Key Assignment Draft750-900 words, APA 6 format with referencesFinancial Report already attachedReview the Comprehensive Annual Financial Report (CAFR) for 2013 from the city of Cedar Falls, Iowa, and answer the following questions.Explain how Cedar Falls follows the Government Accounting Standards Board (GASB) Statement No. 34. Create a brief outline that showcases the flow.Read the management discussion and analysis (MD&A) section on page 18 and describe 2 or more significant areas that were addressed by management.From the notes of the financial statements starting on page 46, describe which accounting policies are being utilized by the city.What did you discover in the statistical section?How is the city doing?Provide an analysis.Examine the funds listed under the budget on page 37 and discuss how they are being utilized by Cedar Falls. Include some examples of items that would be included in these funds and any restrictions that might apply.By looking at the budget starting on page 81, choose 2 different funds and discuss how they are being utilized by Cedar Falls. Include some examples of items that would be included in these funds and any restrictions that might apply.Define and give examples of the infrastructure assets that are held by Cedar Falls.Describe the circumstances, and provide the journal entries for the 2 entries that are going in to the general fund.For example, 1 entry goes into the debt service fund and 1 goes into the capital projects fund.
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Review the Comprehensive Annual Financial Report (CAFR) for 2013 from the city of Cedar Falls, Iowa, and answer
the following questions.




Explain how Cedar Falls follows the Government Accounting Standards Board (GASB) Statement No. 34.
Create a brief outline that showcases the flow.
Read the management discussion and analysis (MD&A) section on page 18 and describe 2 or more
significant areas that were addressed by management.
From the notes of the financial statements starting on page 46, describe which accounting policies are
being utilized by the city.
What did you discover in the statistical section?
o How is the city doing?
o Provide an analysis.
o Examine the funds listed under the budget on page 37 and discuss how they are being utilized by
Cedar Falls. Include some examples of items that would be included in these funds and any
restrictions that might apply.
o


By looking at the budget starting on page 81, choose 2 different funds and discuss how they are
being utilized by Cedar Falls. Include some examples of items that would be included in these
funds and any restrictions that might apply.
Define and give examples of the infrastructure assets that are held by Cedar Falls.
Describe the circumstances, and provide the journal entries for the 2 entries that are going in to the
general fund.
o For example, 1 entry goes into the debt service fund and 1 goes into the capital projects fund.
CITY OF CEDAR FALLS, IOWA
Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30,20 13
Prepared by:
Finance/Public Records Division
of
Department of Administrative Services
Jennifer Rodenbeck, CPA, CPFO
Finance Manage/City Clerk
City of Cedar Falls, Iowa
Gomprehensive Annual Financial Report
For the Fiscal Year Ended June 30,2013
Table of Contents
Paqe
INTRODUCTORY SECTION
Letter of Transmittal. .
GFOA Certificate of Achievement
Organizational Charts . . . .
Principal Officials.
1
.
FINANCIAL SECTION
I ndependent Auditor’s Report
Management’s Discussion and Analysis
Basic Financial Statements:
Government-wide Financíal Statements:
Statement of Net Position
Statement of Activities. . . .
Fund Financial Statements:
Balance Sheet- Governmental Funds . . . .
Statement of Revenues, Expenditures, and Changes ín Fund
Balances – Governmental Funds. . . . . . .
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to
the Statement of Activities
Statement of Net Position – Proprietary Funds.
Statement of Revenues, Expenses, and Changes in Fund Net
Assets – Proprietary Funds.
Statement of Cash Flows – Proprietary Funds.
Notes to Financial Statements. . . .
Required Supplementary lnformation :
Budgetary Comparison Schedule – Function Budget
Notes to Required Supplementary lnformation
Schedule of Funding Progress
Other Supplem entary I nformation :
Combining Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds .
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances – Nonmajor Governmental
Funds
11
12
14
15
18
31
33
35
37
39
40
42
44
46
81
83
86
87
91
Combining Statement of Net Position – lnternal Service Funds.
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Position – lnternal Service Funds
Combining Statement of Cash Flows – lnternal Service Funds.
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedules by Source.
Schedule by Function and Activity
Schedule of Changes by Function and Activity.
STATISTICAL SECTION
Financial Trends:
Net Position by Component
Changes in Net Position.
Fund Balances, Governmental Funds
Changes in Fund Balances, Governmental Funds
Revenue Capacity:
Assessed and Taxable Value of Property. . . .
Property Tax Rates – Direct and Overlapping Governments. . .
Principal Property Taxpayers
Property Tax Levies and Collections.
Debt Capacity:
Ratios of Outstanding Debt by Type.
Ratios of General Bonded Debt Outstanding
Direct and Overlapping Debt.
Legal Debt Margin lnformation. . .
Revenue Bond Coverage – Sewer Authority.
Sales History and Total Sewer Charges.
Water Meters by Rate Class.
Largest Sewer Customers
Demographics on Economic lnformation:
Demographic and Economic Statistics
Principal Employers . . . .
Full-Time Equivalent City Government Employees by
Function/Department
Operating nformation :
Operating lndicators by Function. . . .
Capital Asset Statistics by Function . . . .
95
97
99
101
102
104
106
108
112
114
116
118
120
122
124
126
128
129
131
133
134
135
136
137
139
I
141
143
DEPARTMENT OF ADMINISTRATIVE SERVICES
CITY OF CEDAR FALLS,
220 CLAY STREET
IOWA
CEDAR FALLS, IOIVA 50613
w
PHONE:
FAX:
319-273-8600
319-268-5126
www.cedarfalls,com
October 1,2013
To Mayor Crews, Members of the City Council and citizens of the
City of Cedar Falls:
I am pleased to submit to you the comprehensíve Annual
Financial Report (CAFR) of the city of cedar Falls, lowa,
for the year ended June 30, 2013. This is the eleventh CAFR completed
in compliance with the Governmental
Accountíng standards Board Statement No. 34 (GASB 34).
Responsibility for both the accuracy of the data and
the completeness and fairness of the presentation, including all disclosures,
rests with the city. To the best of our
knowledge and belief, the enclosed data is accurate in all material
respects and is reported in a manner designed
to present fairly the financíal position and results of operations of the
city. All disclosures necessary to enable the
reader to gain an understanding of the city’s financial activities
have been included.
GAAP require that management provide a narrative introduction, overview,
and analysis to accompany the basic
financial statements in the form of Management’s Discussion and
Analysis (MD&A). This letter of transmittal is
designed to complement MD&A and should be read in conjunction
with it. The city of cedar Falls, MD&A can be
found immediately following the report of the independent auditors.
The city is required to undergo an annual single audit in conformity
with the provisions of the u.s. office of
Management and Budget (oMB) circular A-133, “Audits of states,
Local Governments, and Nonprofit
organizations'” lnformation to comply with oMB circular A-133, “Audits
of states, Local Governments, and
Nonprofit organizations,” and “Government Auditing standards” is
included in another report under a separate
cover.
The city of cedar Falls provides many municipal services including fire
and police protection, streets, garbage
collection, parks, recreation, cultural arts, planning, zonihg, g”n”r”i
a¿m¡n¡stråtion, and sewer and storm water
services’ For financial reportíng purposes, all funds, agencies, boards, commissions,
trusts and authorities
involved in the provision of these services are included íf the
city is financially accountable. Financial
accountability is determined by several different factors, including
fiscal dàpendence, ability to impose will upon the
entity’s governlng body, provision of specific financial burdens or
benefits and separate legal entity status. After
careful evaluation of these factors, the city has included in this financíal
report the cedar Falls Electric utílity, Gas
utility, water utility, and communícations utility, as well as all funds
of the cíty. The utilities are each reported as
discretely presented component units.
1
“OUR CITZENS ARE OUR BUSINESS”
GOVERNMENTAL STRUCTURE
The City has operated under the mayor-council form of government since incorporation. Policy-making and
legislative authority are vested in the governing council, which consists of seven members. The City Council is
responsible, among other things, for passing ordinances, adopting the budget, setting goals, and approving mayorappointed committees. The full-time mayor is responsible for carrying out the policies and ordinances of the City
Council, for overseeing the day{o-day operations of the City, and for appointing department directors. The mayor
and Council are elected on a nonpartisan basis. The Council consists of two council members elected at large and
one council member elected from each of the five wards as established by ordinance, elected for terms of four
years. The mayor is elected at large and to a two-year term.
ECONOM¡C CONDITION AND OUTLOOK
The City, incorporated in 1854, is located in the northeastern part of the state, has a land area of 28.9 square miles
and a population of 39,260. The City is empowered to levy a property tax on both real and personal property
located within its boundaries, and has the power by state statute to extend its corporate limits by annexation, which
is seldom done, but will be done when deemed appropriate by the City Council.
The economic condition and outlook of Cedar Falls continues to be strong. The Cedar Falls economy was insulated
from many of the impacts created by the recent recession due to the growth and stability of the University of
Northern lowa and a diverse service business sector.
The Greater Cedar Valley Alliance was formed in the metro area to organize the human resources and generate
needed development capital to attract new business and industry to the area and to encourage expansion of
businesses already in the area. As a result, many new businesses have located offices and plants in the metro
area. Target Corporation constructed a distribution center with an assessed value of approximately $¿S million in
FY02 and in FY08 completed a second refrigeration center. The Cedar Falls lndustrial and Technology Park
continues to show tremendous expansion.
The increase in new businesses and expansion of established firms has had a positive effect on employment and
the City’s tax base. Historically, Cedar Falls’ unemployment rate has closely followed the State trends, which are
significantly lower than the nation’s unemployment rate (See Attachment A). This is due to the strong service
employment base supported by the state university located in Cedar Falls. Since the devaluation of property in
l9B6-1988, Cedar Falls has had steady growth in property values. Assessed values increased in FY14 by $gZ
million, and taxable values increased by $229 million (See Attachment B) due to the increase in assessed
valuations and the residential rollback.
The City of Cedar Falls maintains a comparatively low tax rate. Cedar Falls has the fifth lowest tax rate per capita
of the twenty largest cities in the state of lowa (See Attachment C). Thís low rate can be attributed to the efforts of
the City to streamline operations over the past twenty years. This has been accomplished by maintaining the
approximate same number of employees, even when demand for service has increased. Cedar Falls had one of
the lowest number of full{ime employees per 1,000 residents in FY12. (See Attachment D).
Over the past ten years Cedar Falls’ residential housíng sales prices have significantly increased. ln 2002, the
average sales price reported was $153,312. ln2012, the average sales pricewas $206,773, which is a thirty-five
(35) percent increase in the past ten years (See Attachment E). These statistics indicate that Cedar Falls’ local
economy is sound and there is a strong market for Cedar Falls homes.
2-
Housing values have surged from the recession and devaluation of the mid-1980’s to values that once again place
the homeowners living in Cedar Falls in an advantageous market position. This market growth is a credit to
businesses, the school system, utilities, and quality of City services in Cedar Falls. Each entity has worked
together to strengthen the local economy, create jobs, and improve Cedar Falls’ quality of life.
MAJOR INITIATIVES
Disinfection Project: ln August 2009, the Public Works department presented to council information on an
Ultraviolet Light (UV) Alternatives Evaluation Workshop. This is a process to treat bacteria at the Water
Reclamation Facility. The Environmental Protection Agency (EPA) has directed a new standard of treatment. The
advantage of UV over other disinfectants is it can inactivate hard to control organisms, such as E.coli, without
chemical additions to the final product and without producing a harmful disinfection by-product. Using UV is a
better and safer way to disinfect and there are no residuals.
ln FY11, the Public Works department solicited bids for the construction of the Water Reclamation Facility UV
Disinfection and Biosolids Handling Facilities lmprovements Project (Disinfection Project). Construction of the
project began in FY12 and a majority of the construction has occurred during FY13. Completion is expected in
FY14. The total project cost will be approximately 921.8 million.
This project will have a significant impact on the City’s sewer fund. The City Council did approve a So/o increase on
sewer rates each year for five years beginning in FY12. The council also decided not to finance the project in a
traditional way of selling sewer bonds. lnstead the City has opted to self-finance the project. Cash reserves from
the City’s Capital lmprovements Fund and Hospital Fund havefinanced the project. Through June 30,2013, these
funds have foaned the sewer fund $15.9 million. Self-financing has allowed these funds to earn interest at a rate
greater than earnings on traditional investments and the sewer fund benefits by paying interest costs lower than
bond rates.
Bluff Street Lift Station: ln 1962, the Bluff Street Lift Station was constructed below the 1Oo-year flood elevation.
During the Flood of 2008, the entire basement (pump room) filled with water and the control room had five feet of
standing water in
it.
Due to its location, the station was not accessible for several days and out of service for about
two weeks because of the significant damage to the mechanical equipment in the station as well as to the backup
generator.
Because of the dry well/wet well configuration of the station, conventional flood protection was not
practical, therefore the City applied for a Community Development Grant (CDBG) Disaster Recovery Grant to
construct the new station at a higher elevation and that is not subject to flooding and is completely accessible in a
high water event.
ln FY10, design on the new lift station started and the Public Works Department solicited bids for the New Bluff
Street Lift Station project. Construction began in FY12 and continued in FY13. Completion will occur in FY14. The
total project cost will be approximately $Z.g million. The CDBG grant will fund $3.g million of the cost. The
remaining cost will be financed with sewer bonds and self-financing options. Sewer rates increases described
above also were needed to help finance this project as well.
3
ACCOUNTING SYSTEMS AND BUDGETARY CONTROL
ln developing and evaluating the City’s accounting control system, consideration is given to the adequacy of
internal accounting controls. Accounting control comprises the plan of organization and the procedures and
records that are concerned with the safeguarding of assets and the reliability of financial records and consequen¡y
are designed to provide reasonable assurance that:
¡
Transactions are executed in accordance with management’s general or specific authorizations.

Transactions are recorded as necessary(1)to permit preparation of financial statements in conformitywith
generally accepted accounting principles or any other criteria, such as finance-related legal and contractual
compliance requirements applicable to such statements, and (2) to maintain accountability for assets.
.
Access to assets is permitted only in accordance to management’s authorization.

The recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
The definition of accounting control comprehends reasonable, but not absolute, assurance that the objectives
expressed in it will be accomplished by the system. The concept of reasonable assurance recognizes that the cost
of internal controls should not exceed the benefits. The benefit consists of reductions in the risk of failing to
achieve the objectives implicit in the definition of accounting control.
All internal controf evaluations occur within the above framework. We believe that the City’s internal accounting
controls adequately safeguard assets and provide reasonable assurance of proper recording of financial
transactions.
ln accordance with the State of lowa, the City has formally established budgetary accounting control for its
operating funds. Budgetary control is maintained at the function level (Public Safety, Public Works, Health and
Social Services, Culture and Recreation, Community and Economic Development, General Government, Debt
Service, Capital Projects, and Business-Type activities). The City has adhered to these budgetary laws.
INDEPENDENT AUDIT
Eide Bailly, LLP, a firm of independent public accountants has audíted the financial records, books of account and
transactions of the City for the fiscal year ended June 30, 2013, and their opinion is included in the Financial
Section of this report. The financial statements are the responsibility of the City. The responsibility of the
independent public accountants is to express an opinion on the City’s fínancial statements based on their audit. An
audit is conducted in accordance with U.S. generally accepted auditing standards. Those standards require that
the audit be planned and performed in a manner to obtain a reasonable assurance as to whether the financial
statements are free of material misstatement.
AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Cedar Falls for its comprehensive annual financial
report (CAFR) for the year ended June 30, 2012. The Certificate of Achievement is a prestigious national award
recognizing conformance with the highest standards for preparation of state and local government financial reports.
4
ln order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and
efficiently organized comprehensive annual financial report, whose contents conform to program standards. The
CAFR must satisfy both accounting principles generally accepted in the United States of America and applicable
legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City of Cedar Falls has received a
Certificate of Achievement for the last twenty-three consecutive years (fiscal years ended 1990-2012). We believe
our current report continues to conform to the Certificate of Achievement program requirements, and we are
submitting it to GFOA.
ACKNOWLEDGMENTS
The preparation of this report could not be accomplished without the efficient and dedicated service of the entire
staff of the Finance/Public Records Division, particularly Lisa Roeding, Deputy Finance Manager and Cathy
Niebergall, Financial Technician. Each member of the division has my sincere appreciation for the contributions
made in the preparation of this report. I would also like to thank the members of the City Council for their continued
interest and support in planning and conducting the financial operations of the City in a responsible and prudent
manner.
Sincerely,
enbeck, CPA, CPFO
nce Manager/City Clerk
5
ATTACHMENT A
Unempl
Unemployment Rates
Gedar Falls, Waterloo, lowa & U.S.
9.00
8.00
7.00
c)
o)
o
6.00
c
c)
o
L
o
fL
5.00
4.00
3.00
2.00
July Aug Sep Oct
Nov Dec Jan Feb Mar Apr May
June
tCedarFalls +Waterloo +lowa +U.S.
Unemployment Rates
Cedar Falls, Waterloo, lowa & U.S.
Month
12-13
July
Aug
sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
June
Average
Cedar Falls
(ln %)
4.O
4.4
3.2
3.5
Waterloo
(ln %)
6.6
6.8
5.7
lowa
(ln %)
U.S.
(ln
5.3
5.5
5.2
o/o)
8.3
8.1 …
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