clinton county $22m go bonds os fi… · new issue investment rating: moody’s investors service...
TRANSCRIPT
New Issue Investment Rating: Moody’s Investors Service … Aa2
FINAL OFFICIAL STATEMENT DATED OCTOBER 25, 2016
Assuming compliance with certain covenants, in the opinion of Ahlers & Cooney, P.C., Bond Counsel, under present law and assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), the interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Interest on the Bonds is not exempt from present Iowa income taxes. The Bonds will NOT be designated as “qualified tax-exempt obligations”. See “TAX MATTERS” herein for a more detailed discussion.
$22,000,000 CLINTON COUNTY, IOWA
General Obligation Bonds, Series 2016 Dated Date of delivery Book-Entry Due June 1, as Detailed Herein
The $22,000,000 General Obligation Bonds, Series 2016 (the “Bonds”) are being issued by Clinton County, Iowa (the “County”). Interest is payable semiannually on June 1 and December 1 of each year, commencing December 1, 2017. Interest is calculated based on a 360-day year of twelve 30-day months. The Bonds will be issued using a book-entry system. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature on June 1 in the following years and amounts.
AMOUNTS, MATURITIES, INTEREST RATES, YIELDS AND CUSIP NUMBERS Principal Due Interest CUSIP Principal Due Interest CUSIP Amount June 1 Rate Yield Number(1) Amount June 1 Rate Yield Number(1) $ 935,000 .......... 2018 2.000% 0.950% 187414 CC9 $1,110,000 ......... 2027* 3.000% 2.250% 187414 CM7 945,000 .......... 2019 2.000% 1.050% 187414 CD7 1,145,000 ......... 2028* 3.000% 2.400% 187414 CN5 955,000 .......... 2020 2.000% 1.150% 187414 CE5 1,180,000 ......... 2029* 3.000% 2.550% 187414 CP0 970,000 .......... 2021 2.000% 1.270% 187414 CF2 1,220,000 ......... 2030* 3.000% 2.700% 187414 CQ8 985,000 .......... 2022 2.000% 1.380% 187414 CG0 ******* ......... **** ***** ***** ******* 1,005,000 .......... 2023 3.000% 1.520% 187414 CH8 1,420,000 ......... 2034 3.000% 3.050% 187414 CU9 1,025,000 .......... 2024 3.000% 1.680% 187414 CJ4 1,485,000 ......... 2035 3.000% 3.090% 187414 CV7 1,050,000 .......... 2025 3.000% 1.860% 187414 CK1 1,545,000 ......... 2036 3.000% 3.120% 187414 CW5 1,080,000 .......... 2026 3.000% 2.000% 187414 CL9
$3,945,000 ............. 3.000% Term Bonds due June 1, 2033 Yield .............. 3.000% 187414 CT2
*These maturities have been priced to call. For further details see “MANDATORY REDEMPTION” herein.
OPTIONAL REDEMPTION
Bonds due June 1, 2018 - 2026, inclusive, are not subject to optional redemption. Bonds due June 1, 2027 - 2036, inclusive, are callable in whole or in part on any date on or after June 1, 2026, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the County and within any maturity by lot. See “OPTIONAL REDEMPTION” herein.
PURPOSE, LEGALITY AND SECURITY
The proceeds of the Bonds are expected to be used: (i) to finance the designing, constructing, equipping and furnishing a jail, sheriff’s office, 911 communications center and emergency management agency office and demolition of the existing facility, and (ii) to pay the costs of issuing the Bonds. See “THE PROJECT” herein.
In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the County payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the County without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors’ rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The Bonds are offered when, as and if issued and received by the Underwriter, subject to the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, Bond Counsel, and certain other conditions. It is expected that the Bonds will be made available for delivery on or about December 1, 2016. (1) CUSIP numbers appearing in this Final Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill
Financial Inc. The County is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth on the cover of this Final Official Statement.
(i)
No dealer, broker, salesman or other person has been authorized by the County to give any information or to make
any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the County. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the County and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COUNTY SINCE THE RESPECTIVE DATES THEREOF.
References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do
not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful.
(ii)
TABLE OF CONTENTS Page
BOND ISSUE SUMMARY ............................................................................................................................................................................................. 1 THE COUNTY ................................................................................................................................................................................................................. 2
County Organization and Services ............................................................................................................................................................................... 2 Community Life .......................................................................................................................................................................................................... 2 Education ..................................................................................................................................................................................................................... 3 Transportation .............................................................................................................................................................................................................. 3
SOCIOECONOMIC INFORMATION ............................................................................................................................................................................ 3 Population .................................................................................................................................................................................................................... 3 Employment................................................................................................................................................................................................................. 4 Housing........................................................................................................................................................................................................................ 5 Income ......................................................................................................................................................................................................................... 5 Agriculture ................................................................................................................................................................................................................... 6 Local Option Sales Tax................................................................................................................................................................................................ 6 Retail Sales .................................................................................................................................................................................................................. 7
THE PROJECT ................................................................................................................................................................................................................ 8 DEBT INFORMATION ................................................................................................................................................................................................... 8 PROPERTY ASSESSMENT AND TAX INFORMATION .......................................................................................................................................... 10
Property Tax Assessment........................................................................................................................................................................................... 10 Property Tax Collection ............................................................................................................................................................................................. 11 Levy Limits ............................................................................................................................................................................................................... 13 Tax Levy Procedures ................................................................................................................................................................................................. 13 Utility Property Tax Replacement ............................................................................................................................................................................. 14 Tax Increment Financing ........................................................................................................................................................................................... 14 Legislation ................................................................................................................................................................................................................. 15
FINANCIAL INFORMATION ...................................................................................................................................................................................... 16 Investment Policy ...................................................................................................................................................................................................... 16 Financial Reports ....................................................................................................................................................................................................... 16 No Consent or Updated Information Requested of the Auditor ................................................................................................................................. 16 Summary Financial Information ................................................................................................................................................................................ 16
EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS ............................................................................. 20 Pensions ..................................................................................................................................................................................................................... 20 Other Post-Employment Benefits (OPEB)................................................................................................................................................................. 22
REGISTRATION, TRANSFER AND EXCHANGE ..................................................................................................................................................... 22 BONDHOLDERS’ RISKS ............................................................................................................................................................................................. 23
Secondary Market ...................................................................................................................................................................................................... 23 Ratings Loss .............................................................................................................................................................................................................. 23 Forward-Looking Statements..................................................................................................................................................................................... 23 Tax Matters and Loss of Tax Exemption ................................................................................................................................................................... 23 DTC-Beneficial Owners ............................................................................................................................................................................................ 24 Other Factors ............................................................................................................................................................................................................. 24 Tax Levy Procedures ................................................................................................................................................................................................. 24 Summary.................................................................................................................................................................................................................... 25
TAX MATTERS ............................................................................................................................................................................................................ 25 Tax Exemption .......................................................................................................................................................................................................... 25 Tax Accounting Treatment of Discount and Premium on Certain Bonds .................................................................................................................. 25 Other Tax Advice ...................................................................................................................................................................................................... 26 Audits ........................................................................................................................................................................................................................ 26 Reporting and Withholding ....................................................................................................................................................................................... 26 Tax Legislation .......................................................................................................................................................................................................... 26 Enforcement............................................................................................................................................................................................................... 27 Opinion ...................................................................................................................................................................................................................... 27
CONTINUING DISCLOSURE ...................................................................................................................................................................................... 27 OPTIONAL REDEMPTION .......................................................................................................................................................................................... 28 MANDATORY REDEMPTION .................................................................................................................................................................................... 28 LITIGATION ................................................................................................................................................................................................................. 28 LEGAL MATTERS ....................................................................................................................................................................................................... 29 FINAL OFFICIAL STATEMENT AUTHORIZATION ............................................................................................................................................... 29 INVESTMENT RATING ............................................................................................................................................................................................... 29 UNDERWRITING ......................................................................................................................................................................................................... 30 MUNICIPAL ADVISOR ............................................................................................................................................................................................... 30 CERTIFICATION .......................................................................................................................................................................................................... 30 APPENDIX A - THE COUNTY’S FISCAL YEAR 2015 AUDITED FINANCIAL STATEMENTS APPENDIX B - DESCRIBING BOOK-ENTRY-ONLY ISSUANCE APPENDIX C - PROPOSED FORM OF LEGAL OPINION APPENDIX D - DRAFT CONTINUING DISCLOSURE CERTIFICATE
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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BOND ISSUE SUMMARY
This Bond Issue Summary is expressly qualified by the entire Final Official Statement, which is provided for the convenience
of potential investors and which should be reviewed in its entirety by potential investors. Issuer: Clinton County, Iowa. Issue: $22,000,000 General Obligation Bonds, Series 2016. Dated Date: Date of Delivery (expected to be on or about December 1, 2016). Interest Due: Each June 1 and December 1, commencing December 1, 2017. Principal Due: June 1, commencing June 1, 2018 through 2030 and 2033 through 2036, as detailed on the front
page of this Final Official Statement. Optional Redemption: Bonds maturing on or after June 1, 2027, are callable at the option of the County on any date
on or after June 1, 2026, at a price of par plus accrued interest. See “OPTIONAL REDEMPTION” herein.
Mandatory Redemption: The Bonds are subject to mandatory redemption. See “MANDATORY REDEMPTION”
herein. Authorization: The Bonds are being issued pursuant to authority established in Code of Iowa, Chapter 331,
and all laws amendatory thereof and supplementary thereto, and the authority of approving special election held in the County on May 3, 2016.
Security: The Bonds are valid and legally binding obligations of the County payable both as to principal
and interest from ad valorem taxes levied against all taxable property therein without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors’ rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion.
Investment Rating: The Bonds have been rated “Aa2” by Moody’s Investors Service, New York, New York. See
“INVESTMENT RATING” herein. Purpose: The proceeds of the Bonds are expected to be used: (i) to finance the designing, constructing,
equipping and furnishing a jail, sheriff’s office, 911 communications center and emergency management agency office and demolition of the existing facility, and (ii) to pay the costs of issuing the Bonds. See “THE PROJECT” herein.
Tax Matters: Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of
the Bonds as discussed under “TAX MATTERS” in this Final Official Statement. Interest on the Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Bonds.
NOT Bank Qualified: The Bonds are not “qualified tax-exempt obligations” under Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended. Bond Registrar/Paying Agent: Bankers Trust Company, Des Moines, Iowa. Delivery: The Bonds are expected to be delivered on or about December 1, 2016. Book-Entry Form: The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust
Company (“DTC”), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein.
Denomination: $5,000 or integral multiples thereof. Municipal Advisor: Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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CLINTON COUNTY, IOWA
County Board of Supervisors Daniel Srp Shawn Hamerlinck Chairperson Vice Chairperson John Staszewski
___________________________
County Officials Eric Van Lancker Rhonda McIntyre Mike Wolf, Esq. County Auditor County Treasurer County Attorney Jill Heims Scott Judd Rick Lincoln County Assessor County Recorder County Sheriff
THE COUNTY
The County is located in south central Iowa, approximately 180 miles east of Des Moines, Iowa and 170 miles west of Chicago, Illinois. The County covers approximately 710 square miles. The first County government was formally organized in 1840. The county seat is the City of Clinton, the largest city in the County (2010 Census population of 26,885). The population of the County was 49,116 in 2010 according to the U.S. Census. County Organization and Services The County currently operates under a three member Board of Supervisors. Elections are held every two years, with board members serving staggered four-year terms. Annually, the Board adopts a budget and establishes tax rates to support County programs. Other elected officials operate independently with the Board of Supervisors. These officials are the Auditor, Treasurer, Recorder, Sheriff and Attorney. The County provides numerous services to citizens, including law enforcement, health and social services, parks and cultural activities, planning and zoning, roadway construction and maintenance and general administrative services.
The County employs approximately 181 full-time employees. Various County employees are members of four collective bargaining units. The County has three agreements with the Public Professional and Maintenance Employees IUPAT Local 2003 which include the general services, communications and secondary roads employees. The Clinton County Sheriff’s Office Employee Union represents the Sheriff’s office employees. All agreements expire on June 30, 2017. Community Life The County is bordered on the east by the Mississippi River and the south by the Wapsipinicon River. The County offers residents numerous recreational activities and is home to many private and public golf courses and public pools. Residents can also enjoy the numerous public parks, streams and the Mississippi River and Wapsipinicon River. Park activities include boating, fishing, camping, hiking, picnicking, and enjoying the bike trails.
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Education
The County is served by nine school districts: the Calamus-Wheatland Community School District with approximately 479 students; Camanche Community School District with approximately 877 students; Central Clinton Community School District with approximately 1,451 students; Clinton Community School District with approximately 3,846 students; Delwood Community School District with approximately 189 students; Easton Valley Community School District with approximately 621 students; Maquoketa Community School District with approximately 1,347 students; Midland Community School District with approximately 535 students; and Northeast Community School District with approximately 552 students. Higher education opportunities are offered by Eastern Iowa Community College with its main campus in Clinton, Iowa. Other higher education opportunities are available to County residents in Iowa City, approximately 70 miles west of the County. Transportation The County is served by three principal roadways: Interstate 80 and U.S. Highways 30 and 61. The County is served by the Clinton Municipal Airport. Passenger air service is also available at the Quad City International Airport, approximately 30 miles south of the County. Railway freight and express service are available in the County, along with motor freight carriers.
SOCIOECONOMIC INFORMATION
The following demographic information is for the County. Additional comparisons are made with the State of Iowa (the “State”). Population
The following table reflects population trends for the County and the State.
Population Comparison(1)
The Percent The Percent Year County Change State Change 1970 .................................................. 56,749 N/A 2,824,376 N/A 1980 .................................................. 57,122 0.66% 2,913,808 3.17% 1990 .................................................. 51,040 (10.65%) 2,776,755 (4.70%) 2000 .................................................. 50,149 (1.75%) 2,926,324 5.39% 2010 .................................................. 49,116 (2.06%) 3,046,355 4.10% Note: (1) Source: U.S. Bureau of the Census.
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Employment
Following are lists of large employers located in the County.
Major County Employers(1) Approximate Name Product/Service Employment Mercy Medical Center ................................................................ Healthcare ........................................................................................ 965 Archer-Daniels-Midland (ADM Corn Processing) ....................... Corn Dextrose Products .................................................................... 775 Clinton Community School District ............................................. Education ......................................................................................... 745 Custom Pak, Inc. ....................................................................... Blow Molding .................................................................................... 675 DM Services Inc. ....................................................................... Inbound/Outbound Customer Service ............................................... 450 Hy-Vee Food Stores .................................................................. Retail Grocer .................................................................................... 425 WestRock .................................................................................. Manufacturing ................................................................................... 410 Lyondell Basell Industries .......................................................... Polymer, Chemicals and Fuel ........................................................... 390 Data Dimensions ....................................................................... Business Process Outsourcing ......................................................... 380 Guardian Industries ................................................................... Manufacturing ................................................................................... 350 Eastern Iowa Community College .............................................. Higher Education .............................................................................. 340 Walmart Stores, Incorporated .................................................... Retail Sales ...................................................................................... 335 Wild Rose Casino ...................................................................... Casino .............................................................................................. 330 Nestle-Purina Pet Care .............................................................. Manufacturing ................................................................................... 325 Medical Associates of Clinton, Iowa, P.L.C. ............................... Healthcare ........................................................................................ 320 Clysar, LLC ............................................................................... Polyolefin Shrink Films ...................................................................... 320 Guardian Industries Corporation ................................................ Flat Glass ......................................................................................... 310 Collis, Inc................................................................................... Welded Wire ..................................................................................... 300 Note: (1) Source: Area Chamber of Commerce, selected telephone surveys and the 2016 Manufacturers' News Inc.
The following tables show employment by industry and by occupation for the County and the State as reported by the U.S. Census Bureau 2010 - 2014 American Community Survey 5-year estimated values.
Employment By Industry(1) The County The State Classification Number Percent Number Percent Agriculture, forestry, fishing and hunting, and mining ............................................. 892 3.8% 62,344 4.0% Construction .......................................................................................................... 1,441 6.1% 95,899 6.1% Manufacturing........................................................................................................ 4,846 20.5% 233,193 14.9% Wholesale trade .................................................................................................... 504 2.1% 45,376 2.9% Retail trade ............................................................................................................ 3,165 13.4% 182,416 11.7% Transportation and warehousing, and utilities ........................................................ 1,290 5.5% 71,807 4.6% Information ............................................................................................................ 419 1.8% 28,625 1.8% Finance and insurance, and real estate and rental and leasing .............................. 1,128 4.8% 118,166 7.6% Professional, scientific, and management, and administrative and waste management services ............................................................................... 1,539 6.5% 110,830 7.1% Educational services, and health care and social assistance ................................. 5,291 22.4% 379,192 24.3% Arts, entertainment, and recreation, and accommodation and food services.. ..................................................................................................... 1,634 6.9% 116,274 7.4% Other services, except public administration .......................................................... 756 3.2% 67,550 4.3% Public administration ............................................................................................. 714 3.0% 50,820 3.3% Total .................................................................................................................... 23,619 100.0% 1,562,492 100.0% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5-Year Estimates from 2010 - 2014.
Employment By Occupation(1)
The County The State Classification Number Percent Number Percent Management, business, science and arts occupations .......................................... 6,577 27.8% 536,702 34.3% Service occupations .............................................................................................. 4,144 17.5% 258,198 16.5% Sales and office occupations ................................................................................. 5,588 23.7% 369,512 23.6% Natural resources, construction, and maintenance occupations ............................. 2,283 9.7% 147,530 9.4% Production, transportation, and material moving occupations ................................ 5,027 21.3% 250,550 16.0% Total .................................................................................................................... 23,619 100.0% 1,562,492 100.0% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5-Year Estimates from 2010 - 2014.
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The following shows the annual average unemployment rates for the County, the State and the United States.
Annual Average Unemployment Rates(1)
Calendar The The United Year County State States 2007 .......................................................... 3.9% 3.7% 4.6% 2008 .......................................................... 5.7% 4.2% 5.8% 2009 .......................................................... 7.3% 6.4% 9.3% 2010 .......................................................... 7.0% 6.0% 9.6% 2011 .......................................................... 6.7% 5.5% 8.9% 2012 .......................................................... 5.9% 5.1% 8.1% 2013 .......................................................... 5.3% 4.7% 7.4% 2014 .......................................................... 5.0% 4.2% 6.2% 2015 .......................................................... 4.8% 3.7% 5.3% 2016(2) ...................................................... 6.1% 4.2% 4.9%
Notes: (1) Source: Iowa Workforce Development and U.S. Bureau of Labor Statistics. (2) Preliminary rates for the month of August, 2016.
Housing
The U.S. Census Bureau 5-year estimated values reported that the median value of the County’s owner-occupied homes was $110,100. This compares to $126,300 for the State. The following table represents the five year average market value of specified owner-occupied units for the County and the State at the time of the 2010 - 2014 American Community Survey.
Home Values(1)
The County The State Value Number Percent Number Percent Less than $50,000 ........................................................... 1,696 11.5% 102,799 11.6% $50,000 to $99,999 .......................................................... 4,960 33.5% 221,298 25.0% $100,000 to $149,999 ...................................................... 3,348 22.6% 205,311 23.2% $150,000 to $199,999 ...................................................... 2,065 14.0% 149,310 16.9% $200,000 to $299,999 ...................................................... 1,732 11.7% 131,066 14.8% $300,000 to $499,999 ...................................................... 797 5.4% 55,523 6.4% $500,000 to $999,999 ...................................................... 142 1.0% 14,404 1.6% $1,000,000 or more ......................................................... 61 0.4% 4,273 0.5% Total .............................................................................. 14,801 100.0% 884,984 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2010 - 2014.
Mortgage Status(1)
The County The State Mortgage Status Number Percent Number Percent Housing units with a mortgage ......................................... 8,814 59.6% 546,451 61.7% Housing units without a mortgage .................................... 5,987 40.4% 338,533 38.3% Total .............................................................................. 14,801 100.0% 884,984 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2010 - 2014.
Income
The U.S. Census Bureau 5-year estimated values reported that the County had a median family income of $64,400. This compares to $66,829 for the State. The following table represents the distribution of family incomes for the County and the State at the time of the 2010 - 2014 American Community Survey.
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Family Income(1)
The County The State
Income Number Percent Number Percent Less than $10,000 ........................................................... 485 3.8% 27,085 3.4% $10,000 to $14,999 .......................................................... 399 3.1% 18,696 2.3% $15,000 to $24,999 .......................................................... 1,058 8.2% 52,443 6.6% $25,000 to $34,999 .......................................................... 1,068 8.3% 67,654 8.5% $35,000 to $49,999 .......................................................... 1,740 13.6% 108,497 13.6% $50,000 to $74,999 .......................................................... 2,729 21.3% 178,835 22.4% $75,000 to $99,999 .......................................................... 2,112 16.5% 136,631 17.1% $100,000 to $149,999 ...................................................... 2,274 17.7% 133,785 16.8% $150,000 to $199,999 ...................................................... 568 4.4% 40,514 5.1% $200,000 or more ............................................................ 393 3.1% 32,891 4.1% Total .............................................................................. 12,826 100.0% 797,031 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2010 to 2014.
The U.S. Census Bureau 5-year estimated values reported that the County had a median household income of $49,849. This compares to $52,716 for the State. The following table represents the distribution of household incomes for the County and the State at the time of the 2010 - 2014 American Community Survey.
Household Income(1)
The County The State Income Number Percent Number Percent Less than $10,000 ........................................................... 1,220 6.1% 75,677 6.1% $10,000 to $14,999 .......................................................... 1,348 6.7% 63,143 5.1% $15,000 to $24,999 .......................................................... 2,540 12.7% 132,072 10.7% $25,000 to $34,999 .......................................................... 2,194 11.0% 133,137 10.8% $35,000 to $49,999 .......................................................... 2,703 13.5% 179,656 14.6% $50,000 to $74,999 .......................................................... 3,768 18.9% 246,838 20.0% $75,000 to $99,999 .......................................................... 2,550 12.8% 167,120 13.6% $100,000 to $149,999 ...................................................... 2,578 12.9% 152,618 12.4% $150,000 to $199,999 ...................................................... 634 3.2% 44,860 3.6% $200,000 or more ............................................................ 442 2.2% 37,107 3.0% Total .............................................................................. 19,977 100.0% 1,232,228 100.0%
Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2010 - 2014.
Agriculture
Shown below is information on the agricultural value of the County and the statewide average.
Average Value Per Acre(1)
2011 2012 2013 2014 2015 Average Value Per Acre: Clinton County ........................................... $6,090 $7,426 $8,153 $7,953 $7,665 State of Iowa .............................................. 6,708 8,296 8,716 7,943 7,633 Note: (1) Source: Cooperative Extension Service - Iowa State University.
Local Option Sales Tax
The County approved a 1% local option sales and service tax (“Local Option Tax”) at a special referendum. The Local Option Tax for the County became effective January 1, 1990. The County’s Local Option Tax referendum question stated that proceeds of such tax would be designated for: 63% to be used for secondary roads and 37% to be used for property tax relief.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Once approved, a Local Option Tax can only be repealed through a public referendum at which a majority voting
approve the repeal or tax rate change. Contiguous municipalities are one unit for this purpose. If a Local Option Tax is not imposed county-wide, then the question of repeal is voted upon only by voters in such areas of a county where the tax has been imposed. A Local Option Tax may not be repealed within one year of the effective date.
The State of Iowa Department of Revenue (the “Department”) administers collection and disbursement of all local option sales and services taxes in conjunction with administration of the State-wide sales, services and use tax presently assessed at 6%. The Department is required by statute to remit at least 95% of the estimated tax receipts to a county board of supervisors (for taxes imposed in unincorporated areas) and to each incorporated city. Such remittances are on a monthly basis. Once a year the Department reconciles its monthly estimated payments and makes an adjustment payment or debit at the November 10 payment date. Remittance of collections within a county are based upon the following statutory formula for county-wide collections:
75 percent: Based on a pro rata share of population (the most recent certified federal census) of those incorporated or unincorporated areas in a county which have approved a Local Option Tax.
25 percent: Based on a pro rata share of total property tax dollars levied during the
three year period beginning July 1, 1982, through June 30, 1985, for those incorporated or unincorporated areas of a county which have approved a Local Option Tax.
Local Option Taxes are based on the same sales currently taxed by the state-wide 6% sales and services tax, with
the present statutory exceptions of use taxes, lottery tickets, motor fuel and special fuels, certain farm machinery, industrial equipment, and the sale of automobiles, room rental already subject to a hotel/motel tax, or natural gas or electricity already subject to a city or county franchise fee or user fee.
The following table shows the trend of County Local Option tax receipts.
Local Option Tax Receipts(1)
Local Option Sales Tax Percent Fiscal Year Receipts(2) Change
2008 ..................................... $1,502,449 N/A 2009 ..................................... 1,506,072 0.24% 2010 ..................................... 1,499,240 (0.45%) 2011 ..................................... 1,538,378 2.61% 2012 ..................................... 1,501,075 (2.42%) 2013 ..................................... 1,445,758 (3.69%) 2014 ..................................... 1,512,180 4.59% 2015 ..................................... 1,507,623 (0.30%) 2016 ..................................... 1,465,730(3) (2.78%) 2017 ..................................... 1,453,352(3) (0.84%)
Notes: (1) Source: Iowa Department of Revenue. (2) Includes a makeup payment in November attributable to
the previous fiscal year. (3) Collections received or expected to be received, not
including any allowance for the reconciliation payment. Retail Sales
The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending June 30. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the County. The following amounts exclude the County’s Local Option Tax.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Retail Taxable Sales(1)
Fiscal Year Taxable Annual Percent Ending June 30 Sales Change 2006(2)......................... $472,977,013 n/a 2007(2)......................... 494,700,177 4.59% 2008(2)......................... 552,201,400 11.62% 2009 ............................. 504,336,345 (8.67%) 2010 ............................. 475,987,205 (5.62%) 2011 ............................. 462,113,436 (2.91%) 2012 ............................. 455,442,972 (1.44%) 2013 ............................. 455,953,097 0.11% 2014 ............................. 452,752,243 (0.70%) 2015 ............................. 463,909,393 2.46%
Growth from 2006 to 2015 ............................................. (1.92%)
Notes: (1) Source: the Iowa Department of Revenue. (2) Fiscal years 2006 - 2008 amounts reflect a year ending March
31st.
THE PROJECT
The proceeds of the Bonds are expected to be used: (i) to finance the designing, constructing, equipping and furnishing a jail, sheriff’s office, 911 communications center and emergency management agency office and demolition of the existing facility, and (ii) to pay the costs of issuing the Bonds.
DEBT INFORMATION
After issuance of the Bonds, the County will have outstanding $27,065,000 principal amount of general obligation debt. In addition, the County has outstanding approximately $34,146 principal amount of drainage warrants, which are paid from the Special Revenue, Drainage Districts Fund solely from drainage assessments against benefited properties.
The County has a general obligation legal debt limit equal to 5% of Actual Valuation. For the January 1, 2015 Actual Valuation of $4,007,662,726 (including tax increment valuation and excluding military exemption valuation) applied to fiscal year 2016/17, the total limit is $200,383,136. Including the Bonds, the estimated principal amount of bonded and non-bonded debt applicable to this limit is $27,065,000, resulting in a legal debt margin of $173,318,136.
The County does not anticipate issuing any additional general obligation debt in fiscal year 2017.
Summary of Outstanding General Obligation Bonded Debt(1) (Principal Only)
Series 2009A ........................................................................ $ 405,000 Series 2010A ........................................................................ 2,035,000 Series 2010B ........................................................................ 2,625,000 The Bonds............................................................................ 22,000,000 Total ................................................................................... $27,065,000 Note: (1) Source: the County.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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General Obligation Debt(1) (Principal Only)
Year Total General G.O. Law Total General Ending Series Series Series Obligation Series Obligation Cumulative Retirement June 30 2009A 2010A 2010B Debt 2016 Debt Amount Percent
2017 ........... $130,000 $ 450,000 $ 625,000 $1,205,000 $ 0 $ 1,205,000 $ 1,205,000 4.45% 2018 ........... 135,000 465,000 645,000 1,245,000 935,000 2,180,000 3,385,000 12.51% 2019 ........... 140,000 480,000 665,000 1,285,000 945,000 2,230,000 5,615,000 20.75% 2020 ........... 0 640,000 690,000 1,330,000 955,000 2,285,000 7,900,000 29.19% 2021 ........... 0 0 0 0 970,000 970,000 8,870,000 32.77% 2022 ........... 0 0 0 0 985,000 985,000 9,855,000 36.41% 2023 ........... 0 0 0 0 1,005,000 1,005,000 10,860,000 40.13% 2024 ........... 0 0 0 0 1,025,000 1,025,000 11,885,000 43.91% 2025 ........... 0 0 0 0 1,050,000 1,050,000 12,935,000 47.79% 2026 ........... 0 0 0 0 1,080,000 1,080,000 14,015,000 51.78% 2027 ........... 0 0 0 0 1,110,000 1,110,000 15,125,000 55.88% 2028 ........... 0 0 0 0 1,145,000 1,145,000 16,270,000 60.11% 2029 ........... 0 0 0 0 1,180,000 1,180,000 17,450,000 64.47% 2030 ........... 0 0 0 0 1,220,000 1,220,000 18,670,000 68.98% 2031 ........... 0 0 0 0 1,265,000 1,265,000 19,935,000 73.66% 2032 ........... 0 0 0 0 1,315,000 1,315,000 21,250,000 78.51% 2033 ........... 0 0 0 0 1,365,000 1,365,000 22,615,000 83.56% 2034 ........... 0 0 0 0 1,420,000 1,420,000 24,035,000 88.80% 2035 ........... 0 0 0 0 1,485,000 1,485,000 25,520,000 94.29% 2036 ........... 0 0 0 0 1,545,000 1,545,000 27,065,000 100.00% Total ......... $405,000 $2,035,000 $2,625,000 $5,065,000 $22,000,000 $27,065,000
Note: (1) Source: the County. Detailed Overlapping Bonded Debt(1)
Outstanding Applicable to County Debt(2) Percent(3) Amount Cities: Andover ................................................................................................. $ 0 100.00% $ 0 Calamus ................................................................................................ 0 100.00% 0 Camanche ............................................................................................. 5,880,000 100.00% 5,880,000 Charlotte ................................................................................................ 0 100.00% 0 Clinton ................................................................................................... 37,990,000 100.00% 37,990,000 De Witt .................................................................................................. 18,315,010 100.00% 18,315,010 Delmar ................................................................................................... 0 100.00% 0 Goose Lake ........................................................................................... 0 100.00% 0 Grand Mound ........................................................................................ 0 100.00% 0 Lost Nation ............................................................................................ 0 100.00% 0 Low Moor............................................................................................... 200,000 100.00% 200,000 Toronto .................................................................................................. 0 100.00% 0 Welton ................................................................................................... 0 100.00% 0 Wheatland ............................................................................................. 0 100.00% 0 Total Cities ............................................................................................................................................................. $62,385,010 Schools: Calamus - Wheatland Community School District .................................. $ 0 100.00% $ 0 Camanche Community School District ................................................... 0 100.00% 0 Central Clinton Community School District ............................................. 11,075,000 100.00% 11,075,000 Clinton Community School District ......................................................... 680,000 100.00% 680,000 Delwood Community School District ...................................................... 0 98.89% 0 Easton Valley Community School District .............................................. 2,200,000 18.57% 408,540 Maquoketa Community School District .................................................. 0 0.22% 0 Midland Community School District........................................................ 12,350,000 30.36% 3,749,460 Northeast Community School District ..................................................... 7,245,198 100.00% 7,245,198 Eastern Iowa Community College(4) ...................................................... 16,015,000 16.20% 2,594,430 Kirkwood Community College(4) ............................................................ 136,574,427 0.02% 27,315 Total Schools .......................................................................................................................................................... $25,779,943 Total School and Cities Overlapping Bond Debt ..................................................................................................... $88,164,953 Notes: (1) Source: the Auditor of the State of Iowa and Electronic Municipal Market Access (EMMA). (2) As of September 29, 2016. (3) Overlapping debt percentages are based on levy year 2015 Taxable Valuation, the most current available and
have been rounded. (4) Excludes $32,660,000 (EICC), and $37,880,000 (KCC), of self-supporting industrial job training certificates, for
which a stand-by property tax levy is available to pay debt service.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Statement of Bonded Indebtedness(1)(2) County January 1, 2015 Actual Value ............................................................................................................................................... $4,007,662,726 County January 1, 2015 Taxable Value ............................................................................................................................................ $2,310,472,322
Per Capita (2010
Total Percentage of Population Principal Actual Taxable 49,116)
Direct General Obligation Bonded Debt .................................................. $ 27,065,000 0.68% 1.17% $ 551.04
Overlapping Debt Cities .............................................................................................. $ 62,385,010 1.56% 2.70% $1,270.16
Schools .......................................................................................... 25,779,943 0.64% 1.12% 524.88 Total Overlapping Debt ......................................................................... $ 88,164,953 2.20% 3.82% $1,795.04 Total General Obligation Bonded Debt and Overlapping Debt ............ $115,229,953 2.88% 4.99% $2,346.08
Per Capita Actual Value ....................................................................................................................................................................... $81,595.87 Per Capita Taxable Value ..................................................................................................................................................................... $47,041.13 Notes: (1) Source: the County, Audited Financial Statements and EMMA for the County, School District and Community College. (2) As of the date of issuance of the Bonds for Direct debt and September 29, 2016 for Overlapping Debt.
PROPERTY ASSESSMENT AND TAX INFORMATION Property Tax Assessment
In compliance with Section 441.21 of the Code of Iowa, as amended, the State Director of Revenue annually directs all county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The final values, called Actual Valuation, are then adjusted by the County Auditor. Taxable Valuation subject to tax levy is then determined by the application of State determined rollback percentages, principally to residential property.
Beginning in 1978, the State required a reduction in Actual Valuation to reduce the impact of inflation on its residents. The resulting value is defined as the Taxable Valuation. Such rollback percentages may be changed in future years. Certain historical rollback percentages for residential, multi-residential, agricultural and commercial valuations are as follows:
Percentages for Taxable Valuation After Rollbacks(1)
Multi- Ag Land Fiscal Year Residential Residential(2) & Buildings Commercial 2007/08 ................ 45.5596% N/A 100.0000% 100.0000% 2008/09 ................ 44.0803% N/A 90.1023% 99.7312% 2009/10 ................ 45.5893% N/A 93.8568% 100.0000% 2010/11 ................ 46.9094% N/A 66.2715% 100.0000% 2011/12 ................ 48.5299% N/A 69.0152% 100.0000% 2012/13 ................ 50.7518% N/A 57.5411% 100.0000% 2013/14 ................ 52.8166% N/A 59.9334% 100.0000% 2014/15 ................ 54.4002% N/A 43.3997% 95.0000% 2015/16 ................ 55.7335% N/A 44.7021% 90.0000% 2016/17 ................ 55.6259% 86.2500% 46.1068% 90.0000%
Notes: (1) Source: the Iowa Department of Revenue. (2) New category beginning with fiscal year 2017.
Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2015, are used to calculate tax liability for the tax year starting July 1, 2016 through June 30, 2017.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Property Tax Collection
Each county is required by State law to collect all tax levies within its jurisdiction and remit, before the fifteenth of each month, the amount collected through the last day of the preceding month to underlying units of government, including the County. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 and March 31, pursuant to the Code of Iowa, Sections 445.36 and 445.37. Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes and special assessments are subject to a penalty at the rate of one and one-half percent per month, to a maximum of eighteen percent per annum.
If taxes are not paid when due, the property may be offered at the regular tax sale on the third Tuesday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property, and funds so received are applied to the payment of taxes. A property owner may redeem from the regular tax sale, but failing redemption within two years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of all liens except future installments of taxes.
Actual (100%) Valuations for the County(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year: 2011 2012 2013 2014 2015 Residential ........................................................ $1,828,818,892 $1,842,534,589 $1,877,798,874 $1,896,290,087 $1,948,189,960 Agricultural ........................................................ 617,611,149 617,649,450 941,985,258 944,573,122 992,452,108 Commercial ....................................................... 426,552,744 434,025,297 437,499,525 438,589,758 385,872,346 Industrial ........................................................... 196,750,127 213,224,797 190,461,951 201,914,094 206,443,009 Multi-residential(3) ............................................. 0 0 0 0 37,502,122 Railroad ............................................................. 22,556,547 25,623,648 26,019,792 27,513,966 32,332,003 Utilities without Gas and Electric(4) ................... 74,687,369 75,243,064 56,178,475 56,941,679 56,391,370 Other(5) ............................................................. 446,750 446,750 446,750 446,750 446,750 Gas and Electric Utilities(4) ............................... 232,335,671 245,556,896 297,648,089 323,125,183 353,353,846 Less: Military Exemption ................................... (6,048,732) (5,907,980) (5,743,052) (5,583,780) (5,320,788) Total ................................................................ $3,393,710,517 $3,448,396,511 $3,822,295,662 $3,883,810,859 $4,007,662,726 Percent Change +(-) ........................................ 2.18%(6) 1.61% 10.84% 1.61% 3.19% Notes: (1) Source: Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts:
January 1: 2011 2012 2013 2014 2015 TIF Valuation ............................... $104,760,184 $85,171,469 $103,885,521 $108,675,540 $108,230,150
(3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See “PROPERTY TAX INFORMATION - Utility Property Tax Replacement” herein. (5) Any County Annexation Taxation Exempt Valuation and any County Ag Valuation in TIF Districts. (6) Based on 2010 Actual Valuation of $3,321,261,736.
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Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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For the January 1, 2015 levy year, the County’s Taxable Valuation was comprised of approximately 47% residential, 20% agricultural, 15% commercial, 8% industrial, 8% utilities, 1% multi-residential, 1% railroad, and less than 1% other and military exemption.
Taxable (“Rollback”) Valuations for the County(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year: 2011 2012 2013 2014 2015 Residential ........................................................ $ 928,158,174 $ 973,164,211 $1,021,521,307 $1,056,868,905 $1,083,698,349 Agricultural ........................................................ 355,380,246 370,178,447 408,818,798 422,244,166 457,587,953 Commercial ....................................................... 426,552,744 434,025,297 415,625,017 394,730,783 347,285,232 Industrial ........................................................... 196,750,127 213,224,797 180,938,890 181,722,685 185,798,717 Multi-residential(3) ............................................. 0 0 0 0 32,345,648 Railroad ............................................................. 22,556,547 25,623,648 24,718,805 24,762,568 29,098,802 Utilities without Gas and Electric(4) ................... 74,687,369 75,243,064 56,178,475 56,941,679 56,391,370 Other(5) ............................................................. 446,750 446,750 446,750 0 402,075 Gas and Electric Utilities(4) ............................... 107,912,629 106,056,396 124,860,995 123,704,885 123,183,112 Less: Military Exemption ................................... (6,048,732) (5,907,980) (5,743,052) (5,583,780) (5,318,936) Total ................................................................ $2,106,395,854 $2,192,054,630 $2,227,365,985 $2,255,391,891 $2,310,472,322 Percent Change +(-) ........................................ 0.51%(6) 4.07% 1.61% 1.26% 2.44% Notes: (1) Source: Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts:
January 1: 2011 2012 2013 2014 2015 TIF Valuation ............................... $104,745,368 $85,151,097 $103,844,777 $108,655,168 $108,204,222
(3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See “PROPERTY TAX INFORMATION - Utility Property Tax Replacement” herein. (5) Any County Annexation Taxation Exempt Valuation and any County Ag Valuation in TIF Districts. (6) Based on 2010 Actual Valuation of $2,095,796,047.
The following shows the trend in the County’s tax extensions and collections.
Tax Extensions and Collections(1)
Levy Fiscal Amount Amount Percent Year Year Levied Collected(2) Collected 2006 ............... 2007-08 .............. $11,825,600 $11,819,086 96.16% 2007 ............... 2008-09 .............. 12,290,751 12,247,485 85.55% 2008 ............... 2009-10 .............. 14,316,802 14,263,581 94.29% 2009 ............... 2010-11 .............. 15,127,437 15,161,733 92.80% 2010 ............... 2011-12 .............. 16,337,523 15,853,775 96.60% 2011 ............... 2012-13 .............. 16,410,936 16,303,745 98.36% 2012 ............... 2013-14 .............. 16,574,986 15,810,633 95.03% 2013 ............... 2014-15 .............. 16,638,211 16,175,515 99.56% 2014 ............... 2015-16 .............. 16,247,686 16,375,966 98.05% 2015 ............... 2016-17 .............. 16,375,966 ----- In Collection ----- Notes: (1) Source: the State of Iowa Department of Management and the County.
Includes amounts for Utility Replacement. Does not include levies and collections for the County’s tax increment finance district.
(2) Includes delinquent taxes.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Principal Taxpayers(1)
Levy Year 2015 Taxpayer Name Business/Service Taxable Valuation(2) Alliance Pipeline ............................................................ Utility/Gas Pipeline ....................................................... $ 23,674,121 Union Pacific Railroad ................................................... Railroad ....................................................................... 21,255,632 Alliant Energy ................................................................ Utility ........................................................................... 11,453,704 MidAmerican Energy Corporation .................................. Utility ........................................................................... 10,744,990 Kinder Morgan Cochin LLC ............................................ Utility/Gas Pipeline ....................................................... 9,425,222 Central Iowa Power Coop .............................................. Utility ........................................................................... 7,902,629 Custom-Pak, Inc. ........................................................... Manufacturing .............................................................. 5,866,290 E.I. DuPont De Nemours and Company ........................ Manufacturing .............................................................. 5,657,760 ITC Midwest LLC ........................................................... Utility ........................................................................... 5,225,116 Car-Freshner, Inc. ......................................................... Manufacturing .............................................................. 5,043,150 Total ................................................................................................................................................................. $106,248,614 Ten Largest Taxpayers as Percent of County’s 2015 Taxable Valuation ($2,310,472,322) ............................... 4.60% Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed
contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 01/01/2015 taxable value is the most current available.
Levy Limits
The property tax rates for the County from levy year 2011 through levy year 2015 are shown below:
Property Tax Rates: Levy Years 2011 - 2015(1)(2) (Per $1,000 Actual Valuation)
Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Levy Year: 2011 2012 2013 2014 2015
County: General Basic ..................................................... $ 3.50000 $ 3.50000 $ 3.50000 $ 3.50000 $ 3.50000 Pioneer Cemetery .............................................. 0.02239 0.02580 0.02385 0.02385 0.02385 General Supplemental ........................................ 2.37759 2.37759 2.37759 2.37759 2.37759 Mental Health Services ....................................... 1.44053 1.09992 1.08468 0.84002 0.79832 Debt Service ....................................................... 0.66982 0.63415 0.61796 0.60670 0.49575 Total County Rate............................................. $ 8.01033 $ 7.63746 $ 7.60408 $ 7.34816 $ 7.19551 Others: City (Clinton) ...................................................... $16.26019 $16.71082 $16.32030 $16.00689 $15.88101 Clinton Community School District ...................... 16.63173 16.52906 16.71711 16.75993 16.77276 Eastern Iowa Community College ....................... 0.91511 0.92043 0.92782 0.96863 1.00909 Other .................................................................. 0.82104 0.79743 0.47538 0.53493 0.67504 Total Rate Paid by City Residents .................... $42.63840 $42.59520 $42.04469 $41.61854 $41.53341 Notes: (1) Source: Iowa Department of Management. (2) Does not include tax rate for agriculture. Tax Levy Procedures
The Bonds are general obligations of the County, payable from and secured by a continuing ad valorem tax levied against all of the property valuation within the County. As part of the budgetary process each fiscal year, the County will have an obligation to request a debt service levy to be applied against all of the taxable property within the County. A failure on the part of the County to make a timely levy request or a levy request by the County that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bond holders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the County and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Notwithstanding the foregoing, Iowa Code section 76.2 provides when an Iowa political subdivision issues bonds,
“the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditor(s) to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full.” Utility Property Tax Replacement Property owned by entities involved primarily in the production, delivery, service and sale of electricity and natural gas (“Utilities”) pay a replacement tax based upon the delivery of energy by Utilities in lieu of property taxes. All replacement taxes are allocated among local taxing bodies by the State Department of Revenue and the Department of Management. This allocation is made in accordance with a general allocation formula developed by the Department of Management on the basis of general property tax equivalents. Utility properties paying the replacement tax are exempt from the levy of property tax by political subdivisions. In addition to the replacement tax, Utility property will continue to be valued by a special method as provided in the statute and taxed at the rate of three cents per one thousand dollars for the general fund of the State. By statute, the replacement tax collected by the State and allocated among local taxing bodies (including the County) shall be treated as property tax when received and shall be disposed of by the county treasurer as taxes on real estate. It is possible that the general obligation debt capacity of the County could be adjudicated to be proportionately reduced in future years if Utility property were determined to be other than “taxable property” for purposes of computing the County’s debt limit under Article XI of the Constitution of the State of Iowa. There can be no assurance that future legislation will not (i) operate to reduce the amount of debt the County can issue or (ii) adversely affect the County’s ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Bonds. Approximately 8% of the County’s tax base currently is utility property. Tax Increment Financing
The Code of Iowa currently authorizes the use of two types of tax increment financing by local taxing districts in the State of Iowa. The first type allows local governments to establish TIF districts to be established for the purposes of financing designated urban renewal projects which contribute to the urban redevelopment and economic development of the immediate area. There taxable valuation for this type of TIF district in the County for levy year 2015 was $108,204,222.
The second type of tax increment financing was authorized by state legislative action in the mid-1980’s. The area community colleges can establish TIF districts by contract with specific local businesses and industries to provide jobs training programming for new employees of existing expanding businesses or employees of new businesses. The revenues from these job training TIF districts then retires the debt incurred from the issuance of jobs training certificates which finance the cost of jobs training programming over a maximum of ten years. Upon payment of all jobs training certificates, the district dissolves and the incremental value from the new or expanded business reverts to the general tax base. There is no current valuation for this second type of TIF district.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Legislation From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the County or have an adverse impact on the future tax collections of the County. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation.
During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the “Act”), which the Governor signed into law on June 12, 2013. Among other things, the Act (i) reduces the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property, to 3%, (ii) assigns a “rollback” (the percentage of a property’s value that is subject to tax) to commercial, industrial and railroad property of 90%, (iii) creates a new property tax classification for multi-residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) assessment year, and assigns a declining rollback percentage to such properties for each year until the residential rollback percentage is reached in the 2022 assessment year, after which the rollback percentage for such properties will be equal to the residential rollback percentage each assessment year, and (iv) exempts a specified portion of the assessed value of telecommunication properties.
The Act includes a standing appropriation to replace some of the tax revenues lost by local governments, including tax increment districts, resulting from the new rollback for commercial and industrial property. Beginning in fiscal year 2018 the standing appropriation cannot exceed the actual 2017 appropriation amount. The appropriation does not replace losses to local governments resulting from the Act’s provisions that reduce the annual revaluation growth limit for residential and agricultural properties to 3%, the gradual transition for multi-residential properties to the residential rollback percentage (currently 53% of market value), or the reduction in the percentage of telecommunications property that is subject to taxation.
Given the wide scope of the statutory changes, and the State’s discretion in establishing the annual replacement amount that is appropriated each year commencing in fiscal 2018, the impact of the Act on the County’s future property tax collections is uncertain and the County has not attempted to quantify the financial impact of the Act’s provisions on the County’s future operations. It has been projected by Moody’s Investor Service that local governments in Iowa are likely to experience sizeable reductions in tax revenues collected starting in fiscal 20181. According to Moody’s, local governments that may experience disproportionately higher revenue losses include regions that have a substantial commercial base, a large share of multi-residential developments (such as college towns), or significant amounts of telecommunications property.
Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues bonds, "[t]he governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full."
From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if
enacted, alter or amend one or more of the property tax matters described in this Final Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the County.
1 US Public Finance Weekly Credit Outlook, May 30, 2013, Moody’s Investors Service.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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FINANCIAL INFORMATION Investment Policy
Each investment made by the County must be authorized by applicable law and the County’s Investment Policy. Only the County Treasurer, as limited by a special County resolution, and others authorized by resolution of the County may invest County funds. The County Treasurer when investing or depositing public funds is required to exercise care, skill, prudence, and diligence. Financial Reports
The County’s financial statements are audited annually by certified public accountants. The government-wide, proprietary fund and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board. See APPENDIX A for more detail. No Consent or Updated Information Requested of the Auditor
The tables and excerpts (collectively, the “Excerpted Financial Information”) contained in this “FINANCIAL INFORMATION” section are from the audited financial statements of the County, including the audited financial statements for the fiscal year ended June 30, 2015 (the “2015 Audit”). The 2015 Audit has been prepared by the Office of Auditor State of Iowa, Des Moines, Iowa, (the “Auditor”), and received by the Board of Supervisors. The County has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2015 Audit; nor has the County requested that the Auditor consent to the use of the Excerpted Financial Information and the 2015 Audit in this Final Official Statement. The inclusion of the Excerpted Financial Information and the 2015 Audit in this Final Official Statement in and of itself is not intended to demonstrate the fiscal condition of the County since the date of the 2015 Audit. Questions or inquiries relating to financial information of the County since the date of the 2015 Audit should be directed to the County. Summary Financial Information
The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX A for the County’s 2015 Audit. The County ended fiscal year 2016 with an increase to its general fund of approximately $1,270,000 based on preliminary unaudited cash basis account. The County approved a budget for fiscal year 2017 with an increase to its general fund of approximately $551,000; to date, revenues and expenditures are generally within budgeted amounts.
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Statement of Net Position
Governmental Activities(1) Audited as of June 30 2011 2012 2013 2014 2015 ASSETS: Cash, Cash Equivalents and Pooled Investments .... $16,423,709 $14,474,257 $13,574,817 $14,502,340 $15,567,846 Receivables: Property Taxes: Delinquent ............................................................. 71,178 126,416 143,844 88,741 142,885 Succeeding Year ................................................... 17,291,000 17,354,000 16,790,000 17,757,000 17,127,000 Penalty and Interest on Property Tax ...................... 221,835 279,377 339,620 394,515 383,841 Accounts ................................................................ 98,337 70,278 115,456 38,357 37,588 Accrued Interest ..................................................... 0 0 12 13 38 Drainage Assessments: Delinquent ............................................................. 83,148 82,009 66,035 50,749 46,458 Succeeding Year ................................................... 44,441 14,870 28,876 4,486 34,146 Due from Other Governments.................................. 4,792,325 6,877,595 7,147,905 6,828,034 6,387,940 Inventories ............................................................... 249,989 298,596 290,328 309,134 394,443 Capital Assets, Net of Accumulated Depreciation .... 44533,522 46,138,087 46,350,153 47,435,223 47,780,563 Internal Balances ..................................................... 0 0 0 0 30,000 Total Assets.......................................................... $83,809,484 $85,715,485 $84,847,046 $87,409,592 $87,932,748 DEFERRED OUTFLOWS OF RESOURCES: Pension Related Deferred Outflows ......................... 0 0 0 0 1,176,041 LIABILITIES: Accounts Payable .................................................... $ 1,273,830 $ 1,402,228 $ 1,089,841 $ 1,298,884 $ 1,295,007 Accrued Interest Payable......................................... 24,679 22,711 20,841 18,554 16,240 Salaries and Benefits Payable ................................. 549,983 203,846 213,269 247,654 310,464 Due to Other Governments ...................................... 721,017 1,510,231 51,362 107,446 95,294 Deferred Revenue: Succeeding Year Property Tax ............................... 17,291,000 17,354,000 16,790,000 (2) (2) Long-term Liabilities: Portion Due or Payable Within One Year: Capital Lease Agreement ...................................... 0 0 90,500 0 0 General Obligation Bonds ...................................... 1,085,000 1,105,000 1,125,000 1,145,000 1,170,000 Drainage Warrants ................................................ 17,891 149,538 46,618 3,000 34,146 Compensated Absences ........................................ 729,989 769,506 877,473 943,780 941,920 Portion Due or Payable After One Year: General Obligation Bonds ...................................... 9,610,000 8,505,000 7,380,000 6,235,000 5,065,000 Drainage Warrants ................................................ 17,891 149,538 46,618 3,000 34,146 Compensated Absences ........................................ 303,356 194,548 111,711 115,025 123,037 Net Pension Liability .............................................. 0 0 0 0 4,447,556 Net OPEB Liability ................................................. 446,859 544,992 641,920 741,602 842,893 Total Liabilities ...................................................... $32,149,393 $31,853,724 $28,512,386 $10,911,815 $14,440,492 DEFERRED INFLOWS OF RESOURCES: Unavailable Property Tax Revenue ......................... (2) (2) (2) $17,757,000 $17,127,000 Pension Related Deferred Inflows ........................... 0 0 0 0 2,650,064 Total Deferred Inflows of Resources ..................... $ 0 $ 0 $ 0 $17,757,000 $19,777,064 NET POSITION: Net Invested in Capital Assets ................................. $40,107,917 $41,513,087 $42,164,653 $43,881,223 $44,775,563 Restricted for: Nonexpendable: Permanent Fund .................................................... 5,000 5,000 5,000 5,000 5,000 Expendable: Supplemental Levy Purposes ................................ 2,551,273 4,065,286 4,421,346 4,775,692 4,912,088 Mental Health Purposes ........................................ 1,096,347 439,493 1,207,641 1,703,361 2,002,531 Rural Services Purposes ....................................... 606,250 606,629 426,565 436,830 304,483 Secondary Roads Purposes .................................. 1,826,722 1,597,277 1,692,504 1,530,403 2,036,484 Debt Service .......................................................... 4,015,561 1,056,112 1,658,375 2,218,367 2,826,974 Drainage Purposes ................................................ 47,100 53,159 91,842 64,022 50,500 Vietnam Veterans Memorial .................................. 7,281 7,626 7,770 7,831 7,978 Capital Projects ..................................................... 25,566 0 0 0 0 Other Purposes ..................................................... 176,596 330,781 355,136 341,963 445,172 Unrestricted ............................................................. 1,194,478 4,187,311 4,303,828 3,776,083 (2,475,542) Total Net Position ................................................. $51,660,091 $53,861,761 $56,334,660 $58,740,775 $54,891,231 Note: (1) Source: Audited financial statements of the County for the fiscal years ended June 30, 2011 through 2015. (2) Format change in 2014.
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Statement of Activities Governmental Activities(1)
Audited for the Year Ended June 30 2011 2012 2013 2014 2015 FUNCTIONS/PROGRAMS: Governmental Activities: Public Safety and Legal Services ........................... $ (6,245,962) $ (5,979,085) $ (6,763,628) $ (6,490,661) $ (6,515,736) Physical Health and Social Services ....................... (932,262) (976,395) (971,687) (1,092,131) (971,721) Mental Health ......................................................... (2,612,844) (2,612,844) (2,612,844) (2,612,844) (2,612,844) County Environment and Education ........................ (1,328,258) (584,035) (1,187,575) (1,916,518) (1,711,096) Roads and Transportation ...................................... (2,856,164) (2,816,748) (2,658,397) (2,232,419) (3,144,633) Government Services to Residents ......................... (257,235) (313,782) (348,157) (331,724) (599,516) Administration......................................................... (3,115,526) (3,109,666) (3,381,487) (3,823,164) (3,030,576) Non-program .......................................................... (4,948) (419) 420 104,761 136,997 Interest on Long-Term Debt .................................... (327,934) (299,550) (278,510) (256,026) (223,066) Total Governmental Activities ............................... $(17,681,133) $(17,533,885) $(17,743,909) $(17,477,023) $(18,098,988) General Revenues: Property and Other County Tax Levied For: General Purposes.................................................. $ 14,903,491 $ 15,721,006 $ 16,092,726 $ 15,560,538 $ 16,127,323 Debt Service .......................................................... 1,320,650 1,306,559 1,357,230 1,296,245 1,293,553 Penalty and Interest on Property Tax ....................... 186,691 210,496 212,870 306,674 138,988 State Tax Credits ..................................................... 560,578 545,152 619,680 767,973 1,134,511 Local Option Sales Tax ........................................... 1,568,149 1,568,162 1,404,206 1,512,957 1,511,708 Unrestricted Investments Earnings .......................... 189,733 123,208 111,740 109,837 102,240 Gain on Disposition of Capital Assets ...................... 8,946 7,500 46,720 6,926 227,550 Miscellaneous.......................................................... 570,917 253,472 371,636 321,988 223,057 Total General Revenues ....................................... $ 19,309,155 $ 19,735,555 $ 20,216,808 $ 19,883,138 $ 20,758,930 Change In Net Position ............................................ $ 1,628,022 $ 2,201,670 $ 2,472,899 $ 2,406,115 $ 2,659,942 Net Position, Beginning of Year, Restated ............... 50,032,069 51,660,091 53,861,761 56,334,660 52,231,289 Net Position, End of Year ........................................ $ 51,660,091 $ 53,861,761 $ 56,334,660 $ 58,740,775 $ 54,891,231 Note: (1) Source: Audited financial statements of the County for the fiscal years ended June 30, 2011 through 2015.
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Balance Sheet General Fund(1)
Audited as of June 30 2011 2012 2013 2014 2015 ASSETS: Cash, Cash Equivalents and Pooled Investments ................ $ 6,709,346 $ 7,203,614 $ 7,400,297 $ 6,838,813 $ 6,251,587 Receivables: Property Taxes: Delinquent ......................................................................... 49,180 90,280 102,922 65,525 106,740 Succeeding Year ............................................................... 11,477,000 11,462,000 11,558,000 12,145,000 11,959,000 Penalty and Interest on Property Tax ................................... 221,835 279,377 339,620 394,515 383,841 Accounts ............................................................................. 10,105 18,281 26,562 23,463 18,804 Due from Other Funds ......................................................... 0 12,577 0 0 30,000 Due from Other Governments.............................................. 217,606 217,734 296,729 310,391 392,538 Total Assets ...................................................................... $18,685,072 $19,283,863 $19,724,130 $19,777,207 $19,142,510 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: Liabilities: Accounts Payable ............................................................... $ 440,392 $ 373,120 $ 323,923 $ 425,726 $ 307,166 Salaries and Benefits Payable ............................................ 346,084 133,359 159,113 186,372 223,674 Due to Other Funds ............................................................ 3,365 15,254 2,897 2,889 0 Due to Other Governments ................................................. 27,262 21,800 27,040 21,156 35,675 Deferred Revenue Succeeding Year Property Tax .......................................... 11,477,000 11,462,000 11,558,000 (2) (2) Other ................................................................................. 264,561 368,482 463,845 (2) (2) Total Liabilities ................................................................... $12,558,664 $12,374,015 $12,534,818 $ 636,143 $ 566,515 Deferred Inflows of Resources: Unavailable Revenue Succeeding Year Property Taxes ...................................... (2) (2) (2) $12,145,000 $11,959,000 Other ................................................................................. (2) (2) (2) 453,985 433,226 Total Deferred Inflows of Resources .................................. $12,558,664 $12,374,015 $12,534,818 $12,598,985 $12,392,226 Fund Balances: Restricted For: Supplemental Levy Purposes ............................................. $ 1,670,712 $ 1,944,788 $ 2,175,111 $ 2,385,797 $ 2,238,930 Other Purposes .................................................................. 96,673 253,215 284,410 253,573 356,985 Unassigned ......................................................................... 4,359,023 4,711,845 4,729,791 3,902,709 3,587,854 Total Fund Balances .......................................................... $ 6,126,408 $ 6,909,848 $ 7,189,312 $ 6,542,079 $ 6,183,769 Total Liabilities, Deferred Inflows of Resources and Fund Balances ........................................................... $18,685,072 $19,283,863 $19,724,130 $19,777,207 $19,142,510 Notes: (1) Source: Audited financial statements of the County for the fiscal years ended June 30, 2011 through 2015. (2) Format change in 2014.
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Statement of Revenues, Expenditures and Changes in Fund Balance General Fund(1)
Preliminary Audited Fiscal Year Ended June 30 Unaudited
2011 2012 2013 2014 2015 2016(2) REVENUES: Property and Other County Tax ..................................... $10,846,998 $11,326,651 $11,610,548 $11,730,533 $11,916,318 $11,993,948 Local Option Sales Tax ................................................. 580,215 580,220 519,556 559,794 559,332 554,902 Interest and Penalty on Property Tax ............................. 153,069 148,554 153,244 252,994 175,574 170,490 Intergovernmental ......................................................... 1,448,247 1,890,091 1,462,910 2,412,361 2,844,803 2,878,495 Licenses and Permits .................................................... 73,841 74,499 54,651 19,110 18,904 21,724 Charges for Service ....................................................... 1,017,759 1,071,357 1,104,921 1,030,187 990,188 1,039,212 Use of Money and Property ........................................... 268,102 243,038 250,622 250,473 217,783 187,007 Miscellaneous................................................................ 352,604 629,488 211,611 167,384 161,380 176,899 Total Revenue ............................................................. $14,740,835 $15,963,898 $15,368,063 $16,422,836 $16,884,282 $17,022,677 EXPENDITURES: Operating: Public Safety and Legal Services ................................. $ 6,732,837 $ 6,672,445 $ 7,258,280 $ 6,721,546 $ 6,948,465 $ 6,872,643 Physical Health and Social Services ............................. 1,398,099 1,392,888 1,390,552 1,482,708 1,508,593 1,486,120 Mental Health ............................................................... 0 0 19,881 1,193,603 1,091,862 873,482 County Environment and Education .............................. 1,316,316 1,449,275 1,463,201 1,547,155 1,532,967 1,430,625 Governmental Services to Residents ............................ 1,065,174 1,130,337 1,173,154 1,156,712 1,568,637 1,044,052 Administration............................................................... 3,321,195 3,201,794 3,481,834 4,632,264 4,446,301 3,685,639 Capital Projects ............................................................ 358,820 1,083,316 125,331 72,918 9,023 0 Total Expenditures....................................................... $14,192,441 $14,930,055 $14,912,233 $16,806,906 $17,105,848 $15,392,561 Excess (Deficiency) of Revenues Over (Under) Expenditures ........................................... $ 548,394 $ 1,033,843 $ 455,830 $ (384,070) $ (221,566) $ 1,630,116 Other Financing Sources (Uses): Sale of Capital Assets .................................................. $ 38,750 $ 10,150 $ 99,542 $ 178 $ 148,900 $ 1,543 Transfers (Net) ............................................................. (131,552) (260,553) (275,908) (268,341) (290,644) (362,022) Total Other Financing Sources (Uses) ......................... $ (92,802) $ (250,403) $ (176,366) $ (263,163) $ (136,744) $ (360,479) Change in Fund Balances ............................................. 455,592 783,440 279,464 (647,233) (358,310) 1,269,637 Fund Balance – Beginning of Year ................................ $ 5,670,816 $ 6,126,408 $ 6,909,848 $ 7,189,312 $ 6,542,079 $ 5,846,655 Fund Balance – End of Year .......................................... $ 6,126,408 $ 6,909,848 $ 7,189,312 $ 6,542,079 $ 6,183,769 $ 7,116,292 Notes: (1) Source: Audited financial statements of the County for the fiscal years ended June 30, 2011 through 2015. (2) Preliminary Unaudited Cash Basis Accounting.
EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS Pensions
The County also contributes to the Iowa Public Employees’ Retirement System (“IPERS”), which is a cost-sharing multiple-employer defined benefit pension plan administered by the State of Iowa. IPERS provides retirement and death benefits which are established by State statute to plan members and beneficiaries. Employees who retire at age 65 (or anytime after age 58 with 30 or more years of service) are entitled to full monthly benefits. IPERS offers five options for distribution of retirement benefits. Benefits become fully vested after completing seven years of service or after attaining age 65.
IPERS plan members are required to contribute a percentage of their annual salary, in addition to the County being
required to make annual contributions to IPERS. Contribution amounts are set by State statute. The County’s share is payable from the applicable funds of the County. All contributions are on a current basis. See APPENDIX A – Note 8 for additional information on IPERS.
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The following table sets forth the contributions made by the County and employees to IPERS for the period indicated.
The County has always made their full statutorily required contributions to IPERS. The County cannot predict the levels of funding that will be required in the future.
% of Payroll % of Payroll Fiscal Year Paid by the County Paid by Employee
2013 ........................... 8.67% 5.78% 2014 ........................... 8.93% 5.95% 2015 ........................... 8.93% 5.95% 2016 ........................... 8.93% 5.95% 2017 ........................... 8.93% 5.95%
The IPERS fund is administered by the IPERS Board with administration costs paid from income derived from invested funds. IPERS has an unfunded actuarial liability and unrecognized actuarial loss. The following table sets forth certain information about the funding status of IPERS that has been extracted from the Actuarial Valuation Report of IPERS for fiscal years noted below (the “IPERS Reports”). A complete copy of the Reports can be obtained by visiting IPERS website at: http://ww.ipers.org/ or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa 50306-9117.
Unfunded Actuarial Funded Ratio UAAL as a Fiscal Accrued Liability (Actuarial Percentage of Covered Year Ending Actuarial Value Actuarial Accrued (Actuarial Value) Value) Covered Payroll (Actuarial June 30 of Assets [a] Liability [b] [b]-[a] [a]/[b] Payroll [c] Value) {[b-a]/[c]}
2011 ........... $22,575,309,199 $28,257,080,114 $5,681,770,915 79.89% $6,574,872,719 86.42% 2012 ........... 23,530,094,461 29,446,197,486 5,916,103,025 79.91% 6,786,158,720 87.18% 2013 ........... 24,711,096,187 30,498,342,320 5,787,246,133 81.02% 6,880,131,134 84.12% 2014 ........... 26,460,428,085 32,004,456,088 5,544,028,003 82.68%` 7,099,277,280 78.09% 2015 ........... 27,915,379,103 33,370,318,731 5,454,939,628 83.65% 7,326,348,141 74.46%
Source: IPERS Reports.
According to IPERS, the market value investment return on program assets is as follows: Fiscal Year Ended Investment June 30 Return %
2011 ............................................................ 19.91% 2012 ............................................................ 3.73% 2013 ............................................................ 10.12% 2014 ............................................................ 15.88% 2015 ............................................................ 3.96%
Source: IPERS Reports
Bond Counsel, the County and the Municipal Advisor undertake no responsibility for and make no representations
as to the accuracy or completeness of the information available from the IPERS discussed above or included on the IPERS website, including, but not limited to, updates of such information on the State Auditor’s website or links to other Internet sites accessed through the IPERS website.
Pursuant to GASB Statement No. 68, the County reported a liability of $4,473,000 as of June 30, 2015 for its
proportionate share of the net pension liability for (“IPERS”). The net pension liability is the amount by which the total actuarial liability exceeds the pension plan’s net assets or fiduciary net position (essentially the market value) available for paying benefits. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014. The County’s proportion of the net pension liability was based on the County’s share of contributions to the pension plan relative to the contributions of all IPERS participating employers. As of June 30, 2014, the County’s collective proportion was 0.1127863%. For additional information, see the County’s Audited Financial Statements for Fiscal Year Ending June 30, 2015 in APPENDIX A.
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Other Post-Employment Benefits (OPEB)
In June 2004, the Governmental Accounting Standards Board (“GASB”) issued GASB 45, which address how state
and local governments are required to account for and report their costs and obligations related to other post-employment benefits (“OPEB”), defined to include post-retirement healthcare benefits. GASB 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pension establishes financial reporting standards designed to measure, recognize and display OPEB costs. OPEB costs would become measurable on an accrual basis of accounting, and contribution rates (actuarially determined) would be prescribed for funding such costs. The provisions of GASB 45 do not require governments to fund their OPEBs. The County may establish its OPEB liability at zero as of the beginning of the initial year of implementation; however the unfunded actuarial liability is required to be amortized over future periods.
As of July 1, 2013, the most recent valuation date for the period July 1, 2014 through June 30, 2015, the actuarial accrued liability was $895,637, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $895,637. The covered payroll (annual payroll of active employees covered by the plan) was $9,787,000 and the ratio of the UAAL to covered payroll was 9.16%. As of June 30, 2015, there were no trust fund assets. As of the July 1, 2014 actuarial valuation date, Projected Unit Credit Method was used.
See APPENDIX A – Notes (8) and (9) herein for further discussion of the County’s employee retirement benefit obligations.
REGISTRATION, TRANSFER AND EXCHANGE
See also APPENDIX B - BOOK-ENTRY SYSTEM for information on registration, transfer and exchange of book-entry bonds. The Bonds will be initially issued as book-entry bonds.
The County shall cause books (the “Bond Register”) for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in Des Moines, Iowa. The County will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the County for use in the transfer and exchange of Bonds.
Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner’s attorney duly authorized in writing, the County shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount.
The execution by the County of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid.
The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month next preceding an interest payment date on such bond, nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds.
The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner’s legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid.
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No service charge shall be made for any transfer or exchange of Bonds, but the County or the Bond Registrar may
require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a bond surrendered for redemption.
BONDHOLDERS’ RISKS Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history of economic prospects connected with a particular issue, and secondary marketing practices in connection with a particular Bond or Bonds issue are suspended or terminated. Additionally, prices of bond or note issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price of the Bonds. Ratings Loss
Moody’s Investors Service, Inc. (“Moody’s”) has assigned a rating of “Aa2” to the Bonds. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that the rating will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Moody's, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds.
Rating agencies are currently not regulated by any regulatory body. Future regulation of rating agencies could materially alter the methodology, rating levels, and types of ratings available, for example, and these changes, if ever, could materially affect the market value of the Bonds. Forward-Looking Statements
This Final Official Statement contains statements relating to future results that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When used in this Final Official Statement, the words “estimate,” “forecast,” “intend,” “expect” and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and the actual results. These differences could be material and could impact the availability of funds of the County to pay debt service when due on the Bonds. Tax Matters and Loss of Tax Exemption
As discussed under the heading “TAX MATTERS” herein, the interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Bonds, as a result of acts or omissions of the County in violation of its covenants in the Resolution. Should such an event of taxability occur, the Bonds would not be subject to a special prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Bonds, and there is no provision for an adjustment of the interest rate on the Bonds.
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It is possible that further legislation will be proposed or introduced that could result in changes in the way that tax
exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchasers should consult with their own tax advisors regarding the Jobs Act, the Reduction Act and any other pending or proposed federal income tax legislation. The likelihood of the Jobs Act or the Reduction Act being enacted or whether the currently proposed terms of the Jobs Act or the Reduction Act will be altered or removed during the legislative process cannot be reliably predicted.
It is also possible that actions of the County after the closing of the Bonds will alter the tax status of the Bonds, and, in the extreme, remove the tax exempt status from the Bonds. In that instance, the Bonds are not subject to mandatory prepayment, and the interest rate on the Bonds does not increase or otherwise reset. A determination of taxability on the Bonds, after closing of the Bonds, could materially adversely affect the value and marketability of the Bonds. DTC-Beneficial Owners
Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the County nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner.
In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See APPENDIX B – Describing Book-Entry Only Issuance. Other Factors
An investment in the Bonds involves an element of risk. In order to identify risk factors and make an informed investment decision, potential investors should be thoroughly familiar with this entire Final Official Statement (including the Appendices hereto) in order to make a judgment as to whether the Bonds are an appropriate investment. Tax Levy Procedures
The Bonds are general obligations of the County, payable from and secured by a continuing ad valorem tax levied against all of the taxable property valuation within the County. See “PROPERTY TAX INFORMATION” herein for more details. As part of the budgetary process each fiscal year, the County will have an obligation to request a debt service levy to be applied against all of the taxable property within the County. A failure on the part of the County to make a timely levy request or a levy request by the County that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the County and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Summary
The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investment decision, potential investors should become thoroughly familiar with this entire Final Official Statement and the Appendices hereto.
TAX MATTERS Tax Exemption
Federal tax law contains a number of requirements and restrictions that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Bond proceeds and facilities financed with Bond proceeds, and certain other matters. The County has covenanted to comply with all requirements that must be satisfied in order for the interest on the Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds.
Subject to the County’s compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations.
Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences.
The interest on the Bonds is not exempt from present Iowa income taxes. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Tax Accounting Treatment of Discount and Premium on Certain Bonds
The initial public offering price of certain Bonds may be less than the amount payable on such Bonds at maturity (“Discount Bonds”). Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment.
The initial public offering price of certain Bonds may be greater than the amount of such Bonds at maturity (“Premium Bonds”). Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
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Other Tax Advice
In addition to the income tax consequences described above, potential investors should consider the additional tax consequences of the acquisition, ownership, and disposition of the Bonds. For instance, state income tax law may differ substantially from state to state, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to federal tax issues herein covered by the opinion and with respect to the various state tax consequences of an investment in Bonds. Audits
The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the County as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Reporting and Withholding
Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Tax Legislation
Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may be considered by the Iowa legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest or other income on the Bonds or the market value or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers.
Some legislative proposals may carry retroactive effective dates, that, if enacted, could alter or amend the tax matters referred to in this section or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal or state tax legislation.
The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation.
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Enforcement
Holders of the Bonds shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa and of the United States of America for the enforcement of payment of the Bonds, including, but not limited to, the right to a proceeding in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required by Iowa law and the Resolution authorizing issuance of the Bonds (the “Bond Resolution”).
The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Bond Resolution. The remedies available to the owners of the Bonds upon an event of default under the Bond Resolution, in certain respects, may require judicial action, which is often subject to discretion and delay. Under existing law, including specifically the federal bankruptcy code, certain of the remedies specified in the Bond Resolution may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in these documents. The legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.
No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Bond Resolution, including principal of and interest on the Bonds. Opinion
Bond Counsel’s opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the County described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel’s opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. See APPENDIX C for a draft form of legal opinion for the Bonds.
ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE).
CONTINUING DISCLOSURE
For the purpose of complying with Rule 15c2-12 of the Securities Exchange Commission, as amended and interpreted from time to time (the “Rule”), the County will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds to provide reports of specified information and notice of the occurrence of certain events, as hereinafter described (the “Disclosure Covenants”). The information to be provided on an annual basis, and the events as to which notice is to be given, is set forth in “APPENDIX D – Form of Continuing Disclosure Certificate”. This covenant is being made by the County to assist the Underwriter(s) in complying with the Rule.
Breach of the Disclosure Covenants will not constitute a default or an “Event of Default” under the Bonds or Resolution, respectively. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the County to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price.
Pursuant to the Rule, in the last five years, the County, to the best of its knowledge, believes it is in compliance with those undertakings previously entered into by it pursuant to the Rule.
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Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5)
of the Rule.
OPTIONAL REDEMPTION
Bonds due June 1, 2018 - 2026 inclusive, are not subject to optional redemption. Bonds due June 1, 2027 - 2036, inclusive, are callable in whole or in part on any date on or after June 1, 2026, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the County and within any maturity by lot.
The Bond Registrar will give written notice of redemption, identifying the Bonds (or portions thereof) to be redeemed, by mailing a copy of the redemption notice by first class mail not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for redemption to the registered owner of each Bond (or portion thereof) to be redeemed at the address shown on the registration books maintained by the Bond Registrar. Unless moneys sufficient to pay the redemption price of the Bonds to be redeemed are received by the Bond Registrar prior to the giving of such notice of redemption, such notice may, at the option of the County, state that said redemption will be conditional upon the receipt of such moneys by the Bond Registrar on or prior to the date fixed for redemption. If such moneys are not received, such notice will be of no force and effect, the County will not redeem such Bonds, and the Bond Registrar will give notice, in the same manner in which the notice of redemption has been given, that such moneys were not so received and that such Bonds will not be redeemed. Otherwise, prior to any redemption date, the County will deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on the date.
Subject to the provisions for a conditional redemption described above, notice of redemption having been given as described above and in the Bond Resolution, the Bonds or portions of Bonds so to be redeemed will, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the County shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds will be paid by the Bond Registrar at the redemption price.
MANDATORY REDEMPTION The Bonds coming due on June 1, 2033 are term bonds (the “Term Bonds”) and are subject to mandatory redemption prior to maturity on June 1 of the years and in the amounts as follows: $3,945,000; 3.000% Term Bonds Due June 1, 2033; Yield 3.000%: Redemption Year Amount 2031 ............... $1,265,000 2032 ............... 1,315,000 2033 ............... 1,365,000 (stated maturity)
The County covenants that it will redeem Term Bonds pursuant to the mandatory redemption requirement for such Term Bonds. Proper provision for mandatory redemption having been made, the County covenants that the Term Bonds so selected for redemption shall be payable as at maturity.
LITIGATION
There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the County taken with respect to the issuance or sale thereof. There is no litigation now pending, or to the knowledge of the County, threatened against the County that is expected to materially impact the financial condition of the County.
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LEGAL MATTERS The Bonds are subject to approval as to certain legal matters by Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel. Bond Counsel has not participated in the preparation of this Final Official Statement except for guidance concerning the sections regarding “TAX MATTERS”, and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements, or data contained in this Final Official Statement, and will express no opinion with respect thereto.
The legal opinion to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.
In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel’s opinion. The opinion will state, in part, that the obligation of the County with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable, and to the exercise of judicial discretion in appropriate cases.
FINAL OFFICIAL STATEMENT AUTHORIZATION
This Final Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the County, and all expressions of opinion, whether or not so stated, are intended only as such. The auditors have not performed any additional review and have not consented to the inclusion of the excerpts from the financial statements and the 2015 Audit shown in APPENDIX A.
This Final Official Statement is not to be construed as a contract or agreement amongst the County, the Underwriter, or the holders of any of the Bonds. Any statements made in this Final Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Final Official Statement or the sale of the Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof. The information contained in this Final Official Statement is not guaranteed.
INVESTMENT RATING
The Bonds have been rated “Aa2” by Moody’s Investors Service. The County has supplied certain information and material concerning the Bonds and the County to the rating service shown on the cover page, including certain information and materials which may not have been included in this Final Official Statement, as part of its application for an investment rating on the Bonds. A rating reflects only the views of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from such rating agency. Generally, such rating service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating may be obtained from the rating agency: Moody’s Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, telephone 212-553-1658. The County will provide appropriate periodic credit information to the rating service to maintain a rating on the Bonds.
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UNDERWRITING
The Bonds were offered for sale by the County at a public, competitive sale on October 25, 2016. The best bid submitted at the sale was submitted by Robert W. Baird & Co. Inc., Milwaukee, Wisconsin (the “Underwriter”). The County awarded the contract for sale of the Bonds to the Underwriter at a price of $22,427,009.89 (reflecting the par amount of $22,000,000, plus a reoffering premium of $649,618.65, and less an Underwriter’s discount of $222,608.76). The Underwriter has represented to the County that the Bonds have been subsequently re-offered to the public initially at the yields or prices set forth in the on the cover of this Final Official Statement.
MUNICIPAL ADVISOR
The County has engaged Speer Financial, Inc. as municipal advisor (the “Municipal Advisor”) in connection with the issuance and sale of the Bonds. The Municipal Advisor is a Registered Municipal Advisor in accordance with the rules of the MSRB. The Municipal Advisor will not participate in the underwriting of the Bonds. The financial information included in the Final Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Municipal Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Municipal Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Final Official Statement, nor is the Municipal Advisor obligated by the County’s continuing disclosure undertaking.
CERTIFICATION
We have examined this Final Official Statement dated October 25, 2016, for the $22,000,000 General Obligation Bonds, Series 2016, believe it to be true and correct and will provide to the purchaser of the Bonds at the time of delivery a certificate confirming to the purchaser that to the best of our knowledge and belief information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. /s/ ERIC VAN LANCKER /s/ DANIEL SRP County Auditor Chairperson, Board of Supervisors CLINTON COUNTY, IOWA CLINTON COUNTY, IOWA
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Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
APPENDIX A
CLINTON COUNTY, IOWA
THE AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING
JUNE 30, 2015
OFFICE OF AUDITOR OF STATE STATE OF IOWA
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834 Facsimile (515) 242-6134
Mary Mosiman, CPA
Auditor of State
NEWS RELEASE
Contact: Andy Nielsen
FOR RELEASE April 26, 2016 515/281-5834
Auditor of State Mary Mosiman today released an audit report on Clinton County, Iowa.
The County had local tax revenue of $79,887,725 for the year ended June 30, 2015,
which included $5,175,000 in tax credits from the state. The County forwarded $61,332,338
of the local tax revenue to the townships, school districts, cities and other taxing bodies in the
County.
The County retained $18,555,387 of the local tax revenue to finance County operations,
a 5.3% increase over the prior year. Other revenues included charges for service of
$2,982,764, operating grants, contributions and restricted interest of $6,145,820, capital
grants, contributions and restricted interest of $715,278, local option sales tax of $1,511,708,
unrestricted investment earnings of $102,240 and other general revenues of $589,595.
Expenses for County operations for the year ended June 30, 2015 totaled $27,951,643,
a less than 1% decrease from the prior year. Expenses included $7,665,031 for roads and
transportation, $6,969,988 for public safety and legal services and $3,520,736 for mental
health.
A copy of the audit report is available for review in the County Auditor’s Office,
in the Office of Auditor of State and on the Auditor of State’s web site at
http://auditor.iowa.gov/reports/1510-0023-B00F.
# # #
1510-0023-B00F
CLINTON COUNTY
INDEPENDENT AUDITOR’S REPORTS
BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
JUNE 30, 2015
2
Table of Contents
Page
Officials 3
Independent Auditor’s Report 5-7
Management’s Discussion and Analysis 9-15
Basic Financial Statements: Exhibit
Government-wide Financial Statements: Statement of Net Position A 17 Statement of Activities B 18-19
Governmental Fund Financial Statements: Balance Sheet C 20-21 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position D 23 Statement of Revenues, Expenditures and Changes in Fund Balances E 24-25 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds to the Statement of Activities F 26
Proprietary Fund Financial Statements: Statement of Net Position G 27 Statement of Revenues, Expenses and Changes in Fund Net Position H 28 Statement of Cash Flows I 29
Fiduciary Fund Financial Statement: Statement of Fiduciary Assets and Liabilities – Agency Funds J 30
Notes to Financial Statements 31-53
Required Supplementary Information:
Budgetary Comparison Schedule of Receipts, Disbursements and Changes in Balances – Budget and Actual (Cash Basis) – All Governmental Funds 56-57 Budget to GAAP Reconciliation 58 Notes to Required Supplementary Information – Budgetary Reporting 59 Schedule of the County’s Proportionate Share of the Net Pension Liability 60 Schedule of County Contributions 62-63 Notes to Required Supplementary Information – Pension Liability 64-65 Schedule of Funding Progress for the Retiree Health Plan 66
Supplementary Information: Schedule
Nonmajor Governmental Funds: Combining Balance Sheet 1 68-69 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 2 70-71
Agency Funds: Combining Schedule of Fiduciary Assets and Liabilities 3 72-73 Combining Schedule of Changes in Fiduciary Assets and Liabilities 4 74-75
Schedule of Revenues by Source and Expenditures by Function – All Governmental Funds 5 76-77 Schedule of Expenditures of Federal Awards 6 78-79
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 81-82
Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by OMB Circular A-133 85-86
Schedule of Findings and Questioned Costs 87-94
Staff 95
3
Clinton County
Officials
(Before January 2015)
Term
Name Title Expires
Jill Davisson Board of Supervisors Jan 2015
Brian Schmidt Board of Supervisors Jan 2015
John Staszewski Board of Supervisors Jan 2017
Eric Van Lancker County Auditor Jan 2017
Rhonda McIntyre County Treasurer Jan 2015
Stephen Managan County Recorder Jan 2015
Rick Lincoln County Sheriff Jan 2017
Michael Wolf County Attorney Jan 2015
Roland Ehm County Assessor Jan 2016
John Moreland City Assessor Jan 2016
(After January 2015)
John Staszewski Board of Supervisors Jan 2017
Shawn Hamerlinck Board of Supervisors Jan 2019
Daniel Srp Board of Supervisors Jan 2019
Eric Van Lancker County Auditor Jan 2017
Rhonda McIntyre County Treasurer Jan 2019
Scott Judd County Recorder Jan 2019
Rick Lincoln County Sheriff Jan 2017
Michael Wolf County Attorney Jan 2019
Roland Ehm County Assessor Jan 2016
John Moreland City Assessor Jan 2016
OFFICE OF AUDITOR OF STATE STATE OF IOWA
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834 Facsimile (515) 242-6134
Mary Mosiman, CPA
Auditor of State
5
Independent Auditor’s Report
To the Officials of Clinton County:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business type activities, the discretely presented component unit, each major fund and the
aggregate remaining fund information of Clinton County, Iowa, as of and for the year ended
June 30, 2015, and the related Notes to Financial Statements, which collectively comprise the
County’s basic financial statements 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 U.S. generally accepted accounting principles. 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 U.S. generally accepted auditing standards 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 County’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
County’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 the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
6
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, the discretely presented component unit, each major fund and the aggregate remaining fund information of Clinton County as of June 30, 2015, and the respective changes in its
financial position and, where applicable, its cash flows thereof for the year then ended in
accordance with U.S. generally accepted accounting principles.
Emphasis of a Matter
As discussed in Note 15, Clinton County adopted new accounting guidance related to
Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27. Our opinions are not
modified with respect to this matter.
Other Matters
Required Supplementary Information
U.S. generally accepted accounting principles require Management’s Discussion and Analysis, the Budgetary Comparison Information, the Schedule of the County’s Proportionate
Share of the Net Pension Liability, the Schedule of County Contributions and the Schedule of
Funding Progress for the Retiree Health Plan on pages 9 through 15 and 56 through 66 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
which 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 U.S. generally
accepted auditing standards, 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 Clinton County’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, 2014 (which are not presented herein) and expressed unmodified opinions on those financial statements. The supplementary information
included in Schedules 1 through 6, including the Schedule of Expenditures of Federal Awards
required by U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and
is not a required part of the basic financial statements.
The supplementary information is the responsibility of management and was derived from
and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 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 U.S. generally accepted auditing standards. In our
opinion, the supplementary information is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
7
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
April 11, 2016 on our consideration of Clinton County’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing
of internal control over financial reporting and compliance and the results of that testing and not
to provide an opinion on the 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 Clinton County’s internal control over financial reporting and
compliance.
MARY MOSIMAN, CPA WARREN G. JENKINS, CPA
Auditor of State Chief Deputy Auditor of State
April 11, 2016
9
MANAGEMENT’S DISCUSSION AND ANALYSIS
Clinton County 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, 2015. We encourage readers to consider this information in conjunction with the
County’s financial statements, which follow.
2015 FINANCIAL HIGHLIGHTS
The County implemented Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of
GASB Statement No. 27, during fiscal year 2015. The beginning net position for
governmental activities was restated by $6,509,486 to retroactively report the net pension liability as of July 1, 2014 and deferred outflows of resources related to
contributions made after June 30, 2013 but prior to July 1, 2014. Pension
expense for fiscal year 2014 and the net pension liability, deferred outflows of
resources and deferred inflows of resources at June 30, 2014 were not restated
because the information needed to restate those amounts was not available.
Revenues of the County’s governmental activities increased less than 1%, or approximately $171,000, from fiscal year 2014 to fiscal year 2015. Capital grants, contributions and restricted interest decreased approximately $1.5
million while property tax increased approximately $564,000, charges for service
increased approximately $542,000 and state tax credits increased approximately
$366,000.
Program expenses of the County’s governmental activities decreased less than 1%, or approximately $83,000, from fiscal year 2014 to fiscal year 2015. Roads and transportation expenses decreased approximately $619,000 while mental health
expenses increased approximately $589,000.
The County’s governmental activities net position at June 30, 2015 increased 5.1%, or approximately $2.7 million, over the restated June 30, 2014 balance.
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 County’s financial activities.
The Government-wide Financial Statements consist of a Statement of Net Position and
a Statement of Activities. These provide information about the activities of Clinton County as a whole and present an overall view of the County’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 Clinton County’s operations in more detail than the government-wide
financial statements by providing information about the most significant funds. The
remaining financial statements provide information about activities for which Clinton County acts solely as an agent or custodian for the benefit of those outside
of County government (Agency Funds).
Notes to Financial Statements provide additional information essential to a full
understanding of the data provided in the basic financial statements.
10
Required Supplementary Information further explains and supports the financial
statements with a comparison of the County’s budget for the year, the County’s
proportionate share of the 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 nonmajor
governmental and the individual Agency Funds. In addition, the Schedule of
Expenditures of Federal Awards provides details of various federal programs
benefiting the County.
REPORTING THE COUNTY’S FINANCIAL ACTIVITIES
Government-wide Financial Statements
One of the most important questions asked about the County’s finances is, “Is the County
as a whole better off 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 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 financial information on all of the County’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 County’s net position may serve
as a useful indicator of whether the financial position of the County is improving or deteriorating.
The Statement of Activities presents information showing how the County’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 County’s governmental activities are presented in the Statement of Net Position and
the Statement of Activities. Governmental activities include public safety and legal services,
physical health and social services, mental health, county environment and education, roads and transportation, governmental services to residents, administration, interest on long-term debt and
non-program activities. Property tax and state and federal grants finance most of these activities.
Fund Financial Statements
The County has three kinds of funds:
1) Governmental funds account for most of the County’s basic services. These focus on how money flows into and out of those funds and the balances left at year-end that are available
for spending. The governmental funds include: 1) the General Fund, 2) the Special Revenue
Funds, such as Mental Health, Rural Services and Secondary Roads, 3) the Debt Service Fund
and 4) the Permanent 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 County’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 County’s
programs.
11
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 County’s Enterprise, Rock Creek Marina Fund and the Internal Service, Employee Group Health Fund. Internal Service Funds are an accounting
device used to accumulate and allocate costs internally among the County’s various functions.
The required financial statements 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.
3) Fiduciary funds are used to report assets held in a trust or agency capacity for others which cannot be used to support the County’s own programs. These fiduciary funds include
Agency Funds that account for drainage districts, emergency management services and the
County Assessor, to name a few.
The required financial statement for fiduciary funds is a Statement of Fiduciary Assets and
Liabilities.
Reconciliations between the government-wide financial statements and the governmental
fund financial statements follow the governmental fund financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of financial
position. Prior to restatement, Clinton County’s combined net position decreased 6.6% from a
year ago, from approximately $59 million to approximately $55 million. The analysis that follows focuses on the changes in the net position of the County’s activities.
Governmental Business Type
Activities Activities Total
2014 2014 2014
2015 (Not Restated) 2015 (Not Restated) 2015 (Not Restated)
Current and other assets 40,152$ 39,974 50 42 40,202 40,016
Capital assets 47,781 47,436 198 216 47,979 47,652
Total assets 87,933 87,410 248 258 88,181 87,668
Deferred outflows of resources 1,176 - 7 - 1,183 -
Long-term liabilities 12,724 9,239 36 11 12,760 9,250
Other liabilities 1,717 1,673 15 12 1,732 1,685
Total liabilities 14,441 10,912 51 23 14,492 10,935
Deferred inflows of resources 19,777 17,757 17 - 19,794 17,757
Net position:
Net investment in capital assets 44,776 43,881 198 216 44,974 44,097
Restricted 12,591 11,084 - - 12,591 11,084
Unrestricted (2,476) 3,776 (11) 19 (2,487) 3,795
Total net position 54,891$ 58,741 187 235 55,078 58,976
Net Position of Governmental and Business Type Activities
(Expressed in Thousands)
June 30, June 30, June 30,
The largest portion of the County’s net position is invested in capital assets (e.g., land,
infrastructure, buildings and equipment), less the related debt. 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, enabling legislation or
other legal requirements – decreased from approximately $3,795,000 at June 30, 2014 to
approximately ($2,487,000) at the end of this year, a decrease of $6,282,000, or approximately
165.5%. The decrease is due primarily to reporting the net pension liability as of July 1, 2014.
12
Governmental Business Type
Activities Activities Total
2014 2014 2014
2015 (Not Restated) 2015 (Not Restated) 2015 (Not Restated)
Revenues:
Program revenues:
Charges for service 2,793$ 2,251 189 170 2,982 2,421
Operating grants, contributions and
restricted interest 6,146 5,881 - - 6,146 5,881
Capital grants, contributions and
restricted interest 715 2,226 - - 715 2,226
General revenues:
Property tax 17,421 16,857 - - 17,421 16,857
Penalty and interest on property tax 139 307 - - 139 307
State tax credits 1,134 768 - - 1,134 768
Local option sales tax 1,512 1,513 - - 1,512 1,513
Unrestricted investment earnings 102 110 - - 102 110
Other general revenues 451 329 - - 451 329
Total revenues 30,413 30,242 189 170 30,602 30,412
Program expenses:
Public safety and legal services 6,970 7,041 - - 6,970 7,041
Physical health and social services 1,464 1,477 - - 1,464 1,477
Mental health 3,520 2,931 - - 3,520 2,931
County environment and education 2,156 2,081 - - 2,156 2,081
Roads and transportation 7,665 8,284 - - 7,665 8,284
Governmental services to residents 1,317 1,152 - - 1,317 1,152
Administration 3,366 3,926 - - 3,366 3,926
Non-program 1,070 688 - - 1,070 688
Interest on long-term debt 225 256 - - 225 256
Rock Creek Marina - - 198 184 198 184
Total expenses 27,753 27,836 198 184 27,951 28,020
Change in net position 2,660 2,406 (9) (14) 2,651 2,392
Net position beginning of year, as restated 52,231 56,335 196 249 52,427 56,584
Net position end of year 54,891$ 58,741 187 235 55,078 58,976
June 30, June 30, June 30,
Changes in Net Position of Governmental and Business Type Activities
(Expressed in Thousands)
Year ended Year ended Year ended
Charges for service
9.7%
Operating grants,
contributions
and restricted interest
20.1%
Capital grants, contributions
and restricted
interest2.4%
Unrestricted investment
earnings
0.3%
Property tax56.9%
Local option sales tax
4.9%
Penalty and interest on
property tax
0.5%
State tax credits
3.7%
Other general revenues
1.5%
Revenues by Source
Mental health12.6%
County environment
and education
7.7%
Roads and transportation
27.4%Governmental services to
residents
4.7%
Administration 12.1%
Non-program3.8%
Public safety and legal
services
25.0%
Physical health and social
services
5.2%
Interest on long-term debt
0.8%
Rock Creek Marina
0.7%
Expenses by Function
13
Revenues for governmental activities increased approximately $171,000 over the prior
year. Capital grants, contributions and restricted interest decreased approximately $1.5 million,
or 67.9%, while property tax increased approximately $564,000, charges for service increased approximately $542,000 and state tax credits increased approximately $366,000 over the prior
year.
INDIVIDUAL MAJOR FUND ANALYSIS
As Clinton County completed the year, its governmental funds reported a combined fund
balance of approximately $16.26 million, an increase of approximately $347,000 over last year’s
total of approximately $15.92 million. The following are the major reasons for the changes in the fund balances of the major funds from the prior year:
General Fund expenditures exceeded revenues by approximately $222,000. The ending fund balance decreased approximately $358,000 from the prior year to
approximately $6,184,000. Revenues increased from the previous fiscal year
primarily due to an increase in state tax credits for the commercial and industrial
tax replacement, which was new during fiscal year 2015. General Fund expenditures increased over fiscal year 2014 primarily due to the purchase of new
voting equipment in the current fiscal year.
Special Revenue, Mental Health Fund expenditures totaled approximately $2,490,000, an increase of 41.7% over the prior year. The increase is due to the County
transferring a portion of its fund balance to the Eastern Iowa Mental Health and
Disabilities Services Region per the regional agreement. The Mental Health Fund
balance at year end increased approximately $303,000 over the prior year to $2,113,184 at June 30, 2015.
Special Revenue, Rural Services Fund revenues totaled approximately $2,145,000, an increase of 13.4% over the prior year. Expenditures totaled approximately
$726,000, a decrease of 6.8% from the prior year. Transfers out increased
approximately $356,000 over the prior year. The ending fund balance decreased
approximately $146,000 to approximately $226,000 at June 30, 2015.
Special Revenue, Secondary Roads Fund expenditures decreased approximately $110,000 from the prior year. Although overall expenditures decreased slightly, capital projects expenditures increased approximately $295,000, or 93.7%, over the
prior year. The Secondary Roads Fund balance at year end increased approximately
$504,000 over the prior year ending balance.
Debt Service Fund expenditures were approximately $1,371,000 in fiscal year 2015, a less than 1% decrease from the prior year. The Debt Service Fund balance at year
end increased approximately $10,000 over the prior year fund balance, primarily
due to an increase in state tax credits for the commercial and industrial tax replacement.
BUDGETARY HIGHLIGHTS
Over the course of the year, Clinton County amended its budget two times. The first
amendment was made in December 2014 and resulted in an increase in budgeted disbursements
in the governmental services to residents function for the purchase of new election equipment. Budgeted disbursements in the administration function were also increased for the salary and
benefits of a new employee and repairs to a damaged sewer line. Three other functions also had
modest increases in budgeted disbursements.
14
The second amendment was made in May 2015 and resulted in an increase in budgeted
disbursements in the roads and transportation function for tire replacements, erosion control
repairs due to flooding and roadway maintenance expenses. Budgeted disbursements in the administration function were also increased for the purchase and installation of two roof-top
heating and air conditioning units. Two other functions also had modest increases in budgeted
disbursements.
The County’s receipts were approximately $743,000 more than the amended budget.
Intergovernmental receipts were approximately $876,000 more than anticipated, largely due to an
increase in state tax credits for the commercial and industrial tax replacement as well as grant reimbursements for the two generator projects.
Total disbursements were $2,309,276, or 7.5%, less than the amended budget.
Disbursements for the public safety and legal services function were $709,535 less than budgeted due to less overtime, lower fuel costs and lower overall operating costs in fiscal year 2015.
Disbursements for the mental health function were $454,748 less than budgeted due to the
County becoming a member of the Eastern Iowa Mental Health and Disabilities Services Region.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At June 30, 2015, Clinton County had approximately $47.8 million invested in a broad
range of governmental activities capital assets, including public safety equipment, buildings, park
facilities, roads and bridges. This is a net increase (including additions and deletions) of
approximately $345,000, or 0.73%, over last year.
June 30,
2015 2014
Land 1,204$ 1,095
Construction in progress - 798
Buildings and improvements 8,086 6,953
Equipment and vehicles 5,449 4,646
Infrastructure 33,042 33,944
Total 47,781$ 47,436
(Expressed in Thousands)
Capital Assets of Governmental Activities at Year End
The County had depreciation expense of $2,905,500 for governmental activities for fiscal
year 2015 and total accumulated depreciation for governmental activities of $36,932,674 at
June 30, 2015.
The County’s fiscal year 2015 budget included approximately $767,000 for capital
projects, primarily for secondary road improvements. More detailed information about the
County’s capital assets is presented in Note 5 to the financial statements.
15
Long-Term Debt
At June 30, 2015, Clinton County had $6,368,083 of general obligation bonds and other
debt outstanding, compared to $7,438,872 at June 30, 2014, as shown below.
June 30,
2015 2014
General obligation bonds 6,235,000$ 7,380,000
Drainage warrants 133,083 58,872
Total 6,368,083$ 7,438,872
Outstanding Debt of Governmental Activities at Year-End
The Constitution of the State of Iowa limits the amount of general obligation debt counties
can issue to 5% of the assessed value of all taxable property within the County’s corporate limits.
Clinton County’s outstanding general obligation debt of approximately $6.4 million is significantly
below its constitutional debt limit of approximately $191 million. Additional information about
the County’s long-term liabilities is presented in Note 7 to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
Clinton County’s elected and appointed officials and citizens considered many factors
when setting the fiscal year 2016 budget, tax rates and the fees charged for various County
activities. One of those factors is the economy. At the end of the fiscal year, unemployment in the
County was 4.9% versus 5.2% a year ago. This compares with the State’s unemployment rate of
3.7% and the national rate of 5.3%.
These indicators were taken into account when adopting the budget for fiscal year 2016. Budgeted disbursements are expected to decrease approximately $1.5 million. If these estimates
are realized, the County’s budgetary operating balance is expected to increase approximately
$47,000 by the close of fiscal year 2016.
CONTACTING THE COUNTY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers and
creditors with a general overview of Clinton County’s finances and to show the County’s
accountability for the money it receives. If you have questions about this report or need
additional financial information, contact the Clinton County Budget Director, Lynn Kirchhoff,
Clinton County Administration Building, Clinton County Auditor’s Office, 1900 North Third Street,
Clinton Iowa 52733-2957.
Exhibit A
17
Clinton County
Statement of Net Position
June 30, 2015
Component Unit
Governmental Business Type Conservation
Activities Activities Total Foundation
Cash, cash equivalents and pooled investments 15,567,846$ 73,517 15,641,363 126,073
Receivables:
Property tax:
Delinquent 142,885 - 142,885 -
Succeeding year 17,127,000 - 17,127,000 -
Penalty and interest on property tax 383,841 - 383,841 -
Accounts 37,588 6,537 44,125 -
Accrued interest 38 - 38 -
Drainage assessments:
Delinquent 46,458 - 46,458 -
Suceeding year 34,146 - 34,146 -
Due from other governments 6,387,940 - 6,387,940 -
Inventories 394,443 - 394,443 -
Capital assets, net of accumulated depreciation 47,780,563 197,944 47,978,507 -
Internal balances 30,000 (30,000) - -
Total assets 87,932,748 247,998 88,180,746 126,073
Deferred Outflows of Resources
Pension related deferred outflows 1,176,041 7,048 1,183,089 -
Liabilities
Accounts payable 1,295,007 11,197 1,306,204 -
Accrued interest payable 16,240 - 16,240 -
Salaries and benefits payable 310,464 3,611 314,075 -
Due to other governments 95,294 414 95,708 -
Long-term liabilities:
Portion due or payable within one year:
General obligation bonds 1,170,000 - 1,170,000 -
Drainage warrants 98,937 - 98,937 -
Compensated absences 941,920 10,536 952,456 -
Portion due or payable after one year:
General obligation bonds 5,065,000 - 5,065,000 -
Drainage warrants 34,146 - 34,146 -
Compensated absences 123,037 - 123,037 -
Net pension liability 4,447,556 25,444 4,473,000
Net OPEB liability 842,893 - 842,893 -
Total liabilities 14,440,494 51,202 14,491,696 -
Deferred Inflows of Resources
Unavailable property tax revenue 17,127,000 - 17,127,000 -
Pension related deferred inflows 2,650,064 16,502 2,666,566 -
Total deferred inflows of resources 19,777,064 16,502 19,793,566 -
Net Position
Net investment in capital assets 44,775,563 197,944 44,973,507 -
Restricted for:
Nonexpendable:
Permanent Fund 5,000 - 5,000 -
Expendable:
Supplemental levy purposes 4,912,088 - 4,912,088 -
Mental health purposes 2,002,531 - 2,002,531 -
Rural services purposes 304,483 - 304,483 -
Secondary roads purposes 2,036,484 - 2,036,484 -
Debt service 2,826,974 - 2,826,974 -
Drainage purposes 50,500 - 50,500 -
Vietnam Veterans Memorial 7,978 - 7,978 -
Other 445,172 - 445,172 126,073
Unrestricted (2,475,542) (10,602) (2,486,144) -
Total net position 54,891,231$ 187,342 55,078,573 126,073
Assets
Primary Government
See notes to financial statements.
18
Clinton County
Statement of Activities
Year ended June 30, 2015
Operating Grants, Capital Grants,
Charges Contributions Contributions
for and Restricted and Restricted
Expenses Service Interest Interest
Functions/Programs:
Governmental activities:
Public safety and legal services 6,969,988$ 426,569 27,683 -
Physical health and social services 1,463,861 59,470 432,670 -
Mental health 3,520,736 126,186 1,354,909 -
County environment and education 2,155,748 175,533 74,686 194,433
Roads and transportation 7,665,031 39,164 4,137,133 344,101
Governmental services to residents 1,317,069 708,355 9,198 -
Administration 3,365,971 61,650 97,001 176,744
Non-program 1,070,121 1,196,298 10,820 -
Interest on long-term debt 224,786 - 1,720 -
Total governmental activities 27,753,311 2,793,225 6,145,820 715,278
Business type activities:
Rock Creek Marina 198,332 189,539 - -
Total primary government 27,951,643$ 2,982,764 6,145,820 715,278
Component Unit:
Conservation Foundation 58,323$ - 84,932 -
General Revenues:
Property and other county tax levied for:
General purposes
Debt service
Penalty and interest on property tax
State tax credits
Local option sales tax
Unrestricted investment earnings
Gain on disposition of capital assets
Miscellaneous
Total general revenues
Change in net position
Net position beginning of year, as restated
Net position end of year
Program Revenues
See notes to financial statements.
Exhibit B
19
Component
Unit
Business
Governmental Type Conservation
Activities Activities Total Foundation
(6,515,736) - (6,515,736)
(971,721) - (971,721)
(2,039,641) - (2,039,641)
(1,711,096) - (1,711,096)
(3,144,633) - (3,144,633)
(599,516) - (599,516)
(3,030,576) - (3,030,576)
136,997 - 136,997
(223,066) - (223,066)
(18,098,988) - (18,098,988)
- (8,793) (8,793)
(18,098,988) (8,793) (18,107,781)
26,609
16,127,323 - 16,127,323 -
1,293,553 - 1,293,553 -
138,988 - 138,988 -
1,134,511 - 1,134,511 -
1,511,708 - 1,511,708 -
102,240 - 102,240 427
227,550 - 227,550 -
223,057 - 223,057 -
20,758,930 - 20,758,930 427
2,659,942 (8,793) 2,651,149 27,036
52,231,289 196,135 52,427,424 99,037
54,891,231$ 187,342 55,078,573 126,073
Primary Government
Net (Expense) Revenue and
Change in Net Position
20
Clinton County
Balance Sheet Governmental Funds
June 30, 2015
Mental Rural
General Health Services
Assets
Cash, cash equivalents and pooled investments 6,251,587$ 2,226,520 233,228
Receivables:
Property tax:
Delinquent 106,740 19,619 5,338
Succeeding year 11,959,000 1,702,000 2,170,000
Penalty and interest on property tax 383,841 - -
Accounts 18,804 870 -
Accrued interest - - -
Drainage assessments:
Delinquent - - -
Succeeding year - - -
Interfund loan receivable 30,000 - -
Due from other governments 392,538 86,073 -
Inventories - - -
Total assets 19,142,510$ 4,035,082 2,408,566
Liabilities:
Accounts payable 307,166$ 148,005 1,537
Salaries and benefits payable 223,674 7,021 5,398
Due to other governments 35,675 49,448 -
Total liabilities 566,515 204,474 6,935
Deferred inflows of resources:
Unavailable revenues:
Succeeding year property tax 11,959,000 1,702,000 2,170,000
Other 433,226 15,424 5,198
Total deferred inflows of resources 12,392,226 1,717,424 2,175,198
Fund balances:
Nonspendable:
Inventories - - -
Vietnam Veterans Memorial - - -
Restricted for:
Supplemental levy purposes 2,238,930 - -
Mental health purposes - 2,113,184 -
Rural services purposes - - 226,433
Secondary roads purposes - - -
Drainage purposes - - -
Debt service - - -
Other purposes 356,985 - -
Unassigned 3,587,854 - -
Total fund balances 6,183,769 2,113,184 226,433
19,142,510$ 4,035,082 2,408,566
Special Revenue
Liabilities, Deferred Inflows of Resources
and Fund Balances
Total liabilities, deferred inflows of resources
and fund balances
See notes to financial statements.
Exhibit C
21
Secondary Debt
Roads Service Nonmajor Total
1,159,224 736,595 160,847 10,768,001
- 11,188 - 142,885
- 1,296,000 - 17,127,000
- - - 383,841
1,345 - 15 21,034
- - 38 38
- - 46,458 46,458
- - 34,146 34,146
- - - 30,000
528,707 5,325,431 55,191 6,387,940
394,443 - - 394,443
2,083,719 7,369,214 296,695 35,335,786
529,052 - 11,947 997,707
74,371 - - 310,464
10,171 - - 95,294
613,594 - 11,947 1,403,465
- 1,296,000 - 17,127,000
- 8,158 80,604 542,610
- 1,304,158 80,604 17,669,610
394,443 - - 394,443
- - 5,000 5,000
- - - 2,238,930
- - - 2,113,184
- - - 226,433
1,075,682 - - 1,075,682
- - 102,979 102,979
- 6,065,056 - 6,065,056
- - 96,165 453,150
- - - 3,587,854
1,470,125 6,065,056 204,144 16,262,711
2,083,719 7,369,214 296,695 35,335,786
Exhibit D
23
Clinton County
Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position
June 30, 2015
16,262,711$
47,780,563
542,610
4,519,099
Deferred outflows of resources 1,176,041$
Deferred inflows of resources (2,650,064) (1,474,023)
(12,739,729)
Net position of governmental activities (page 17) 54,891,231$
Total governmental fund balances (page 21)
Amounts reported for governmental activities in the Statement of Net
Position are different because:
Other long-term assets are not available to pay current year expenditures
and, therefore, are recognized as deferred inflows of resources in the
governmental funds.
The Internal Service Fund is used by management to charge the costs of
partial self funding of the County's health insurance benefit plan to individual
funds. A portion of the assets and liabilities of the Internal Service Fund are
included in governmental activities in the Statement of Net Position.
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmental funds. The
cost of assets is $84,713,237 and the accumulated depreciation is
$36,932,674.
Long-term liabilities, including bonds payable, drainage warrants payable,
compensated absences payable, other postemployment benefits payable, net
pension liability and accrued interest payable, are not due and payable in the
current year and, therefore, are not reported in the governmental funds.
Pension related deferred outflows of resources and deferred inflows of
resources are not due and payable in the current year and, therefore, are not
reported in the governmental funds, as follows:
See notes to financial statements.
24
Clinton County
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Year ended June 30, 2015
Mental Rural
General Health Services
Revenues:
Property and other county tax 11,916,318$ 2,158,625 2,030,968
Local option sales tax 559,332 - -
Interest and penalty on property tax 175,574 - -
Intergovernmental 2,844,803 508,682 113,920
Licenses and permits 18,904 - -
Charges for service 990,188 126,186 -
Use of money and property 217,783 - -
Miscellaneous 161,380 - -
Total revenues 16,884,282 2,793,493 2,144,888
Expenditures:
Operating:
Public safety and legal services 6,948,465 - 317,402
Physical health and social services 1,508,593 - -
Mental health 1,091,862 2,490,411 -
County environment and education 1,532,967 - 408,316
Roads and transportation - - -
Governmental services to residents 1,568,637 - -
Administration 4,446,301 - -
Non-program - - -
Debt service - - -
Capital projects 9,023 - -
Total expenditures 17,105,848 2,490,411 725,718
Excess (deficiency) of revenues
over (under) expenditures (221,566) 303,082 1,419,170
Other financing sources (uses):
Sale of capital assets 148,900 - -
Transfers in 5,000 - -
Transfers out (290,644) - (1,565,522)
Drainage warrants issued - - -
Total other financing sources (uses) (136,744) - (1,565,522)
Change in fund balances (358,310) 303,082 (146,352)
Fund balances beginning of year 6,542,079 1,810,102 372,785
Fund balances end of year 6,183,769$ 2,113,184 226,433
Special Revenue
See notes to financial statements.
Exhibit E
25
Secondary Debt
Roads Service Nonmajor Total
- 1,292,394 - 17,398,305
952,376 - - 1,511,708
- - - 175,574
4,170,428 86,738 35,749 7,760,320
29,640 - - 48,544
- - 8,148 1,124,522
- 1,720 304 219,807
27,940 - 114,738 304,058
5,180,384 1,380,852 158,939 28,542,838
- - 2,984 7,268,851
- - - 1,508,593
- - - 3,582,273
- - 164,649 2,105,932
5,922,243 - - 5,922,243
- - 895 1,569,532
- - - 4,446,301
- - 23,306 23,306
- 1,371,048 92,036 1,463,084
610,662 - - 619,685
6,532,905 1,371,048 283,870 28,509,800
(1,352,521) 9,804 (124,931) 33,038
- - - 148,900
1,856,166 - - 1,861,166
- - (5,000) (1,861,166)
- - 165,195 165,195
1,856,166 - 160,195 314,095
503,645 9,804 35,264 347,133
966,480 6,055,252 168,880 15,915,578
1,470,125 6,065,056 204,144 16,262,711
Exhibit F
26
Clinton County
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds to the Statement
of Activities
Year ended June 30, 2015
347,133$
Expenditures for capital assets 2,716,244$
Capital assets contributed by the State and others 453,201
Depreciation expense (2,905,500) 263,945
80,395
Property tax 22,571
Other (44,512) (21,941)
Issued (165,195)
Repaid 1,235,984 1,070,789
919,562
Compensated absences (6,152)
Other postemployment benefits (101,291)
Pension expense (331,655)
Interest on long-term debt 2,314 (436,784)
436,843
2,659,942$
Change in fund balances - Total governmental funds (page 25)
Amounts reported for governmental activities in the Statement of
Activities are different because:
Change in net position of governmental activities (page 19)
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 the governmental funds, as follows:
The Internal Service Fund is used by management to charge the costs
of partial self funding of the County's health insurance benefit plan to
individual funds. A portion of the change in net position of the Internal
Service Fund is reported with governmental activities.
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 repayments exceeded issuances, as follows:
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
and contributed capital assets exceeded depreciation expense in the
current year, as follows:
Because some revenues will not be collected for several months after
the County's year end, they are not considered available revenues and
are recognized as deferred inflows of resources in the governmental
funds, as follows:
In the Statement of Activities, the gain on the disposition of capital
assets is reported, whereas the governmental funds report the proceeds
from the disposition as an increase in financial resources.
The current year County share of IPERS contributions is reported as
expenditures in the governmental funds but is reported as deferred
outflows of resources in the Statement of Net Position.
See notes to financial statements.
Exhibit G
27
Clinton County
Statement of Net Position Proprietary Funds
June 30, 2015
Business Type Governmental
Activities Activities
Internal
Enterprise - Service -
Rock Employee
Creek Group
Marina Health
Assets
Cash and cash equivalents 57,864$ 4,815,498
Accounts receivable 6,483 16,608
Capital assets, net of accumulated depreciation 197,944 -
Total assets 262,291 4,832,106
Deferred Outflows of Resources
Pension related deferred outflows 7,048 -
Liabilities
Accounts payable 10,227 298,270
Salaries and benefits payable 3,611 -
Interfund loan payable 30,000 -
Due to other governments 414 -
Compensated absences 10,536 -
Net pension liability 25,444 -
Total liabilities 80,232 298,270
Deferred Inflows of Resources
Pension related deferred inflows 16,502 -
Net Position
Net investment in capital assets 197,944 -
Unrestricted (25,339) 4,533,836
Total net position 172,605 4,533,836
Adjustment to reflect the consolidation of Internal
Service Fund activities related to the Enterprise
Fund 14,737
Net position of business type activities 187,342$
See notes to financial statements.
Exhibit H
28
Clinton County
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
Year ended June 30, 2015
Business Type Governmental
Activities Activities
Internal
Enterprise - Service -
Rock Employee
Creek Group
Marina Health
Operating revenues:
Reimbursements from operating funds -$ 2,443,631
Reimbursements from employees and others - 250,971
Stop loss insurance recoveries - 699,939
Hotel/motel excise tax 907 -
Camping fees 91,079 -
Boat rental fees 8,530 -
Other recreational fees 40,298 -
Concession sales 40,856 -
Miscellaneous 135 -
Total operating revenues 181,805 3,394,541
Operating expenses:
Administrative fees - 41,429
Medical and health services - 2,787,993
Insurance premiums - 95,901
Salaries 74,605 -
Employee benefits 14,904 -
Supplies 28,520 -
Utilities 27,828 -
Repair and improvements 13,824 -
Depreciation 17,671 -
Miscellaneous 4,801 45,055
Total operating expenses 182,153 2,970,378
Operating income (loss) (348) 424,163
Non-operating income (expenses):
Interest income - 14,235
Miscellaneous (10,000) -
Net non-operating income (expenses) (10,000) 14,235
Net income (loss) (10,348) 438,398
Net position beginning of year, as restated 182,953 4,095,438
Net position end of year 172,605 4,533,836
Adjustment to reflect the consolidation of Internal
Service Fund activities related to the Enterprise
Fund 14,737
Net position of business type activities 187,342$
See notes to financial statements.
Exhibit I
29
Clinton County
Statement of Cash Flows Proprietary Funds
Year ended June 30, 2015
Business Type Governmental
Activities Activities
Internal
Enterprise - Service -
Rock Employee
Creek Group
Marina Health
Cash flows from operating activities:
Cash received from operating funds -$ 2,443,631
Cash received from employees and others - 250,971
Cash received from stop loss insurance recoveries - 693,387
Cash received from hotel/motel excise tax 878 -
Cash received from camping fees 87,639 -
Cash received from boat rental fees 10,200 -
Cash received from other recreational fees 40,006 -
Cash received from concession sales 39,579 -
Cash received from miscellaneous operations 363 -
Cash paid for administrative fees - (41,429)
Cash paid to employees for services (93,032) -
Cash paid to suppliers for services (72,120) (2,900,919)
Net cash provided by operating activities 13,513 445,641
Cash flows from investing activities:
Interest on investments - 14,235
Cash flows from non-capital financing activities:
Cash received from other funds 20,000 -
Net increase in cash and cash equivalents 33,513 459,876
Cash and cash equivalents beginning of year 24,351 4,355,622
Cash and cash equivalents end of year 57,864$ 4,815,498
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) (348)$ 424,163
Adjustments to reconcile operating income (loss) to net cash
provided by operating activities:
Depreciation 17,671 -
Changes in assets and liabilities:
Increase in accounts receivable (3,140) (6,552)
Increase decrease in accounts payable 2,653 28,030
Increase in salaries and benefits payable 442 -
Decrease in due to other governments 201 -
Decrease in compensated absences (305) -
Decrease in net pension liability (18,483) -
Increase in deferred outflows of resources (1,680) -
Increase in deferred inflows of resources 16,502 -
Total adjustments 13,861 21,478
Net cash provided by operating activities 13,513$ 445,641
See notes to financial statements.
Exhibit J
30
Clinton County
Statement of Fiduciary Assets and Liabilities Agency Funds
June 30, 2015
Assets
Cash and pooled investments:
County Treasurer 5,597,631$
Other County officials 80,815
Receivables:
Property tax:
Delinquent 578,032
Succeeding year 57,925,000
Accounts 39,469
Drainage assessments 4,033
Special assessments 1,450,797
Due from other governments 156,531
Total assets 65,832,308
Liabilities
Accounts payable 126,896
Salaries and benefits payable 42,880
Due to other governments 65,468,590
Trusts payable 47,958
Compensated absences 132,776
Stamped drainage warrants payable 13,208
Total liabilities 65,832,308
Net position -$
See notes to financial statements.
31
Clinton County
Notes to Financial Statements
June 30, 2015
(1) Summary of Significant Accounting Policies
Clinton County is a political subdivision of the State of Iowa and operates under the Home
Rule provisions of the Constitution of Iowa. The County operates under the Board of
Supervisors form of government. Elections are on a partisan basis. Other elected
officials operate independently with the Board of Supervisors. These officials are the Auditor, Treasurer, Recorder, Sheriff and Attorney. The County provides numerous
services to citizens, including law enforcement, health and social services, parks and
cultural activities, planning and zoning, roadway construction and maintenance and
general administrative services.
The County’s financial statements are prepared in conformity with U.S. generally accepted
accounting principles as prescribed by the Governmental Accounting Standards Board.
A. Reporting Entity
For financial reporting purposes, Clinton County has included all funds,
organizations, agencies, boards, commissions and authorities. The County 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 County are such that exclusion would cause the
County’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 County 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 County.
These financial statements present Clinton County (the primary government) and
its component units. The component units discussed below are included in the
County’s reporting entity because of the significance of their operational or
financial relationships with the County.
Discretely Presented Component Unit
The Clinton County Conservation Foundation, established under the Nonprofit
Corporation Act, Chapter 504A of the Code of Iowa, is legally separate from the
County but has the potential to provide specific benefits to the County Conservation Board. The Foundation is governed by a five-member board. In
accordance with criteria set forth by the Governmental Accounting Standards
Board, the Foundation meets the definition of a component unit which should
be discretely presented.
32
Blended Component Units – Certain drainage districts have been established
pursuant to Chapter 468 of the Code of Iowa for the drainage of surface waters
from agricultural and other lands or the protection of such lands from overflow. Although these districts are legally separate from the County, they are
controlled, managed and supervised by the Clinton County Board of
Supervisors. The drainage districts are reported as a Special Revenue Fund.
The County has other drainage districts which are managed and supervised by
elected trustees. The financial transactions of these districts are reported as
Agency Funds. Financial information of the individual drainage districts can be obtained from the Clinton County Auditor’s Office.
Jointly Governed Organizations – The County also participates in several jointly
governed organizations that provide goods or services to the citizenry of the
County but do not meet the criteria of a joint venture since there is no ongoing
financial interest or responsibility by the participating governments. The County Board of Supervisors are members of or appoint representatives to the
following boards and commissions: County Assessor’s Conference Board,
County Emergency Management Commission, County Public Safety
Commission and the County Joint E911 Service Board. Financial transactions
of these organizations are included in the County’s financial statements only to
the extent of the County’s fiduciary relationship with the organization and, as such, are reported in the Agency Funds of the County.
The County also participates in the following jointly governed organizations
established pursuant to Chapter 28E of the Code of Iowa: County Case
Management Services, Clinton County Communications Commission, Eastern
Iowa Mental Health and Disabilities Services Region and the Clinton County Area Solid Waste Agency.
B. 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 County and its component units. For the most part, the effect of interfund
activity has been removed from these statements. Governmental activities are supported by property tax, intergovernmental revenues and other nonexchange
transactions.
The Statement of Net Position presents the County’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 the following categories.
Net investment in capital assets consists of capital assets, net of
accumulated depreciation and reduced by outstanding balances for
bonds and other debt attributable to the acquisition, construction or
improvement of those assets.
Nonexpendable restricted net position is subject to externally imposed
stipulations which require it to be maintained permanently by the County, including the County’s Permanent Fund.
Expendable restricted net position results when constraints placed on net
position use are either externally imposed or are imposed by law through
constitutional provisions or enabling legislation. Enabling legislation did
not result in any restricted net position.
33
Unrestricted net position consists of net position not meeting the definition
of the preceding categories. Unrestricted net position is often subject to
constraints 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 funds, proprietary funds and fiduciary funds, even though the
latter are excluded from the government-wide financial statements. Major
individual governmental funds are reported as separate columns in the fund
financial statements. All remaining governmental funds are aggregated and
reported as nonmajor governmental funds.
The County reports the following major governmental funds:
The General Fund is the general operating fund of the County. All general tax revenues 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:
The Mental Health Fund is used to account for property tax and other
revenues to be used to fund mental health, intellectual disabilities
and developmental disabilities services.
The Rural Services Fund is used to account for property tax and other
revenues to provide services which are primarily intended to benefit
those persons residing in the county outside of incorporated city
areas.
The Secondary Roads Fund is used to account for the road use tax allocation from the State of Iowa, required transfers from the General
Fund and the Special Revenue, Rural Services Fund and other
revenues to be used for secondary roads construction and
maintenance.
The Debt Service Fund is utilized to account for property tax and other
revenues to be used for the payment of interest and principal on the
County’s general long-term debt. A portion of the fund also accounts for
the unpaid balance due on the monies advanced to the City of Clinton by the County pursuant to a Chapter 28E agreement for the City-managed
Lincolnway Railport Project.
Additionally, the County reports the following funds:
An Enterprise Fund is utilized to account for the acquisition, operation
and maintenance of governmental facilities and services which are
supported by user charges.
34
An Internal Service Fund is utilized to account for the financing of goods
or services purchased by one department of the County and provided to
other departments or agencies on a cost reimbursement basis.
Fiduciary Funds – Agency Funds are used to account for assets held by
the County as an agent for individuals, private organizations, certain jointly governed organizations, other governmental units and/or other
funds.
C. Measurement Focus and Basis of Accounting
The government-wide, proprietary fund and fiduciary 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 year or soon enough thereafter to pay liabilities of the current year. For
this purpose, the County 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 County.
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 recorded as expenditures only when
payment is due. Capital asset acquisitions are reported as expenditures in
governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.
Under the terms of grant agreements, the County 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 County’s policy to first apply cost-reimbursement grant resources to such
programs, followed by categorical block grants and then by general revenues.
When an expenditure is incurred in governmental funds which can be paid using
either restricted or unrestricted resources, the County’s policy is to pay the
expenditure from restricted fund balance and then from less-restrictive
classifications – committed, assigned and then unassigned fund balances.
Proprietary funds distinguish operating revenues and expenses from non-
operating 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 County’s Internal Service Fund is charges to customers for sales and services. Operating expenses for the Internal Service Fund include the cost
of services and administrative expenses. All revenues and expenses not meeting
this definition are reported as non-operating revenues and expenses.
35
The County maintains its financial records on the cash basis. The financial
statements of the County are prepared by making memorandum adjusting
entries to the cash basis financial records.
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources
and Fund Equity
The following accounting policies are followed in preparing the financial
statements:
Cash, Cash Equivalents and Pooled Investments – The cash balances of
most County funds are pooled and invested. Interest earned on
investments is recorded in the General Fund unless otherwise provided
by law. Investments are stated at fair value except for 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 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 – Property tax in governmental funds is 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 the tax asking is certified by the County Board of
Supervisors. Delinquent property tax receivable represents unpaid taxes for the current and prior years. The succeeding year property tax
receivable represents taxes certified by the Board of Supervisors to be
collected in the next fiscal year for the purposes set out in the budget for
the next fiscal year. By statute, the Board of Supervisors is required to
certify its budget in March of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the
following fiscal year becomes effective on the first day of that year.
Although the succeeding year property tax receivable has been recorded,
the related revenue is deferred in both the government-wide and fund
financial statements and will not be recognized as revenue until the year
for which it is levied.
Property tax revenue recognized in these funds become due and collectible
in September and March of the fiscal year with a 1.5% per month
penalty for delinquent payments; is based on January 1, 2013 assessed
property valuations; is for the tax accrual period July 1, 2014 through
June 30, 2015 and reflects the tax asking contained in the budget certified by the County Board of Supervisors in March 2014.
Interest and Penalty on Property Tax Receivable – Interest and penalty on
property tax receivable represents the amount of interest and penalty
that was due and payable but has not been collected.
Drainage Assessments Receivable – Drainage assessments receivable
represent amounts assessed to individuals for work done on drainage districts which benefit their property. These assessments are payable by
individuals in not less than 10 nor more than 20 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. Delinquent drainage assessments receivable represent assessments which are due and payable but have not been collected.
Succeeding year drainage assessments receivable represents remaining
assessments which are payable but not yet due.
36
Special Assessments Receivable – Special assessments receivable
represent the amounts due from individuals for work done which
benefits their property. These assessments are payable by individuals in not less than 10 nor more than 20 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. Special
assessments receivable represent assessments which are due and
payable but have not been collected.
Interfund Loan Receivable and Payable – Interfund loan receivable and payable represent the amount loaned between funds.
Due from Other Governments – Due from other governments represents
amounts due from the State of Iowa, various shared revenues, grants
and reimbursements from other governments.
Inventories – Inventories are valued at cost using the first-in, first-out method. Inventories consist of expendable supplies held for
consumption. Inventories of governmental funds are recorded as
expenditures when consumed rather than when purchased.
Capital Assets – Capital assets, which include property, equipment and
vehicles, intangibles 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 County), are reported in
the governmental activities column in the government-wide 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 that do not add to the value of the asset or materially extend
asset lives are not capitalized. Reportable capital assets are defined by
the County as assets with initial, individual costs in excess of the
following thresholds and estimated useful lives in excess of two years.
Amount
Intangibles 150,000$
Infrastructure 50,000
Land, buildings and improvements 25,000
Equipment and vehicles 5,000
Asset Class
Capital assets of the County are depreciated using the straight line
method over the following estimated useful lives:
Estimated
Useful lives
(In Years)
Buildings 10 - 50
Building improvements 20 - 50
Infrastructure 10 - 65
Intangibles 5 - 20
Equipment 2 - 30
Vehicles 3 - 10
Asset Class
37
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 County after the
measurement date but before the end of the County’s reporting period.
Due to Other Governments – Due to other governments represents taxes
and other revenues collected by the County and payments for services
which will be remitted to other governments.
Trusts Payable – Trusts payable represents amounts due to others which
are held by various County officials in fiduciary capacities until the
underlying legal matters are resolved.
Compensated Absences – County employees accumulate a limited amount
of earned but unused compensatory and vacation hours for subsequent
use or for payment upon termination, death or retirement. A liability is recorded when incurred in the government-wide, proprietary fund and
fiduciary fund financial statements. A liability for these amounts is
reported in governmental fund financial statements only for employees
who have resigned or retired. The compensated absences liability has
been computed based on rates of pay in effect at June 30, 2015. The compensated absences liability attributable to the governmental
activities will be paid primarily by the General Fund and the Special
Revenue, Mental Health, Rural Services and Secondary Roads Funds.
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 activities or 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.
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 represents
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.
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
38
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 receivable that will not be recognized until
the year for which it is levied and the unamortized portion of the net
difference between projected and actual earnings on pension plan
investments.
Fund Equity – In the governmental fund financial statements, fund
balances are classified as follows:
Nonspendable – Amounts which cannot be spent 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 are imposed by law through constitutional provisions or
enabling legislation.
Unassigned – All amounts not included in the preceding classifications.
Net Position – The net position of the Internal Service, Employee Group
Health Fund is designated for anticipated future catastrophic losses of
the County.
E. Budgets and Budgetary Accounting
The budgetary comparison and related disclosures are reported as Required
Supplementary Information. During the year ended June 30, 2015,
disbursements in one department exceeded the amount appropriated.
(2) Cash, Cash Equivalents and Pooled Investments
The County’s deposits in banks at June 30, 2015 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 County 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 Board of Supervisors; 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 County had no investments meeting the disclosure requirements of Governmental
Accounting Standards Board Statement No. 3, as amended by Statement No. 40.
39
(3) Interfund assets and liabilities
The detail of interfund receivables and payables at June 30, 2015 is as follows:
Receivable Fund Payable Fund Amount
General Enterprise:
Rock Creek Marina 30,000$
The County transferred funds from the General Fund to supplement operations of the
Enterprise, Rock Creek Marina Fund.
(4) Interfund Transfers
The detail of interfund transfers for the year ended June 30, 2015 is as follows:
Transfer to Transfer from Amount
Special Revenue:
Secondary Roads General 290,644$
Special Revenue:
Rural Services 1,565,522
1,856,166
General Special Revenue:
County Recorder's Records
Management 5,000
Total 1,861,166$
Transfers generally move resources from the fund statutorily required to collect the
resources to the fund statutorily required to expend the resources.
(5) Capital Assets
Governmental activities capital assets activity for the year ended June 30, 2015 was as
follows:
Balance Balance
Beginning End
of Year Increases Decreases of Year
Capital assets not being depreciated:
Land 1,095,133$ 109,100 - 1,204,233
Construction in progress, road network - 1,036,458 1,036,458 -
Construction in progress, other 797,552 579,060 1,376,612 -
Total capital assets not being depreciated 1,892,685 1,724,618 2,413,070 1,204,233
Capital assets being depreciated:
Buildings and improvements 11,325,923 1,376,612 135,412 12,567,123
Equipment and vehicles 10,930,331 1,601,460 566,768 11,965,023
Infrastructure, road network 57,940,400 1,036,458 - 58,976,858
Total capital assets being depreciated 80,196,654 4,014,530 702,180 83,509,004
Less accumulated depreciation for:
Buildings and improvements 4,372,452 243,947 135,412 4,480,987
Equipment and vehicles 6,283,804 723,014 490,530 6,516,288
Infrastructure, road network 23,996,860 1,938,539 - 25,935,399
Total accumulated depreciation 34,653,116 2,905,500 625,942 36,932,674
Total capital assets being depreciated, net 45,543,538 1,109,030 76,238 46,576,330
Governmental activities capital assets, net 47,436,223$ 2,833,648 2,489,308 47,780,563
40
Depreciation expense was charged to the following functions:
Governmental activities:
Public safety and legal services 142,921$
Physical health and social services 1,061
Mental health 565
County environment and education 133,238
Roads and transportation 2,346,695
Governmental services to residents 35,680
Administration 245,340
Total depreciation expense - governmental activities 2,905,500$
Business type activities capital assets activity for the year ended June 30, 2015 was as
follows:
Balance Balance
Beginning End
of Year Increases Decreases of Year
Capital assets being depreciated:
Buildings 283,284$ - - 283,284
Equipment 159,731 - - 159,731
Infrastructure 59,211 - - 59,211
Total capital assets being depreciated 502,226 - - 502,226
Less accumulated depreciation for:
Buildings 140,588 10,931 - 151,519
Equipment 86,812 6,740 - 93,552
Infrastructure 59,211 - - 59,211
Total accumulated depreciation 286,611 17,671 - 304,282
Business type activities capital assets, net 215,615$ (17,671) - 197,944
Total depreciation expense - business type activities 17,671$
(6) Due to Other Governments
The County purchases services from other governmental units and also acts as a fee and tax collection agent for various governmental units. Tax collections are remitted to those
governments in the month following collection. A summary of amounts due to other
governments at June 30, 2015 is as follows:
Fund Description Amount
General Services 35,675$
Special Revenue:
Mental Health Services 49,448
Secondary Roads Services 10,171
59,619
Total for governmental funds 95,294$
Agency:
County Assessor Collections 955,065$
City Assessor 1,059,951
Schools 31,927,124
Community Colleges 2,033,439
Corporations 23,649,083
Townships 445,671
All other 5,398,257
Total for agency funds 65,468,590$
41
(7) Long-Term Liabilities
A summary of changes in governmental activities long-term liabilities for the year ended
June 30, 2015 is as follows:
General Compen- Net Net
Obligation Drainage sated Pension OPEB
Bonds Warrants Absences Liability Liability Total
Balance beginning
of year, as restated 7,380,000$ 58,872 1,058,805 7,415,626 741,602 16,654,905
Increases - 165,195 900,427 - 105,194 1,170,816
Decreases 1,145,000 90,984 894,275 2,968,070 3,903 5,102,232
Balance end of year 6,235,000$ 133,083 1,064,957 4,447,556 842,893 12,723,489
Due within one year 1,170,000$ 98,937 941,920 - - 2,210,857
A summary of changes in business type activities long-term liabilities for the year ended
June 30, 2015 is as follows:
Compen- Net
sated Pension
Absences Liability Total
Balance beginning of year,
as restated 10,841$ 43,927 54,768
Increases 12,248 - 12,248
Decreases 12,553 18,483 31,036
Balance end of year 10,536$ 25,444 35,980
Due within one year 10,536$ - 10,536
General Obligation Bonds
A summary of the County’s June 30, 2015 general obligation bonded indebtedness is as
follows:
Year Road and Bridge Construction
Ending Interest Interest
June 30, Rates Principal Interest Rates Principal Interest
2016 3.20% 125,000$ 18,730 2.60% 440,000$ 75,655
2017 3.50 130,000 14,730 2.85 450,000 64,215
2018 3.60 135,000 10,180 3.00 465,000 51,390
2019 3.80 140,000 5,320 3.20 480,000 37,440
2020 - - 3.45 640,000 22,080
Total 530,000$ 48,960 2,475,000$ 250,780
Series 2010B
Issued April 1, 2010
Year Lincolnway Railport Industrial Park Total
Ending Interest
June 30, Rates Principal Interest Principal Interest Total
2016 2.75% 605,000$ 100,500 1,170,000 194,885 1,364,885
2017 3.00 625,000 83,863 1,205,000 162,808 1,367,808
2018 3.00 645,000 65,113 1,245,000 126,683 1,371,683
2019 3.25 665,000 45,763 1,285,000 88,523 1,373,523
2020 3.50 690,000 24,150 1,330,000 46,230 1,376,230
Total 3,230,000$ 319,389 6,235,000 619,129 6,854,129
Series 2009A
Issued July 15, 2009
Series 2010A
Issued April 1, 2010
Road and Bridge Construction
42
During the year ended June 30, 2015, the County retired $1,145,000 of general obligation
bonds.
Pursuant to a Chapter 28E agreement between the County and the City of Clinton, Iowa, the County is participating in the City-managed Lincolnway Railport Project by
contributing $6,000,000 of the series 2010B general obligation bond proceeds to the City
of Clinton to be used solely for the purpose designated in the Clinton County Lincolnway
Railport urban renewal area. The City is to repay the County from a portion of the sale
of property in the Industrial Park. If the County has not been reimbursed by December
2020, the City will reimburse the County for any unpaid balance due on the monies advanced by the County for the project. As of June 30, 2015, $6,000,000 of bond
proceeds had been advanced to the City and repayments totaling $674,569 have been
received.
Drainage Warrants
Drainage warrants are warrants which are legally drawn on drainage district funds but are not paid for lack of funds, in accordance with Chapter 74 of the Code of Iowa. The
warrants bear interest at rates in effect at the time the warrants are first presented.
Warrants will be paid as funds are available.
Drainage warrants are paid from the Special Revenue, Drainage Districts Fund solely from
drainage assessments against benefited properties.
(8) Pension Plan
Plan Description - IPERS membership is mandatory for employees of the County, except
for those covered by another retirement system. Employees of the County are provided
with pensions through a cost-sharing multiple employer defined benefit pension plan
administered by the Iowa Public Employees’ Retirement System (IPERS). IPERS issues a
stand-alone 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.
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.)
Sheriffs, deputies and protection occupation members may retire at normal retirement
age, which is generally at age 55. Sheriffs, deputies and protection occupation members may retire any time after reaching age 50 with 22 or more years of covered employment.
The formula used to calculate a sheriff’s, deputy’s and protection occupation member’s
monthly IPERS benefit includes:
43
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% for each
month the member receives benefits before the member’s earliest normal retirement age.
For service earned on or after July 1, 2012, the reduction is 0.50% for each month 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 - Effective July 1, 2012, as a result of a 2010 law change, the 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%. 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.
In fiscal year 2015, pursuant to the required rate, Regular members contributed 5.95% of
covered payroll and the County contributed 8.93% for a total rate of 14.88%. The
Sheriff, deputies and the County each contributed 9.88% of covered payroll for a total
rate of 19.76%. Protection occupation members contributed 6.76% of covered payroll
and the County contributed 10.14% for a total rate of 16.90%.
The County’s contributions to IPERS for the year ended June 30, 2015 were $925,288.
Net Pension Liability, Pension Expense, Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions - At June 30, 2015, the County reported a
liability of $4,473,000 for its proportionate share of the net pension liability. The net
pension liability was measured as of June 30, 2014 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that
date. The County’s proportion of the net pension liability was based on the County’s
share of contributions to IPERS relative to the contributions of all IPERS participating
employers. At June 30, 2014, the County’s collective proportion was 0.1127863%, which
was a decrease of 0.017133% from its collective proportion measured as of June 30,
2013.
44
For the year ended June 30, 2015, the County recognized pension expense of $333,720.
At June 30, 2015, the County reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual experience 50,942$ 74,046$
Changes of assumptions 206,859 72,954
Net difference between projected and actual
earnings on pension plan investments - 2,470,831
Changes in proportion and differences between
County contributions and the County's proportionate
share of contributions - 48,735
County contributions subsequent to the
measurement date 925,288 -
Total 1,183,089$ 2,666,566$
$925,288 reported as deferred outflows of resources related to pensions resulting from
the County contributions subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ending June 30, 2016. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Year
Ending
June 30, Amount
2016 (603,206)$
2017 (603,206)
2018 (603,206)
2019 (603,206)
2020 4,059
Total (2,408,765)$
There were no non-employer contributing entities to IPERS.
Actuarial Assumptions - The total pension liability in the June 30, 2014 actuarial valuation was determined using the following actuarial assumptions applied to all
periods included in the measurement:
Rate of inflation 3.00% per annum.
(effective June 30, 2014)
Rates of salary increase 4.00 to 17.00% average, including inflation.
(effective June 30, 2010) Rates vary by membership group.
Long-term investment rate of return 7.50% compounded annually, net of investment
(effective June 30, 1996) expense, including inflation.
The actuarial assumptions used in the June 30, 2014 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.
45
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 Real Rate of Return
US Equity 23% 6.31%
Non US Equity 15 6.76
Private Equity 13 11.34
Real Estate 8 3.52
Core Plus Fixed Income 28 2.06
Credit Opportunities 5 3.67
TIPS 5 1.92
Other Real Assets 2 6.27
Cash 1 (0.69)
Total 100%
Discount Rate - The discount rate used to measure the total pension liability was 7.50%.
The projection of cash flows used to determine the discount rate assumed employee
contributions will be made at the contractually required rate and contributions from the
County 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 to 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 County’s Proportionate Share of the Net Pension Liability to Changes in
the Discount Rate - The following presents the County’s proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the
County’s proportionate share of the net pension liability would be if it were calculated
using a discount rate 1% lower (6.50%) or 1% higher (8.50%) than the current rate.
1% Discount 1%
Decrease Rate Increase
(6.50%) (7.50%) (8.50%)
County's proportionate share of
the net pension liability (asset) 10,110,702$ 4,473,000$ (280,433)$
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.
46
(9) Other Postemployment Benefits (OPEB)
Plan Description – The County operates a single-employer health benefit plan which
provides medical/prescription drug benefits for employees, retirees and their spouses. There are 184 active and 4 retired members in the plan. Retired participants must be
age 55 or older at retirement.
The medical/prescription drug benefits are provided through a partially self-funded
medical plan administered by Wellmark. Retirees under age 65 pay the same premium for the medical/prescription drug benefits as active employees, which results in an
implicit rate subsidy and an OPEB liability.
Funding Policy – The contribution requirements of plan members are established and may
be amended by the County. The County currently finances the retiree benefit plan on a pay-as-you-go basis.
Annual OPEB Cost and Net OPEB Obligation – The County’s annual OPEB cost is
calculated based on the annual required contribution (ARC) of the County, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents
a level of funding which, 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 County’s annual OPEB cost for the year
ended June 30, 2015, the amount actually contributed to the plan and changes in the
County’s net OPEB obligation:
Annual required contribution 130,610$
Interest on net OPEB obligation 18,554
Adjustment to annual required contribution (43,970)
Annual OPEB cost 105,194
Contributions made (3,903)
Increase in net OPEB obligation 101,291
Net OPEB obligation beginning of year 741,602
Net OPEB obligation end of year 842,893$
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, 2015.
For the year ended June 30, 2015, the County contributed $3,903 to the medical plan.
Plan members eligible for benefits contributed $26,196, or 87% of the premium costs.
The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan and the net OPEB obligation are summarized as follows:
Year Percentage of Net
Ended Annual Annual OPEB OPEB
June 30, OPEB Cost Cost Contributed Obligation
2013 109,291$ 11.31% 641,920$
2014 104,324 4.45 741,602
2015 105,194 3.71 842,893
47
Funded Status and Funding Progress – As of July 1, 2013, the most recent actuarial
valuation date for the period July 1, 2014 through June 30, 2015, the actuarial accrued
liability was $895,637, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $895,637. The covered payroll (annual payroll of
active employees covered by the plan) was approximately $9,787,000 and the ratio of the
UAAL to covered payroll was 9.16%. As of June 30, 2015, there were no trust fund
assets.
Actuarial Methods and Assumptions – Actuarial valuations of an ongoing plan involve
estimates of the value of reported amounts and assumptions about the probability of
occurrence of events far into the future. Examples include assumptions about future
employment, mortality and the health care 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 for the
Retiree Health Plan, presented as Required Supplementary Information in the section
following the Notes to Financial Statements, presents multiyear trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative
to the actuarial accrued liabilities for benefits
Projections of benefits for financial reporting purposes are based on the plan as understood by the employer and the plan members and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit
costs between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques 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, 2013 actuarial valuation date, the frozen entry age actuarial cost method was used. The actuarial assumptions include a 2.5% discount rate based on the
County’s funding policy. The projected annual medical trend rate is 6%.
Mortality rates are from the 94 Group Annuity Mortality Table, applied on a gender-specific
basis. Annual retirement and termination probabilities were developed from the
retirement probabilities from the IPERS Actuarial Report as of June 30, 2010 and
applying the termination factors used in the IPERS Actuarial Report as of June 30, 2010.
Projected claim costs of the medical plan are $513 per month for retirees less than age 65
and $1,177 per month for family plans of retirees less than age 65. All coverage ceases
when the retiree attains age 65. Therefore, claim costs are not calculated for retirees
over the age of 65. The actuary made no payroll assumptions as to the future because benefits are not payroll related. The UAAL is being amortized as a level percentage of
projected payroll expense on an open basis over 30 years.
(10) Risk Management
The County is a member of the Iowa Communities Assurance Pool, as allowed by
Chapter 331.301 of the Code of Iowa. The Iowa Communities Assurance Pool (Pool) is a
local government risk-sharing pool whose 727 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.
48
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%
of 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 County’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
County’s contributions to the Pool for the year ended June 30, 2015 were $313,153.
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 County’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 County’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 County’s risk-sharing certificate, or in the event a
casualty claim, property loss or series of 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 County does not report a liability for losses in excess of reinsurance or excess risk-
sharing recoveries unless it is deemed probable such losses have occurred and the
amount of such loss can be reasonably estimated. Accordingly, at June 30, 2015, no liability has been recorded in the County’s financial statements. As of June 30, 2015,
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 claim 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 County also carries commercial insurance purchased from other insurers for coverage
associated with workers compensation and employee blanket bond in the amount of
$1,000,000 and $100,000, respectively. The County 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.
49
(11) Employee Health Insurance Plan
The Internal Service, Employee Group Health Fund was established to account for the
partial self-funding of the County’s health insurance benefit plan. The plan is funded by both employee and County contributions and is administered through a service
agreement with Wellmark. The agreement is subject to automatic renewal provisions.
The County assumes liability for claims up to the individual stop loss limitation of
$70,000. Claims in excess of coverage are insured through purchase of stop loss
insurance.
Monthly payments of service fees and plan contributions to the Employee Group Health Fund are recorded as expenditures from the operating funds. Under the administrative
services agreement, monthly payments of service fees and claims processed are paid to
Wellmark from the Employee Group Health Fund. The County’s contribution for the
year ended June 30, 2015 was $2,443,631.
Amounts payable from the Employee Group Health Fund at June 30, 2015 total $298,270, which is for incurred but not reported (IBNR) and reported but not paid claims. The
amounts are based on actuarial estimates of the amounts necessary to pay prior-year
and current-year claims and to establish a reserve for catastrophic losses. That reserve
was $4,533,836 at June 30, 2015 and is reported as a designation of the Internal
Service, Employee Group Health Fund net position. A liability has been established
based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires a liability for claims be reported if information prior to the
issuance of the financial statements indicates it is probable a liability has been incurred
at the date of the financial statements and the amount of the loss can be reasonably
estimated. Settlements have not exceeded the stop-loss coverage in any of the past three
years. A reconciliation of changes in the aggregate liability for claims for the current year is as follows:
Unpaid claims beginning of year 270,240$ -
Incurred claims (including claims incurred but
not reported at June 30, 2015) 2,787,993
Payment on claims during the year 2,759,963
Unpaid claims end of year 298,270$
50
(12) Jointly Governed Organization
The County participates in the Clinton County Communications Commission, a jointly
governed organization formed pursuant to the provisions of Chapter 28E of the Code of
Iowa. The parties to the 28E organization are the County, the cities of Camanche,
Clinton and DeWitt and the Clinton County Emergency Management Commission. Financial transactions of this organization are included in the County’s financial
statements as part of the Other Agency Funds because of the County’s fiduciary
relationship with the organization. The following financial data is for the year ended
June 30, 2015:
Additions:
Property tax from County general supplemental levy 1,004,237$
Deductions:
Salaries 617,856$
Benefits 269,055
Office supplies 1,401
Travel 2,991
Uniforms 1,800
Telephone 3,029
Technology services 18,110
Machinery and mechanical equipment 14,256
Insurance 4,831
Equipment/furniture 1,349
Miscellaneous 11,140 945,818
Net 58,419
Balance beginning of year 801,555
Balance end of year 859,974$
51
(13) Early Childhood Iowa Area Board
The County is the fiscal agent for the Early Childhood Iowa Area Board, an organization
formed pursuant to the provisions of Chapter 256I of the Code of Iowa. The Area
Board receives state grants to administer early childhood and school ready programs.
Financial transactions of the Area Board are included in the County’s financial statements as part of the Other Agency Funds because of the County’s fiduciary
relationship with the organization. The Area Board’s financial data for the year ended
June 30, 2015 is as follows:
Early
Childhood
School
Ready Total
Revenues:
State of Iowa grants:
Early childhood 179,610$ - 179,610
Family support and parent education - 244,131 244,131
Preschool support for low-income families - 108,089 108,089
Quality improvement - 53,555 53,555
Allocation for administration 9,453 13,369 22,822
Other grant programs - 26,214 26,214
Total state grants 189,063 445,358 634,421
Interest on investments 114 118 232
Total revenues 189,177 445,476 634,653
Expenditures:
Program services:
Early childhood 185,555 - 185,555
Family support and parent education - 257,693 257,693
Preschool support for low income families - 109,028 109,028
Quality improvement - 54,844 54,844
Other program services - 45,921 45,921
Total program services 185,555 467,486 653,041
Administration 3,981 12,566 16,547
Total expenditures 189,536 480,052 669,588
Change in fund balance (359) (34,576) (34,935)
Fund balance beginning of year 24,845 72,261 97,106
Fund balance end of year 24,486$ 37,685 62,171
A finding related to the operations of the Early Childhood Iowa Area Board is included
as item II-C-15 in the Schedule of Findings and Questioned Costs.
52
(14) County Financial Information Included in the Eastern Iowa Mental Health and
Disabilities Services Region
The Eastern Iowa Mental Health and Disabilities Services Region, a jointly governed
organization formed pursuant to the provisions of Chapter 28E of the Code of Iowa
which became effective July 10, 2014, includes the following member counties:
Cedar County, Clinton County, Jackson County, Muscatine County, and Scott
County. The financial activity of the County’s Special Revenue, Mental Health
Fund is included in the Eastern Iowa Mental Health and Disabilities Services
Region for the year ended June 30, 2015, as follows:
Revenues:
Property and other county tax 2,158,625$
Intergovernmental:
State tax credits 147,697$
Social services block grant 360,985 508,682
Charges for service 126,186
Total revenues 2,793,493
Expenditures:
Services to persons with:
Mental illness 1,137,646
Intellectual disabilities 19,040
Other developmental disabilities 65,135 1,221,821
General administration:
Direct administration 168,686
Distribution to regional fiscal agent 1,099,904 1,268,590
Total expenditures 2,490,411
Excess of revenues over expenditures 303,082
Fund balance beginning of year 1,810,102
Fund balance end of year 2,113,184$
53
(15) Accounting Change/Restatement
Governmental Accounting Standards Board Statement No. 68, Accounting and
Financial Reporting for Pensions – an Amendment of GASB statement No. 27, was
implemented during fiscal year 2015. The revised requirements establish new
financial reporting requirements for state and local governments which provide their
employees with pension benefits, including additional note disclosures and required
supplementary information. In addition, GASB Statement No. 68 requires a state or
local government employer to recognize a net pension liability and changes in the net
pension liability, deferred outflows of resources and deferred inflows of resources
which arise from other types of events related to pensions. During the transition year,
as permitted, beginning balances for deferred outflows of resources and deferred
inflows of resources will not be reported, except for deferred outflows of resources
related to contributions made after the measurement date of the beginning net
pension liability which is required to be reported by Governmental Accounting
Standards Board Statement No. 71, Pension Transition for Contributions Made
Subsequent to the Measurement Date. Beginning net position for governmental and
business type activities was restated to retroactively report the beginning net pension
liability and deferred outflows of resources related to contributions made after the
measurement date, as follows:
Business Enterprise -
Governmental Type Rock Creek
Activities Activities Marina
Net position June 30, 2014, as previously reported 58,740,775$ 234,694 221,512
Net pension liability at June 30, 2014 (7,415,626) (43,927) (43,927)
Deferred outflows of resources
related to prior year contibutions made after
the June 30, 2013 measurement date 906,140 5,368 5,368
Net position July 1, 2014, as restated 52,231,289$ 196,135 182,953
56
Clinton County
Budgetary Comparison Schedule of Receipts, Disbursements and Changes in Balances –
Budget and Actual (Cash Basis) – All Governmental Funds
Required Supplementary Information
Year ended June 30, 2015
Less
Funds not
Required to
Actual be Budgeted Net
Receipts:
Property and other county tax 18,871,682$ - 18,871,682
Interest and penalty on property tax 149,662 - 149,662
Intergovernmental 8,030,494 - 8,030,494
Licenses and permits 51,794 - 51,794
Charges for service 1,133,851 - 1,133,851
Use of money and property 218,695 45 218,650
Miscellaneous 443,247 61,851 381,396
Total receipts 28,899,425 61,896 28,837,529
Disbursements:
Public safety and legal services 7,220,104 - 7,220,104
Physical health and social services 1,476,108 - 1,476,108
Mental health 3,562,338 - 3,562,338
County environment and education 2,187,528 165,195 2,022,333
Roads and transportation 5,903,247 - 5,903,247
Governmental services to residents 1,567,503 - 1,567,503
Administration 4,535,415 - 4,535,415
Non-program 17,680 - 17,680
Debt service 1,463,084 92,037 1,371,047
Capital projects 673,249 - 673,249
Total disbursements 28,606,256 257,232 28,349,024
Excess (deficiency) of receipts
over (under) disbursements 293,169 (195,336) 488,505
Other financing sources, net 314,095 165,195 148,900
Excess (deficiency) of receipts and
other financing sources over (under)
disbursements and other financing uses 607,264 (30,141) 637,405
Balance beginning of year 10,160,737 89,861 10,070,876
Balance end of year 10,768,001$ 59,720 10,708,281
See accompanying independent auditor’s report.
57
Final to
Net
Original Final Variance
19,332,577 19,332,577 (460,895)
138,850 138,850 10,812
7,143,756 7,154,533 875,961
34,825 34,825 16,969
1,023,545 1,023,545 110,306
203,923 203,923 14,727
189,050 206,077 175,319
28,066,526 28,094,330 743,199
7,902,450 7,929,639 709,535
1,696,197 1,711,892 235,784
4,017,086 4,017,086 454,748
2,087,964 2,146,545 124,212
5,901,253 6,011,253 108,006
1,652,512 1,777,512 210,009
4,788,961 4,906,597 371,182
- 20,000 2,320
1,371,098 1,371,098 51
766,678 766,678 93,429
30,184,199 30,658,300 2,309,276
(2,117,673) (2,563,970) 3,052,475
(6) 4,474 144,426
(2,117,679) (2,559,496) 3,196,901
7,882,792 7,882,792 2,188,084
5,765,113 5,323,296 5,384,985
Budgeted Amounts
58
Clinton County
Budgetary Comparison Schedule – Budget to GAAP Reconciliation
Required Supplementary Information
Year ended June 30, 2015
Governmental Funds
Accrual Modified
Cash Adjust- Accrual
Basis ments Basis
Revenues 28,899,425$ (356,587) 28,542,838
Expenditures 28,606,256 (96,456) 28,509,800
Net 293,169 (260,131) 33,038
Other financing sources, net 314,095 - 314,095
Beginning fund balances 10,160,737 5,754,841 15,915,578
Ending fund balances 10,768,001$ 5,494,710 16,262,711
See accompanying independent auditor’s report.
59
Clinton County
Notes to Required Supplementary Information – Budgetary Reporting
June 30, 2015
The budgetary comparison is presented as Required Supplementary Information in
accordance with Governmental 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 County Board of Supervisors annually adopts a
budget on the cash basis following required public notice and hearing for all funds
except component units, the Enterprise Fund, the Internal Service Fund and Agency
Funds, and appropriates the amount deemed necessary for each of the different County
offices and departments. The budget may be amended during the year utilizing similar statutorily prescribed procedures. Encumbrances are not recognized on the cash basis
budget and appropriations lapse at year end.
Formal and legal budgetary control is based upon ten major classes of expenditures
known as functions, not by fund. These ten functions are: public safety and legal
services, physical health and social services, mental health, county environment and
education, roads and transportation, governmental services to residents,
administration, non-program, debt service and capital projects. Function
disbursements required to be budgeted include disbursements for the General Fund, the Special Revenue Funds, the Debt Service Fund and the Permanent Fund. Although
the budget document presents function disbursements by fund, the legal level of
control is at the aggregated function level, not by fund. Legal budgetary control is also
based upon the appropriation to each office or department. During the year, two
budget amendments increased budgeted disbursements by $474,101. The budget
amendments are reflected in the final budgeted amounts.
In addition, annual budgets are similarly adopted in accordance with the Code of Iowa by the appropriate governing body as indicated: for the County Extension Office by the
County Agricultural Extension Council, for the County Assessor by the County
Conference Board, for the E911 System by the Joint E911 Service Board and for
Emergency Management Services by the County Emergency Management Commission.
During the year ended June 30, 2015, disbursements in one department exceeded the
amount appropriated.
60
Clinton County
Schedule of the County’s Proportionate Share of the Net Pension Liability
Iowa Public Employees’ Retirement System
Last Fiscal Year*
(In Thousands)
Required Supplementary Information
2015
County's collective proportion of the net
pension liability (asset) 0.1127863%
County's collective proportionate share of
the net pension liability (asset) $ 4,473
County's covered-employee payroll $ 9,934
County's collective proportionate share of
the net pension liability as a percentage
of its covered-employee payroll 45.03%
Plan fiduciary net position as a
percentage of the total pension
liability 87.61%
* The amounts presented for each fiscal year were determined as of June 30.
See accompanying independent auditor’s report.
62
Clinton County
Schedule of County Contributions
Iowa Public Employees’ Retirement System
Last Ten Fiscal Years
(In Thousands)
Required Supplementary Information
2015 2014 2013 2012
Statutorily required contribution 925$ 912 865 819
Contributions in relation to the
statutorily required contribution (925) (912) (865) (819)
Contribution deficiency (excess) -$ - - -
County's covered-employee payroll 10,101$ 9,934 9,644 9,668
Contributions as a percentage of
covered-employee payroll 9.16% 9.18% 8.97% 8.47%
See accompanying independent auditor’s report.
63
2011 2010 2009 2008 2007 2006
676 621 562 497 455 439
(676) (621) (562) (497) (455) (439)
- - - - - -
9,081 8,905 8,422 7,826 7,305 7,098
7.44% 6.97% 6.67% 6.35% 6.23% 6.18%
64
Clinton County
Notes to Required Supplementary Information – Pension Liability
Year ended June 30, 2015
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% per year measured from the member’s first unreduced
retirement age to a 6% 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.
Benefit provisions for sheriffs and deputies were changed in the 2004 legislative session. The
eligibility for unreduced retirement benefits was lowered from age 55 by one year each July 1
(beginning in 2004) until it reached age 50 on July 1, 2008. The years of service requirement remained at 22 or more. Their contribution rates were also changed to be shared 50-50 by the
employee and employer, instead of the previous 40-60 split.
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% to 3.00%.
Decreased the assumed rate of interest on member accounts from 4.00% to 3.75% 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.
65
The 2006 valuation implemented the following refinements as a result of a quadrennial
experience study:
Adjusted salary increase assumptions to service based assumptions.
Decreased the assumed interest rate credited on employee contributions from 4.25% to 4.00%.
Lowered the inflation assumption from 3.50% to 3.25%.
Lowered disability rates for sheriffs, deputies and protection occupation members.
66
Clinton County
Schedule of Funding Progress for the
Retiree Health Plan (in Thousands)
Required Supplementary Information
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Year Actuarial Value of Liability AAL Funded Covered of Covered
Ended Valuation Assets (AAL) (UAAL) Ratio Payroll Payroll
June 30, Date (a) (b) (b-a) (a/b) ( c) ((b-a)/c)
2010 Jul 1, 2009 - 1,576$ 1,576 0.00% 8,037$ 19.61%
2011 Jul 1, 2009 - 1,576 1,576 0.00 8,916 17.68
2012 Jul 1, 2011 - 939 939 0.00 9,603 9.78
2013 Jul 1, 2011 - 939 939 0.00 9,460 9.92
2014 Jul 1, 2013 - 896 896 0.00 10,304 8.70
2015 Jul 1, 2013 - 896 896 0.00 9,787 9.16
See Note 9 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.
68
Clinton County
Combining Balance Sheet Nonmajor Governmental Funds
June 30, 2015
Special
Resource County
Enhancement Recorder's
and Records Seized
Protection Management Property
Assets
Cash, cash equivalents and pooled investments 24,474$ 34,307 19,247
Receivables:
Accounts - - -
Accrued interest - - -
Drainage assessments:
Delinquent - - -
Succeeding year - - -
Due from other governments - - -
Total assets 24,474$ 34,307 19,247
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ - -
Deferred inflows of resources:
Unavailable other revenues - - -
Fund balances:
Nonspendable:
Vietnam Veterans Memorial - - -
Restricted for:
Drainage purposes - - -
Other purposes 24,474 34,307 19,247
Total fund balances 24,474 34,307 19,247
Total liabilities, deferred inflows of resources
and fund balances 24,474$ 34,307 19,247
See accompanying independent auditor’s report.
Schedule 1
69
Revenue Permanent
Miscel- Vietnam
laneous Drainage Veterans Veterans
Grants Districts Memorial Trust Total
8,370 59,720 1,789 12,940 160,847
- 15 - - 15
- - - 38 38
- 46,458 - - 46,458
- 34,146 - - 34,146
5,626 49,565 - - 55,191
13,996 189,904 1,789 12,978 296,695
5,626 6,321 - - 11,947
- 80,604 - - 80,604
- - - 5,000 5,000
- 102,979 - - 102,979
8,370 - 1,789 7,978 96,165
8,370 102,979 1,789 12,978 204,144
13,996 189,904 1,789 12,978 296,695
70
Clinton County
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
Year ended June 30, 2015
Special
Resource County
Enhancement Recorder's
and Records Seized
Protection Management Property
Revenues:
Intergovernmental 24,929$ - -
Charges for service - 8,148 -
Use of money and property 42 63 -
Miscellaneous - - 3,322
Total revenues 24,971 8,211 3,322
Expenditures:
Operating:
Public safety and legal services - - 2,984
County environment and education 15,343 - -
Governmental services to residents - 895 -
Non-program - - -
Debt service - - -
Total expenditures 15,343 895 2,984
Excess (deficiency) of revenues over
(under) expenditures 9,628 7,316 338
Other financing sources (uses):
Transfers out - (5,000) -
Drainage warrant proceeds - - -
Total other financing sources (uses) - (5,000) -
Change in fund balances 9,628 2,316 338
Fund balances beginning of year 14,846 31,991 18,909
Fund balances end of year 24,474$ 34,307 19,247
See accompanying independent auditor’s report.
Schedule 2
71
Revenue Permanent
Miscel- Vietnam
laneous Drainage Veterans Veterans
Grants Districts Memorial Trust Total
10,820 - - - 35,749
- - - - 8,148
- 51 1 147 304
- 111,416 - - 114,738
10,820 111,467 1 147 158,939
- - - - 2,984
- 149,306 - - 164,649
- - - - 895
20,561 - 2,745 - 23,306
- 92,036 - - 92,036
20,561 241,342 2,745 - 283,870
(9,741) (129,875) (2,744) 147 (124,931)
- - - - (5,000)
- 165,195 - - 165,195
- 165,195 - - 160,195
(9,741) 35,320 (2,744) 147 35,264
18,111 67,659 4,533 12,831 168,880
8,370 102,979 1,789 12,978 204,144
72
Clinton County
Combining Schedule of Fiduciary Assets and Liabilities Agency Funds
June 30, 2015
Agricultural
County Extension County City Community
Offices Education Assessor Assessor Schools Colleges
Assets
Cash, cash equivalents
and pooled investments:
County Treasurer -$ 2,563 556,234 729,195 349,046 19,638
Other County officials 80,815 - - - - -
Receivables:
Property tax:
Delinquent - 2,197 1,189 5,241 291,078 16,801
Succeeding year - 250,000 422,000 361,000 31,287,000 1,997,000
Accounts 3,074 - - - - -
Drainage assessments - - - - - -
Special assessments - - - - - -
Due from other governments - - 112 - - -
Total assets 83,889$ 254,760 979,535 1,095,436 31,927,124 2,033,439
Liabilities
Accounts payable -$ - 1,077 3,420 - -
Salaries and benefits payable - - 8,652 6,430 - -
Due to other governments 35,931 254,760 955,065 1,059,951 31,927,124 2,033,439
Trusts payable 47,958 - - - - -
Compensated absences - - 14,741 25,635 - -
Stamped drainage
warrants payable - - - - - -
Total liabilities 83,889$ 254,760 979,535 1,095,436 31,927,124 2,033,439
See accompanying independent auditor’s report.
Schedule 3
73
Auto
Special License E911
Corpor- Assess- and Service Drainage
ations Townships ments Use Tax Board Districts Other Total
223,703 8,585 175,864 1,112,999 830,403 35,550 1,553,851 5,597,631
- - - - - - - 80,815
260,380 1,086 - - - - 60 578,032
23,165,000 436,000 - - - - 7,000 57,925,000
- - - - 36,316 4 75 39,469
- - - - - 4,033 - 4,033
- - 1,450,797 - - - - 1,450,797
- - - - 100,000 - 56,419 156,531
23,649,083 445,671 1,626,661 1,112,999 966,719 39,587 1,617,405 65,832,308
- - - - 7,409 533 114,457 126,896
- - - - - - 27,798 42,880
23,649,083 445,671 1,626,661 1,112,999 959,310 25,846 1,382,750 65,468,590
- - - - - - - 47,958
- - - - - - 92,400 132,776
- - - - - 13,208 - 13,208
23,649,083 445,671 1,626,661 1,112,999 966,719 39,587 1,617,405 65,832,308
74
Clinton County
Combining Schedule of Changes in Fiduciary Assets and Liabilities Agency Funds
Year ended June 30, 2015
Agricultural
County Extension County City Community
Offices Education Assessor Assessor Schools Colleges
Assets and Liabilities
Balances beginning of year 63,968$ 249,949 969,364 1,161,143 31,318,785 1,930,590
Additions:
Property and other county tax - 246,287 408,396 361,232 30,887,856 1,969,644
E911 surcharge - - - - - -
State tax credits - 16,544 24,768 24,848 2,106,166 127,279
Office fees and collections 836,766 - 732 4,095 - -
Auto licenses, use tax and postage - - - - - -
Assessments - - - - - -
Trusts 874,374 - - - - -
Miscellaneous - - - 829 56,234 -
Total additions 1,711,140 262,831 433,896 391,004 33,050,256 2,096,923
Deductions:
Agency remittances:
To other funds 422,871 - - - - -
To other governments 413,467 258,020 423,725 456,711 32,441,917 1,994,074
Trusts paid out 854,881 - - - - -
Total deductions 1,691,219 258,020 423,725 456,711 32,441,917 1,994,074
Balances end of year 83,889$ 254,760 979,535 1,095,436 31,927,124 2,033,439
See accompanying independent auditor’s report.
Schedule 4
75
Auto
Special License E911
Corpora- Assess- and Service Drainage
tions Townships ments Use Tax Board Districts Other Total
24,076,660 431,224 1,457,483 1,092,205 895,879 25,638 1,464,632 65,137,520
22,911,894 421,085 - - - - 85,455 57,291,849
- - - - 408,982 - - 408,982
1,720,750 19,685 - - - - 449 4,040,489
- - - - - - 1,150 842,743
- - - 12,653,424 - - - 12,653,424
- - 700,292 - - 13,906 - 714,198
- - - - - - - 874,374
- 8,651 - - - 13 2,282,024 2,347,751
24,632,644 449,421 700,292 12,653,424 408,982 13,919 2,369,078 79,173,810
- - - 425,639 - - - 848,510
25,060,221 434,974 531,114 12,206,991 338,142 13,178 2,160,754 76,733,288
- - - - - - 55,551 910,432
25,060,221 434,974 531,114 12,632,630 338,142 13,178 2,216,305 78,492,230
23,649,083 445,671 1,626,661 1,112,999 966,719 26,379 1,617,405 65,819,100
76
Clinton County
Schedule of Revenues By Source and Expenditures By Function – All Governmental Funds
For the Last Ten Years
2015 2014 2013 2012
Revenues:
Property and other county tax 17,398,305$ 16,914,959 17,433,243 16,971,197
Local option sales tax 1,511,708 1,512,957 1,404,206 1,568,162
Interest and penalty on property tax 175,574 252,994 153,244 148,554
Intergovernmental 7,760,320 7,068,915 7,094,699 11,857,107
Licenses and permits 48,544 42,117 73,345 97,195
Charges for service 1,124,522 1,075,768 1,140,371 1,100,291
Use of money and property 219,807 251,657 250,931 245,406
Miscellaneous 304,058 380,963 507,538 890,743
Total 28,542,838$ 27,500,330 28,057,577 32,878,655
Expenditures:
Operating:
Public safety and legal services 7,268,851$ 7,058,888 7,588,190 6,844,604
Physical health and social services 1,508,593 1,482,708 1,390,552 1,392,888
Mental health 3,582,273 2,951,395 3,939,104 9,536,046
County environment and education 2,105,932 2,064,868 2,048,657 2,149,180
Roads and transportation 5,922,243 6,327,485 5,547,484 6,841,181
Governmental services to residents 1,569,532 1,163,451 1,173,154 1,130,337
Administration 4,446,301 4,632,264 3,481,834 3,202,208
Non-program 23,306 4,815 2,525 80,495
Debt service 1,463,084 1,497,708 1,682,112 1,441,928
Capital projects 619,685 388,251 719,795 1,246,850
Total 28,509,800$ 27,571,833 27,573,407 33,865,717
See accompanying independent auditor’s report.
Schedule 5
77
2011 2010 2009 2008 2007 2006
16,215,989 15,151,449 13,122,899 12,611,466 11,889,226 10,885,977
1,568,149 1,493,260 1,596,635 1,349,137 1,502,602 1,197,154
153,069 152,824 167,424 175,190 144,441 149,590
10,745,146 9,984,494 11,379,705 10,954,929 10,339,027 10,154,334
90,602 107,223 95,627 100,548 68,677 68,648
1,093,479 1,005,790 1,017,760 1,041,896 1,121,830 1,090,334
284,566 312,597 325,334 481,374 439,454 306,207
816,752 331,319 319,848 435,410 357,352 166,449
30,967,752 28,538,956 28,025,232 27,149,950 25,862,609 24,018,693
6,900,152 6,378,617 5,773,813 5,698,173 5,391,799 4,936,287
1,398,099 1,550,419 1,476,184 1,370,152 1,397,848 1,388,548
7,916,840 7,640,292 8,495,067 8,351,568 7,935,820 7,592,273
1,950,917 1,889,731 1,855,913 1,561,503 1,825,999 1,370,588
5,623,843 4,668,020 5,039,654 5,344,431 4,378,909 4,760,000
1,067,379 1,136,514 1,240,716 996,106 1,204,331 995,914
3,321,195 3,143,634 3,020,633 2,617,109 2,453,222 2,350,649
148,616 59,960 61,998 106,136 464,257 194,083
1,573,694 1,047,003 150,383 375,174 139,031 6,131
3,808,551 2,924,093 425,943 237,297 361,943 757,545
33,709,286 30,438,283 27,540,304 26,657,649 25,553,159 24,352,018
Modified Accrual Basis
78
Clinton County
Schedule of Expenditures of Federal Awards
Year ended June 30, 2015
Agency or
CFDA Pass-through Program
Grantor/Program Number Number Expenditures
Direct:
U.S. Department of the Interior:
Payments in Lieu of Taxes 15.226 17,716$
U.S. Department of Justice:
Bulletproof Vest Partnership Program 16.607 816
Total direct 18,532
Indirect:
U.S. Department of Agriculture:
Iowa Department of Human Services:
Human Services Administrative Reimbursements:
State Administrative Matching Grants for the
Supplemental Nutrition Assistance Program 10.561 35,216
U.S. Department of Defense:
Office of Treasurer of State:
Payments to States in Lieu of Real Estate Taxes 12.112 10,909
U.S. Department of Justice:
Governor's Office of Drug Control Policy:
Edward Byrne Memorial Justice Assistance
Grant Program 16.738 11-JAG-58807 10,820
U.S. Department of Transportation:
Iowa Department of Public Safety:
National Priority Safety Programs 20.616 14-405d-M6OT
Task 16-00-00 5,106
National Priority Safety Programs 20.616 15-405d-M6OT
Task 13-00-00 15,219
20,325
U.S. Department of Health and Human Services:
Iowa Department of Public Health:
Hospital Preparedness Program (HPP) and
Public Health Emergency Preparedness (PHEP)
Aligned Cooperative Agreements 93.074 5885BT70 76,579
Immunization Cooperative Agreements 93.268 5885I419 7,788
Centers for Disease Control and Prevention_
Investigations and Technical Assistance 93.283 5885NB09 18,308
PPHF Capacity Building Assistance to
Strengthen Public Health Immunization
Infrastructure and Performance financed in
part by Prevention and Public Health Funds 93.539 5885I419 3,728
Schedule 6
79
Clinton County
Schedule of Expenditures of Federal Awards
Year ended June 30, 2015
Agency or
CFDA Pass-through Program
Grantor/Program Number Number Expenditures
Indirect (continued):
U.S. Department of Health and Human Services:
Iowa Department of Human Services:
Human Services Administrative Reimbursements:
Refugee and Entrant Assistance_State
Administered Programs 93.566 79
Child Care Mandatory and Matching
Funds of the Child Care and Development Fund 93.596 9,119
Foster Care_Title IV-E 93.658 13,506
Adoption Assistance 93.659 4,266
Children's Health Insurance Program 93.767 216
Medical Assistance Program 93.778 66,301
Social Services Block Grant 93.667 10,832
Eastern Iowa Mental Health and Disabilities
Services Region:
Social Services Block Grant 93.667 360,985
371,817
U.S. Department of Homeland Security:
Iowa Department of Homeland Security and
Emergency Management:
Disaster Grants - Public Assistance
(Presidentially Declared Disasters) 97.036 FEMA 4119 DR IA 43,310
Hazard Mitigation Grant 97.039 HMGP-DR-1998-0002 01 31,260
Hazard Mitigation Grant 97.039 HMGP-DR-1998-0019 01 105,043
136,303
Emergency Management Performance Grants 97.042 EMPG-15-PT-23 38,202
Total indirect 866,792
Total 885,324$
Basis of Presentation – The Schedule of Expenditures of Federal Awards includes the federal
grant activity of Clinton County and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore,
some amounts presented in this schedule may differ from amounts presented in, or used in the
preparation of, the basic financial statements.
See accompanying independent auditor’s report.
OFFICE OF AUDITOR OF STATE STATE OF IOWA
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834 Facsimile (515) 242-6134
Mary Mosiman, CPA
Auditor of State
81
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
To the Officials of Clinton County:
We have audited in accordance with U.S. generally accepted auditing standards 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, the discretely presented component unit, each major fund
and the aggregate remaining fund information of Clinton County, Iowa, as of and for the year
ended June 30, 2015, and the related Notes to Financial Statements, which collectively comprise
the County’s basic financial statements, and have issued our report thereon dated April 11, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Clinton
County’s internal control over financial reporting 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 Clinton County’s internal control.
Accordingly, we do not express an opinion on the effectiveness of Clinton County’s internal
control.
Our consideration of internal control was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control that
might be material weaknesses or significant deficiencies and, therefore, material weaknesses or
significant deficiencies may exist that were not identified. However, as described in the
accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in
internal control we consider to be material weaknesses and a significant deficiency.
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 a material misstatement of the County’s financial statements will not be prevented or
detected and corrected on a timely basis. We consider the deficiencies described in Part II of the
accompanying Schedule of Findings and Questioned Costs as items II-A-15 and II-B-15 to be
material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
which is less severe than a material weakness, yet important enough to merit attention by those
charged with governance. We consider the deficiency described in Part II of the accompanying
Schedule of Findings and Questioned Costs as item II-C-15 to be a significant deficiency.
82
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Clinton County’s financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, non-compliance 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
non-compliance or other matters that are required to be reported under Government Auditing
Standards. However, we noted certain immaterial instances of non-compliance or other matters
which are described in Part IV of the accompanying Schedule of Findings and Questioned Costs.
Comments involving statutory and other legal matters about the County’s operations for
the year ended June 30, 2015 are based exclusively on knowledge obtained from procedures
performed during our audit of the financial statements of the County. 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.
Clinton County’s Responses to the Findings
Clinton County’s responses to the findings identified in our audit are described in the
accompanying Schedule of Findings and Questioned Costs. Clinton County’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 County’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 County’s
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
We would like to acknowledge the many courtesies and assistance extended to us by
personnel of Clinton County during the course of our audit. Should you have any questions
concerning any of the above matters, we shall be pleased to discuss them with you at your
convenience.
MARY MOSIMAN, CPA WARREN G. JENKINS, CPA
Auditor of State Chief Deputy Auditor of State
April 11, 2016
83
Independent Auditor’s Report on Compliance
for Each Major Federal Program and on Internal Control over Compliance
Required by OMB Circular A-133
OFFICE OF AUDITOR OF STATE STATE OF IOWA
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834 Facsimile (515) 242-6134
Mary Mosiman, CPA
Auditor of State
85
Independent Auditor’s Report on Compliance
for Each Major Federal Program and on Internal Control over Compliance
Required by OMB Circular A-133
To the Officials of Clinton County:
Report on Compliance for Each Major Federal Program
We have audited Clinton County, Iowa’s compliance with the types of compliance
requirements described in U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that could have a direct and material effect on each of its major federal
programs for the year ended June 30, 2015. Clinton County’s major federal programs are
identified in Part I of the accompanying Schedule of Findings and Questioned Costs.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations,
contracts and grant agreements applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Clinton County’s
major federal programs based on our audit of the types of compliance requirements referred to
above. We conducted our audit of compliance in accordance with U.S. generally accepted auditing
standards, the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, and OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether non-compliance with the types of compliance requirements referred to above that could
have a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about Clinton County’s compliance with those requirements
and performing such other procedures as we considered necessary in the circumstances.
We believe our audit provides a reasonable basis for our opinion on compliance for each of
the major federal programs. However, our audit does not provide a legal determination of Clinton
County’s compliance.
Opinion on Each Major Federal Program
In our opinion, Clinton County complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on each of
its major federal programs for the year ended June 30, 2015.
86
Report on Internal Control Over Compliance
The management of Clinton County is responsible for establishing and maintaining
effective internal control over compliance with the types of compliance requirements referred to
above. In planning and performing our audit of compliance, we considered Clinton County’s
internal control over compliance with the types of requirements that could have a direct and
material effect on each major federal program to determine the auditing procedures appropriate in
the circumstances for the purpose of expressing an opinion on compliance for the major federal
programs and to test and report on internal control over compliance in accordance with OMB
Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, we do not express an opinion on the effectiveness of Clinton
County’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a
control over compliance does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect and correct noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance such that there is a reasonable possibility material noncompliance with a type of
compliance requirement of a federal program will not be prevented or detected and corrected on a
timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies. We
did not identify any deficiencies in internal control over compliance we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the
scope of our testing of internal control over compliance and the results of that testing based on
the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other
purpose.
MARY MOSIMAN, CPA WARREN G. JENKINS, CPA
Auditor of State Chief Deputy Auditor of State
April 11, 2016
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
87
Part I: Summary of the Independent Auditor’s Results:
(a) Unmodified opinions were issued on the financial statements.
(b) A significant deficiency and material weaknesses in internal control over financial
reporting were disclosed by the audit of the financial statements.
(c) The audit did not disclose any non-compliance which is material to the financial
statements.
(d) No material weaknesses in internal control over the major programs were noted.
(e) Unmodified opinions were issued on compliance with requirements applicable to each of
the major programs.
(f) The audit disclosed no audit findings which are required to be reported in accordance with
Office of Management and Budget Circular A-133, Section .510(a).
(g) The major programs were as follows:
CFDA Number 93.667 – Social Services Block Grant.
CFDA Number 97.039 – Hazard Mitigation Grant.
(h) The dollar threshold used to distinguish between Type A and Type B programs was
$300,000.
(i) Clinton County did not qualify as a low-risk auditee.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
88
Part II: Findings Related to the Financial Statements:
INTERNAL CONTROL DEFICIENCIES:
II-A-15 Segregation of Duties – During our review of internal control, the existing procedures are evaluated in order to determine incompatible duties, from a
control standpoint, are not performed by the same employee. This segregation of
duties helps to prevent losses from employee error or dishonesty and, therefore,
maximizes the accuracy of the County’s financial statements. Generally, one or
two individuals in the offices identified may have control over the following areas for which no compensating controls exist:
ApplicableOffices
(1) Incoming mail is not opened by an individual
who is not authorized to make entries to the
accounting records. Conservation
(2) Collection and deposit preparation functions are
not performed by an individual who does not
record and account for cash receipts.
Conservation
and
Conservation
Foundation
(3) Bank accounts are not reconciled by an
individual who does not sign checks, handle
or record cash.
Conservation
and
Conservation
Foundation
Recommendation – We realize segregation of duties is difficult with a limited
number of office employees. However, each official should review the operating
procedures of their office to obtain the maximum internal control possible under
the circumstances utilizing currently available personnel, including Board
members and personnel from other County offices. The official should utilize current personnel to provide additional control through review of financial
transactions, reconciliations and reports. Reviews performed by independent
persons should be documented by the signature or initials of the reviewer and the
date of the review.
Responses –
Conservation – Segregation of duties is difficult with a small office staff. We
will make an effort to try to utilize other, non-office staff to review and
initial deposits and reports when they are available.
Conservation Foundation – All Foundation donations are first recorded by the Executive Director. All Foundation donations are then receipted by the
Foundation Treasurer. All collection of cash and checks and deposit
functions are performed by the Foundation Treasurer, or a member of the
three-person Finance Committee. Bank accounts are reconciled monthly
by the Foundation Treasurer. The retained CPA of the Foundation provides
an independent reconciliation annually.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
89
Conclusions –
Conservation – Response accepted.
Conservation Foundation – Response acknowledged. Bank reconciliations should be reviewed by an independent person monthly.
II-B-15 Financial Reporting – During the audit, we identified material amounts of
receivables and capital asset additions and deletions not recorded by the
County. Adjustments were subsequently made by the County to properly
include these amounts in the financial statements.
Recommendation – The County should implement procedures to ensure all
receivables and capital asset additions and deletions are identified and
included in the County’s financial statements.
Response – The County accepts the recommendation. The County has recently
taken actions to improve its capital asset reporting.
Conclusion – Response accepted.
II-C-15 Early Childhood Iowa Board – County Records – Section 256I.8 of the Code of
Iowa states, in part, the Early Childhood Iowa Area Board shall “submit an
annual report on the effectiveness of the community plan in addressing
school readiness and children’s health and safety needs to the state board
and to the local government bodies in the area.” The annual report template is provided on the Early Childhood Iowa website maintained by the
Department of Management. The County acts as fiscal agent for the Area
Board and completes the annual report.
Total expenditures reported were overstated by $2,202 since the expenditures
did not deduct travel and training expenditures funded from Decat.
In addition, the beginning and ending fund balances reported in the annual report for fiscal year 2015 could not be reconciled to the accrual basis fund
balance per the County’s financial records.
The amounts reported in Note 13 to the financial statements reflect the activity
reported in the annual report.
Recommendation - The County should review and reconcile the annual report with the County’s year-end ledger balance adjusted for accruals and make
appropriate corrections to the annual report, as necessary. In addition, the
Area Board should contact the Early Childhood Iowa Office within the
Department of Management to determine the appropriate resolution,
including the necessity of amending the fiscal year 2015 annual report.
Response – The County accepts the recommendation. The County in cooperation with the State has recently taken actions to correct this matter.
Conclusion – Response accepted.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
90
INSTANCES OF NON-COMPLIANCE:
No matters were noted.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
91
Part III: Findings and Questioned Costs For Federal Awards:
INSTANCES OF NON-COMPLIANCE:
No matters were noted.
INTERNAL CONTROL DEFICIENCIES:
No material weaknesses in internal control over the major programs were noted.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
92
Part IV: Other Findings Related to Required Statutory Reporting:
IV-A-15 Certified Budget – Disbursements during the year ended June 30, 2015 did not
exceed the amounts budgeted by function. However, disbursements exceeded the
amount appropriated in one department.
Recommendation – Chapter 331.434(6) of the Code of Iowa authorizes the Board of
Supervisors, by resolution, to increase or decrease appropriations of one office or department by increasing or decreasing the appropriation of another office or
department as long as the function budget is not increased. Such increases or
decreases should be made before disbursements are allowed to exceed the
appropriation.
Response – The County has reviewed such instances with department heads. The
County accepts the recommendation.
Conclusion – Response accepted.
IV-B-15 Questionable Expenditures – No expenditures we believe may not meet the
requirements of public purpose as defined in an Attorney General’s opinion dated
April 25, 1979 were noted.
IV-C-15 Travel Expense – No expenditures of County money for travel expenses of spouses of
County officials or employees were noted.
IV-D-15 Business Transactions – The following business transactions between the County and County officials were noted:
Name, Title and Transaction
Business Connection Description Amount
Jill Davisson, County Supervisor,
sons own Davisson Tiling, LLC Ditch repair and tile lines 3,703$
In accordance with Chapters 331.342 (2)(i)(j) of the Code of Iowa, the transaction
with Davisson Tiling, LLC may represent a conflict of interest since the
transactions were not entered into through competitive bidding and the total exceeded $1,500 for the fiscal year.
Recommendation – The County should consult legal counsel to determine
disposition of this matter.
Response – As a matter of the Clinton County Drainage District Maintenance Policy
and Procedures approved by the Board of Supervisors in April of 2013, this repair would not have come before the Board of Trustees under the section “Low Cost
Drainage District Repair Projects (Estimated Cost<$5,000). However, the County
accepts the recommendation. Further, the Clinton County Drainage District
Maintenance Policy and Procedures is due for a review and the recommendation
stated above will be included in that discussion.
Conclusion – Response acknowledged. The County should consult legal counsel to
determine the disposition of this matter.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
93
IV-E-15 Bond Coverage – Surety bond coverage of County officials and employees is in
accordance with statutory provisions. The amount of coverage should be reviewed
annually to ensure the coverage is adequate for current operations.
IV-F-15 Board Minutes – No transactions were found that we believe should have been
approved in the Board minutes but were not.
IV-G-15 Deposits and Investments – No instances of non-compliance with the deposit and
investment provisions of Chapters 12B and 12C of the Code of Iowa and the
County’s investment policy were noted.
IV-H-15 Resource Enhancement and Protection Certification – The County properly
dedicated property tax revenue to conservation purposes as required by
Chapter 455A.19(1)(b) of the Code of Iowa in order to receive the additional REAP
funds allocated in accordance with subsections (b)(2) and (b)(3).
IV-I-15 County Extension Office – The County Extension Office is operated under the
authority of Chapter 176A of the Code of Iowa and serves as an agency of the State of Iowa. This fund is administered by an Extension Council separate and
distinct from County operations and, consequently, is not included in Exhibits A
or B.
Disbursements during the year ended June 30, 2015 for the County Extension
Office did not exceed the amount budgeted.
IV-J-15 Early Childhood Iowa Board – The County is the fiscal agent for the Early Childhood
Iowa Area Board, an organization formed pursuant to the provisions of
Chapter 256I of the Code of Iowa. Financial transactions of the Area Board are
included in the County’s financial statements as part of the Other Agency Funds
because of the County’s fiduciary relationship with the organization.
Except for the item identified in II-C-15, no instances of non-compliance were noted as a result of the audit procedures performed.
IV-K-15 Conservation Land Acquisition – During the fiscal year ended June 30, 2015, the
County issued a check from the Conservation Land Acquisition Fund to the
Enterprise, Rock Creek Marina Fund to cover operating expenses. Under Chapter
350.6 of the Code of Iowa, the Conservation Land Acquisition Fund is to be expended for conservation land acquisition and capital improvement projects. An
adjustment was subsequently made by the County to record an interfund loan
receivable and payable.
Recommendation – Funds from the Conservation Land Acquisition Fund should
only be expended for conservation land acquisition and capital improvement
projects pursuant to Chapter 350.6 of the Code of Iowa. The Enterprise, Rock Creek Marina Fund should reimburse the Conservation Land Acquisition Fund.
Response – This matter has been reviewed with the Conservation Department and it
has committed to repaying the Conservation Land Acquisition Fund.
Conclusion – Response accepted.
Clinton County
Schedule of Findings and Questioned Costs
Year ended June 30, 2015
94
IV-L-15 Rock Creek Marina Deficit – The Enterprise, Rock Creek Marina Fund had a deficit
unrestricted net position of $25,339 at June 30, 2015.
Recommendation – The County should investigate alternatives to eliminate this deficit and return this fund to a sound financial position.
Response – Corrective actions resulted in a deficit unrestricted net position for the
Rock Creek Marina Fund. This matter will result in a discussion about
alternatives to place the fund in a sound financial position.
Conclusion – Response accepted.
95
Clinton County
Staff
This audit was performed by:
Donna F. Kruger, CPA, Manager
Jenny M. Podrebarac, Senior Auditor II
Melissa A. Hastert, CPA, Staff Auditor
Melissa E. Janssen, Staff Auditor
Trent M. Mussmann, Staff Auditor
Jenna M. Paysen, Staff Auditor
Alex W. Case, Assistant Auditor
Joseph B. Sparks, Assistant Auditor
Andrew E. Nielsen, CPA
Deputy Auditor of State
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
B-1
APPENDIX B
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
1. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the
Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
B-2
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the County or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to any Tender/Remarketing Agent’s DTC account.
10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
11. The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof.
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Clinton County, Iowa $22,000,000 General Obligation Bonds, Series 2016
C-1
APPENDIX C
PROPOSED FORM OF OPINION OF BOND COUNSEL