I-1 - Preliminary Official Statement - UR Loan Agreement

• The Enterprise, Sewer Fund cash balance decreased $506,235 to $400,629. Revenue bond proceeds of $3,673,751 were received to help fund a sewer construction project, an increase of $1,385,205 over the prior year. In addition, revenue for charges for services increased $99,560, or approximately 13.1%, over the prior year due to an increase in the number of customers. Disbursements related to sewer construction projects were $4,389,318 in fiscal year 2019, an increase of $2,200,546 over the prior year BUDGETARY HIGHLIGHTS Over the course of the year, the City amended its budget once. The amendment was approved on May 28, 2019 and resulted in an increase in budgeted receipts and disbursements. The amendment increased budgeted receipts for property tax, licenses and permits, use of money and property, intergovernmental receipts, charges for services and miscellaneous. Increases in budgeted disbursements were made for building inspections, general legal and technology expenses, roads and the wastewater treatment plant project. The City’s receipts were $101,752 more than budgeted and total disbursements were $2,035,920 less than amended budget. The capital projects function was $1,987,420 less than budgeted primarily due to delay in payment requests for the capital projects. The City exceeded amounts budgeted in the public works, general government, debt service and business type activities functions prior to the budget amendment. Even with the budget amendment, the City exceeded the amounts budgeted in debt service and business type activities functions by $30,000 and $37,558 respectively for the year ended June 30, 2019. DEBT ADMINISTRATION At June 30, 2019, the City had $19,284,162 of bonds outstanding, compared to $17,111,401 last year, as shown below. Outstanding Debt at Year-End June 30, 2019 2018 General obligation bonds $ 12,160,000 13,240,000 Revenue bonds 7,124,162 3,871,401 Total $ 19,284,162 17,111,401 Debt increased as a result of issuing revenue bonds for a sewer construction project. The Constitution of the State of Iowa limits the amount of general obligation debt cities can issue to 5% of the assessed value of all taxable property within the City’s corporate limits. The City’s outstanding general obligation debt of $12,316,000, including $156,000 for developer agreements, is below its constitutional debt limit of approximately $17.5 million. Additional information about the City’s long-term debt is presented in Note 3 to the financial statements. 13