000 362,000 131,000
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 five
percent of the tax increment revenues. The total principal and interest remaining to be paid on the notes is $897,425.
For the current year, $173,155 of principal and interest was paid on the bonds and total tax increment revenues were
$3,220,977.
The covenants providing for the issuance of the 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.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-39-
NOTE 6 LONG-TERM LIABILITIES (continued)
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 $121,500.
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
2017 $ 5,414,738 $1,360,052 $ 6,774,790 $ 41,000 $ 4,698 $ 45,698
2018 4,686,392 1,217,794 5,904,186 44,000 3,006 47,006
2019 5,073,092 1,108,943 6,182,035 46,000 1,046 47,046
2020 5,474,988 966,237 6,441,225 – – –
2021 5,345,000 813,354 6,158,354 – – –
2022-2026 10,575,000 2,757,685 13,332,685 – – –
2027-2031 9,880,000 1,192,171 11,072,171 – – –
2032-2034 2,010,000 137,950 2,147,950 – – –
Subtotal 48,459,210 9,554,186 58,013,396 131,000 8,750 139,750
Plus unamortized
premium 1,098,357 – 1,098,357 – – –
Totals $49,557,567 $9,554,186 $59,111,753 $ 131,000 $ 8,750 $ 139,750
Year ending Revenue
June 30 Principal Interest Total
2017 $ 145,000 $ 28,955 $ 173,955
2018 155,000 24,315 179,315
2019 160,000 19,045 179,045
2020 170,000 13,285 183,285
2021 175,000 6,825 181,825
Totals $ 805,000 $ 92,425 $ 897,425
Nine issues of unmatured revenue notes, totaling $8,284,949, are outstanding at June 30, 2016. These notes bear
interest at rates ranging from 1.10% to 4.10% and mature in varying annual amounts, ranging from $31,000 to
$409,000, with the final maturities due in the year ending June 30, 2032.
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, 2016, the City was in compliance with the revenue note/bond provisions.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-40-
NOTE 6 LONG-TERM LIABILITIES (continued)
The City has pledged future sewer, water, golf, and gas customer revenues, net of specified operating expenses, to repay the
$11,683,339 in revenue notes issued from 1998 to 2016. 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 2032. 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 $9,706,750. For the current year,
principal and interest paid and total customer net revenues were $1,115,620 and $5,716,251, respectively.
Details of revenue notes and bonds payable at June 30, 2016 are as follows:
Amount of Outstanding
Interest Final Annual original June 30,
Business Type activities Date of issue rates due date payments issue 2016
Revenue Notes and Bonds
Water
Revenue Capital Loan
2012C September 5, 2012 2.00 - 4.10 June 1, 2032 $105,000 - 185,000 $2,625,000 $2,220,000
Revenue Note Series
2015B July 21, 2015 3.00 June 1, 2027 110,000 - 140,000 1,450,000 1,340,000
Sewer
Bonds-Series 1998A October 8, 1998 1.75 June 1, 2018 31,000 - 33,000 455,748 64,000
Bonds-Series 1998B October 8, 1998 1.75 June 1, 2018 66,000 - 68,000 945,252 134,000
Bonds-Series 1998C October 8, 1998 1.75 June 1, 2018 79,000 - 82,000 1,178,000 161,000
Revenue Capital Loan
2013A March 1, 2013 2.00 - 2.50 June 1, 2024 100,000 - 120,000 1,185,000 885,000
Golf Course
Revenue refunding bond February 19, 2016 3.50 December 1, 2020 52,262 - 322,567 572,339 542,949
Gas
Revenue Note March 18, 2015 2.70 June 1, 2022 358,000 - 409,000 2,632,000 2,298,000
Stormwater
Revenue Note Series
2016A June 1, 2016 1.10 - 2.00 June 1, 2026 60,000 - 70,000 640,000 640,000
Year ending Revenue Notes/Bonds
June 30 Principal Interest Total
2017 $ 961,262 $ 224,824 $1,186,086
2018 985,107 202,173 1,187,280
2019 828,018 178,903 1,006,921
2020 845,995 158,116 1,004,111
2021 1,130,567 131,512 1,262,079
2022-2026 2,394,000 378,413 2,772,413
2027-2031 955,000 140,275 1,095,275
2032 185,000 7,585 192,585
Subtotal 8,284,949 1,421,801 9,706,750
Plus unamortized premium 13,650 – 13,650
Totals $8,298,599 $1,421,801 $9,720,400
One issue of unmatured Des Moines Water Works refunding bonds, totaling $107,950, is outstanding at June 30, 2016.
This note bears interest at a rate of 3.0% and matures in whole during the year ending June 30, 2017.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-41-
NOTE 6 LONG-TERM LIABILITIES (continued)
A summary of the City of Waukee's share of the principal and interest on the bonds issued by Des Moines Water Works
is as follows:
Des Moines Water Works
Year ending 2006 Water Refunding Bonds
June 30 Principal Interest Total
2017 $ 107,950 $ 3,239 $ 111,189
As of June 30, 2016, the general obligation debt issued by the City did not exceed its legal debt limit computed as
follows:
Actual valuation $1,287,907,585
Debt limit - 5% of total actual valuation $64,395,379
Debt applicable to debt limit
General obligation bonded debt outstanding $48,459,210
Urban Renewal revenue bonds outstanding 805,000
Tax increment financing debt outstanding 949,820
Total debt subject to debt limit $50,214,030
Percentage of debt limit 77.98%
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 7401 Register
Drive 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 2016, 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, 2016 were $577,811.
Net Pension Liability, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
At June 30, 2016, the City reported a liability of $2,637,573 for its proportionate share of the net pension liability. The
net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was
based on the City’s share of contributions to IPERS relative to the contributions of all IPERS participating employers.
The following table summarizes the change in the City’s proportionate share:
June 30
2015 2014 Change
City’s proportionate share 0.053387% 0.046117% 0.007270%
For the year ended June 30, 2016, the City recognized pension expense of $409,023. At June 30, 2016, 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 $ 43,668 $ 48,537
Change in assumptions 79,575 745
Net difference between projected and actual earnings
on IPERS’ investments – 353,391
Change in proportion and difference between
City contributions and proportionate share
of contributions 351,476 –
City contributions subsequent to the
measurement date 577,811 –
Totals $1,052,530 $ 402,673
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-44-
NOTE 7 PENSION PLAN (continued)
$577,811 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, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Year ending June 30, Total
2017 $ (52,269)
2018 (52,269)
2019 (52,269)
2020 220,341
2021 8,512
Totals $ 72,046
There were no non-employer contributing entities at IPERS.
Actuarial Assumptions
The total pension liability in the June 30, 2015 actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Rate of inflation (effective June 30, 2014) 3.00 percent per annum.
Rates of salary increase (effective June 30, 2010) 4.00 to 17.00 percent average, including inflation. Rates vary
by membership group.
Long-term investment rate of return 7.50 percent, compounded annually, net of investment
(effective June 30, 1996) expense, including inflation
Wage growth (effective June 30, 1990) 4.00 percent per annum based on 3.00 percent inflation and
1.00 percent real wage inflation.
The actuarial assumptions used in the June 30, 2015 valuation were based on the results of actuarial experience
studies with dates corresponding to those listed above.
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 28% 2.04
Domestic Equity 24 6.29
International Equity 16 6.75
Private Equity/Debt 11 11.32
Real Estate 8 3.48
Credit Opportunities 5 3.63
U.S. TIPS 5 1.91
Other Real Assets 2 6.24
Cash 1 (0.71)
Total 100%
Discount Rate
The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to
determine the discount rate assumed that employee contributions will be made at the contractually required rate and
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 7.5
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 (6.5 percent) or 1-percentage-point higher (8.5 percent) than the current
rate.
1% Discount 1%
Decrease Rate Increase
(6.5%) (7.5%) (8.5%)
City’s proportionate share of the net pension liability (asset) $5,791,231 $2,637,573 $ (22,850)
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, 2016, 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, 2016 is as follows:
Transfer to Transfer from Amount
General Employee Benefits $1,343,400
Gas 18,821
1,362,221
Debt Service Governmental funds
General 35,570
Urban Renewal TIF 3,452,778
Enterprise funds
Water 323,326
Sewer 93,513
Gas 105,875
Golf 801
Nonmajor Enterprise funds 182,981
4,194,844
Capital Projects Urban Renewal TIF 1,500,000
Equipment Revolving General 25,000
Total $7,082,065
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, 2016 is as follows:
Receivable Fund Payable Fund Amount
General Enterprise - Golf Course $ 729,105
Enterprise—Water Enterprise - Golf Course 100,000
Total $ 829,105
These balances result from prior fiscal year interfund loans to finance Golf Course operations. Repayments will be
made from future revenues over the next several years.
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 746 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.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-47-
NOTE 10 RISK MANAGEMENT (continued)
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, 2016 were
$185,988.
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 $350,000 per claim. Claims
exceeding $350,000 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, 2016, no liability has been
recorded in the City's financial statements. As of June 30, 2016, 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.
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.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-48-
NOTE 10 RISK MANAGEMENT (continued)
Self-insurance
The City has a partially self funded-insured medical expense reimbursement plan which provides medical benefits to its
employees and their dependents. The plan is funded by both employee and City contributions and is administered
through a service agreement with Wellmark Blue Cross Blue Shield of Iowa. The uninsured risk retention per person is
based on coverage selected and whether the claims are in or out of the network. There has been no significant
reduction in insurance coverage under the plan from prior years. Amounts payable for incurred but not reported (IBNR)
claims were $7,975 at June 30, 2016.
NOTE 11 COMMITMENTS
The City entered into contract commitments with contractors for the completion of several infrastructure construction
projects. The total contract commitments are approximately $10,700,000 of which approximately $8,500,000 has been
incurred as of June 30, 2016. The unpaid commitment balance is approximately $2,200,000 which will be funded by
current reserves in the capital projects funds and other sources.
In May, 2016, the City entered into a 28E agreement with the Waukee Community School District for the purpose of
purchasing and developing land to be used for joint public-use recreational fields and as the site for a new high school.
In accordance with the 28E agreement, in May, 2016, the City entered into four agreements to purchase land at a cost
of $6,240,000 with purchase dates ranging from November, 2016 to December, 2016. The Waukee Community School
District will reimburse the City for a substantial portion of the costs of the land acquisition, with the remaining City
obligation being funded through the sale of City owned land (as described in Note 16) and other sources.
NOTE 12 URBAN RENEWAL DEVELOPMENT AGREEMENTS
The City has entered into a development agreement for an urban renewal project. The agreement requires 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 paid by the City under the agreement is not to exceed $3,300,000. During the year
ended June 30, 2016, the City rebated $462,529 of incremental property tax to the developer. The outstanding balance
of the agreement at June 30, 2016 was $949,820.
The agreement is not a general obligation of the City and, due to its nature, is not recorded as a liability in the City’s
financial statements. However, the agreement is subject to the constitutional debt limitation of the City.
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (OPEB)
The City operates a single-employer retiree benefit plan which provides healthcare benefits for retirees and their
spouses and dependents. There are both active and retired members in the plan. Participants must be age 55 or older
at retirement.
The healthcare benefit plans are self-insured and are administered by a third party. The benefits are provided in the
form of an implicit rate subsidy where retirees under the age of 65 receive health insurance coverage by paying a
combined retiree/active rate which results in an implicit rate subsidy and an OPEB liability. The City currently finances
the retiree benefit plan on a pay-as-you-go basis.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-49-
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (continued)
The City’s annual OPEB cost is calculated based on the annual required contribution (ARC) of the City, an amount
actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid
on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a
period not to exceed 30 years. The following table shows the components of the City’s annual OPEB cost for June 30,
2016, the amount actually contributed to the plan and changes in the City’s net OPEB obligation:
Annual required contribution $ 56,000
Interest on net OPEB obligation 16,675
Adjustment to annual required contribution (15,159)
Annual OPEB cost 57,516
Contributions made –
Increase in net OPEB obligation 57,516
Net OPEB obligation, beginning of year 416,881
Net OPEB obligation, end of year $ 474,397
For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, 2008. The end of year net
OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding
requirements and the actual contributions for the year ended June 30, 2016.
For the year ended June 30, 2016, the City made no contributions to the plan. The City’s annual OPEB cost, the
percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation are summarized as follows:
Percentage of
Annual annual OPEB Net OPEB
Fiscal year ended OPEB cost cost contributed obligation
June 30, 2014 $ 70,140 0.0% $ 359,573
June 30, 2015 $ 57,308 0.0% $ 416,881
June 30, 2016 $ 57,516 0.0% $ 474,397
As of July 1, 2014, the most recent actuarial valuation date for the period July 1, 2015 through June 30, 2016, the
actuarial accrued liability was $275,000 with no actuarial value of assets, resulting in an unfunded actuarial accrued
liability, UAAL, of $275,000. The covered payroll (annual payroll of active employees covered by the plan) was
approximately $6,260,000, and the ratio of the UAAL to the covered payroll was 4.4%. As of June 30, 2016, there were
no trust fund assets.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual
results are compared with past expectations and new estimates are made about the future. The schedule of funding
progress, presented as required supplementary information in the section following the Notes to Financial Statements,
presents multiyear trend information about whether the actuarial value of the plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
-50-
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (continued)
Projections of benefits for financial reporting purposes are based on the plan as understood by the employer and the
plan members and include the types of benefits provided at the time of each valuation and the historical pattern of
sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions
used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and
the actuarial value of assets, consistent with the long-term perspective of the calculations.
As of the July 1, 2014 actuarial valuation date, the unit credit actuarial cost method was used. The actuarial
assumptions include a 4.0% discount rate based on the City’s funding policy. The projected annual medical trend rate
is 8.0%. The ultimate medical trend rate is 5.0%. The medical trend rate is reduced 0.5% each year until reaching the
5.0% ultimate trend rate.
Mortality rates are from the RP2000 Group Annuity Mortality Table, applied on a gender-specific basis. Annual
retirement and termination probabilities were developed from the Actuary’s Pension Handbook.
Projected claim costs of the healthcare plan are approximately $1,295 per month for retirees. The salary increase rate
was assumed to be 3.5% per year. The UAAL is being amortized as a level dollar amount on an open basis over a
period of 30 years.
NOTE 14 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. 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.
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.
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, 2016, the
Series 2013B bonds had a balance of $52,405,000 and the City of Waukee's estimated future allocation based on the
WRA flows is currently $1,797,517.
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, 2016, the
Series 2015E bonds had a balance of $31,865,000 and the City of Waukee's estimated future allocation based on the
WRA flows is currently $1,141,351.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
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NOTE 14 JOINT VENTURE (continued)
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, 2016, the outstanding balance of State Revolving Loans issues after July 1, 2004 totaled
$264,697,879 and the City of Waukee’s estimated future allocation is currently $8,663,833.
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 15 DEFICIT BALANCES
At June 30, 2016, funds with deficit balances were as follows:
Road Use Tax Fund $ 20,349
The Road Use Tax deficit balance is the result of increased expenditures during fiscal year 2016 in excess of
anticipated increases in road use tax revenues from new census data and increases in the State of Iowa’s road use tax.
The deficit will be eliminated by future revenues.
NOTE 16 SUBSEQUENT EVENTS
In August 2016, the Waukee City Council approved the sale of $1,720,000 in general obligation bonds. The proceeds
of the bonds were to be used to redeem two previously outstanding bonds.
In August 2016, the Waukee City Council approved two separate sales of land owned by the City to developers for
$1,600,000 and $340,000, respectively. Proceeds from the sales are to be used for the purchase of land for joint public-
use recreation fields as described in Note 11.
In August 2016, the Waukee City Council approved a development agreement with a developer. The agreement calls
for property tax rebates to the developer totaling up to $3,480,000 over a ten year period beginning in June, 2021. The
tax rebates are based on incremental property values.
In October 2016, the City was approved for up to $12,557,000 in State Revolving Fund loans which will be used for
sewer utility improvements.
In November, 2016, the Waukee City Council authorized the sale of $2,900,000 in sewer revenue capital loan notes for
the purpose of sewer utility improvements.
City of Waukee, Iowa
NOTES TO FINANCIAL STATEMENTS
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NOTE 17 NEW GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENTS
The Governmental Accounting Standards Board (GASB) has issued several statements not yet implemented by the
City. The statements which may impact the City are as follows:
GASB Statement No. 75, Financial Reporting for Postemployment Benefit Plans Other than Pension Plans will be
effective for the City beginning with the year ending June 30, 2018. The statement improves accounting and financial
reporting by state and local governments for postemployment benefits other than pensions (other postemployment
benefits or OPEB). The statement establishes standards for recognizing and measuring liabilities, deferred outflows of
resources, deferred inflows of resources, and expense/expenditures. Note disclosure and required supplementary
information requirements are also addressed.
GASB Statement No. 77, Tax Abatement Disclosures will be effective for the City beginning with the year ending June
30, 2017. The statement requires disclosure of tax abatement information about (1) a reporting government’s own tax
abatement agreements and (2) those that are entered into by other governments and that reduce the reporting
government’s tax revenues.
The City’s management has not yet determined the effect these Statements will have on the City’s financial statements.
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REQUIRED SUPPLEMENTARY INFORMATION
See accompanying independent auditor's report.
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City of Waukee, Iowa
SCHEDULE OF FUNDING PROGRESS FOR THE RETIREE HEALTH PLAN
Required Supplementary Information
(In Thousands)
Actuarial UAAL as a
Actuarial accrued Unfunded percentage
Actuarial value of liability AAL Funded Covered of covered
Fiscal valuation assets (AAL) (UAAL) ratio payroll payroll
year ended date (a) (b) (b - a) (a/b) (c) ((b - a)/c)
June 30, 2010 July 1, 2008 $ – $265 $265 0.0% $3,866 6.9%
June 30, 2011 July 1, 2008 $ – $265 $265 0.0% $4,144 6.4%
June 30, 2012 July 1, 2011 $ – $360 $360 0.0% $4,491 8.0%
June 30, 2013 July 1, 2011 $ – $360 $360 0.0% $4,633 7.8%
June 30, 2014 July 1, 2011 $ – $360 $360 0.0% $5,339 6.7%
June 30, 2015 July 1, 2014 $ – $275 $275 0.0% $5,902 4.7%
June 30, 2016 July 1, 2014 $ – $275 $275 0.0% $6,260 4.4%
See Note 13 in the accompanying Notes to Financial Statements for the plan description, funding policy, annual OPEB Cost,
Net OPEB Obligation, funded status and funding progress.
See accompanying independent auditor's report.
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City of Waukee, Iowa
BUDGETARY COMPARISON SCHEDULE OF REVENUES,
EXPENDITURES/EXPENSES AND CHANGES IN BALANCES - BUDGET AND ACTUAL - ALL
GOVERNMENTAL FUNDS AND PROPRIETARY FUNDS
Required Supplementary Information
Year ended June 30, 2016
Governmental Proprietary Accrual Total
funds actual funds actual adjustments actual
REVENUES
Property taxes $ 9,436,301 $ – $ – $ 9,436,301
Tax increment financing 3,229,861 – – 3,229,861
Other city tax 27,921 – – 27,921
Licenses and permits 1,288,941 – – 1,288,941
Use of money and property 195,336 70,627 2,108 268,071
Intergovernmental 5,241,337 – – 5,241,337
Charges for services 351,341 15,981,431 – 16,332,772
Miscellaneous 405,168 202,525 (180,695) 426,999
Total revenues 20,176,206 16,254,583 (178,587) 36,252,202
EXPENDITURES/EXPENSES
Public safety 4,281,395 – – 4,281,395
Public works 2,297,252 – – 2,297,252
Health and social services 5,100 – – 5,100
Culture and recreation 1,763,428 – (67,631) 1,695,797
Community and economic development 1,211,082 – – 1,211,082
General government 817,880 – – 817,880
Debt service 7,507,909 – – 7,507,909
Capital projects 11,339,024 – – 11,339,024
Business type activities – 10,921,777 4,659,922 15,581,699
Total disbursements 29,223,070 10,921,777 4,592,291 44,737,138
Excess (deficiency) of revenues over (under)
expenditures/expenses (9,046,864) 5,332,806 (4,770,878) (8,484,936)
OTHER FINANCING SOURCES (USES), NET 8,296,505 (725,317) – 7,571,188
Excess (deficiency) of revenues and other
financing sources over disbursements and
other financing uses (750,359) 4,607,489 (4,770,878) (913,748)
BALANCES, beginning of year 24,477,402 46,302,565 249,415 71,029,382
BALANCES, end of year $23,727,043 $50,910,054 $(4,521,463) $70,115,634
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Budgeted amounts Final to actual
Original Final variance
$ 9,113,927 $ 9,113,927 $ 322,374
3,388,430 3,388,430 (158,569)
79,737 79,737 (51,816)
944,440 1,242,440 46,501
238,925 246,925 21,146
2,381,580 2,383,530 2,857,807
15,707,773 15,724,523 608,249
304,450 309,200 117,798
32,159,262 32,488,712 3,763,490
4,428,830 4,571,165 289,770
3,256,019 3,217,597 920,345
4,000 5,500 400
1,715,353 1,745,369 49,572
882,055 1,244,285 33,203
887,331 918,081 100,201
6,169,803 7,025,803 (482,106)
24,545,000 24,545,000 13,205,976
14,162,076 14,162,076 (1,419,623)
56,050,467 57,434,876 12,697,738
(23,891,205) (24,946,164) 16,461,228
3,045,000 3,045,000 4,526,188
(20,846,205) (21,901,164) 20,987,416
64,176,557 64,176,557 6,852,825
$43,330,352 $42,275,393 $27,840,241
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City of Waukee, Iowa
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION - BUDGETARY REPORTING
Year ended June 30, 2016
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 expenditures/expenses 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 expenditures/expenses by $1,384,409. This budget amendment is reflected in
the final budgeted amounts.
During the year ended June 30, 2016, disbursements in the debt service and business type activities functions
exceeded the amount budgeted.
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City of Waukee, Iowa
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Iowa Public Employees’ Retirement System
For the Last Two Years *
(In Thousands)
Required Supplementary Information
June 30
2016 2015
City’s proportion of the net pension liability 0.053387% 0.046117%
City’s proportionate share of the net pension liability $2,638 $1,829
City’s covered-employee payroll $6,412 $6,005
City’s proportionate share of the net pension liability
as a percentage of its covered-employee payroll 41.14% 30.49%
Plan fiduciary net position as a percentage of the
total pension liability 85.19% 87.61%
Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 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.
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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
2016 2015 2014 2013
Statutorily required contribution $ 578 $ 550 $ 497 $ 423
Contributions in relation to the statutorily
required contribution 578 550 497 423
Contribution deficiency (excess) $ – $ – $ – $ –
City’s covered-employee payroll $6,412 $6,005 $5,339 $4,633
Contributions as a percentage of covered-employee payroll 9.0% 9.2% 9.3% 9.1%
See accompanying notes to required supplementary information – pension liability.
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Year ended June 30
2012 2011 2010 2009 2008 2007
$ 374 $ 328 $ 288 $ 246 $ 209 $ 179
374 328 288 246 209 179
$ – $ – $ – $ – $ – $ –
$4,491 $4,144 $3,866 $3,738 $3,378 $2,919
8.3% 7.9% 7.4% 6.6% 6.2% 6.1%
See accompanying notes to required supplementary information – pension liability.
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City of Waukee, Iowa
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – PENSION LIABILITY
Year ended June 30, 2016
CHANGES OF BENEFIT TERMS
Legislation passed in 2010 modified benefit terms for current Regular members. The definition of final average salary
changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four
years of service to seven years. The early retirement reduction increased from 3 percent per year measured from the
member’s first unreduced retirement age to a 6 percent reduction for each year of retirement before age 65.
In 2008, legislative action transferred four groups – emergency medical service providers, county jailers, county attorney
investigators, and National Guard installation security officers – from Regular membership to the protection occupation
group for future service only.
CHANGES OF ASSUMPTIONS
The 2014 valuation implemented the following refinements as a result of a quadrennial experience study:
Decreased the inflation assumption from 3.25 percent to 3.00 percent.
Decreased the assumed rate of interest on member accounts from 4.00 percent to 3.75 percent per year.
Adjusted male mortality rates for retirees in the Regular membership group.
Reduced retirement rates for sheriffs and deputies between the ages of 55 and 64.
Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL beginning
June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate
closed 20 year period.
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.
The 2007 valuation adjusted the application of the entry age normal cost method to better match projected contributions
to the projected salary stream in the future years. It also included in the calculation of the UAL amortization payments
the one-year lag between the valuation date and the effective date of the annual actuarial contribution rate.
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SUPPLEMENTARY INFORMATION
See accompanying independent auditor's report.
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City of Waukee
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2016
Special Revenue Funds Debt service
Road Library Waukee Special
Use Tax Foundation Foundation Forfeitures Assessments Total
ASSETS
Cash, cash equivalents and
pooled investments $ 60,020 $ 178,159 $ 275,341 $ 768 $ 95,326 $ 609,614
Receivables
Property tax
Special assessments – – – – 322,527 322,527
Other 11,944 – – – – 11,944
Prepaid insurance 18,250 – – – – 18,250
Total assets $ 90,214 $ 178,159 $ 275,341 $ 768 $ 417,853 $ 962,335
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES
Accounts payable $ 107,369 $ – $ – $ – $ – $ 107,369
Compensated absences 3,194 – – – – 3,194
Total liabilities 110,563 – – – – 110,563
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenues
Special assessments – – – – 322,527 322,527
FUND BALANCES
Nonspendable
Prepaid insurance 18,250 – – – – 18,250
Restricted for
Debt service – – – – 95,326 95,326
Other (38,599) 178,159 275,341 768 – 415,669
Total fund balances (20,349) 178,159 275,341 768 95,326 529,245
Total liabilities, deferred
inflows of resources
and fund balances $ 90,214 $ 178,159 $ 275,341 $ 768 $ 417,853 $ 962,335
See accompanying independent auditor's report.
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City of Waukee
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
Year ended June 30, 2016
Special Revenue Funds Debt service
Road Library Waukee Special
Use Tax Foundation Foundation Forfeitures Assessments Total
REVENUES
Other city taxes $ – $ – $ – $ – $ 18,955 $ 18,955
Licenses and permits 11,836 – – – – 11,836
Use of money and property – (2,108) – – 10,877 8,769
Intergovernmental 1,710,101 – – – – 1,710,101
Miscellaneous 9,233 33,655 147,040 – – 189,928
Total revenue 1,731,170 31,547 147,040 – 29,832 1,939,589
EXPENDITURES
Operating
Public works 1,891,748 – – – – 1,891,748
Culture and recreation – 26,542 41,089 – – 67,631
Debt service
Principal – – – – 39,000 39,000
Interest – – – – 6,160 6,160
Capital projects 310,977 – – – – 310,977
Total expenditures 2,202,725 26,542 41,089 – 45,160 2,315,516
Excess (deficiency) of
revenues over (under)
expenditures (471,555) 5,005 105,951 – (15,328) (375,927)
OTHER FINANCING SOURCES (USES)
Sale of capital assets 21,913 – – – – 21,913
NET CHANGES IN FUND BALANCES (449,642) 5,005 105,951 – (15,328) (354,014)
FUND BALANCES, beginning 429,293 173,154 169,390 768 110,654 883,259
FUND BALANCES, ending $ (20,349) $ 178,159 $ 275,341 $ 768 $ 95,326 $ 529,245
See accompanying independent auditor's report.
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City of Waukee, Iowa
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS
June 30, 2016
Enterprise Funds
Solid Utility Storm
Waste Billing Water Total
ASSETS
Current assets
Cash and pooled investments $ 166,309 $ 123,513 $1,435,151 $1,724,973
Receivables
Customer accounts 90,796 – 54,739 145,535
Total current assets 257,105 123,513 1,489,890 1,870,508
Noncurrent assets
Capital assets (net of accumulated depreciation) – 8,960 698,825 707,785
Total assets 257,105 132,473 2,188,715 2,578,293
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows – 16,008 20,673 36,681
LIABILITIES
Current liabilities
Accounts payable 35 41,041 60,738 101,814
Compensated absences – 4,844 3,681 8,525
Revenue notes payable – – 60,000 60,000
Interest payable – – 835 835
Total current liabilities 35 45,885 125,254 171,174
Noncurrent liabilities
Revenue notes payable – – 580,000 580,000
Net OPEB liability – 8,195 10,653 18,848
Net pension liability – 40,116 51,804 91,920
Total noncurrent liabilities – 48,311 642,457 690,768
Total liabilities 35 94,196 767,711 861,942
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Pension related deferred inflows – 6,124 7,909 14,033
NET POSITION
Net investment in capital assets – – 409,353 409,353
Unrestricted 257,070 48,161 1,024,415 1,329,646
Total net position $ 257,070 $ 48,161 $1,433,768 $1,738,999
See accompanying independent auditor’s report.
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City of Waukee, Iowa
COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION
NONMAJOR PROPRIETARY FUNDS
Year ended June 30, 2016
Enterprise Funds
Solid Utility Storm
Waste Billing Water Total
OPERATING REVENUES
Charges for service $1,065,087 $ 205,930 $ 584,621 $1,855,638
Miscellaneous – 18,245 – 18,245
Total operating revenues 1,065,087 224,175 584,621 1,873,883
OPERATING EXPENSES
Business type activities
Cost of sales and services 1,015,759 232,216 317,570 1,565,545
Depreciation and amortization – 2,240 37,234 39,474
Total operating expenses 1,015,759 234,456 354,804 1,605,019
Operating income (loss) 49,328 (10,281) 229,817 268,864
NONOPERATING REVENUES (EXPENSES)
Interest expense – – (835) (835)
Interest income 232 175 1,571 1,978
Bond issuance and other costs – – (8,147) (8,147)
Total nonoperating revenues (expenses) 232 175 (7,411) (7,004)
Income (loss) before transfers 49,560 (10,106) 222,406 261,860
Transfers (out) – – (182,981) (182,981)
CHANGE IN NET POSITION 49,560 (10,106) 39,425 78,879
NET POSITION BEGINNING OF YEAR 207,510 58,267 1,394,343 1,660,120
NET POSITION END OF YEAR $ 257,070 $ 48,161 $1,433,768 $1,738,999
See accompanying independent auditor’s report.
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City of Waukee, Iowa
SCHEDULE OF REVENUES BY SOURCE AND EXPENDITURES BY FUNCTION -
ALL GOVERNMENTAL FUNDS
For the last ten years
Modified Accrual Basis
2016 2015 2014 2013
REVENUES
Property tax $ 9,436,301 $ 8,385,843 $ 7,666,911 $ 7,133,514
Tax increment financing revenue 3,229,861 3,204,146 3,017,853 3,427,898
Other city tax 27,921 133,216 60,988 39,355
Licenses and permits 1,288,941 1,391,499 1,057,350 639,233
Use of money and property 195,336 182,503 222,405 210,762
Intergovernmental 5,241,337 5,602,222 2,539,186 3,713,932
Charges for services 351,341 414,059 597,042 728,310
Miscellaneous 405,168 385,164 281,147 1,058,091
Totals $20,176,206 $19,698,652 $15,442,882 $16,951,095
EXPENDITURES
Operating
Public safety $ 4,281,395 $ 3,543,201 $ 3,286,146 $ 2,912,583
Public works 2,297,252 2,281,384 2,241,516 1,580,884
Health and social services 5,100 4,800 16,500 12,750
Culture and recreation 1,763,428 1,599,802 1,457,105 2,010,987
Community and economic
development 1,211,082 760,100 910,021 618,937
General government 817,880 872,753 757,317 785,443
Debt service 7,507,909 6,421,577 5,996,633 4,642,544
Capital projects 11,339,024 19,067,964 9,226,292 5,976,606
Totals $29,223,070 $34,551,581 $23,891,530 $18,540,734
See accompanying independent auditor’s report.
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Modified Accrual Basis
2012 2011 2010 2009 2008 2007
$ 6,811,607 $ 6,397,893 $ 5,934,368 $ 5,318,576 $ 4,405,384 $ 3,804,888
3,186,693 3,051,143 3,032,038 2,824,039 2,447,271 1,651,122
462,040 62,895 70,367 1,301,852 599,570 466,312
507,344 531,196 353,777 673,103 627,720 766,811
204,505 215,266 173,419 128,470 330,789 242,139
1,762,542 4,495,541 2,898,776 4,641,902 1,054,612 1,727,796
253,692 239,040 184,230 209,664 134,996 92,707
813,998 440,669 144,913 1,142,477 170,474 459,154
$14,002,421 $15,433,643 $12,791,888 $16,240,083 $ 9,770,816 $ 9,210,929
$ 3,040,673 $ 2,821,515 $ 2,528,267 $ 2,391,927 $ 1,806,932 $ 1,510,461
1,381,993 1,192,453 1,133,462 1,099,806 1,167,008 1,081,599
15,175 16,909 12,180 11,000 9,800 9,000
1,338,835 1,312,158 1,173,584 1,211,373 982,900 1,110,158
885,864 1,023,639 892,553 848,245 701,524 645,533
868,324 787,974 855,172 982,213 717,792 708,556
6,111,183 3,919,273 3,441,710 8,379,401 2,552,259 2,432,070
3,501,963 7,768,712 7,021,544 10,807,450 7,764,263 4,062,917
$17,144,010 $18,842,633 $17,058,472 $25,731,415 $15,702,478 $11,560,294
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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 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, 2016, and the related notes
to the financial statements, which collectively comprise the City's basic financial statements, and have
issued our report thereon dated October 25, 2016.
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 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.
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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 II of the
accompanying schedule of findings.
Comments involving statutory and other legal matters about the City's operations for the year ended
June 30, 2016 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 Responses to the Findings
The City of Waukee's responses to the findings identified in our audit are described in the
accompanying schedule of findings. The City's responses were not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on
them.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
DENMAN & COMPANY, LLP
West Des Moines, Iowa
October 25, 2016
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SCHEDULE OF FINDINGS
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City of Waukee, Iowa
SCHEDULE OF FINDINGS
Year ended June 30, 2016
Part I—Findings Relating to the Financial Statements Reported in
Accordance with Government Auditing Standards
Instances of Noncompliance
No matters were noted.
Internal Control Deficiencies
No material weaknesses in internal control over financial reporting were noted.
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City of Waukee, Iowa
SCHEDULE OF FINDINGS (continued)
Year ended June 30, 2016
Part II—Other Findings Related to Required Statutory Reporting
II-A-16 CERTIFIED BUDGET
Disbursements during the year ended June 30, 2016 exceeded the amounts budgeted in the debt service
and business type activities functions. 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 be amended in accordance with Chapter 384.18 of the Code of Iowa before
disbursements are allowed to exceed the budget.
Response
The budget will be amended in the future, as applicable.
Conclusion
Response accepted.
II-B-16 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.
II-C-16 TRAVEL EXPENSE
No expenditures of City money for travel expenses of spouses of City officials and/or employees were noted.
II-D-16 BUSINESS TRANSACTIONS
We noted no business transactions between the City and City officials or employees in excess of $1,500.
II-E-16 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.
II-F-16 COUNCIL MINUTES
No transactions were found that we believe should have been approved in the Council minutes but were not.
II-G-16 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.
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City of Waukee, Iowa
SCHEDULE OF FINDINGS (continued)
Year ended June 30, 2016
Part II—Other Findings Related to Required Statutory Reporting (continued)
II-H-16 REVENUE BONDS/NOTES
No instances of noncompliance with the water, sewer, gas and golf course revenue bond and note provisions
were noted.
II-I-16 ANNUAL URBAN RENEWAL REPORT
The annual renewal report was properly approved and certified to the Iowa Department of Management on or
before December 1. However, the following reporting exceptions were noted:
The City TIF debt outstanding balance as of June 30, 2016 reported on the Levy Authority Summary does not
agree with the City’s financial records. The amount reported by the City as TIF debt outstanding was
understated by approximately $14,650,000.
Recommendation
The City should ensure the debt balance reported on the Levy Authority Summary agrees with the City’s
financial records.
Response
The City excluded the issuance of TIF debt which occurred in fiscal year 2015 based on discrepancies in
information distributed by the Iowa Department of Management. Outstanding TIF debt reported on the
Annual Urban Renewal report will be reconciled to City records in the future.
Conclusion
Response accepted.
II-J-16 FINANCIAL CONDITION
The Road Use Tax Fund had a deficit balance of $20,349 at June 30, 2016.
Recommendation
The City should investigate alternatives to eliminate this deficit in order to return the fund to a sound financial
position.
Response
Deficit balance is the result of increased expenditures in anticipation of revenue increases from updated
census data and increased state road use tax rates which will be realized by the City in future fiscal years.
Conclusion
Response accepted.