New Issue Investment Rating: Moody’s Investors Service ... Hawkeye CC $1.915...The $1,915,000Industrial New Jobs Training Certificates, Taxable Series2016-1(the “Certificates”)are

New Issue Investment Rating: Moody’s Investors Service …Aa1

FINAL OFFICIAL STATEMENT DATED APRIL 26, 2016

In the opinion of Ahlers & Cooney, P.C., Bond Counsel, under present law interest on the Certificates is includable in gross income of the owners thereof for purposes of present federal income taxation as more fully discussed under the heading “TAXABILITY OF INTEREST” herein.

HAWKEYE COMMUNITY COLLEGE, IOWA

(Merged Area VII) In the Counties of Benton, Black Hawk, Bremer, Buchanan, Butler,

Chickasaw, Fayette, Floyd, Grundy and Tama

$1,915,000 Industrial New Jobs Training Certificates, Taxable Series 2016-1 Dated Date of Delivery Book-Entry Due Serially June 1, 2017 – 2026 The $1,915,000 Industrial New Jobs Training Certificates, Taxable Series 2016-1 (the “Certificates”) are being issued by the Hawkeye Community College (Merged Area VII), Iowa (the “College”). Interest is payable semiannually on June 1 and December 1 of each year, commencing December 1, 2016. The Certificates will be issued using a book-entry system. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Certificates. The ownership of one fully registered Certificate for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Certificates will be made to purchasers. The Certificates will mature on June 1 in the following years and amounts.

AMOUNTS, MATURITIES, INTEREST RATES, PRICE OR YIELDS AND CUSIP NUMBERS Principal Due Interest CUSIP Principal Due Interest CUSIP Amount June 1 Rate Yield NUMBER Amount June 1 Rate Yield NUMBER $225,000 .................... 2017 2.000% 0.850% 42016A KS9 $185,000 .................... 2022 2.000% 1.950% 42016A KX8 200,000 .................... 2018 2.000% 1.100% 42016A KT7 185,000 .................... 2023 2.150% 2.150% 42016A KY6 200,000 .................... 2019 2.000% 1.300% 42016A KU4 185,000 .................... 2024 2.300% 2.300% 42016A KZ3 195,000 .................... 2020 2.000% 1.550% 42016A KV2 175,000 .................... 2025 2.500% 2.500% 42016A LA7 195,000 .................... 2021 2.000% 1.750% 42016A KW0 170,000 .................... 2026 2.600% 2.600% 42016A LB5

OPTIONAL REDEMPTION

The Certificates due June 1, 2017 - 2022, inclusive, are non-callable. The Certificates due June 1, 2023 - 2026, inclusive, are callable in whole or in part on any date on or after June 1, 2022, at a price of par and accrued interest. If less than all the Certificates are called, they shall be redeemed in any order of maturity as determined by the College and within any maturity by lot. See “OPTIONAL REDEMPTION” herein.

PURPOSE, LEGALITY AND SECURITY

The Certificate proceeds will be used to: (i) fund new jobs training projects (the “Projects”) pursuant to certain Industrial New Jobs Training Agreements, (ii) fund a Debt Service Reserve Fund in the amount of $196,242.40, and (iii) pay certain Certificate issuance costs and administrative expenses. See “DESCRIPTION OF THE CERTIFICATES - Projects”, “DESCRIPTION OF THE CERTIFICATES – Use of Proceeds” herein.

In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Certificates will constitute valid and legally binding obligations of the College and the Certificates are payable from the Net Revenues as more fully described herein under “DESCRIPTION OF THE CERTIFICATES - Security”. In the event such Net Revenues are insufficient, the Certificates are payable from a special standby tax levied upon all taxable property within the Merged Area 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. Additional security for the Certificates is provided by a Debt Service Reserve Fund (the “Reserve Fund”) to be applied, until depleted, to pay interest and principal payments due on the Certificates.

The Certificates 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 Certificates will be made available for delivery on or about June 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 College is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Certificates or as set forth on the cover of this Final Official Statement.

Hawkeye Community College, (Merged Area VII), Iowa

$1,915,000 Industrial New Jobs Training Certificates, Taxable Series 2016-1

No dealer, broker, salesman or other person has been authorized by the College to give any information or to make

any representations with respect to the Certificates 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 College. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the College 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 COLLEGE 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.



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TABLE OF CONTENTS

CERTIFICATE ISSUE SUMMARY ............................................................................................................................................................... 1 DESCRIPTION OF THE CERTIFICATES ................................................................................................................................................... 2

Introduction ...................................................................................................................................................................................................... 2 Description of Certificates ............................................................................................................................................................................... 2 Authority .......................................................................................................................................................................................................... 3 Projects ............................................................................................................................................................................................................. 3 Security ............................................................................................................................................................................................................ 3 Optional Redemption ....................................................................................................................................................................................... 3 Use of Proceeds ................................................................................................................................................................................................ 4 Summary of the Resolution and Parity Certificates ......................................................................................................................................... 4

THE COMPANIES ............................................................................................................................................................................................ 5 THE COLLEGE ................................................................................................................................................................................................ 7

College Organization and Services .................................................................................................................................................................. 7 Enrollment History ........................................................................................................................................................................................... 8 Educational Facilities ....................................................................................................................................................................................... 8

SOCIOECONOMIC INFORMATION ............................................................................................................................................................ 9 Population Trends ............................................................................................................................................................................................ 9 Employment ..................................................................................................................................................................................................... 9 Income Statistics ............................................................................................................................................................................................ 10 Agricultural Statistics ..................................................................................................................................................................................... 11 Retail Sales ..................................................................................................................................................................................................... 11

GENERAL OBLIGATION DEBT INFORMATION ................................................................................................................................... 12 PROPERTY TAX INFORMATION .............................................................................................................................................................. 14

Property Tax Assessment ............................................................................................................................................................................... 14 Property Tax Collection ................................................................................................................................................................................. 15 Property Tax Rates ......................................................................................................................................................................................... 17 Utility Property Tax Replacement .................................................................................................................................................................. 18 Tax Increment Financing ............................................................................................................................................................................... 18 Legislation ...................................................................................................................................................................................................... 19

FINANCIAL INFORMATION....................................................................................................................................................................... 20 Financial Reports ........................................................................................................................................................................................... 20 No Consent or Updated Information Requested of the Auditor ..................................................................................................................... 20 Summary Financial Information .................................................................................................................................................................... 20

EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS ....................................................... 24 Pensions ......................................................................................................................................................................................................... 24 Other Post-Employment Benefits (OPEB) ..................................................................................................................................................... 26

REGISTRATION, TRANSFER AND EXCHANGE .................................................................................................................................... 26 TAXABILITY OF INTEREST ....................................................................................................................................................................... 27

General ........................................................................................................................................................................................................... 27 Interest Income Taxable ................................................................................................................................................................................. 27 Sale, Exchange, or Other Disposition ............................................................................................................................................................ 27 Backup Withholding and Information Reporting ........................................................................................................................................... 28 Enforcement ................................................................................................................................................................................................... 28 Opinions ......................................................................................................................................................................................................... 28

CONTINUING DISCLOSURE....................................................................................................................................................................... 28 OPTIONAL REDEMPTION .......................................................................................................................................................................... 29 LITIGATION ................................................................................................................................................................................................... 29 LEGAL MATTERS ......................................................................................................................................................................................... 29 FINAL OFFICIAL STATEMENT AUTHORIZATION ............................................................................................................................. 30 INVESTMENT RATING ................................................................................................................................................................................ 30 UNDERWRITING ........................................................................................................................................................................................... 30 MUNICIPAL ADVISOR ................................................................................................................................................................................. 30 CERTIFICATION ........................................................................................................................................................................................... 31 APPENDIX A – THE COLLEGE’S AUDITED FINANCIAL STATEMENTS FOR ITS FISCAL YEAR ENDED JUNE 30, 2015 APPENDIX B – DESCRIBING BOOK-ENTRY ONLY ISSUANCE APPENDIX C – DRAFT FORM OF LEGAL OPINION APPENDIX D – DRAFT FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX E – MAP OF IOWA COMMUNITY COLLEGES



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CERTIFICATE ISSUE SUMMARY The Certificate Issue Summary is expressly qualified by the entire Final Official Statement. Issuer: Hawkeye Community College (Merged Area VII), Iowa. Issue: $1,915,000 Industrial New Jobs Training Certificates, Taxable Series 2016-1. Sale Date: April 26, 2016. Dated Date: Date of delivery (expected to be on or about June 1, 2016). Interest Due: Each June 1 and December 1, commencing December 1, 2016. Principal Due: Serially each June 1, commencing June 1, 2017 through 2026, as detailed on the front page of

this Final Official Statement. Optional Redemption: Certificates maturing on or after June 1, 2023, are callable at the option of the College on any

date on or after June 1, 2022, at a price of par plus accrued interest. See “OPTIONAL REDEMPTION” herein.

Authorization: The Certificates are being issued pursuant to authority established in Code of Iowa, Chapters

260E, as amended, and all laws amendatory thereof and supplementary thereto and an approving Resolution of the Board of Directors of the College.

Security: The Certificates will constitute valid and legally binding obligations of the College payable

from the Net Revenues as more fully described herein under “DESCRIPTION OF THE CERTIFICATES - Security”. In the event such Net Revenues are insufficient, the Certificates are payable from a special standby tax levied upon all taxable property within the Merged Area 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. Additional security is provided by a Debt Service Reserve Fund (the “Reserve Fund”) to be applied, until depleted, to pay interest and principal payments due on the Certificates.

Investment Rating: Moody’s Investors Service, New York, New York has assigned the Certificates a rating of

“Aa1”. See “INVESTMENT RATING” herein. Purpose: The Certificate proceeds will be used to: (i) fund new jobs training projects pursuant to certain

Industrial New Jobs Training Agreements, (ii) fund a Debt Service Reserve Fund in the amount of $196,242.40, and (iii) pay certain Certificate issuance costs and administrative expenses. See “DESCRIPTION OF THE CERTIFICATES - Projects” and “DESCRIPTION OF THE CERTIFICATES – Use of Proceeds” herein.

Taxability: The interest to be paid on the Certificates is subject to federal and Iowa state income taxes as

discussed under “TAXABILITY OF INTEREST” in this Final Official Statement. See APPENDIX C for a draft form of legal opinion for the Certificates.

Registrar/Paying Agent: Bankers Trust Company, Des Moines, Iowa. Book-Entry Form: The Certificates 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 Certificates. See APPENDIX B herein.

Delivery Date: Expected to be delivered on or about June 1, 2016. Denomination: $5,000 or integral multiples thereof. Municipal Advisor: Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois.



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HAWKEYE COMMUNITY COLLEGE Board of Directors Casey P. McLaughlin, Chairman Jay A. Nardini, Vice Chairman Bruce R. Clark Gene E. Ficken David P. Krejchi Ronald R. McGregor Teresa L. Meyer John F. Schuller Joan A. Webster-Vore

__________________________________ Officials Linda Allen, Ph.D. ....................................................................... President Jane Bradley, Ph.D. ............................ Vice President of Academic Affairs Daniel Gillen ...................... Vice President of Administration and Finance Kathy Flynn ......................... Vice President of Institutional Advancement Holly Johnson ....................... Executive Director of Hawkeye Foundation John Clopton ..................Executive Director of Human Resource Services Aaron Sauerbrei ........................................ Executive Director of Business and Community Education Julie Thomas ..................................................................... Board Treasurer Denise Dunn ..................................................................... Board Secretary

__________________________________

DESCRIPTION OF THE CERTIFICATES Introduction This Final Official Statement, including the cover page and all appendices, is provided to set forth certain information with respect to the College, the Certificates, and the companies involved. None of the references to or summaries of the laws of the State of Iowa or any documents referred to in this Final Official Statement purport to be complete, and all such references are qualified in their entirety by reference to the complete provisions thereof. Description of Certificates The Certificates are dated the date of delivery (expected to be on or about June 1, 2016) and will be issued as fully registered certificates in the denomination of $5,000 or any integral multiple thereof and, when issued, will be registered in the name of Cede & Co., as Certificate holder and nominee of the Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Certificates. Purchases of the Certificates will be made in book-entry form. Purchasers of the Certificates will not receive certificates representing their interest in the Certificates purchased. So long as DTC or its nominee, Cede & Co., is the Certificate holder, the principal and interest on the Certificates will be paid to DTC, which will in turn remit such principal and interest to its participants for subsequent dispersal to the beneficial owners of the Certificates as described herein. Disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants as more fully described in APPENDIX B.



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The Certificates will bear interest from their dated date at such rates and mature on the dates and in the amounts set forth herein, with interest being payable December 1, 2016 and semiannually thereafter on the first day of June and December in each year until maturity or earlier redemption. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Payments of principal and interest shall be made to the registered holders thereof or to their designated agents as the same appear on the books of the Registrar. Authority The Certificates are issued pursuant to the provisions of Chapter 260E of the Code of Iowa, as amended (the “Act”), and in conformity with a resolution of the Board of Directors of the College authorizing the issuance of the Certificates (the “Resolution”). Projects The Certificates are issued for the purpose of paying a portion of the costs of training arrangements and new jobs training programs (the “Projects”) which are the subject of and in conformity with certain Industrial New Jobs Training Agreements (the “Agreements”) between the College and the Companies described under “THE COMPANIES” herein. Security The Certificates constitute a valid and binding obligation of the College, payable from the Net Revenues. The “Net Revenues” are the revenues and funds derived from the Agreements, held in a special tax fund (the “Revenue Fund”) and pledged to the payment of the Certificates. The sources of Net Revenues include new jobs credit from withholding to be received or derived from new employment resulting from the Projects (1½% of the wages paid on the new jobs created); supplemental new jobs credit from withholding to be received or derived from new employment resulting from the Projects (an additional 1½% of the wages paid on those jobs for which the employer has agreed to pay wages of at least the Laborshed wage), and tuition, student fees or special charges, if any, fixed by the Board of Directors of the College to defray program costs. The Projects are sized in order that the anticipated Net Revenues are sufficient to meet the debt service requirements of the Certificates as the same become due. Additional security is provided by a Reserve Fund to be applied, until depleted, to pay interest and principal payments due on the Certificates. In the event such Net Revenues are not available and appropriated in any year as provided by the Act and in the Agreement, all the taxable property in the Merged Area is subject to ad valorem taxation without limitation as to rate or amount (the “Standby Tax”) to pay the Certificates, 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 Standby Tax has been levied by the Resolution for the payment of debt service on the Certificates and the College is required by law to include in its annual tax levy the principal and interest coming due on the Certificates to the extent the necessary funds are not provided from other sources. Optional Redemption

The Certificates due June 1, 2017 - 2022, inclusive, are not subject to optional redemption prior to maturity. The Certificates due June 1, 2023 - 2026, inclusive, are subject to optional redemption prior to maturity in whole or in part on any date on or after June 1, 2022 at a price of par and accrued interest. If less than all the Certificates are called, they shall be redeemed in any order of maturity as determined by the College and within any maturity by lot. So long as Certificates are held by DTC, the College will notify DTC of the particular amount of such maturity to be redeemed prior to maturity. DTC will determine by lot the amount of each participant’s interest in each maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed.



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The Registrar will give written notice of redemption, identifying the Certificates (or portions thereof) to be redeemed

not less than thirty (30) days prior to the date fixed for redemption to the registered owner of each Certificate (or portion thereof) to be redeemed. Failure to give such written notice to any registered owner of the Certificates (or portions thereof) or any defect therein shall not affect the validity of any proceedings for the redemption of other Certificates (or portions thereof). Written notice will be deemed completed upon transmission to the owner of record of the Certificate. All Certificates (or portions thereof) so called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment at that time. Use of Proceeds The proceeds of the Certificates, other than any accrued interest and except as may be provided below, shall be credited to the Project Fund and used to pay the costs of the Projects and the costs of issuance of the Certificates including, but not limited to, underwriting fees, municipal advisor fees, rating agency fees, printing costs, and bond counsel fees and expenses. Proceeds of the Certificates shall also be used to fund the Reserve Fund and to pay all College expenses relating to the administration of the new jobs training projects. The estimated use of proceeds of the Certificates is as follows: New Jobs Training Project .................................................... $1,317,093.50 College Administration Expense ............................................ 354,466.50 Underwriting, Legal, and Issuance Costs .............................. 28,047.60 State Administration Expense ............................................... 19,150.00 Reserve Fund ....................................................................... 196,242.40 Total ...................................................................................... $1,915,000.00 Summary of the Resolution and Parity Certificates The Board of Directors of the College is expected to adopt the Resolution on April 26, 2016. Under the Resolution, the College pledges the Net Revenues to the payment of the Certificates (as described previously under “DESCRIPTION OF THE CERTIFICATES - Security” herein). A copy of the Resolution shall be filed in the office of the County Auditors of each county contained within the Merged Area. For the purpose of further securing and providing funds to pay the principal and interest of the Certificates, there has been levied and appropriated to the Revenue Fund for each future year the following direct annual tax, the Standby Tax, on all of the taxable property in the Merged Area: Fiscal Year (July 1 to June 30) Amount of Collection(1) $266,028 .............................................................................. 2016/17 236,528 .............................................................................. 2017/18 232,528 .............................................................................. 2018/19 223,528 .............................................................................. 2019/20 219,628 .............................................................................. 2020/21 205,728 .............................................................................. 2021/22 202,028 .............................................................................. 2022/23 198,050 .............................................................................. 2023/24 183,795 .............................................................................. 2024/25 174,420 .............................................................................. 2025/26 Notes: (1) For example, a levy made and certified against the

taxable valuations of January 1, 2015, will be collected during the fiscal year commencing July 1, 2016.

Provided, however, that the College may direct the adjustment and corresponding reduction of any levy of taxes made whenever funds on hand from any source other than taxation and which may be appropriated to the payment of the Certificates are available in the Revenue Fund. The College does not currently anticipate levying the Standby Tax to pay debt service on the Certificates.



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Additional certificates (the “Parity Certificates”) may be issued on a parity and equality of rank with the Certificates with respect to the lien and claim of such Parity Certificates to the Net Revenues, for the following purposes and under the following conditions, but not otherwise:

(a) For the purpose of refunding any of the Certificates or Parity Certificates which shall have matured or which shall mature not later than three months after the date of delivery of refunding certificates and for the payment of which there shall be insufficient money in the Sinking Fund and the Reserve Fund; and

(b) For the purpose of the Projects or additional projects, so long as Net Revenues are sufficient to secure the

Certificates and the Parity Certificates. Parity Certificates must be payable as to principal and as to interest on the same month and date as the Certificates.

THE COMPANIES AgencyBloc, Inc. Certificate Amount: $125,000 Number of New Jobs: 9

AgencyBloc is a web-based agency management (Software-as-a-Service) platform that provides tools for health

and life insurance agencies and agents for managing their business. Core features of the software include CRM (Customer Relationship Manager), commission tracking and processing, policy tracking, carrier tracking, agent management, specialized reporting, document management, and commission statement generation. The Company is located in Cedar Falls, Iowa. ConAgra Foods Packaged Foods, LLC Certificate Amount: $795,000 Number of New Jobs: 57

ConAgra Foods Packaged Foods, LLC makes many leading brands, including: Healthy Choice, Chef Boyardee, Egg Beaters, Hebrew National, Hunt’s, Orville Redenbacher’s, PAM, and Banquet, among others. Their consumer brands are found in 97% of U.S. households and 24 are ranked first or second in their category. ConAgra Foods also has a very significant presence in commercial food products and is one of the nation’s leading specialty potato providers to restaurants and other foodservice establishments. The positions will be added at the Waterloo, Iowa, location. Jack Henry & Associates, Inc. Certificate Amount: $220,000 Number of New Jobs: 10

Jack Henry & Associates, Inc. is a leading provider of complimentary software solutions and services comprising

business intelligence and bank management, retail and business banking, member and member business services, internet banking and electronic funds transfer, risk management and protection, document imaging solutions, data conversion, outsource processing and management, software implementation, training and support services to over 11,900 customers in all 50 states and outside the U.S., primarily to banks, credit unions and other financial institutions. The company has locations in Cedar Falls and Des Moines, Iowa.



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Martin Brothers Distributing Company, Inc. Certificate Amount: $270,000 Number of New Jobs: 22

Martin Brothers Distributing Company, Inc. is a full-line, independent, family-owned foodservice distributor founded in 1940 by Roy & Glen Martin and located in Cedar Falls, Iowa. They have over 500 experienced, knowledgeable employees who are committed to providing their customers with “Legendary Customer Service”. They have grown into a regional, independent distributor serving Iowa and seven surrounding states. They are the largest foodservice distributor in the State of Iowa. The Martin Bros. distribution facility is a 225,000 square foot warehouse stocked with over 12,000 products subdivided into dry, refrigerated and freezer categories. Their center utilizes some of the top technologies available in the industry to maximize efficiency and maintain the highest operational standards. Spinutech, Inc. Certificate Amount: $85,000 Number of New Jobs: 6

Spinutech is web design and web development company that specializes in delivering Internet solutions that meet and exceed the specific needs of its customers. The company’s process incorporates a unique combination of services which enables its customers to more effectively communicate such customer’s message. Core services include: Content Management websites, Ecommerce, Web Design, Video to Web, Digital Marketing, SEO, Digital Strategy, SEM, Social Media Marketing. The company is located in Cedar Falls, Iowa. Winnebago Industries, Inc. Certificate Amount: $420,000 Number of New Jobs: 76

Winnebago Industries, Inc. was incorporated under the laws of the State of Iowa on February 12, 1958, and adopted

its present name on February 28, 1961. Winnebago Industries is headquartered in Forest City, Iowa, and is a leading manufacturer of recreation vehicles (RVs), which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes (Class A, B, and C), travel trailers, and fifth wheel products. The Company markets its recreation vehicles on a wholesale basis through an independent dealer organization located throughout the U.S. and Canada.

Winnebago Industries’ main production facility in Forest City, Iowa covers about 232 acres, not counting parking areas near the main complex. The 20-plus buildings on the site have a total of approximately 60 acres under roof. There are also satellite manufacturing facilities at Charles City, IA (Hardwoods and Class B production), Lake Mills, IA (Class B production) and Waverly, IA (Wire Harness fabrication process), Middlebury, Indiana (Towables) and Junction City, Oregon (Future Class A diesel production).

Winnebago Industries, Inc. is a publicly-traded corporation listed on the New York Stock Exchange (WGO) and reported 2,989 shareholders of record on October 13, 2015. The Company is under the direction of a Board of Directors consisting of nine directors and guided on a daily basis by its CEO, Michael Happe, and six Vice Presidents representing various departments of the Company. Current total employment of Winnebago Industries is approximately 2,742 which includes not only the Forest City main facility but all satellite locations as well. The Company is continually seeking new hires at all locations. The positions will be added at the Waverly, Iowa location.



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THE COLLEGE

The College’s main campus is located in Waterloo, Iowa, was founded in 1966 and is a public college of Iowa. The College is located in part of the Counties of Benton, Black Hawk, Bremer, Buchanan, Butler, Chickasaw, Fayette, Floyd, Grundy and Tama (the “Counties”). See APPENDIX E for a map of the Iowa Community Colleges. The College has a 320-acre campus located in south Waterloo. All vocational-technical programs are housed in modern facilities on campus. Seven instructional buildings serve as centers for the Criminal Justice and Public Service Programs, the Graphic and Applied Art Programs, the Developmental Education Program, the Agriculture and Natural Resources Programs, the Electronics Program, the Industrial and Engineering Technology Programs, the Power Mechanics Program, Horticulture Science facilities, the Business Program, and the Health-Science Programs. Hawkeye Center serves as the student and administrative center.

On September 12, 1991, the State Board of Education approved the plan of the Board of Directors of the College to expand the curriculum of the school to include arts and sciences courses, and thereby officially classified the school as an area community college. The College began offering the expanded curriculum on January 1, 1992.

The College is accredited by the Higher Learning Commission formerly known as the North Central Association of Colleges and Schools. As a public post-high school community college, Hawkeye has been approved jointly by the Iowa State Board of Public Instruction and Iowa State Board of Regents. Individual accredited programs are recognized as follows: Practical Nursing and Associate Degree Nursing, Dental Assistant and Dental Hygiene, Respiratory Therapy, and Medical Laboratory Technician.

The College offers a well-planned, diversified program of adult education, extends its services and facilities to business and industry by offering trade courses, in-service training, and special workshops anywhere in the area. These courses upgrade employees in their current positions as well as educate employees for new roles and opportunities in business and industry. To complement career and vocational-technical classes, the Department of Continuing Education offers adult courses and programs that emphasize general interest in the areas of home improvement, family relationships, community services, senior citizens, hobby and leisure time pursuits.

In addition to the main campus facilities, the College has locations in Waterloo – Martin Luther King Jr. Center, Adult Education Center; Cedar Falls – Business and Community Education Center; Independence – Independence Center; Waverly – Waverly Outreach Center; Holland – Western Outreach Center. The College offers forty-five different career programs varying from one month to two academic years in length. The College supports and cooperates with twenty-two public school districts in promoting and conducting adult education programs. Over 11,000 people participate annually in the Adult Education program.

In February 2015, voters authorized the College to borrow up to $25 million for facilities to address the following community needs: additional workforce development programs and services for adult students; expanded capacity in high-demand fields such as healthcare and advanced manufacturing; and additional career academies in high schools and the College’s outreach center. The College issued $6,000,000 in General Obligation School bonds in February of 2016. College Organization and Services

The College is governed by a Board of Directors, of which nine members are elected from nine districts. Directors are elected to staggered three-year terms. The College employs approximately 700 full and part-time employees including adjunct instructors. The full-time faculty of the College are represented by the Hawkeye Professional Educators’ Association under a two-year contract which expires on August 9, 2017. Support staff, full-time and part-time, are represented by the United Electrical, Radio and Machine Workers of America UE Local 855 under a one-year contract that expires June 30, 2016.



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Enrollment History The College annually enrolls approximately 5,426 full-time equivalent credit students and serves approximately an additional 11,000 registrants in continuing education programs and courses.

College Enrollment(1)

Fiscal Total FTE Year Credit Hours Enrollment

2005 ....................................................... 122,127 5,770 2006 ....................................................... 120,959 5,644 2007 ....................................................... 127,104 5,850 2008 ....................................................... 126,222 5,782 2009 ....................................................... 118,702 5,843 2010 ....................................................... 141,643 6,280 2011 ....................................................... 145,035 6,452 2012 ....................................................... 137,166 6,104 2013 ....................................................... 130,140 5,919 2014 ....................................................... 124,418 5,836 2015 ....................................................... 114,658 5,426 Note: (1) Source: the College and the Iowa Department of Education.

Educational Facilities

Located within the Hawkeye Community College are 22 public school districts. The public school districts and their total student enrollments and population are listed below. Certified Enrollment District School District October 2015(1) Population(2) Aplington-Parkersburg ..................................... 842 4,547 Cedar Falls ...................................................... 5,052 40,251 Clarksville ........................................................ 342 2,161 Denver ............................................................. 718 3,847 Dike-New Hartford............................................ 900 4,338 Dunkerton ........................................................ 445 2,566 East Buchanan ................................................. 538 2,961 Gladbrook-Reinbeck ........................................ 587 4,260 Grundy Center ................................................. 635 3,788 Hudson ............................................................ 679 3,709 Independence .................................................. 1,431 9,100 Janesville ......................................................... 376 2,375 Jesup ............................................................... 884 5,094 Nashua-Plainfield ............................................. 630 4,147 North Butler ...................................................... 602 1,877 North Tama ...................................................... 453 3,111 Sumner-Fredericksburg.................................... 833 4,974 Tripoli ............................................................... 452 2,524 Union ............................................................... 1,127 6,214 Wapsie Valley .................................................. 690 3,885 Waterloo .......................................................... 10,936 78,321 Waverly-Shall Rock .......................................... 1,996 13,798 Total ............................................................... 31,148 207,848 Notes: (1) Source: Iowa Department of Education. (2) Source: National Center for Education Statistics as of the 2010

Census.



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SOCIOECONOMIC INFORMATION

Population Trends

The College has an estimated 2010 population of 207,848. The Counties in the Merged Area VII are listed below. These figures are for the entire respective counties, even though only a portion of each county may be within the boundaries of the Merged Area VII.

Population(1) 2010 2000 1990 1980 Benton ........................... 26,076 25,308 22,429 23,649 Black Hawk .................... 131,090 128,012 123,798 137,961 Bremer ........................... 24,276 23,325 22,813 24,820 Buchanan ....................... 20,958 21,093 20,844 22,900 Butler ............................. 14,867 15,305 15,731 17,668 Chickasaw ..................... 12,439 13,095 13,295 15,437 Fayette ........................... 20,880 22,008 21,843 25,488 Floyd .............................. 16,303 16,900 17,058 19,597 Grundy ........................... 12,453 12,369 12,029 14,366 Tama ............................. 17,767 18,103 17,419 19,533 Note (1) Source: U.S. Bureau of the Census. Employment

Following are lists of certain major employers located in the Area VII Counties.

Major Area Employers(1)

Approximate Location Name Business or Product Employment(2) Waterloo ................................. John Deere ................................................................ Manufacturing ............................................................... 5,600 Waterloo ................................. Wheaton Franciscan Healthcare ................................ Health Care ................................................................... 3,060 Waterloo ................................. Tyson Fresh Meats .................................................... Food Processing ........................................................... 2,500 Cedar Falls ............................. University of Northern Iowa ........................................ Higher Education ........................................................... 1,740 Waterloo ................................. Unity Point Health Care .............................................. Health Care ................................................................... 1,615 Waterloo ................................. Waterloo Community Schools .................................... Public Education ........................................................... 1,610 Waterloo/Cedar Falls .............. Hy-Vee ....................................................................... Grocery Stores .............................................................. 1,545 Waterloo/Cedar Falls .............. Wal-Mart .................................................................... Discount Stores ............................................................. 1,045 Cedar Falls ............................. Target Regional Distribution ....................................... Retail Distribution .......................................................... 860 Waterloo ................................. CBE Companies, Inc. ................................................. Financial ....................................................................... 800 Waterloo/Cedar Falls .............. Area Education Agency 267 ....................................... Educational Support ...................................................... 795 Waterloo ................................. Bertch Cabinet Manufacturing .................................... Manufacturing ............................................................... 760 Waterloo ................................. Black Hawk County .................................................... Government .................................................................. 750 Cedar Falls ............................. Cedar Falls Community Schools ................................ Education ...................................................................... 715 Waterloo ................................. Omega Cabinetry Ltd. ................................................ Manufacturing ............................................................... 700 Waterloo ................................. Hawkeye Community College .................................... Education ...................................................................... 700 Notes: (1) Source: Greater Cedar Valley Alliance, 2016 Iowa Manufacturers Register and a selected telephone survey. (2) Includes part-time employees.



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The following table shows the annual average unemployment rates for certain Counties, the State and the United States. These figures are for the entire respective counties, even though only a portion of each county may be within the boundaries of the Merged Area VII.

Annual Average Unemployment Rates(1)

Calendar Black Hawk Bremer Buchanan State of United Year County County County Iowa States 2007 .................................... 3.8% 3.2% 4.2% 3.8% 4.6% 2008 .................................... 4.1% 3.5% 4.0% 4.0% 5.8% 2009 .................................... 5.7% 5.0% 6.2% 6.2% 9.3% 2010 .................................... 6.4% 5.4% 6.9% 6.3% 9.6% 2011 .................................... 5.9% 4.6% 6.3% 5.9% 8.9% 2012 .................................... 5.4% 3.9% 5.1% 5.2% 8.1% 2013 .................................... 4.7% 3.8% 4.7% 4.7% 7.4% 2014 .................................... 4.8% 3.9% 4.9% 4.4% 6.2% 2015 .................................... 4.5% 3.5% 4.2% 3.8% 5.3% 2016(2) ................................ 5.3% 4.3% 5.6% 3.6% 4.9%

Notes: (1) Source: Iowa Workforce Development. (2) As of February 2016

Income Statistics There are 22 school districts within the boundaries of the College. The following is the average adjusted gross income (AGI) per state income tax returns filed by residents of each of the school districts for the year ending December 31, 2014.

Adjusted Gross Income (AGI) By School District in 2014(1)

Average AGI School District Adjusted Gross Income Number of Returns Per Return Aplington-Parkersburg ........................... $ 108,952,336 2,808 $38,801 Cedar Falls ............................................ 1,169,684,126 22,766 51,379 Clarksville .............................................. 42,755,660 1,278 33,455 Denver ................................................... 120,584,817 2,451 49,198 Dike-New Hartford ................................. 112,316,483 2,572 43,669 Dunkerton .............................................. 50,304,981 1,299 38,726 East Buchanan ...................................... 64,898,131 1,801 36,034 Gladbrook-Reinbeck .............................. 114,031,685 2,651 43,015 Grundy Center ....................................... 98,433,615 2,411 40,827 Hudson .................................................. 94,590,114 2,065 45,806 Independence ........................................ 212,143,748 5,830 36,388 Janesville ............................................... 57,645,065 1,390 41,471 Jesup ..................................................... 129,919,159 2,984 43,539 Nashua-Plainfield ................................... 83,879,910 2,380 35,244 North Butler ........................................... 82,128,666 2,358 34,830 North Tama ............................................ 69,044,994 1,916 36,036 Sumner-Fredericksburg ......................... 114,476,963 3,075 37,228 Tripoli ..................................................... 57,352,122 1,522 37,682 Union ..................................................... 160,419,483 3,719 43,135 Wapsie Valley ........................................ 83,592,521 2,219 37,671 Waterloo ................................................ 1,625,587,371 45,088 36,054 Waverly-Shell Rock................................ 341,600,903 8,325 41,033 Note: (1) Source: Iowa Department of Revenue.



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Agricultural Statistics

Shown below are agricultural statistics of the Counties in the Merged Area VII and certain data comparing the Counties with statewide averages:

Average Value Per Acre(1) Counties 2011 2012 2013 2014 2015 Benton ........................................................................ $7,681 $ 9,134 $ 9,826 $9,080 8,485 Black Hawk ................................................................. 8,372 10,511 11,239 9,982 9,198 Bremer........................................................................ 7,562 9,745 10,348 9,174 8,692 Buchanan ................................................................... 7,421 9,479 10,113 8,977 8,447 Butler .......................................................................... 7,423 9,387 9,904 8,769 8,101 Chickasaw .................................................................. 6,368 8,202 8,700 7,965 7,567 Fayette ....................................................................... 6,748 8,652 9,080 8,340 8,233 Floyd .......................................................................... 7,113 9,203 9,863 8,539 7,808 Grundy........................................................................ 8,461 10,253 10,931 9,876 9,183 Tama .......................................................................... 7,188 8,527 9,145 8,560 7,985 State of Iowa .............................................................. 6,708 8,296 8,716 7,943 7,633 Note: (1) Source: Cooperative Extension Service - Iowa State University. 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 Counties.

Retail Taxable Sales(1)

Fiscal Year Ended June 30

Counties 2011 2012 2013 2014 2015 Benton ....................................... $ 114,707,440 $ 122,326,648 $ 118,636,702 $ 126,786,286 $ 129,222,369 Black Hawk ................................ 1,710,560,724 1,755,167,454 1,780,865,630 1,819,226,681 1,852,652,613 Bremer ...................................... 171,702,918 180,028,719 181,849,420 184,254,113 191,961,205 Buchanan .................................. 153,364,056 157,441,735 159,681,961 164,079,436 159,852,993 Butler ......................................... 52,531,091 55,362,879 55,999,362 59,628,005 61,209,960 Chickasaw ................................. 86,539,219 92,446,696 89,621,310 91,732,652 88,306,701 Fayette ...................................... 120,362,787 127,312,743 124,439,382 128,082,765 130,412,827 Floyd ......................................... 102,641,848 109,743,327 113,565,019 118,766,637 120,847,656 Grundy ...................................... 67,925,030 69,198,866 66,136,430 68,102,884 67,682,620 Tama ......................................... 68,895,588 79,914,752 75,076,996 75,690,855 78,065,747 Total ........................................ $2,649,230,701 $2,748,943,819 $2,765,872,212 $2,836,350,314 $2,880,214,691 Note: (1) Source: Iowa Department of Revenue.

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GENERAL OBLIGATION DEBT INFORMATION

After issuance of the Certificates, the College will have approximately $16,980,000 in Industrial New Jobs Training Certificates paid from proceeds from anticipated job credits from withholding taxes, budgeted reserves, and, in the case of an insufficiency of such sources, from standby property taxes. Also, the College has $6,000,000 principal amount of General Obligation School Bonds outstanding.

The College has a general obligation legal debt limit equal to 5% of Actual Valuation. For the January 1, 2014 Actual Valuation of $16,144,737,044 (including tax increment valuation and excluding military exemption valuation) applied to fiscal year 2015/16, the total limit is $807,236,852. Including the Certificates, the estimated principal amount of bonded and nonbonded debt applicable to this limit is approximately $22,980,000, resulting in a legal debt margin of $784,256,852.

The College does not expect to issue additional general obligation debt in the near future.

Summary of General Obligation Bonded Debt(1) (Principal Only - By Series)

General Obligation School Bonds

Series 2016 ............................................................................................... $ 6,000,000 Industrial New Jobs Training Certificates Taxable Series 2009-1 .............................................................................. $ 2,825,000 Taxable Series 2010-1 .............................................................................. 1,530,000 Taxable Series 2011-1 .............................................................................. 330,000 Taxable Series 2011-2 .............................................................................. 865,000 Taxable Series 2012-1 .............................................................................. 1,700,000 Taxable Series 2012-2 .............................................................................. 780,000 Taxable Series 2013-1 .............................................................................. 1,840,000 Taxable Series 2014-1 .............................................................................. 2,225,000 Taxable Series 2014-2 .............................................................................. 1,140,000

Taxable Series 2015-1 .............................................................................. 1,830,000 The Series 2016-1 Certificates .......................................................................... 1,915,000

Total ................................................................................................................ $22,980,000

Note: (1) Source: the College.




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General Obligation Debt(1) (Principal Only)

Fiscal Outstanding Industrial New Jobs Training Certificates(2) Total Year Ending Series Series Series Series Series Series Series Series Series Series Outstanding INJT June 30 2009-1 2010-1 2011-1 2011-2 2012-1 2012-2 2013-1 2014-1 2014-2 2015-1 Certificates

2016 ........... $ 685,000 $ 335,000 $330,000 $155,000 $ 250,000 $375,000 $ 235,000 $ 250,000 $ 385,000 $ 170,000 $ 3,170,000 2017 ........... 690,000 315,000 0 155,000 245,000 405,000 235,000 250,000 380,000 190,000 2,865,000 2018 ........... 710,000 310,000 0 155,000 240,000 0 230,000 250,000 375,000 185,000 2,455,000 2019 ........... 740,000 295,000 0 140,000 240,000 0 225,000 250,000 0 185,000 2,075,000 2020 ........... 0 275,000 0 130,000 235,000 0 225,000 250,000 0 190,000 1,305,000 2021 ........... 0 0 0 130,000 245,000 0 230,000 250,000 0 185,000 1,040,000 2022 ........... 0 0 0 0 245,000 0 230,000 245,000 0 185,000 905,000 2023 ........... 0 0 0 0 0 0 230,000 240,000 0 180,000 650,000 2024 ........... 0 0 0 0 0 0 0 240,000 0 180,000 420,000 2025 ........... 0 0 0 0 0 0 0 0 0 180,000 180,000 2026 ........... 0 0 0 0 0 0 0 0 0 0 0 Total ......... $2,825,000 $1,530,000 $330,000 $865,000 $1,700,000 $780,000 $1,840,000 $2,225,000 $1,140,000 $1,830,000 $15,065,000

Total Outstanding Total Fiscal GO Bond Industrial New General Cumulative Year Ending Series Jobs Training The Obligation Principal Retired June 30 2016 Certificates Certificates(2) Debt Amount Percent

2016 ....................................... $2,320,000 $ 3,170,000 $ 0 $ 5,490,000 $ 5,490,000 23.89% 2017 ....................................... 2,310,000 2,865,000 225,000 5,400,000 10,890,000 47.39% 2018 ....................................... 1,370,000 2,455,000 200,000 4,025,000 14,915,000 64.90% 2019 ....................................... 0 2,075,000 200,000 2,275,000 17,190,000 74.80% 2020 ....................................... 0 1,305,000 195,000 1,500,000 18,690,000 81.33% 2021 ....................................... 0 1,040,000 195,000 1,235,000 19,925,000 86.71% 2022 ....................................... 0 905,000 185,000 1,090,000 21,015,000 91.45% 2023 ....................................... 0 650,000 185,000 835,000 21,850,000 95.08% 2024 ....................................... 0 420,000 185,000 605,000 22,455,000 97.12% 2025 ....................................... 0 180,000 175,000 355,000 22,810,000 99.26% 2026 ....................................... 0 0 170,000 170,000 22,980,000 100.00% Total ..................................... $6,000,000 $15,065,000 $1,915,000 $22,980,000

Notes: (1) Source: the College.

(2) Industrial New Jobs Training Certificates are retired by proceeds from anticipated job credits from withholding taxes, incremental property tax, budgeted reserves, and in the case of an insufficiency of such sources, from standby property taxes.



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Statement of General Obligation Bonded Indebtedness(1)(2)

College Actual Value, January 1, 2014 ............................................................................................................................................. $16,144,737,044 College Taxable Value, January 1, 2014 .......................................................................................................................................... $ 9,434,892,649

Total Ratio to Ratio to Per Capita Applicable College Actual College Taxable (2010 Pop.

G.O. Debt Valuation Valuation Est. 207,848) Direct General Obligation Bonded Debt(3) ......... $ 22,980,000 0.14% 0.24% $ 110.56 Less: Direct Debt Paid From Non Property Tax Sources (3) ................................. (16,980,000) (0.11%) (0.18%) (81.69) Net Direct GO Bonded Debt............................ $ 6,000,000 0.03% 0.06% $ 28.87 Overlapping Debt: Schools ............................................................ $ 49,815,000 0.31% 0.53% $ 239.67 Cities ................................................................ 168,221,325 1.04% 1.78% 809.35 Counties ........................................................... 69,027,208 0.43% 0.73% 332.10 Total Overlapping Debt .................................... $287,063,533 1.78% 3.04% $1,381.12 Total Net Direct General Obligation and Overlapping Bonded Debt(4).................... $293,063,533 1.81% 3.10% $1,409.99

College Actual Value, January 1, 2014 Per Capita ................................................................................................................................. $77,675.69 College Taxable Value, January 1, 2014 Per Capita ............................................................................................................................... $45,393.23

Notes: (1) Source: the College, Audited Financial Statements and EMMA for the Cities, School Districts and Counties. (2) As of the date of issuance of the Certificates for Direct Debt and November 3, 2015 for Overlapping Debt. (3) Includes all Industrial New Jobs Training Certificates of the College which are retired by proceeds from anticipated job credits

from withholding taxes, budgeted reserves, and, in the case of an insufficiency of such sources, from standby property taxes.

PROPERTY 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.



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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, 2014, are used to calculate tax liability for the tax year starting July 1, 2015 through June 30, 2016. 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 College. 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 College(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year January 1: 2011 2012 2013 2014 2015(5) Residential ........................................................ $ 9,023,210,017 $ 9,149,860,190 $ 9,189,846,041 $ 9,353,964,331 $ 9,754,942,712 Agricultural Land ............................................... 2,466,799,394 2,464,940,162 3,511,503,329 3,510,044,162 3,618,668,170 Agricultural Buildings ......................................... 178,153,457 184,975,329 224,020,626 233,416,501 174,179,010 Commercial ....................................................... 2,058,344,652 2,035,973,707 2,067,542,479 2,064,628,802 1,882,848,141 Industrial ........................................................... 331,039,289 349,582,353 352,954,102 369,520,982 377,947,262 Multi-residential ................................................. 0 0 0 0 227,403,507 Railroad ............................................................. 27,574,028 31,716,589 37,426,253 40,047,550 42,498,623 Utilities without Gas and Electric(3) ................... 150,114,269 148,226,728 137,303,777 126,651,818 119,861,320 Gas and Electric Utilities(3) ............................... 407,024,428 425,573,615 406,749,737 467,821,648 553,998,275 Other ................................................................. 0 137,263 0 0 0 Less: Military Exemption ................................... (23,266,814) (22,627,560) (22,069,094) (21,358,750) (20,567,013) Total ................................................................ $14,618,992,720 $14,768,358,376 $15,905,277,250 $16,144,737,044 $16,731,780,007 Percent Change +(-) ........................................ 7.46%(4) 1.02% 7.70% 1.51% 3.64% Notes: (1) Source: the 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 ............................... $612,823,372 $461,646,486 $677,252,787 $728,102,428 $763,123,470 (3) See “PROPERTY TAX INFORMATION-Utility Property Tax Replacement” herein. (4) Based on 2010 Actual Valuation of $13,604,110,133. (5) Preliminary; subject to change.




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For the January 1, 2015 levy year, the College’s Taxable Valuation was comprised of approximately 55%

residential, 17% commercial, 18% agricultural land and buildings, 3% industrial, 4% utilities, 2% multi-residential, and less than 1% railroad, other and military exemption.

Taxable (“Rollback”) Valuations for the College(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year January 1: 2011 2012 2013 2014 2015(5) Residential .......................................................... $4,579,441,234 $4,832,645,979 $4,999,294,830 $5,213,288,593 $5,426,275,609 Agricultural Land ................................................. 1,419,423,463 1,477,322,591 1,523,981,846 1,569,049,681 1,668,429,565 Agricultural Buildings ........................................... 102,511,598 110,862,200 97,224,277 104,355,849 80,330,831 Commercial ......................................................... 2,058,344,652 2,035,973,707 1,964,168,157 1,858,165,925 1,694,563,373 Industrial ............................................................. 331,039,289 349,582,353 335,306,559 332,568,884 340,152,536 Multi-residential ................................................... 0 0 0 0 196,135,657 Railroad ............................................................... 27,574,028 31,716,589 35,554,942 36,042,801 38,248,762 Utilities without Gas and Electric(3) ..................... 150,114,269 148,226,728 137,303,777 126,651,818 119,861,320 Gas and Electric Utilities(3) ................................. 217,611,478 214,444,741 217,649,833 216,127,848 239,983,540 Other ................................................................... 0 137,263 0 0 0 Less: Military Exemption ..................................... (23,266,814) (22,627,560) (22,069,094) (21,358,750) (20,567,013) Total .................................................................. $8,862,793,197 $9,178,284,591 $9,288,415,127 $9,434,892,649 $9,783,414,180 Percent Change +(-) .......................................... 6.89%(4) 3.56% 1.20% 1.58% 3.69% Notes: (1) Source: the 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 ............................... $602,946,215 $434,488,209 $434,488,209 $661,517,101 $715,466,740

(3) See “PROPERTY TAX INFORMATION-Utility Property Tax Replacement” herein. (4) Based on 2010 Taxable Valuation of $8,291,878,903. (5) Preliminary; subject to change.

Historical College Valuation Trends(1)(2) Levy Year 100% Actual Value Taxable Value 2006 ........................................................... $11,055,842,265 $6,910,265,888 2007 ........................................................... 12,211,799,996 7,369,979,434 2008 ........................................................... 12,549,436,467 7,734,633,310 2009 ........................................................... 13,381,088,226 7,953,051,213 2010 ........................................................... 13,604,110,133 8,291,878,903 2011 ........................................................... 14,618,992,720 8,862,793,197 2012 ........................................................... 14,768,358,376 9,178,284,591 2013 ........................................................... 15,905,277,250 9,288,415,127 2014 ........................................................... 16,144,737,044 9,434,892,649 2015(3) ...................................................... 16,731,780,007 9,783,414,180 Notes: (1) Source: the Iowa Department of Management.

(2) Net of Military Exemption. (3) Preliminary; subject to change.

Levy Year January 1, 2015 Preliminary College Valuation By County(1) Percent Percent 100% Actual Value of Total Taxable Value of Total Benton ................................... $ 238,197,749 1.42% $ 107,992,356 1.10% Black Hawk ............................ 9,119,769,222 54.51% 5,662,320,234 57.88% Bremer ................................... 2,319,942,324 13.87% 1,309,799,585 13.39% Buchanan ............................... 1,602,932,320 9.58% 867,012,423 8.86% Butler ..................................... 1,203,689,353 7.19% 663,456,217 6.78% Chickasaw ............................. 246,781,176 1.47% 130,859,215 1.34% Fayette ................................... 200,476,646 1.20% 105,268,529 1.08% Floyd ...................................... 66,188,341 0.40% 32,895,677 0.34% Grundy ................................... 1,045,751,873 6.25% 552,335,468 5.65% Tama ..................................... 688,051,003 4.11% 351,474,476 3.59% Total ..................................... $16,731,780,007 $ 9,783,414,180 Note: (1) Source: the Iowa Department of Management.



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The following shows the trend in the College’s tax extensions and collections.

Tax Extensions and Collections(1)

Levy Fiscal Amount Amount Percent Year Year Levied Collected(2) Collected 2004 .............. 2005-06 .......... $6,793,389 $6,584,025 96.92% 2005 .............. 2006-07 .......... 6,735,335 6,759,565 100.36% 2006 .............. 2007-08 .......... 5,687,831 5,509,468 96.86% 2007 .............. 2008-09 .......... 6,879,288 7,073,144 102.82% 2008 .............. 2009-10 .......... 6,892,421 6,890,306 99.97% 2009 .............. 2010-11 .......... 7,548,375 7,565,783 100.23% 2010 .............. 2011-12 .......... 7,615,451 7,616,726 100.02% 2011 .............. 2012-13 .......... 8,152,213 8,125,536 99.67% 2012 .............. 2013-14 .......... 8,437,044 8,410,452 99.68% 2013 .............. 2014-15 .......... 8,308,869 8,262,008 99.44% 2014 .............. 2015-16 .......... 8,507,807 - In Collection - - Notes: (1) Source: the State of Iowa Department of Management and the

College. Includes amounts for Utility Replacement. (2) Includes delinquent taxes.

Listed below are the larger taxpayers in the Counties within the College Merged Area VII and their taxable valuations.

Principal Taxpayers(1) January 1, 2014

Taxpayer Name Business/Service Taxable Value(2) Target Corporation ................................................................ Warehouse ...................................................................... $ 77,508,954 Deere and Company.............................................................. Manufacturing .................................................................. 55,714,301 IOC Black Hawk County ........................................................ Casino/Hotel .................................................................... 48,937,500 Waterloo Owner LLC ............................................................. Retail Mall ........................................................................ 32,155,128 College Square Mall Partners LLC ......................................... Retail Mall ........................................................................ 27,043,722 Menards ................................................................................ Retail ............................................................................... 23,212,257 CenturyLink ........................................................................... Utility ................................................................................ 23,122,975 Northern Natural Gas Company............................................. Utility ................................................................................ 22,929,314 Con Agra. .............................................................................. Food Processing .............................................................. 19,951,236 Ferguson Enterprises, Inc. ..................................................... Warehouse ...................................................................... 18,636,903 Total ............................................................................................................................................................................. $349,212,290 Ten Largest Taxpayers as Percent of College’s 2014 Taxable Valuation ($9,434,892,649) ..................................................... 3.70% Notes: (1) Source: the Counties. (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. Property Tax Rates

All taxable property within the Merged Area is taxed by each county at a rate not to exceed $0.2025 per $1,000 of assessed value on such property for the operation of the area vocational school or the area community college such as the College. In addition to the tax authorized for the operation of a merged area community college, the voters in any merged area may vote a tax not to exceed $0.2025 per $1,000 of assessed value for a period not to exceed ten years for the plant fund to be used for capital improvements to the College. The voters of the College reapproved the plant levy at an election held in September, 2013. The board of directors of a merged area may also certify a levy not to exceed $0.03 per $1,000 of assessed value for equipment replacement and they are authorized to levy to pay certain insurance expenses of the merged area. In addition, upon voter approval, the College can institute a property tax that generates $0.06 per $1,000 of assessed valuation. The voters of the College reapproved at an election held in September 2015, the Equipment Levy for a $0.06 per $1,000 of assessed valuation. The additional $0.06 per $1,000 levy can only be used for Instructional Equipment.



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The property tax rates for the College from levy year 2010 through levy year 2014 are shown below:

Property Tax Rates(1) (Per $1,000 Taxable Valuation)

Fiscal Year: 2011/12 2012/13 2013/14 2014/15 2015/16 Levy Year: 2010 2011 2012 2013 2014 General Fund ............................................... $0.20250 $0.20250 $0.20250 $0.20250 $0.20250 Plant Fund .................................................... 0.20250 0.20250 0.20250 0.20250 0.20250 Debt Service Fund ........................................ 0.36000 0.36000 0.25895 0.12654 0.25000 Equipment .................................................... 0.09000 0.09000 0.09000 0.09000 0.09000 Other Funds ................................................. 0.10615 0.10569 0.19810 0.32934 0.20588 Total College .............................................. $0.96115 0.96069 $0.95205 $0.95088 $0.95088 Note: (1) Source: Iowa Department of Management.

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 Finance 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 College) 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 College 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 College’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 College can issue or (ii) adversely affect the College’s ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Certificates. Approximately 4% of the College’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. The total taxable valuation of this type of TIF district in the College is levy year 2014 was $661,517,101.

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.



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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 College or have an adverse impact on the future tax collections of the College. Purchasers of the Certificates 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 Certificates 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, from the current 4% 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 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter, (iii) creates a new property tax classification for multi-residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) that begins in the 2015 assessment year, and assigns a declining rollback percentage to such properties for each subsequent 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. Prior to fiscal year 2018, the appropriation is a standing unlimited appropriation, but 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% from 4%, the gradual transition for multi-residential properties from the commercial rollback percentage (100% of market value) 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 College’s future property tax collections is uncertain and the College has not attempted to quantify the financial impact of the Act’s provisions on the College’s future operations. It has been projected by Moody’s Investor Service that local governments in Iowa are likely to experience modest reductions in property tax revenues starting in fiscal 2015 as a result of the Act, with sizeable reductions possible 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 General Obligation 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 College. 1 US Public Finance Weekly Credit Outlook, May 30, 2013, Moody’s Investors Service.



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FINANCIAL INFORMATION Financial Reports

The College’s financial statements are audited annually by certified public accountants. For financial reporting purposes, the College is considered a special-purpose government engaged only in business-type activities as defined in GASB Statement No. 34. Accordingly, the basic financial statements of the College have been prepared using the economic resources measurement focus and the accrual basis of accounting. 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 and in APPENDIX A are from the audited financial statements of the College, including the audited financial statements for the fiscal year ended June 30, 2015, (the “2015 Audit”). The 2015 Audit has been prepared by Williams & Company, P.C., Certified Public Accountants, Spencer, Iowa (the “Auditor”), and received by the Board. The College has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2015 Audit; nor has the College requested that the Auditor consent to the use of the Excerpted Financial Information and the 2015 Audit in this Final Official Statement. Other than as expressly set forth in this Final Official Statement, the financial information contained in the Excerpted Financial Information and the 2015 Audit has not been updated since the date of the 2015 Audit. 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 College since the date of the 2015 Audit. Questions or inquiries relating to financial information of the College since the date of the 2015 Audit should be directed to the College. 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 College’s 2015 Audit. The College ended its fiscal year 2015 Current Funds – Unrestricted Balance at approximately $11,366,000. The College approved a budget with a planned use of reserves of approximately $1,190,000 for fiscal year 2016.




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Statement of Net Position(1)(2)

Audited as of June 30 2011 2012 2013 2014 2015 ASSETS: Current Assets: Cash and Cash Equivalents ................................ $ 922,873 $ 1,050,308 $ 2,973,544 $ 2,049,233 $ 5,568,274 Pooled Investments ............................................ 51,648,970 30,735,975 28,300,960 27,435,036 28,715,165 Receivables Due From Other, (Net) ...................................... 1,986,895 1,940,937 2,161,686 2,401,905 3,100,296 Accrued Interest ............................................... 59,692 51,196 46,368 35,327 40,631 Property Taxes – Succeeding Year ................... 7,612,953 8,152,213 8,437,044 8,308,869 8,507,807 Student Loans .................................................. 23,177 15,724 2,514 13,537 16,205 Loans Receivable (Net) .................................... 60,199 52,625 51,516 41,346 41,180 Iowa Industrial New Jobs Training Program ...... 684,523 826,885 725,383 875,934 922,247 Due From Other Governments ............................ 1,311,690 1,228,400 3,219,131 987,759 2,551,991 Prepaid Expenses .............................................. 72,959 322,486 280,548 392,835 308,110 Inventories .......................................................... 169,492 143,098 148,209 204,951 151,880 Bond Issue Costs/Unamortized Bond Discount ... 11,365 14,941 8,559 0 0 Total Current Assets ......................................... $ 64,564,788 $ 44,534,788 $ 46,355,462 $ 42,746,732 $ 49,923,786 Noncurrent Assets Pooled Investments ............................................ $ 7,263,049 $ 21,804,111 $ 18,648,590 $ 23,380,923 $ 12,793,855 Receivables: Iowa Industrial New Jobs Training Program ....... 3,546,186 2,781,074 2,054,560 0 0 Life Insurance Cash Value ................................. 19,637 21,060 22,482 23,900 25,448 Bond Issue Costs/Unamortized Discount ............ 47,881 65,377 6,783 0 0 Capital Assets (Net) ............................................ 50,121,714 54,613,676 56,687,268 57,399,942 58,694,486 Total Noncurrent Assets ................................... $ 60,998,467 $ 79,285,298 $ 77,419,683 $ 80,804,765 $ 71,513,789 Total Assets ..................................................... $125,563,255 $123,820,086 $123,775,145 $123,551,497 $121,437,575 DEFERRED OUTFLOWS OF RESOURCES: Pension Related Deferred Outflows .................... $ 0 $ 0 $ 0 $ 0 $ 1,385,410 LIABILITIES: Current Liabilities: Accounts Payable ............................................... $ 1,372,936 $ 1,054,467 $ 1,090,560 $ 1,196,190 $ 2,457,600 Salaries and Benefits Payable ............................ 2,079,937 2,109,596 2,699,571 2,448,787 2,678,422 Accrued Interest Payable .................................... 89,489 73,423 56,821 42,454 34,509 Unearned Revenue............................................. 1,173,937 891,495 1,229,885 1,374,674 1,289,865 Compensated Absences ..................................... 540,014 519,884 495,776 575,000 575,000 Early Retirement Payable ................................... 740,545 1,935,601 130,317 0 973,929 Assets Held in Custody For Others ..................... 1,526,495 1,037,932 870,126 852,348 760,071 Certificates Payable ............................................ 3,143,102 3,234,350 3,215,305 3,580,000 3,170,000 General Obligation School Bonds ....................... 2,629,845 2,728,113 2,818,381 2,045,170 0 Note Payable ...................................................... 16,947 0 0 0 0 Total Current Liabilities ..................................... $ 20,926,200 $ 21,737,074 $ 21,043,786 $ 12,114,623 $ 11,939,396 Noncurrent Liabilities: Unearned Revenue............................................. $ 466,764 $ 438,293 $ 405,859 $ 386,283 $ 447,235 Compensated Absences ..................................... 79,514 116,617 122,328 188,080 279,060 Early Retirement Payable ................................... 459,660 111,455 0 0 56,356 Certificated Payable ............................................ 15,611,411 14,958,637 14,102,129 13,235,000 11,895,000 General Obligation School Bonds ....................... 7,583,365 4,856,856 2,041,879 0 0 Net Pension Liability ........................................... 0 0 0 0 5,159,327 Net Other Post-Employment Benefits Liability ..... 270,710 279,021 290,392 304,342 298,708 Total Noncurrent Liabilities ............................... $ 24,471,424 $ 20,760,879 $ 16,962,587 $ 14,113,705 $ 18,135,686 Total Liabilities ................................................. $ 45,397,624 $ 42,497,953 $ 38,006,373 $ 26,228,328 $ 30,075,082 DEFERRED INFLOWS OF RESOURCES: Unavailable Property Tax Revenue ..................... $ 7,612,953 $ 8,152,213 $ 8,437,044 $ 8,308,869 $ 8,507,807 Pension Related Deferred Inflows ....................... 0 0 0 0 1,967,619 Total Deferred Inflows of Resources .................. $ 7,612,953 $ 8,152,213 $ 8,437,044 $ 8,308,869 $ 10,475,426 NET POSITION: Net Invested in Capital Assets ............................ $ 39,503,499 $ 47,018,528 $ 51,827,008 $ 55,354,772 $ 58,694,486 Restricted Non Expendable ................................................ 1,864,583 1,895,410 2,027,426 2,051,532 2,098,930 Expendable ...................................................... 15,445,723 13,072,623 13,814,889 14,901,908 14,189,624 Unrestricted ........................................................ 23,351,826 19,335,572 18,099,449 16,706,088 7,289,437 Total Net Position ............................................. $ 80,165,631 $ 81,322,133 $ 85,768,772 $ 89,014,300 $ 82,272,477 Notes: (1) Source: Audited financial statements for the College for the fiscal years ended June 30, 2011 through 2015. (2) Includes the Hawkeye Community College Foundation.



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Statement of Revenues, Expenses and Changes In Net Position(1)(2)

Audited Fiscal Year Ended June 30

2011 2012 2013 2014 2015 REVENUES: Operating Revenues: Tuition and Fees (Net) .................................................... $ 7,902,981 $ 8,050,003 $ 9,644,039 $ 10,451,454 $ 9,517,319 Federal Appropriations ................................................... 15,210,266 13,900,279 12,662,733 12,217,312 13,559,712 Iowa Industrial New Jobs Training Program .................... 2,868,437 3,930,802 2,809,463 1,194,342 3,813,684 Gifts and Grants ............................................................. 651,104 1,077,862 708,315 946,486 1,022,645 Auxiliary Enterprises Revenue (Net) ............................... 2,434,361 1,996,485 1,806,432 1,865,332 2,133,658 Miscellaneous................................................................. 2,119,747 2,198,075 2,252,311 1,919,139 3,304,574 Total Operating Revenues ............................................ $ 31,186,896 $ 31,153,506 $ 29,883,293 $ 28,594,065 $ 33,351,592 EXPENSES: Operating Expenses: Education and Support: Liberal Arts and Sciences ............................................. $ 6,530,382 $ 7,143,778 $ 7,576,779 $ 6,690,837 $ 7,370,096 Vocational Technical .................................................... 9,090,162 9,337,189 9,803,909 9,641,726 16,264,681 Adult Education ............................................................ 2,421,766 2,580,395 3,067,166 4,761,973 4,689,368 Cooperative Services ................................................... 4,117,198 5,389,973 4,599,275 3,899,676 5,345,385 General Administration ................................................. 2,549,778 3,541,248 2,607,332 2,265,799 1,953,527 Student Services .......................................................... 2,628,683 2,970,292 3,072,403 3,399,493 3,939,035 Learning Resources ..................................................... 713,523 813,606 790,155 878,858 1,143,181 Physical Plant ............................................................... 3,333,448 3,710,311 3,932,589 3,629,241 3,679,968 General Institution ........................................................ 7,246,308 7,894,533 6,754,056 8,047,467 6,887,909 Auxiliary Enterprises ....................................................... 2,554,299 2,588,301 2,411,054 2,659,540 2,784,313 Scholarships and Grants ................................................ 944,767 959,496 1,046,531 1,134,204 1,372,699 Loan Cancellations and Bad Debts ................................. 58,130 76,064 103,582 104,802 43,694 Administrative and Collection Costs ................................ 59,250 83,867 63,738 78,168 433,782 Program Costs ............................................................... 150,081 207,057 47,194 161,329 138,901 Fundraising Expenses .................................................... 17,236 17,134 29,893 19,192 50,492 Depreciation Expense .................................................... 2,236,116 2,436,149 2,573,857 2,636,302 2,945,020 Total Operating Expenses ............................................ $ 44,651,127 $ 49,749,393 $ 48,479,513 $ 50,008,607 $ 59,042,051 Operating Income (Loss) ............................................ $(13,464,231) $(18,595,887) $(18,596,220) $(21,414,542) $(25,690,459) NON-OPERATING REVENUES (EXPENSES): State Appropriations ....................................................... $ 12,435,369 $ 12,860,686 $ 15,606,493 $ 16,097,835 $ 17,099,053 Property Taxes ............................................................... 7,565,783 7,616,726 8,125,536 8,410,452 8,262,008 Interest Income from Investments ................................... 705,808 122,122 486,762 850,576 483,621 Gain (Loss) on Sale of Capital Assets ............................ (108,940) (45,636) (33,744) 2,620 (176,488) Interest on Indebtedness ................................................ (1,116,244) (1,015,188) (756,435) (701,413) (514,188) Net Non-Operating Revenues ....................................... $ 19,481,776 $ 19,538,710 $ 23,428,612 $ 24,660,070 $ 25,154,006 Increase (Decrease) In Net Position ................................ $ 6,017,545 $ 942,823 $ 4,832,392 $ 3,245,528 $ (536,453) Net Position Beginning of Year ........................................ 74,148,086(3) 80,379,310(3) 80,936,380(3) 85,768,772 82,808,930(3) Net Position End of Year ................................................. $ 80,165,631 $ 81,322,133 $ 85,768,772 $ 89,014,300 $ 82,272,477 Notes: (1) Source: Audited financial statements for the College for the fiscal years ended June 30, 2011 through 2015. (2) Includes the Hawkeye Community College Foundation. (3) Includes a Prior Period Adjustment.




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Balance Sheet(1)

Current Funds - Unrestricted

Audited as of June 30 2011 2012 2013 2014 2015 ASSETS: Cash and Investment ............................. $16,456,045 $16,106,259 $15,539,562 $14,804,464 $15,142,708 Receivables Due From Other ................................... 1,803,981 1,265,250 1,777,272 2,083,358 2,428,769 Accrued Interest .................................. 34,034 41,936 36,264 21,777 25,833 Property Taxes – Succeeding Year ...... 1,558,920 1,672,619 1,770,619 1,752,355 1,776,609 Due From Other Governments ............... 530,917 203,536 295,799 293,680 115,139 Prepaid Expenses ................................. 72,959 322,486 280,548 342,041 308,110 Inventories ............................................. 169,492 143,098 148,209 204,951 151,880 Total Assets ........................................ $20,626,348 $19,755,184 $19,848,273 $19,502,626 $19,949,048 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE: Liabilities: Accounts Payable ................................. $ 1,219,610 $ 274,903 $ 843,062 $ 1,027,142 $ 2,298,306 Salaries and Benefits Payable .............. 2,042,434 2,104,592 2,690,695 2,438,389 2,676,625 Unearned Revenue............................... 1,010,534 719,861 881,357 875,862 977,335 Early Retirement Payable ..................... 235,101 497,467 72,086 0 0 Compensated Absences ....................... 548,213 636,501 618,104 763,080 854,060 Total Liabilities .................................... $ 6,614,812 $ 5,905,943 $ 6,875,923 $ 5,104,473 $ 6,806,326 Deferred Inflows of Resources: Succeeding Year Property Tax ............ $ 1,558,920 $ 1,672,619 $ 1,770,619 $ 1,752,355 $ 1,776,609 Fund Balance: Unrestricted .......................................... $ 9,416,604 $ 9,472,431 $ 8,846,549 $ 9,101,918 $ 8,195,868 Auxiliary Enterprises ............................. 4,594,932 4,376,810 4,125,801 3,543,880 3,170,245 Total Fund Balance ............................. $14,011,536 $13,849,241 $12,972,350 $12,645,798 $11,366,113 Total Liabilities, Deferred Inflows of Resources and Fund Balance ............ $20,626,348 $19,755,184 $19,848,273 $19,502,626 $19,949,048

Note: (1) Source: Audited financial statements of the College for the fiscal years ended June 30, 2011 through 2015.




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Schedule of Revenues, Expenditures and Other Changes In Fund Balances (1)

Current Funds – Unrestricted

Audited Fiscal Year Ended June 30 2011 2012 2013 2014 2015

REVENUES AND OTHER ADDITIONS: General: State Appropriations ....................................................... $11,137,051 $11,441,467 $12,243,369 $13,193,803 $13,717,409 Tuition and Fees ............................................................. 19,021,047 18,571,387 19,133,475 19,168,702 17,732,024 Property Taxes ............................................................... 1,494,466 1,558,679 1,666,482 1,765,610 1,742,218 Federal Appropriations ................................................... 1,367,820 711,943 741,997 721,486 210,861 Investment Earnings ....................................................... 91,502 96,514 72,733 171,678 274,026 Miscellaneous................................................................. 1,032,406 975,142 667,358 670,648 1,621,105 Total General Revenues ............................................... $34,144,292 $33,355,132 $34,525,414 $35,691,927 $35,297,643 Auxiliary Enterprises Tuition and Fees ............................................................. 954,296 793,050 692,915 762,869 810,144 Sales and Services ......................................................... 1,841,966 1,560,431 1,347,843 1,337,807 1,585,821 Miscellaneous................................................................. 129,153 43,476 76,115 85,362 84,344 Total Auxiliary Enterprises ............................................. $ 2,925,415 $ 2,396,957 $ 2,116,873 $ 2,186,038 $ 2,480,309 Total Revenues and Other Additions ............................... $37,069,707 $35,752,089 $36,642,287 $37,877,965 $37,777,952 EXPENDITURES AND OTHER DEDUCTIONS: Education and Support: Liberal Arts and Sciences ............................................... $ 6,530,382 $ 7,143,778 $ 7,576,779 $ 6,690,837 $ 7,251,599 Vocational Technical ...................................................... 9,557,818 9,435,893 9,856,494 9,850,670 10,348,488 Adult Education .............................................................. 2,429,625 2,580,395 3,067,166 4,761,973 3,963,525 General Administration ................................................... 1,858,534 1,873,824 1,992,813 1,833,264 1,887,072 Student Services ............................................................ 2,633,091 2,970,292 3,072,403 3,399,493 3,709,559 Learning Resources ....................................................... 713,523 819,601 790,155 878,858 1,143,181 Physical Plant ................................................................. 3,207,032 3,236,399 3,547,813 3,533,647 2,798,289 General Institution .......................................................... 5,299,567 5,399,814 4,924,977 4,400,525 5,014,994 Total Education and Support ......................................... $32,229,572 $33,459,996 $34,828,600 $35,349,267 $36,116,707 Auxiliary Enterprises ........................................................ $ 2,963,456 $ 2,646,111 $ 2,441,526 $ 2,792,120 $ 2,799,975 Total Expenditures and Other Deductions ..................... $35,193,028 $36,106,107 $37,270,126 $38,141,387 $38,916,682 Excess of Revenues and Other Additions Over (Under) Expenditures and Other Deductions .......... $ 1,876,679 $ (354,018) $ (627,839) $ (263,422) $ (1,138,730) Transfers ......................................................................... 134,257 191,723 136,701 (63,130) (140,955) Net Increase (Decrease).................................................. $ 2,010,936 $ (162,295) $ (491,138) $ (326,552) $ (1,279,685) Fund Balance Beginning of Year ..................................... 12,000,600 14,011,536 13,463,488(2) 12,972,350 12,645,798 Fund Balance End of Year ............................................... $14,011,536 $13,849,241 $12,972,350 $12,645,798 $11,366,113 Notes: (1) Source: Audited financial statements for the College for the fiscal years ended June 30, 2011 through 2015. (2) Includes a prior period adjustment.

EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS Pensions

Pursuant to GASB Statement No. 68, the College reported a liability of $5,159,327 as of June 30, 2015 for its proportionate share of the net pension liability for Iowa Public Employee Retirement System (“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 College’s proportion of the net pension liability was based on the College’s share of contributions to the pension plan relative to the contributions of all IPERS participating employers. As of June 30, 2014, the College’s collective proportion was 0.127483%. For additional information, see the College’s Audited Financial Statements for Fiscal Year Ending June 30, 2015 in APPENDIX A.



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The College contributes to the Teachers Insurance and Annuity Association – College Retirement Equities Fund (“TIAA-CREF”) retirement program, which is a defined contribution plan. TIAA-CREF administers the retirement plan for the College. The defined contribution retirement plan provides individual annuities for each plan participant. As required by the Code of Iowa, all eligible College employees must participate in a retirement plan from the date they are employed. See APPENDIX A – Note 8 for more information. The College 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. Prior to July 1, 2012, benefits become fully vested after completing four years of service or after attaining age 55 and after July 1, 2012 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 College being required to make annual contributions to IPERS. Contribution amounts are set by State statute. The College’s share is payable from the applicable funds of the College. All contributions are on a current basis. See APPENDIX A – Note 5 for additional information on IPERS. The following table sets forth the contributions made by the College and employees to IPERS for the period indicated. The College has always made their full statutorily required contributions to IPERS. The College cannot predict the levels of funding that will be required in the future. % of Payroll % of Payroll Fiscal Year Paid by the College 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.

Fiscal Actuarial Unfunded Actuarial Funded Ratio UAAL as a Percentage of Year Ending Actuarial Value Accrued Accrued Liability (Actuarial Value) Covered Covered Payroll (Actuarial June 30 of Assets [a] Liability [b] (Actuarial Value) [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 Investment Ended Return June 30 % 2011 19.91% 2012 3.73% 2013 10.12% 2014 15.88% 2015 3.96% Source: IPERS Reports

http://ww.ipers.org/



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Bond Counsel, the College 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 or TIAA-CREF 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. 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 College 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. In accordance with the requirements of GASB 45, the College’s financial statements comply with these provisions. As of July 1, 2014, the most recent valuation date for the period July 1, 2014 through June 30, 2015, the actuarial accrued liability was $438,328, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $438,328. The covered payroll (annual payroll of active employees covered by the plan) was $16,704,697 and the ratio of the UAAL to covered payroll was 2.6%. As of June 30, 2015, there were no trust fund assets. As of the July 1, 2014 actuarial valuation date, the Projected Unit Credit Actuarial Cost Method was used.

See APPENDIX A – Notes 8, 9, and 10 herein for a further discussion of the College’s employee retirement and other post-employment benefit obligations.

REGISTRATION, TRANSFER AND EXCHANGE

See also APPENDIX B, BOOK-ENTRY SYSTEM for information on registration, transfer and exchange of book-entry Certificates. The Certificates will be initially issued as book-entry Certificates.

The College shall cause books (the “Register”) for the registration and for the transfer of the Certificates to be kept at the principal corporate trust office of the Registrar in Des Moines, Iowa. The College will authorize to be prepared, and the Registrar shall keep custody of, multiple Certificate blanks executed by the College for use in the transfer and exchange of Certificates.

Any Certificate 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 Certificate Resolution. Upon surrender for transfer or exchange of any Certificate at the principal corporate trust office of the Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Registrar and duly executed by the registered owner or such owner’s attorney duly authorized in writing, the College shall execute and the 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 Certificate or Certificates of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount.

The execution by the College of any fully registered Certificate shall constitute full and due authorization of such Certificate, and the Registrar shall thereby be authorized to authenticate, date and deliver such Certificate, provided, however, the principal amount of outstanding Certificates of each maturity authenticated by the Registrar shall not exceed the authorized principal amount of Certificates for such maturity less Certificates previously paid.



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The Registrar shall not be required to transfer or exchange any Certificate following the close of business on the 15th day of the month next preceding any interest payment date on such Certificate, nor to transfer or exchange any Certificate after notice calling such Certificate for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Certificates. The person in whose name any Certificate 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 Certificates 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 Certificate to the extent of the sum or sums so paid.

No service charge shall be made for any transfer or exchange of Certificates, but the College or the 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 Certificates.

TAXABILITY OF INTEREST General The following discussion is a summary of certain Federal income tax consequences relating to the purchase, ownership, and disposition of the Certificates, based on certain relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”). This discussion does not purport to deal with all aspects of Federal income taxation that may affect particular investors in light of their individual circumstances, and is limited to investors who hold the Certificates as capital assets under Section 1221 of the Code, which generally means property held for investment. Prospective investors, particularly those subject to special rules, should consult their tax advisors regarding the consequences of purchasing, owning, and disposing of the Certificates for Federal income tax purposes, and for State and local tax purposes. Interest Income Taxable In general, interest on the Certificates is includable in the gross income of the owners thereof as ordinary interest income for Federal income tax purposes. Except for original issue discount, which accrues under special rules, interest income on the Certificates is so included in the gross income of the owners when accrued or received in accordance with the owner's regular method of Federal tax accounting. Sale, Exchange, or Other Disposition In general, upon the sale, exchange, or redemption of a Certificate, an owner will recognize taxable gain or loss in an amount equal to the difference between the amount realized and the owner’s adjusted tax basis in the Certificate. An owner’s adjusted tax basis in a Certificate generally will equal the owner’s initial cost of the Certificate, plus any accrued original issue discount and accrued market discount previously included in the owner’s taxable income. Such gain or loss generally will be capital gain or loss. Such gain or loss generally will be long-term capital gain or loss if the owner has held the Certificate for more than one year. Subject to various special rules, the Code currently provides preferential treatment for certain net long-term capital gains realized by individuals and generally limits the use by any taxpayer of capital losses to reduce ordinary income.



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Backup Withholding and Information Reporting In general, information reporting requirements will apply to non-corporate owners of Certificates with respect to payments of the principal of and interest on the Certificates and proceeds of sale of such Certificates before maturity. Backup withholding at a rate of 28% generally will apply to such payments unless the owner: (i) is a corporation or other exempt recipient and, when required, demonstrates that fact, or (ii) provides a correct taxpayer identification number, certifies under penalties of perjury when required that such owner is not subject to backup withholding, and has not been notified by the IRS that it has failed to report all interest and dividends required to be shown on its Federal income tax returns. Enforcement

There is no certificate trustee or similar person to monitor or enforce the terms of the resolution for issuance of the Certificates. In the event of a default in the payment of principal of or interest on the Certificates, there is no provision for acceleration of maturity of the principal of the Certificates. Consequently, the remedies of the owners of the Certificates (consisting primarily of an action in the nature of mandamus requiring the College and certain other public officials to perform the terms of the resolution for the Certificates) may have to be enforced from year to year.

The owners of the Certificates cannot foreclose on property within the boundaries of the College or sell such property in order to pay the debt service on the Certificates. In addition, the enforceability of the rights and remedies of owners of the Certificates may be subject to limitation as set forth in Bond Counsel’s opinion. The opinion will state, in part, that the obligations of the College with respect to the Certificates 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 by equitable principle, whether considered at law or in equity. Opinions

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 College 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.

ALL POTENTIAL PURCHASERS OF THE CERTIFICATES SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE CERTIFICATES (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 College 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, if material, 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, if material, is set forth in “APPENDIX D - Form of Continuing Disclosure Certificate”. This covenant is being made by the College to assist the Underwriter(s) in complying with the Rule.



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Breach of the Disclosure Covenants will not constitute a default or an “Event of Default” under the Certificates 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 Certificates in the secondary market. Thus, a failure on the part of the College to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Certificates and their market price.

Pursuant to the Rule, in the last five years, the College believes it has complied in all material respects with regard to its prior Disclosure Covenants; provided, however, that on April 22, 2013 Moody’s Investors Service upgraded the rating of the College’s outstanding bonds. The College failed to file a notice of the rating upgrade and also failed to file a notice of the failure to file the rating upgrade on EMMA.

Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule.

OPTIONAL REDEMPTION

The Certificates due June 1, 2017 - 2022, inclusive, are not subject to optional redemption prior to maturity. The Certificates due June 1, 2023 - 2026, inclusive, are subject to optional redemption prior to maturity in whole or in part on any date on or after June 1, 2022 at a price of par and accrued interest. If less than all the Certificates are called, the College will notify DTC of the particular amount of such maturity to be redeemed prior to maturity. DTC will determine by lot the amount of each participant’s interest in each maturity to be redeemed, and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed.

The Registrar will give notice of redemption, identifying the Certificates (or portions thereof) to be redeemed not less than thirty (30) days prior to the date fixed for redemption to the registered owner of each Certificate (or portion thereof) to be redeemed. Unless moneys sufficient to pay the redemption price of the Certificates to be redeemed are received by the Registrar prior to the giving of such notice of redemption, such notice may, at the option of the College, state that said redemption will be conditional upon the receipt of such moneys by the 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 College will not redeem such Certificates, and the 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 Certificates will not be redeemed. Otherwise, prior to any redemption date, the College will deposit with the Registrar an amount of money sufficient to pay the redemption price of all the Certificates or portions of Certificates which are to be redeemed on the date.

LITIGATION

There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Certificates, or in any way contesting or affecting the validity of the Certificates or any proceedings of the College taken with respect to the issuance or sale thereof.

LEGAL MATTERS The Certificates 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 section “DESCRIPTION OF THE CERTIFICATES” and “TAXABILITY OF INTEREST”, 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. A legal opinion in substantially the forms set forth in “DRAFT FORM OF LEGAL OPINION” in APPENDIX C to this Final Official Statement will be delivered at closing.



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The legal opinion to be delivered concurrently with the delivery of the Certificates 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.

FINAL OFFICIAL STATEMENT AUTHORIZATION

This Final Official Statement has been authorized for distribution to prospective purchasers of the Certificates. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the College, 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 in this Final Official Statement of the excerpts from the College’s financial statements or the 2015 Audit included in APPENDIX A.

INVESTMENT RATING

The Certificates have been rated “Aa1” by Moody’s Investors Service (“Moody’s”). The College has supplied certain information and material concerning the Certificates and the College to Moody’s as part of its application for an investment rating on the Certificates. 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 ratings may have an adverse effect on the secondary market price of the Certificates. An explanation of the significance of investment ratings may be obtained from the rating agency: Moody’s Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007.

UNDERWRITING

The Certificates were offered for sale by the College at a public, competitive sale on April 26, 2016. The best bid submitted at the sale was submitted by Robert W. Baird & Co., Milwaukee, Wisconsin (the “Underwriter”). The College awarded the contract for sale of the Certificates to the Underwriter at a price of $1,918,532.40. The Underwriter has represented to the College that the Certificates have been subsequently re-offered to the public initially at the yields or prices set forth in this Final Official Statement.

MUNICIPAL ADVISOR

The College has engaged Speer Financial, Inc. as Municipal Advisor (the “Municipal Advisor”) in connection with the issuance and sale of the Certificates. The Municipal Advisor is an Registered Municipal Advisor in accordance with the rules of the Municipal Securities Board (the “MSRB”). The Municipal Advisor will not participate in the underwriting of the Certificates. 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 Certificates. 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 College’s continuing disclosure undertaking.



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CERTIFICATION

I have examined this Final Official Statement dated April 26, 2016, for the $1,915,000 Industrial New Jobs Training Certificates, Taxable Series 2016-1, and to the best of my knowledge, information and belief, believe it to be true and correct and will provide to the purchaser(s) of the Certificates at the time of delivery a certificate confirming to the purchaser that to the best of my knowledge, information, and belief, information in the Final Official Statement was at the time of acceptance of the bid for the Certificates and, including any addenda thereto, was at the time of delivery of the Certificates 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/ DANIEL GILLEN Vice President Administration and Finance

HAWKEYE COMMUNITY COLLEGE (Merged Area VII) Waterloo, Iowa



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APPENDIX A

HAWKEYE COMMUNITY COLLEGE, IOWA (MERGED AREA VII)

THE AUDITED FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2015

State of Iowa - Area VII Community College

HAWKEYE COMMUNITY COLLEGE WATERLOO, IOWA

FOR THE FISCAL YEAR ENDED JUNE 30, 2015

HAWKEYE COMMUNITY COLLEGE 1501 EAST ORANGE ROAD

WATERLOO, IA 50701 www.hawkeyecollege.edu

TABLE OF CONTENTS Page

Schedule of Officials...................................................................................................................................... 1

Independent Auditors' Report .. ... .. ... .. . . . . . .. .. .. . .. .. .. .. .. .. .. . . . . . . . .. . . .. . .. .. . .. .. . .. . . . . .. . .. . .. . . . . . . . . .. .. . . . .. . .. . .. .. .. . . .. . . .. . .. .. . 2 - 3

Management's Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 9

Basic Financial Statements: Exhibit Statement of Net Position...................................................................................... A .. .. . .. . . .. .. .. .. ... ... 1 O - 11 Statement of Revenues, Expenses and

Changes in Net Position . ... .. .. . .. .. .. .. .. ........ .. .. ... . ... .. .. .. ... .. .. . . . .. .. . .. .. . .. . .. . .. . ... ... B .. . .. .. .. . . .. . ... ... .. . 12 Statement of Cash Flows ................................................................................... C ....................... 13-14 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 - 32

Required Supplementary Information: Schedule of Funding Progress for the Retiree Health Plan . ... .. ... .. . . . .. ... . .. . .. ... ... . . . . .. . .. . .. . .. .. . .. .. .. . . .. .. .. .. ... 33 Schedule of the College's Proportionate Share of the Net Pension Liability .. . .. . .. . .. . .. . .. .. . . . .. .. .. .. .. ..... .. 34 Schedule of College Contributions - IPERS............................................................................................ 35 - 36 Notes to Required Supplementary Information - Net Pension Liability ............................................... 37

Other Supplementary Information: Schedule Notes to Other Supplementary Information........................................................... . .. . .. . . . . . . .... .. .. . .. 38 Budgetary Comparison Schedule of Expenditures - Budget to Actual .. . . . . ... . .. . 1 .. . .. .. . .. . .. . ... ... . . . 39 Note to Other Supplementary Information - Budgetary Reporting . .. . ... .. . .. . .. . .. . . . . . .. .. .. . . .. . . .. .. ... . 40 Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . 41 - 44

Schedule of Revenues, Expenditures and Other Changes in Fund Balances .. ... .. .... .. .. .. .. .. .. .. . . ... .. .. . .... .. . .. .. . .. . . . .. . ... . .. . .. .. 3 . . .. . . . . . . . . . ...... .. .. 45 - 48

Current Unrestricted Fund: Schedule of Revenues, Expenditures and

Other Changes in Fund Balance -- Education and Support .. . .. .. . .. . .. . .. . ... . .. 4 ... . . . .. .. .. .. ... .. ... . 49 - 50 Schedule of Revenues, Expenditures and

Other Changes in Fund Balance --Auxiliary Enterprises ............................. 5 ....................... 51

Current Restricted Fund: Schedule of Revenues, Expenditures and

Other Changes in Fund Balance ................................................................ .

Agency Funds - Schedule of Changes in Deposits Held in Custody for Others ............................................................................ .

Schedule of CrediUContact Hour Enrollment ...................................................... .

Comparison of Taxes and Intergovernmental Revenues .................................... .

Current Fund Revenues by Source and Expenditures by Function ..................... .

Schedule of Expenditures of Federal Awards ..................................................... .

Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements

6 . ...................... 52-53

7 . ...................... 54

8 . ...................... 55

9 . ...................... 56

10 . ...................... 57-58

11 . ...................... 59-60

-Performed in Accordance with Government Auditing Standards ............................................................... 61 -62

Independent Auditors' Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by 0MB Circular A-133 ......................................................... 63 - 64

Schedule of Findings and Questioned Costs . .. .. .. .. .. .. .. .. .. .. .. . .. .. .. . .. .. .. . .. ... .. . .. . .. ... . .. . . . . . .. .. . . .. . . . .. . . . .. .. .. .. .. . .. . .. . 65 - 68

Schedule of Prior Year Findings ................................................................................................................... 69

Corrective Action Plan for Federal Audit Findings 70- 71

* * * * * *

Name

Casey McLaughlin Jay Nardini Teresa Meyer David Krejchi Bruce Clark Gene Ficken Ronald McGregor John Schuller Joan Webster-Vore

Linda Allen Daniel Gillen Julie Thomas Donna McNulty Denise Dunn

HAWKEYE COMMUNITY COLLEGE OFFICIALS

Title

Board of Trustees

Chairperson Vice Chairperson

Member Member Member Member Member Member Member

Community College (As of June 30, 2015)

- 1 -

Term Expires

2015 2015 2015 2017 2017 2017 2015 2017 2017

President Vice President, Administration and Finance

Board Treasurer President Secretary

Board Secretary

/WILLIAMS. & COMPANY Pc.

Certified Public Accountants

Board of Trustees Hawkeye Community College Waterloo, Iowa

INDEPENDENT AUDITORS' REPORT

Report on the Financial Statements

We have audited the accompanying financial statements of Hawkeye Community College, Waterloo, Iowa, and its discretely presented component unit as of and for the year ended June 30, 2015 and the related notes to the financial statements, which collectively comprise the College's basic financial statements as listed in the table of contents of this report.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.

Auditors' Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Hawkeye Community College Foundation (a discretely presented component unit of the Community College discussed in Note 1 ), which statements reflect total assets of $7,092,414 and total revenues of $1 ,164,781 for the year then ended. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Hawkeye Community College Foundation, is based solely on the report of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of Hawkeye Community College Foundation were not audited in accordance with Government Auditing Standards.

An audit includes 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 entity'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 entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of Hawkeye Community College and its discretely presented component unit as of June 30, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

203 N orth Grand Avenue P. 0. Box 808 Spencer, Iowa 51 301 -0808 71 2 -262- 1 500 - 4=AX 7 1 2-262-2820

Emphasis of Matter

As discussed in Note 14 to the financial statements, Hawkeye Community College adopted new accounting guidance related Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Schedule of Funding Progress for the Retiree Health Plan, the Schedule of the College's Proportionate Share of the Net Pension Liability, the Schedule of College Contributions, and Notes to Required Supplementary Information - Net Pension Liability on pages 4 through 9 and 33 through 37 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires 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.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise Hawkeye Community College'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 eight years ended June 30, 2014 (which is not presented herein) and expressed unmodified opinions on those financial statements. We did not previously audit, in accordance with the standards referred to in the third paragraph of this report, the financial statements for the year ended June 30, 2006. The other supplementary information included in Schedules 1 through 10, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards, Schedule 11, is presented for purposes of additional analysis as required by U.S. Office of Management and Budget (0MB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements.

The other supplementary information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, other supplementary information and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2016, on our consideration of Hawkeye Community College's internal control over financial reporting and 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 Hawkeye Community College's internal control over financial reporting and compliance.

Spencer, Iowa January 15, 2016

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'willf~~ ~~,Pit~. Certified Public ~~;ul~~-nJ

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED JUNE 30, 2015

Management of Hawkeye Community College provides this Management's Discussion and Analysis of the College's annual financial statements. This narrative overview and analysis of the financial activities of Hawkeye Community College is for the fiscal year ended June 30, 2015. We are also discretely presenting financial information about the Hawkeye Community College Foundation (Foundation). We encourage readers to consider this information in conjunction with the College's financial statements, which follow.

FINANCIAL HIGHLIGHTS

• College operating revenues totaled $32,393,362 for fiscal year 2015, and increased $4,710,933, as compared to fiscal year 2014 operating revenues of $27,682,429. The increase resulted primarily from an increase in federal appropriations and Iowa Industrial New Jobs Training Program (INJTP) revenue.

• College operating expenses totaled $58,109,167 for fiscal year2015 and increased $8,697,105, as compared to fiscal year 2014 operating expenses of $49,412,062. The increase resulted primarily from Vocational Technical expenditures related to Workforce Training & Economic Development (WTED) and Iowa's Information Technology, Healthcare, Utilities, and Manufacturing (IHUM) programs.

• The College's net position decreased 8.5%, or $6,973,720, from the year ended June 30, 2014. The decrease was primarily due to the implementation of Governmental Accounting Standards Board (GASB) 68 whereby the College is now required to account for its Net Pension Liability as a proportional share of the unfunded Iowa Public Employee Retirement System (IPERS).

USING THE 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 College's financial activities.

The Basic Financial Statements consist of a statement of net position, a statement of revenues, expenses, and changes in net position and a statement of cash flows. These provide information about the activities of the College as a whole and present an overall view of the College's finances.

Notes to Financial Statements provide additional information essential to a full understanding of the data provided in the basic financial statements.

Required Supplementary Information presents a Schedule of Funding Progress for the Retiree Health Plan, Schedule of the College's Proportionate Share of the Net Pension Liability, and Schedule of College Contributions.

Other Supplementary Information provides detailed information about the individual funds. The Budgetary Comparison Schedule of Expenditures - Budget to Actual further explains and supports the financial statements with a comparison of the College's budget for the year. In addition, the Schedule of Expenditures of Federal Awards provides details of various federal programs benefiting the College.

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REPORTING THE COLLEGE'S FINANCIAL ACTIVITIES

The Statement of Net Position

The statement of net position presents the assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position of the College as a whole, as of the end of the fiscal year June 30, 2015. The statement of net position is a point-in-time financial statement. The purpose of this statement is to present a fiscal snapshot of the College to the readers of the financial statements. The statement of net position includes year-end information concerning current and non-current assets, deferred outflows of resources, current and non-current liabilities, deferred inflows of resources, and net position . Over time, readers of the financial statements will be able to determine the College's financial position by analyzing the increases and decreases in net position . This statement is also a good source for readers to determine how much the College owes to outside vendors and creditors. The statement also presents the available assets that can be used to satisfy those liabilities.

Net Position

Current and Other Assets Capital Assets, Net of Accumulated Depreciation

Total Assets

Deferred Outflows of Resources

Current Liabilities Non-current Liabilities

Total Liabilities

Deferred Inflows of Resources

Net Position : Net Investment in Capital Assets Restricted Unrestricted

Total Net Position

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

0

2015 2014

June 30, 2015 $ 56,063,042

$

58,282,119 114,345,161

1,385,410

11 ,932,257 18,135,686 30,067,943

10,475,426

58,282,119 11 ,616,293

5,288,790 75,187,202

• Total Assets

• Total Deferred Outflows

• Total Liabilities

• Total Deferred Inflows

D Total Net Position

Comparison of Net position

June 30, 2014 (not restated)

$ 59,626,331

$

57,024,101 116,650,432

12,066,936 14,113,705 26,180,641

8,308,869

54,978,931 12,078,289 15,103,702 82,160,922

A portion of the College's net position (77.5%) is invested in capital assets (e.g., land, buildings and equipment}, less the related debt. The debt related to the invested in capital assets is liquidated with resources other than capital assets. The restricted portion of the net position (15.5%) includes resources that are subject to external restrictions. The remaining net position (7.0%) is the unrestricted net position that can be used to meet the College's obligations as they come due.

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Statement of Revenues, Expenses and Changes in Net Position

Changes in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues earned by the College, both operating and non-operating, and the expenses incurred by the College, operating and non-operating, and any other revenues, expenses, gains and losses received or spent by the College.

In general, a public college, such as Hawkeye Community College, will report an operating loss since the financial reporting model classifies state appropriations and property taxes as non-operating revenues. Operating revenues are received for providing goods and services to the various students, customers and constituencies of the College. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the College. Non-operating revenues are revenues received for which goods and services are not provided. The utilization of capital assets is reflected in the financial statements as depreciation, which allocates the cost of an asset over its expected useful life.

Changes in Net Position Year Ended

Year Ended June 30, 2014 June 30, 2015 (not restated)

Operating Revenues: Tuition and Fees $ 17,732,024 $ 19,168,702 Less: Scholarship Allowances (8,214,705) (8,717,248) Tuition and Fees, net of scholarship allowances 9,517,319 10,451,454 Federal Appropriations 13,559,712 12,217,312 Iowa Industrial New Jobs Training Program 3,813,684 1,194,342 Auxiliary Enterprises Revenue, net of scholarships 2,133,658 1,865,332 Gifts and Grants 95,959 63,744 Miscellaneous 3,273,030 1,890,245

Total Operating Revenues 32,393,362 27,682,429

Total Operating Expenses 58,109,167 49,412,062

Operating Loss (25,715,805) (21,729,633)

Non-Operating Revenues (Expenses) State Appropriations 17,099,053 16,097,835 Property Taxes 8,262,008 8,410,452 Interest Income from Investments 277,070 173,446 Gain (Loss) on Sale of Capital Assets (176,488) 2,620 Interest on Indebtedness (514,188) (701,413)

Net Non-Operating Revenues 24,947,455 23,982,940

Increase (Decrease) in Net Position (768,350) 2,253,307

Net Position Beginning of Year - Restated 75,955,552 79,907,615

Net Position End of Year $ 75,187,202 $ 82,160,922

The fiscal year 2015 beginning net position was restated to implement GASB Statement No. 68. The restatement reduced beginning net position by $6,205,370, from $82,160,922 as of June 30, 2014, to $75,955,552 as of July 1, 2014. More detailed information about the restatement is presented in Note 14 to the basic financial statements. Net position of the College decreased $768,750 as a result of operations during fiscal year 2015.

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In fiscal year 2015, the major fluctuations in revenues were a result of the following changes:

• Decrease in tuition and fees due to declining enrollment.

• Federal Appropriations increased due primarily to the new IHUM funding.

• INJTP revenues increased due to the timing of the projects and the variability of the revenue accounts. Overall revenue is influenced not only by the withholding diversion received from the companies, but also the amount of reimbursed expenses the companies experienced throughout the year.

• Miscellaneous revenue increased primarily due to reimbursements from the Operating Equipment Protection Insurance program.

Operating Expenses

Year Ended June 30, 2015

Education and Support: Liberal Arts and Sciences $ 7,370,096 Vocational Technical 16,264,681 Adult Education 4,689,368 Cooperative Services 5,345,385 General Administration 1,953,527 Student Services 3,939,035 Learning Resources 1,143,181 Physical Plant 3,679,968 General Institution 6,887,909

Sub-total 51,273,150 Auxiliary Enterprises 2,784,313 Scholarships and Grants 1,107,943 Depreciation Expense 2,943,761

Total $ 58,109,167

60,000,000

55,000,000

50,000,000

45,000,000 2015 2014


$ 6,690,837 9,641,726 4,761,973 3,899,676 2,265,799 3,399,493

878,858 3,629,241 8,047,467

43,215,070 2,659,540

901 ,150 2,636,302

$ 49,412,062

• Total Operating Expenses

In fiscal year 2015, the major fluctuations in operating expenses were a result of the following factors:

• Vocational Technical expenses increased due primarily to WTED and IHUM programs.

• Cooperative Services expenditures increased due to expanded use of INJTP training funds in the current year.

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Statement of Cash Flows

The statement of cash flows is an important tool in helping the users to assess the College's ability to generate future net cash flows, its ability to meet its obligations as they come due, and its need for external financing. The statement of cash flows presents information related to cash inflows and outflows, summarized by operating, non-capital financing, capital financing and investing activities.

Cash Flows

Year Ended Year Ended June 30, 2015 June 30, 2014

Cash and Cash Equivalents Provided (Used) by: Operating Activities $ (24,717,554) $ (15,932,927) Non-Capital Financing Activities 25,361,061 24,508,287 Capital and Related Financing Activities (6,900,400) (6,815,744) Investing Activities 9,726,624 {2,588,900l

Net Increase (Decrease) in Cash and Cash Equivalents 3,469,731 (829,284)

Cash and Cash Equivalents at Beginning of Year 1,831,641 2,660,925

Cash and Cash Equivalents at End of Year $ 5,301,372 $ 1,831,641

Cash used by operating activities includes tuition, fees, grants and contracts, net of payments to employees and to suppliers. Cash provided by non-capital financing activities includes state appropriations and local property taxes received by the College. Cash used by capital and related financing activities represents the proceeds from debt, the principal and interest payments on debt and the purchase of capital assets. Cash provided by investing activities includes investment income earned.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

As of June 30, 2015, the College had $58,282,119 invested in capital assets, which was net of accumulated depreciation of $35,056,969. Depreciation expense totaled $2,943,761 for fiscal year 2015. Details of the capital assets are shown below.

Capital Assets, Net, at Year-End

Land Construction in Progress

Capital Assets Not Depreciated

Buildings Other Structures and Improvements Furniture and Equipment

Capital Assets, Net of Depreciation Total Capital Assets

June 30, 2015 $ 379,179

$

2,599,570 2,978,749

30,619,581 18,985,556 5,698,233

55,303,370 58,282,119

June 30, 2014 $ 379,179

$

1,410,824 1,790,003

31,248,321 18,526,374 5,459,403

55,234,098 57,024,101

Major capital expenses for the fiscal year ended June 30, 2015 include: completion of upgrade of the HVAC and electrical systems in Buchanan Hall to improve technical training areas; network infrastructure upgrades; parking lot replacement; Child Development Center relocation and remodel; Black Hawk Hall excavation and waterproofing. More detailed information about the College's capital assets is presented in Note 5 to the basic financial statements.

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Long-Term Debt

As of June 30, 2015, the College had $15,065,000 in debt outstanding, a decrease of $3,750,000 from June 30, 2014. The table below summarizes these amounts by type.

Certificate Payable General Obligation Bonds Total

Outstanding Debt


$ 15,065,000

$ 15,065,000


$ 16,815,000 2,000,000

$ 18,815,000

More detailed information about the College's outstanding debt is presented in Note 6 to the basic financial statements.

ECONOMIC FACTORS

Hawkeye Community College continues to take steps in anticipation of enrollment decreases experienced by most of Iowa's Community Colleges due to demographic and economic fluctuations. Cost cutting measures in the past few years have resulted in a financial situation for the College that will help position it to maintain fiscal sustainability during uncertain economic times ahead. Some challenges that are facing the College are:

• The regional area served by the College is experiencing a decline in high school age students. The College is exploring avenues to better serve, and market to, our non-traditional student client base.

• Salaries, wages and fringe benefits comprise approximately75% of annual Educational and Support expenses. Providing competitive packages to attract and retain the best employees in an area of relatively low unemployment continues to be an issue facing the College.

• Facilities at the College require constant upkeep and maintenance at increasing costs. The addition of space through new construction and remodeling over the past several years has added an additional burden to maintenance costs. Hawkeye Community College has used a Plant Fund Levy, which expired in fiscal year 2015, to help fund the cost of upkeep and repair. In the fall of 2013, the College successfully sought taxpayer approval to extend the levy for an additional 10-year term. In addition, legislation was passed that will allow the levy to continue indefinitely, subject to a reverse referendum.

• The use of technology continues to expand with current equipment quickly becoming outdated. The College faces the challenge of maintaining and upgrading technology at a reasonable cost.

• The Iowa Board of Regents has recommended a change to the distribution formula for state aid to reward enrollment of Iowa students. This initiative will create an increased emphasis to draw Iowa students to the Regents Universities, which will in turn create an even higher level of competition with Iowa's Community Colleges.

• The amount of property taxes collected to fund the general operations of the College is capped at a 20.25 cent millage rate. This results in a contribution of approximately 5% of general operating fund resources. The original funding formula for Iowa's Community Colleges intended for local funding to contribute 33% with State General Aid (SGA} and tuition covering one-third each. While SGA contributes nearly 39%, the shortfall in local funding has shifted the burden to tuition and fees which now account for approximately 50% of the general operating fund.

• Hawkeye Community College has the 4th lowest mandatory tuition and fees rate per credit hour of the 15 Iowa Community Colleges and charges nearly $7 less than the state average.

CONTACTING THE COLLEGE'S FINANCIAL MANAGMENT

This financial report is designed to provide our customers, taxpayers in the community college, and our creditors with a general overview of the College's finances and to demonstrate the College's accountability for the resources it receives. If you have questions about the report or need additional financial information, contact Hawkeye Community College, 1501 E. Orange Road, P.O. Box 8015, Waterloo, Iowa 50704-8015.

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Basic Financial Statements

HAWKEYE COMMUNITY COLLEGE STATEMENT OF NET POSITION

JUNE 30, 2015

Primary Component Government Unit

ASSETS

Current Assets Cash and Cash Equivalents $ 5,301,372 $ 266,902 Pooled Investments 24,489,212 4,225,953 Receivables:

Due from Others, Net of Allowance for Uncollectible Accounts of $5,922,903 3,073,213 27,083

Accrued Interest 26,008 14,623 Property Taxes - Succeeding Year 8,507,807 Student Loans 16,205 Loans Receivable, Net 41,180 Iowa Industrial New Jobs Training Program 922,247

Due From Other Governments 2,551,991 Prepaid Expenses 308,110 Inventories 151,880

Total Current Assets 45,348,045 4,575,741

Noncurrent Assets Pooled Investments 10,714,997 2,078,858 Receivables: Life Insurance Cash Value 25,448 Capital Assets:

Land 379,179 375,841 Land Improvements 37,785 Construction in Progress 2,599,570 Buildings 49,590,624 Other Structures and Improvements 25,890,303 Furniture and Equipment 14,879,412 Accumulated Depreciation {35,056,969} {1,259}

Total Noncurrent Assets 68,997,116 2,516,673

TOTAL ASSETS 114,345,161 7,092,414

DEFERRED OUTFLOWS OF RESOURCES

Pension Related Deferred Outflows 1,385,410

TOTAL DEFERRED OUTFLOWS OF RESOURCES $ 1,385,410 $

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HAWKEYE COMMUNITY COLLEGE STATEMENT OF NET POSITION

JUNE 30, 2015

LIABILITIES

Current Liabilities Accounts Payable Salaries and Benefits Payable Accrued Interest Payable Unearned Revenue Compensated Absences Early Retirement Payable Assets Held in Custody for Others Certificates Payable

Total Current Liabilities

Noncurrent Liabilities Unearned Revenue Compensated Absences Early Retirement Payable Certificates Payable Net Pension Liability Net OPEB Liability

Total Noncurrent Liabilities

TOTAL LIABILITIES

DEFERRED INFLOWS OF RESOURCES

Unavailable Property Tax Revenue Pension Related Deferred Inflows

TOTAL DEFERRED INFLOWS OF RESOURCES

NET POSITION

Net Investment in Capital Assets Restricted:

Nonexpendable: Endowment

Expendable: Economic Development Property Tax Levies Iowa New Jobs Training Scholarships and Departmental Programs Loans Cash Reserve Other

Unrestricted

TOTAL NET POSITION

Primary Government

$ 2,450,461 2,678,422

34,509 1,289,865

575,000 973,929 760,071

3,170,000

11,932,257

447,235 279,060

56,356 11,895,000 5,159,327

298,708

18,135,686

30,067,943

8,507,807 1,967,619

10,475,426

58,282,119

3,433,497 3,869,970 2,275,037

52,214 99,946

366,380 1,519,249 5,288,790

$ 75,187,202

See Accompanying Notes to Financial Statements - 11 -

Component Unit

$ 7,139

7,139

7,139

412,367

2,098,930

617,401 174,006

1,781,924 2,000,647

$7,085,275

EXHIBIT A

This page intentionally left blank

HAWKEYE COMMUNITY COLLEGE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

YEAR ENDED JUNE 30, 2015

REVENUES Operating Revenues:

Tuition and Fees, net of scholarship allowances of $8,214,705

Federal Appropriations Iowa Industrial New Jobs Training Program Gifts and Grants Auxiliary Enterprises Revenue, net of scholarship

allowances of $346,651 Miscellaneous

Total Operating Revenues

EXPENSES Operating Expenses:

Education and Support: Liberal Arts and Sciences Vocational Technical Adult Education Cooperative Services General Administration Student Services Learning Resources Physical Plant General Institution

Auxiliary Enterprises Scholarships and Grants Loan Cancellations and Bad Debts Administrative and Collection Costs Program Costs Fundraising Expenses Depreciation Expense

Total Operating Expenses

Operating Income (Loss)

NON-OPERA TING REVENUES (EXPENSES) State Appropriations Property Taxes Interest Income from Investments Loss on Sale of Capital Assets Interest on Indebtedness

Net Non-Operating Revenues

Increase (Decrease) in Net Position

Net Position Beginning of Year Prior Year Adjustment Net Position Beginning of Year - Restated

Net Position End of Year

Primary Government

$ 9,517,319 13,559,712 3,813,684

95,959

2,133,658 3,273,030

32,393,362

7,370,096 16,264,681 4,689,368 5,345,385 1,953,527 3,939,035 1,143,181 3,679,968 6,887,909 2,784,313 1,107,943

2,943,761

58,109,167

(25,715,805)

17,099,053 8,262,008

277,070 (176,488) (514,188)

24,947,455

(768,350)

82,160,922 (6,205,370) 75,955,552

$ 75,187,202


Component Unit

$

926,686

31,544

958,230

264,756 43,694

433,782 138,901 50,492

1,259

932,884

25,346

206,551

206,551

231,897

6,853,378

6,853,378

$ 7,085,275

EXHIBIT B

HAWKEYE COMMUNITY COLLEGE STATEMENT OF CASH FLOWS


CASH FLOWS FROM OPERATING ACTIVITIES: Tuition and Fees Grants and Contracts Iowa Industrial New Jobs Training Program Payments to Employees Payments to Suppliers Payments to NJTP Recipients Collection of Loans to Students Auxiliary Enterprise Net Activity Other Receipts Miscellaneous Agency Fund Receipts Miscellaneous Agency Fund Disbursements

Net Cash (Used) by Operating Activities

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: State Appropriations Property Taxes

Net Cash Provided from Non-Capital Financing Activities

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases of Capital Assets Principal Paid on Debt and Leases Interest Paid on Debt and Leases

Net Cash (Used) by Capital and Related Financing Activities

CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from Sales and Maturities of Investments Purchase of Investments Interest on Investments

Net Cash Provided by Investing Activities

Net Increase in Cash

Cash at Beginning of Year

Cash at End of Year

- 13 -

Primary Government

$ 17,671,493 11,892,503 2,017,371

(32,708,842) (24,474,914)

(1,623,718) (2,668)

(290,061) 2,890,228 2,693,188

{2,782,134}

{24,717,554}

17,099,053 8,262,008

25,361,061

(4,378,266) (2,000,000)

{522,134}

{6,900,400}

16,089,921 (6,636,292)

272,995

9,726,624

3,469,731

1,831,641

$ 5,301,372

HAWKEYE COMMUNITY COLLEGE STATEMENT OF CASH FLOWS


Reconciliation of Operating (Loss) to Net Cash (Used) by Operating Activities:

Operating {Loss) Adjustments to Reconcile Operating {Loss) to Net Cash {Used) by Operating Activities:

Depreciation Changes in Assets and Liabilities:

Increase in Due From Others Increase in Notes Receivable Increase in Due From Other Governments Decrease in Inventories Decrease in Prepaid Expenses Increase in Deferred Outflows Increase in Accounts Payable Increase in Salaries and Benefits Payable Increase in Compensated Absences Increase in Unearned Revenue Increase in Early Retirement Payable Decrease in Assets Held in Custody for Others Decrease in NJTP Loans Payable Decrease in Net OPEB Liability Decrease in Net Pension Liability Increase in Deferred Inflows

Total Adjustments

Net Cash (Used) by Operating Activities

$

$


{25,715,805)

2,943,761

{788,491) {2,668)

{1,763,169) 53,071 84,726

{625,229) 1,298,809

229,451 90,980

129,910 1,030,285

{88,946) {1,750,000)

{5,634) {1,806,224) 1,967,619

998,251

(24,717,554)

EXHIBITC

HAWKEYE COMMUNITY COLLEGE NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2015

Note 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Hawkeye Community College is a publicly supported school established and operated by Merged Area VII under the provisions of Chapter 260C of the Code of Iowa. Hawkeye Community College may offer programs of adult and continuing education, lifelong learning, community education, and up to two years of liberal arts, pre-professional or occupational instruction partially fulfilling the requirements for a baccalaureate degree but confers no more than an associate degree. Hawkeye Community College may also offer up to two years of vocational or technical education, training or retraining to persons who are preparing to enter the labor market. Hawkeye Community College maintains seven sites throughout Waterloo, Cedar Falls, and Independence, Iowa, and has its administrative offices in Waterloo. Hawkeye Community College is governed by a Board of Trustees whose members are elected from each trustee district within Merged Area VII.

The College'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, Hawkeye Community College has included all funds, organizations, agencies, boards, commissions and authorities. Hawkeye Community College 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 Hawkeye Community College are such that exclusion would cause Hawkeye Community College'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 College 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 Hawkeye Community College.

These financial statements present Hawkeye Community College (the primary government) and its component unit. The component unit discussed below is included in Hawkeye Community College's reporting entity because of the significance of its operational or financial relationship with the Community College. Certain disclosures about the component unit have been audited separately and a report has been issued under a separate cover. The audited financial statements are available at the College.

Discretely Presented Component Unit

Hawkeye Community College Foundation is a non-profit corporation, whose purpose is to support the Community College through donations to provide scholarships to students, and for the enhancement and extension of facilities, equipment and services. The Foundation is governed by a Board of Trustees, two of which are appointed by the Board of Trustees of the Community College. The Foundation operates on a June 30 fiscal year end. The financial statements of Hawkeye Community College Foundation, Inc. can be obtained from: Business Services, Hawkeye Community College, 1501 E. Orange Road, P.O. Box 8015, Waterloo, IA 50704-8015.

B. Basis of Presentation

GASS Statement No. 35 establishes standards for external financial reporting for public colleges and universities and requires resources to be classified for accounting and reporting purposes into the following net position categories/components:

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JUNE 30, 2015

Note 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Net Investment in Capital Assets: Capital assets, net of accumulated depreciation and outstanding debt obligations attributable to the acquisition, construction or improvement of those assets.

Restricted Net Position:

Nonexpendable - Net position subject to externally imposed stipulations that they be maintained permanently by the College, including the College's permanent endowment funds.

Expendable - Net position whose use by the College is subject to externally imposed stipulations that can be fulfilled by actions of the College, pursuant to those stipulations or that expire by the passage of time.

Unrestricted Net Position: Net position not subject to externally imposed situations. Resources may be designated for specific purposes by action of management or by the Board of Trustees or may otherwise be limited by contractual agreements with outside parties. Substantially all unrestricted net position is designated for academic and general programs of the College.

GASB Statement No. 35 requires the Statements of Net Position, Revenues, Expenses, and Changes in Net Position and Cash Flows be reported on a consolidated basis. These basic financial statements report information on all of the activities of the College. For the most part, the effect of interfund activity has been removed from these statements.

C. Measurement Focus. Basis of Accounting. and Financial Statement Presentation

For financial reporting purposes, Hawkeye Community College is considered a special-purpose government engaged only in business type activities as defined in GASB Statement No. 34. Accordingly, the basic financial statements of the College have been prepared 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 taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

D. Assets. Deferred Outflows of Resources. Liabilities. Deferred Inflows of Resources and Net Position

The following accounting policies are followed in preparing the balance sheets:

Cash. Cash Equivalents and Pooled Investments -- Investments are stated at fair value.

For the purposes of the statement of cash flows, all short-term investments that are highly liquid are considered to be cash equivalents. Cash equivalents are readily convertible to known amount of cash, and at the day of purchase, they have a maturity date no longer than three months.

Due From Other Governments -- This represents state aid, grants and reimbursements due from the State of Iowa, and grants and reimbursements due from the Federal government.

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JUNE 30, 2015


Inventories -- Inventories are valued at lower of cost (first-in, first-out method) or market, except for the livestock and grain from the farm operations, which is valued at market value. Inventories consist of supplies and materials held for consumption, livestock and merchandise held for resale. The cost is recorded as an expenditure at the time individual inventory items are consumed or sold.

Property Tax Receivable - Property tax receivable is recognized on the levy or lien date, which is the date that the tax asking is certified by the Board of Trustees to the appropriate County Auditors. The succeeding year property tax receivable represents taxes certified by the Board of Trustees 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 Trustees is required to submit to the state board by May 1 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 and will not be recognized as revenue until the year for which it is levied.

Receivable for Iowa Industrial New Jobs Training Program (NJTP) - This represents the amount to be remitted to the College for training projects entered into between the College and employers under the provisions of Chapter 260E of the Code of Iowa. The receivable amount is based on expenditures incurred through June 30, 2015 on NJTP projects, including interest incurred on NJTP certificates, less revenues received to date.

Capital Assets -- Capital assets, which include property, plant, equipment, and infrastructure assets (i.e., roads, curbs, gutters, sidewalks, and similar items which are immovable and of value only to the College), are reported at historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. No interest costs were capitalized.

Capital assets are defined by the College as assets with initial, individual costs in excess of $5,000 and estimated useful lives in excess of one year.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Assets

Buildings and Other Structures and Improvements Furniture and Equipment

Years

25- 50 3 - 10

The College does not capitalize or depreciate library books. The value of each book falls below the capital asset threshold and the balance was deemed immaterial to the financial statements.

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JUNE 30, 2015


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 employer after the measurement date but before the end of the employer's reporting period.

Salaries and Benefits Payable -- Payroll and related expenses for instructors with annual contracts corresponding to the current school year, which are payable in July and August, have been accrued as liabilities.

Unearned Revenue - When assets are recognized in connection with a transaction before the earnings process is complete, those assets must be offset by a corresponding liability for unearned revenue. Unearned revenue consists of tuition deposits, tuition and fees for a portion of summer classes, fees and registration for fall, unearned revenue on 260E projects, unearned revenue on federal and state funds.

Compensated Absences - College employees accumulate a limited amount of earned but unused vacation hours for subsequent use or for payment upon termination, death or retirement. Amounts representing the cost of compensated absences plus related benefits are recorded as liabilities. These liabilities have been computed based on rates of pay in effect at June 30, 2015.

Pensions - For purposes of measuring the net pension liability, deferred outflows of resources related to pensions, deferred inflows of resources related to pensions, 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. Deferred inflows of resources in the Statement of Net Position consists of succeeding year property tax receivable which will not be recognized as revenue 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.

Auxiliary Enterprise Revenues - Auxiliary enterprise revenues primarily represent revenues generated by career education, adult education, farm operations, and food service.

Summer Session - The Community College operates summer sessions during May, June, and July. Revenues and expenses for the summer sessions are recorded in the appropriate fiscal year. Tuition and fees are allocated based on the summer session class schedule.

Tuition and Fees - Tuition and fees revenues are reported net of scholarship allowances, while stipends and other payments made directly to students are presented as scholarship expenses.

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JUNE 30, 2015


Operating and Non-operating Activities - Operating activities, as reported in the Statement of Revenues, Expenses and Changes in Net Position, are transactions that result from exchange transactions, such as payments received for providing services and payments made for services or goods received. Non-operating activities include state appropriations, property tax, and interest income.

E. Scholarship Allowances and Student Aid

Financial aid to students is reported in the financial statements under the alternative method, as prescribed by the National Association of College and University Business Officer (NACUBO). Certain aid (loans and funds provided to students as awarded by third parties) is accounted for as third party payments ( credited to the student's account as if the student made the payment). All other aid is reflected in the financial statements as operating expenses or scholarship allowances, which reduce revenues. The amount reported as operating expenses represents the portion of aid that was provided to the student in the form of cash. Scholarship allowances represent the portion of aid provided to the student in the form of reduced tuition. Under the alternative method, these amounts are computed on a total College basis by allocating the cash payments to students, excluding payments for services, on the ratio of all aid to the aid not considered to be third party aid.

Note 2 - CASH, CASH EQUIVALENTS, AND POOLED INVESTMENTS

The College'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 insure there will be no loss of public funds.

The Community College 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 Trustees; 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 College's investment policy additionally limits investments in commercial paper to obligations that mature within 270 days and that is rated within the two highest classifications, as established by at least one of the standard rating services, with no more than five percent at the time of purchase placed in the second highest classification. At the time of purchase not more than ten percent of the investment portfolio can be in these investments and no more than five percent of the investment portfolio can be invested in the securities of a single issuer.

Investments are stated at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates.

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JUNE 30, 2015

Note 2-CASH, CASH EQUIVALENTS, AND POOLED INVESTMENTS (Continued)

At June 30, 2015, the Community College had the following investments:

Current Pooled Investments Noncurrent Pooled Investments

$ 24,489,212 10,714,997

$ 35,204,209

Fair Value

Investment Maturities (in years) Investment Type

Money Market Mutual Fund Certificates of Deposit U.S Government Securities

$17,820,044 1,384,077

16,000,088 $ 35,204,209

Less than 1 1 to 5

$ 17,820,044 663,098

6,006,070 $ 24,489,212

$ 720,979

9,994,018 $10,714,997

Interest rate risk - The Community College's investment policy limits the investment of operating funds (funds expected to be expended in the current budget year or within 15 months of receipt) in instruments that mature within 397 days. Funds not identified as operating funds may be invested in investments with maturities longer than 397 days, but the maturities shall be consistent with the needs and use of the Community College.

Credit risk - The Community College's investments in Money Market Mutual Funds are unrated.

Concentration of credit risk - The College's investment policy seeks to provide safety of the principal, maintain the necessary liquidity to match expected liabilities, and obtain a reasonable rate of return. The policy allows for investments of up to 100% in interest bearing savings, money market and checking accounts, certificates of deposits, repurchase agreements, money market mutual funds, bonds, notes, certificates of indebtedness, treasury bills or other securities issued by the United States of America, its agencies and allowable instrumentalities; up to 10% in prime bankers' acceptances; and up to 10% in commercial paper. The policy does not allow the College to invest in futures, options or reverse purchase agreements.

Component Unit Investments. Investments are managed by the Foundation and external managers, in accordance with Board policy, and are stated at fair value. Fair value of the investments has been determined as of June 30. Values have not been adjusted for market fluctuations subsequent to June 30. Accounting principles generally accepted in the United States of America require adjustment of year end values only when the value has been permanently impaired. Management does not feel market fluctuations after year end have caused permanent impairment to its investment portfolio. A summary of the securities held at June 30, 2015 follows:

Common Stocks Corporate Bonds U.S. Government Agency Bonds Mutual Funds - Equity Mutual Funds - Foreign Mutual Fund

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Fair Value

$2,227,532 294,493 726,413 891,451 609,323

1,555,599

$6,304,811


JUNE 30, 2015

Note 3-LOANS RECEIVABLE (Component Unit)

The Foundation, a component unit to the College, makes loans to students of the College to be used primarily for the cost of tuition and books. These loans generally become payable upon the student's completion of or withdrawal from higher education programs. HyPro, John Deere, and Tyson loans become forgivable upon the completion of the program and two or three years of employment with the respective companies.

Loans receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible or forgivable amounts through a charge to expense and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to loans receivable. Interest rates and terms vary by program. Below is a summary of loans receivable:

Note 4 -- INVENTORIES

Loans Receivable Less Allowance for Uncollectible Loans Less Allowance for Forgivable Loans

Net Loans Receivable

2015

$ 333,960 (6,949)

{285,831)

$ 41,180

The Community College's inventories at June 30, 2015 are as follows:

Type

Supplies and Materials Farm Operations Merchandise Held for Resale

Total

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Amount

$ 31,213 91,086 29,581

$151,880


JUNE 30, 2015

Note 5--CAPITAL ASSETS

A summary of changes in capital assets is as follows:

Balance Beginning

of Year Additions

Capital assets not being depreciated: Land $ 379,179 $ Construction in progress 1,410,824 1,534,378 Total capital assets not being depreciated 1,790,003 1,534,378

Capital assets being depreciated: Buildings 49,232,942 357,682 Other structures and improvements 24,499,876 1,390,427 Furniture and equipment 14,351,163 1,511,303 Total capital assets being depreciated 88,083,981 3,259,412

Less accumulated depreciation for: Buildings 17,984,621 986,422 Other structures and improvements 5,973,502 931,245 Furniture and equipment 8,891,760 1,026,094 Total accumulated depreciation 32,849,883 2,943,761

Total capital assets being depreciated, net 55,234,098 315,651

Capital assets, net $57,024,101 $ 1,850,029

Balance End of

Deletions Year

$ $ 379,179 345,632 2,599,570 345,632 2,978,749

49,590,624 25,890,303

983,054 14,879,412 983,054 90,360,339

18,971,043 6,904,747

736,675 9,181,179 736,675 35,056,969

246,379 55,303,370

$ 592,011 $ 58,282,119

On June 30, 2015, the Community College had future construction commitments of $740,700. Construction in Progress projects as of June 30, 2015 include: Black Hawk Waterproofing, Buchanan Hall Remodel, Hawkeye Restroom Remodel, Diesel Mechanical Building, Exterior Campus Signs, and Black Hawk Child Development Center.

Reconciliation Net Investment in Capital Assets:

Land Buildings Construction in Progress Other Structures and Improvements Furniture and Equipment Accumulated Depreciation

Net Investment in Capital Assets

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$ 379,179 49,590,624

2,599,570 25,890,303 14,879,412

(35,056,969)

$58,282,119


JUNE 30, 2015

Note 5-- CAPITAL ASSETS (Continued)

Capital Assets for the College's Foundation, a component unit, for the year ended June 30, 2015 is as follows:

Balance Balance Beginning End of of Year Additions Deletions Year

Capital assets not being depreciated: Land $ 375,841 $ $ $ Total capital assets not being depreciated 375,841

Capital assets being depreciated: Land Improvements 37,785 Total capital assets being depreciated 37,785

Less accumulated depreciation for: Land Improvements 1,259 Total accumulated depreciation 1,259

Total capital assets being depreciated, net 36,526

Capital assets, net $ 375,841 $ 36,526 $ $

Note 6 -- LONG-TERM LIABILITIES

A summary of changes in long-term liabilities for the year ended June 30, 2015 is as follows:

Primary Government: Compensated Absences Early Retirement Payable Certificates Payable General Obligation School Bonds Net Pension Liability Net OPEB Liability

Total Primary Government

Balance Beginning of Year

$ 763,080

16,815,000 2,000,000 6,965,551

304,342 $ 26,847,973

Additions

$ 836,380 1,030,285 1,830,000

$ 3,696,665

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Reductions

$ (745,400)

(3,580,000) {2,000,000) (1,806,224)

(5,634) $ (8,137,258)

Ending Balance

$ 854,060 1,030,285

15,065,000

5,159,327 298,708

$ 22,407,380

375,841 375,841

37,785 37,785

1,259 1,259

36,526

412,367

Due Within One Year

$ 575,000 973,929

3,170,000

$ 4,718,929


JUNE 30, 2015

Note 6 -- LONG-TERM DEBT (Continued)

Certificates Payable

In accordance with agreements dated between June 30, 1996 and June 30, 2015, the Community College issued certificates with a June 30, 2015 outstanding balance of $15,065,000 with interest rates ranging from 0.40% to 5.35%. The debt was incurred to fund the development and training costs incurred relative to implementing Chapter 260E of the Code of Iowa, Iowa Industrial New Jobs Training Program (NJTP). NJTP's purpose is to provide tax-aided training for employees of industries which are new to or are expanding their operations within the State of Iowa. Interest is payable semi-annually, while principal payments are due annually. The certificates are to be retired by proceeds from anticipated job credits from withholding taxes, incremental property tax, budgeted reserves, and, in the case of default, from standby property taxes. During 2015, Hawkeye Community College recorded $468,355 of interest expense from the certificates payable.

The certificates will mature as follows:

Year Ending

June 30, Principal Interest Total

2016 $ 3,170,000 $ 414,108 $ 3,584,108 2017 2,865,000 341,073 3,206,073 2018 2,455,000 269,105 2,724,105 2019 2,075,000 194,148 2,269,148 2020 1,305,000 118,580 1,423,580

2021-2025 3,195,000 191,110 3,386,110

Total $ 15,065,000 $ 1,528,124 $16,593,124

Bonds Payable

On April 19, 2011, Hawkeye Community College issued $5,550,000 in general obligation school bonds, to finance the improvement of its Main Campus and construct, remodel, erect and equip buildings thereon, and construct, lease, or acquire and improve and equip new or existing facilities. Annual principal payments began June 1, 2012. Interest payments are due semi-annually each June and December. The capital loan notes matured in June 2015. The balance of the general obligation school bonds at June 30, 2015, was $0.

Note 7 --OPERATING LEASES

The College has leased various facilities within the area to house different divisions of the College. These leases have been classified as operating leases and, accordingly, all rents are expensed as incurred. The leases expire between 2015 and 2017 and require various minimum annual rentals. Certain leases are renewable for additional periods. Some of the leases also require the payment of normal maintenance and insurance on the properties. In most cases, management expects the leases will be renewed or replaced by other leases.

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JUNE 30, 2015

Note 7 -- OPERATING LEASES (Continued)

The following is a schedule by year of future minimum rental payments required under operating leases which have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2015:

Year Ending

June 30, Amount

2016 $ 42,268 2017 14,574

Total $ 56,842

Rents for the year ended June 30, 2015 for all operating leases, except those with terms of a month or less, totaled $295,206.

Note 8 -- IOWA PUBLIC EMPLOYEES RETIREMENT SYSTEM (IPERS)

Plan Description - The Community College contributes to the Iowa Public Employees Retirement System (IPERS). IPERS membership is mandatory for employees of the College except for those covered by another retirement system. Employees of the College are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by 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 oratwww.ipers.org.

IPERS benefits are established under Iowa Code chapter 978 and the administrative rules thereunder. Chapter 978 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, anytime 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 fiveyear average salary.)

If a member retires before normal retirement age, the member's monthly retirement benefit will be permanently reduced by an early-retirement reduction. The early retirement reduction is calculated differently for service earned before and after July 1, 2012. For service earned before July 1, 2012, the reduction is 0.25 percent for each month that the member receives benefits before the member's earliest normal retirement age. For service earned starting July 1, 2012, the reduction is 0.50 percent for each month that the member receives benefits before age 65.

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JUNE 30, 2015

Note 8 -- IOWA PUBLIC EMPLOYEES RETIREMENT SYSTEM (IPERS) (Continued)

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 201 O 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. Statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires that 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 years 2015 and 2014, pursuant to the required rate, Regular members contributed 5.95 percent of pay and the Community College contributed 8.93 percent for a total rate of 14.88 percent.

The Community College's contributions to IPERS for the year ended June 30, 2015 were $897,638.

Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2015, the Community College reported a liability of $5,159,327 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 Community College's proportion of the net pension liability was based on the Community College's share of contributions to the pension plan relative to the contributions of all lPERS participating employers. At June 30, 2014, the Community College's collective proportion was 0.127483 percent, which was a decrease of 0.00446 percent from its proportion measured as of June 30, 2013.

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I r 1

I I


JUNE 30, 2015


For the year ended June 30, 2015, the Community College recognized pension expense of $433,804. At June 30, 2015, the College 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 $ 56,072 $

Changes of assumptions 227,693

Net difference between projected and actual earnings on pension plan investments 1,967,619

Changes in proportion and differences between Community College contributions and proportionate share of contributions 204,007

Community College contributions subsequent to the measurement date 897,638

Total $ 1,385,410 $ 1,967,619

$897,638 reported as deferred outflows of resources related to pensions resulting from the Community College contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended 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 Ended June 30,

2016 2017 2018 2019 2020

There are no non-employer contributing entities at IPERS.

- 27 -

$ (377,939) (377,939) (377,939) (377,939)

31,910 $ {1,479,846)


JUNE 30, 2015


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 (effective June 30, 2014)

Rates of salary increase (effective June 30, 2010)

Long-term investment rate of return (effective June 30, 1996)

3.00% per annum

4.00% to 17.00%, average, including inflation. Rates vary by membership

7.50%, compounded annually, net of investment 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

The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which best-estimate ranges of expected future real rates (expected returns, net of pension plan 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:

Asset Class

US Equity Non US Equity Private Equity Real Estate Core Plus Fixed Income Credit Opportunities TIPS Other Real Assets Cash

Total

Asset Allocation

23% 15 13 8

28 5 5 2 1

100%

Long-Term Expected Real Rate of Return

6.31 6.76 11.34 3.52 2.06 3.67 1.92 6.27

(0.69)

Discount Rate - The discount rate used to measure the total pension liability was 7.50 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the contractually required rate and that contributions from the College will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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JUNE 30, 2015


Sensitivity of the Community College's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the College's proportionate share of the net pension liability calculated using the discount rate of 7.50 percent, as well as what the College's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.5 percent) or 1-percentagepoint higher (8.5 percent) than the current rate.

College's proportionate share of the net pension liability

1% Decrease (6.50%)

$ 9,748,403

Discount Rate (7.50%)

$ 5,159,327

1% Increase (8.50%)

$1,285,671

Pension Plan Fiduciary Net Position - Detailed information about the pension plan's fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS' website at www.ipers.org.

Payables to the Pension Plan -At June 30, 2015, the College reported payables to the defined benefit pension plan of $87,698, for legally required employer contributions.

Note 9 -- TEACHERS INSURANCE AND ANNUITY ASSOCIATION -- COLLEGE RETIREMENT EQUITIES FUND (TIAA-CREF)

The Community College contributes to the TIAA-CREF retirement program, which is a defined contribution plan. TIAA administers the retirement plan for Hawkeye Community College. The defined contribution retirement plan provides individual annuities for each plan participant. As required by the Code of Iowa, all eligible College employees must participate in a retirement plan from the date they are employed.

Benefit terms, including contribution requirements, for TIAA-CREF are established and specified by the contract with TIAA-CREF, and in accordance with the Code of Iowa. For each employee in the pension plan, the College is required to contribute 8.93 percent of annual salary, including overtime pay, to an individual employee account. Each employee is required to contribute 5.95 percent. Contributions made by both employer and employee vest immediately. For the years ended June 30, 2015, employee contributions totaled $681,599 and the College recognized pension expense of $1,022,668.

At June 30, 2015, the College reported payables to the defined contribution pension plan of $99,913, for legally required employer contributions.

Note 10 - OTHER POSTEMPLOYMENT BENEFITS (OPEB)

Plan Description- The College operates a single-employer retiree benefit plan which provides medical/prescription drug benefits for retirees and their spouses. There are 272 active and 13 retired members in the plan. The plan does not issue a publicly available financial report.

The medical/prescription drug coverage is provided through a fully-insured plan. Retirees under age 65 pay the same premium for the medical/prescription drug benefit as active employees, which results in an implicit subsidy and an OPEB liability.

Funding Policy- The contribution requirements of plan members are established and may be amended by the College. The College currently finances the retiree benefit plan on a pay-as-you-go basis.

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JUNE 30, 2015

Note 10-0THER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)

Annual OPEB Cost and Net OPEB Obligation - The College's annual OPEB cost is calculated based on the annual required contribution (ARC) of the College, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years.

The following table shows the components of the College's annual OPEB cost for the year ended June 30, 2015, the amount actually contributed to the plan and changes in the College's net OPES obligation:

Annual Required Contribution Interest on Net OPES Obligation Adjustment to Annual Required Contribution

Annual OPES Cost

Net OPES Obligation Beginning of Year Annual OPEB Cost Employer Contributions Made Expected Net OPEB Obligation End of Year

$ 49,620 12,935

(18,138} 44,417

304,342 44,417

(50,051} $ 298,708

The College's annual OPES cost, the percentage of annual OPES cost contributed to the plan and the net OPEB obligation for fiscal years 2009 through 2015 are summarized as follows:

Percentage of Net Year Annual Annual OPEB OPEB

Ended OPEB Cost Cost Contributed Obligation

June 30, 2009 $135,045 0% $135,045 June 30, 2010 $135,045 0% $270,090 June 30, 2011 $ 53,233 98.8% $270,710

June 30, 2012 $ 53,233 84.4% $279,021 June 30, 2013 $ 53,714 78.8% $290,392

June 30, 2014 $ 53,714 74.0% $304,342 June 30, 2015 $ 44,417 112.7% $298,708

Funded Status and Funding Progress-As of July 1, 2014, the most recent actuarial valuation date for the period July 1, 2014 through June 30, 2015, the actuarial accrued liability was $438,328, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $438,328. The covered payroll (annual payroll of active employees covered by the plan) was $16,704,697 and the ratio of the UAAL to covered payroll was 2.6%. 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 assumption 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, presented as required supplementary information in the section following the Notes to Financial Statements, will present 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.

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JUNE 30, 2015

Note 10-0THER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)

Projections of benefits for financial reporting purposes are based on the plan as understood by the employer and the plan members and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

As of the July 1, 2014 actuarial valuation date, the Projected Unit Credit Actuarial Cost Method was used. The actuarial assumptions include a 4.25% investment return. The projected annual medical trend (inflation) rate is 5% for all years. An inflation rate of 3% is assumed for the purpose of this computation

Mortality rates are from the RP 2014 Mortality Tables with Scale MP-2014, applied on a gender-specific basis. Annual retirement and termination probabilities were developed from the Scale T-6 of the Actuary's Pension Handbook. The salary increase rate was assumed to be 3.0% per year. The UAAL is being amortized as a level dollar amount on an open basis over 30 years.

Note 11 -- RISK MANAGEMENT

The Community College has secured insurance purchased from commercial insurance carriers to provide coverage and protection in the following categories: general liability, automobile liability, group excess liability, linebacker, pollution liability, professional services, property and inland marine, workers compensation and employers' liability, and crime insurance. There have been no reductions in insurance coverage from prior years. Settled claims resulting from the risks have not exceeded commercial insurance coverage in any of the past three years.

Note 12 -- NEW JOBS TRAINING PROGRAMS

Hawkeye Community College administers the Iowa Industrial New Jobs Training Program (NJTP) in Merged Area VII in accordance with Chapter 260E of the Code of Iowa. NJTP's purpose is to provide tax-aided training or retraining for employees of industries which are new to or are expanding their operations within the State of Iowa. Certificates are sold by the Community College to fund approved projects and are to be retired by proceeds from anticipated jobs credits from withholding taxes, incremental property taxes, budgeted reserves and in the case of default, from standby property tax. The Community College is currently administering 105 projects receiving project funding or in the repayment stage.

Hawkeye Community College also administers the Iowa Small Business New Jobs Training Program (SBNJTP) in Merged Area VII in accordance with Chapter 260F of the Code of Iowa. SBNJTP's purpose is to provide tax-aided training or retraining for employees of small businesses which are new to or are expanding their operations within the State of Iowa. Approved small businesses receive loans from the Iowa Employment Training Fund, a State administered fund. The Community College received funding for 15 projects during fiscal year 2015.

- 31 -


JUNE 30, 2015

Note 13 - EARLY RETIREMENT PROGRAM

During fiscal year 2015, a Voluntary Early Retirement Plan was offered. All full-time staff that were 55 years of age by the end of the contract year and who had at least 1 O years of full-time service with the Community College were eligible for early retirement remuneration. Early retirement was effective at the end of the employee's contract year, unless otherwise negotiated between the College and the employee. The benefits were equal to the College making a cash payment of $52,404, the equivalent to six years of health insurance coverage at the College's current least expensive single health insurance premium with five percent compounded inflation, plus two percent of the contract year salary at the time of retirement election for each complete year based on the employee's full-time employment anniversary date. Payments will be made on the following schedule: the first payment, equal to 30% of the total, paid on the second pay period of the month following the date of retirement; the second payment, equal to the remaining 70% of the total, paid on the second pay period in January of the following calendar year. Eligible employees retiring before reaching 65 year of age are entitled to continue their participation in the College's health insurance program, at their own expense, until they reach 65 years of age.

At June 30, 2015, there were 12 participants expecting to receive payments under this plan, with a total liability of payments of $1,030,285. The liability is calculated based on unadjusted premium amounts to be paid over the term of each employee's involvement in the plan. The Community College's early retirement expense for the year ended June 30, 2015 was $1,034,640.

Note 14-- PRIOR YEAR ADJUSTMENT

Accounting Change I Restatement:

Governmental Accounting Standards Board Statement No. 68 Accounting and Financial Reporting for Pensions - an Amendment of GASS No. 27 was implemented during the 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, GASS 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 was restated to retroactively report the beginning net pension liability and deferred outflows of resources related to contributions made after the measurement date.

These changes have the following affects on beginning net position:

Beginning Net Position, as Previously Stated Prior Period Adjustment - Beginning Deferred Outflows of Resources Prior Period Adjustment - Beginning Net Pension Liability Beginning Net Position, Restated

- 32 -

$82,160,922 760,181

(6,965,551) $ 75,955,552

Required Supplementary Information

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF FUNDING PROGRESS FOR THE RETIREE HEAL TH PLAN

REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2015

(in thousands)

UMLasa Year Actuarial Actuarial Actuarial Unfunded Percentage

Ended Valuation Value of Accrued ML Funded Covered of Covered June 30, Date Assets Liability {ML) {UML) Ratio Payroll Payroll

{a} {b} {b - a} {a I b} {cl {{b - a} I c}

2009 July 1, 2008 ·$ $ 1,790 $ 1,790 0.0% $ 15,164 11.8% 2010 July 1, 2008 $ $ 1,790 $ 1,790 0.0% $ 15,164 11.8% 2011 July 1, 2010 $ $ 578 $ 578 0.0% $ 13,405 4.3% 2012 July 1, 2010 $ $ 578 $ 578 0.0% $ 13,405 4.3% 2013 July 1, 2012 $ $ 613 $ 613 0.0% $ 13,678 4.5% 2014 July 1, 2012 $ $ 613 $ 613 0.0% $ 13,678 4.5% 2015 July 1, 2014 $ $ 438 $ 638 0.0% $ 16,705 2.6%

See Note 10 to the accompanying Notes to Financial Statements for the plan description, funding policy, annual OPEB Cost and Net OPEB Obligation, and the funded status and funding progress.

See Accompanying Independent Auditors' Report - 33-


HAWKEYE COMMUNITY COLLEGE SCHEDULE OF THE COLLEGE'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

REQUIRED SUPPLEMENTARY INFORMATION FOR THE LAST YEAR

College's Proportion of the Net Pension Liability

College's Proportionate Share of the Net Pension Liability

College's Covered-Employee Payroll

College's Proportionate Share of the Net Pension Liability as a Percentage of Its Covered-Employee Payroll

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability

2015

0.127483%

$ 5,159,327

$ 8,502,676

60.68%

87.61%

Note: GASB Statement 68 requires 10 years of information to be presented in this table. However, until this information is available, the College will present information from those years for which information is available.

See Accompanying Independent Auditors' Report

- 34-

Statutorily Required Contribution

Contributions in Relation to the Statutorily Required Contribution

Contribution Deficiency

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF COLLEGE CONTRIBUTIONS - IPERS

REQUIRED SUPPLEMENTARY INFORMATION FOR THE LAST TEN YEARS

Years Ended June 30, 2015 2014 2013

$ 897,638 $ 759,289 $ 696,670 $

897,638 759,289 696,670

$ $ $ $

College's Covered-Employee Payroll $10,051,937 $ 8,502,676 $ 8,035,409 $

Contribution as a Percentage of Covered-Employee Payroll 8.93% 8.93% 8.67%

- 35 -

2012 2011

571,237 $ 475,282

571,237 475,282

$

7,078,525 $ 6,838,590

8.07% 6.95%

2010 2009 2008 2007 2006

$ 503,571 $ 537,200 $ 507,045 $ 469,877 $ 463,111

503,571 537,200 507,045 469,877 463,111

$ $ $ $ $ =======

$ 7,572,496 $ 8,459,843 $ 8,380,909 $ 8,171,774 $ 8,054,104

6.65% 6.35% 6.05% 5.75% 5.75%

See Accompanying Independent Auditors' Report - 36-


HAWKEYE COMMUNITY COLLEGE NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - NET PENSION LIABILITY

JUNE 30, 2015

CHANGES OF BENEFIT TERMS:

Legislation passed in 201 O modified benefit terms for current Regular members. The definition of final average salary changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four years of service to seven years. The early retirement reduction increased from 3 percent per year measured from the member's first unreduced retirement age to a 6 percent reduction for each year of retirement before age 65.

In 2008, legislative action transferred four groups - emergency medical service providers, county jailers, county attorney investigators, and National Guard installation security officers - from Regular membership to the protection occupation group for future service only.

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 percent to 3.00 percent • Decreased the assumed rate of interest on member accounts from 4.00 percent to 3.75 percent per

year. • Adjusted male mortality rates for retirees in the Regular membership group. • Reduced retirement rates for sheriffs and deputies between the ages of 55 and 64. • Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL

beginning June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate closed 20 year period.

The 201 O 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.

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 percent to 4.00

percent. • Lowered the inflation assumption from 3.50 percent to 3.25 percent. • Lowered disability rates for sheriffs and deputies and protection occupation members.

- 37 -

Other Supplementary Information

HAWKEYE COMMUNITY COLLEGE NOTES TO OTHER SUPPLEMENTARY INFORMATION SCHEDULES

JUNE 30, 2015

Other supplementary information of the College is presented on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts which comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance, revenues and expenditures. The various fund groups and their designated purposes are as follows:

Current Funds - The Current Funds are utilized to account for those economic resources that are expendable for the purpose of performing the primary and supporting missions of the Community College and consist of the following:

Unrestricted Fund -- The Educational and Support subgroup of the Unrestricted Fund accounts for the general operations of the Community College.

The Auxiliary Enterprises subgroup accounts for activities which are intended to provide non-instructional services for sales to students, staff and/or institutional departments, and which are supplemental to the educational and general objectives of the Community College.

Restricted Fund -- The Restricted Fund is used to account for resources that are available for the operation and support of the educational program but which are restricted as to their use by donors or outside agencies.

Plant Funds -- The Plant Funds are used to account for transactions relating to investment in the Community College properties, and consist of the following selfbalancing subfunds:

Unexpended -- This account is used to account for the unexpended resources derived from various sources for the acquisition or construction of plant assets.

Retirement of Indebtedness -- This account is used to account for the accumulation of resources for principal and interest payments on plant indebtedness.

Investment in Plant -- This account is used to account for the excess of the carrying value of plant assets over the related liabilities.

Agency Funds -- The Agency Funds are used to account for assets held by the Community College in a custodial capacity or as an agent for others. Agency Funds' assets equal liabilities.

The Budgetary Comparison Schedule of Expenditures - Budget to Actual provides a comparison of the budget to actual expenditures for those funds and/or levies required to be budgeted. Since the College uses the Business-Type Activities reporting, this budgetary comparison information is included as other supplementary information.

Schedules presented in other supplementary information are reported using the current financial resources measurement focus and the accrual basis of accounting with modifications for depreciation and other items included in the adjustments column. The schedule of revenues, expenditures and changes in fund balances is a schedule of financial activities related to the current reporting period. It does not purport to present the results of operations or net income or loss for the period as would a statement of income or a statement of revenues and expenses.

- 38 -

HAWKEYE COMMUNITY COLLEGE BUDGETARY COMPARISON SCHEDULE OF EXPENDITURES

SCHEDULE 1

BUDGET (NON-GAAP BASIS) AND ACTUAL - OTHER SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2015

Variance between

Original Amended Actual and Funds/Lev~ Budget Budget Actual Budget

Unrestricted $ 35,851,150 $35,851,150 $36,116,707 $ {265,557l

Restricted 11,752,000 11,752,000 10,065,801 1,686,199 Early Retirement 2,000,000 2,000,000 1,034,640 965,360 Unemployment 75,000 75,000 35,360 39,640 Tort Liability 250,000 250,000 138,958 111,042 Insurance 400,000 400,000 1,165,470 (765,470) Equipment Replacement 800,000 800,000 943,529 {143,529l

Total Restricted 15,277,000 15,277,000 13,383,758 1,893,242

Plant 3,000,000 5,750,000 5,022,571 727,429 Bonds and Interest 2,050,000 2,050,000 2,045,833 4,167

Total $56,178,150 $ 58,928,150 $ 56,568,869 $ 2,359,281

- 39 -

l I

i

HAWKEYE COMMUNITY COLLEGE NOTE TO OTHER SUPPLEMENTARY INFORMATION - BUDGETARY REPORTING

JUNE 30, 2015

While the College reports financial position, results of operation and changes in net position on the basis of generally accepted accounting principles (GAAP), the Board of Trustees annually prepares a budget designating the proposed expenditures for operation of the Community College on a budgetary basis that is accrual basis with the exception of capital outlay and debt service payments. Following required public notice and hearing, and in accordance with Chapter 260C of the Code of Iowa, the Board of Trustees certifies the approved budget to the appropriate county auditors and then submits the budget to the State Board of Education for approval. The budget may be amended during the year utilizing similar statutorily prescribed procedures. Formal and legal budgetary control is based on total operating expenditures.

Budgets are not required to be adopted for the Auxiliary Enterprises subgroup, Scholarships and Grants Accounts, Workforce Act, Loan Funds, Endowment Funds and Agency Funds.

The major differences between the budget basis and GAAP are as follows:

Total Actual Expenditures, Budgetary Basis Items Not Required to be Budgeted:

Auxiliary Enterprises Scholarships and Grants Accounts Workforce Act Investment in Plant -Asset Disposals

Combining Adjustments GAAP Basis

Total Funds

$ 56,568,869

2,799,975 9,518,719 2,201,121

913,163 (13,202,004)

$ 58,799,843

Expenses from the Statement of Revenues, Expenses, and Changes in Net Position:

Total Operating Expenses Interest on Indebtedness

- 40 -

$ 58,285,655 514,188

$ 58,799,843

HAWKEYE COMMUNITY COLLEGE COMBINING BALANCE SHEET

JUNE 30, 2015

Current Funds

Unrestricted Restricted ASSETS AND DEFERRED OUTFLOWS OF RESOURCES:

Assets: Cash and Investments $ 15,142,708 $ 24,933,355 Receivables:

Due From Others 2,428,769 273,236 Accrued Interest 25,833 Property Taxes - Succeeding Year 1,776,609 2,595,866 Student Loans 16,205 Iowa Industrial New Jobs Training Program 922,247

Due From Other Governments 115,139 2,393,073 Prepaid Expenses 308,110 Inventories 151,880 Capital Assets:

Land Buildings Construction in Progress Other Structures and Improvements Furniture and Equipment Accumulated Depreciation

Total Assets 19,949,048 31,133,982

Deferred Outflows of Resources: Pension Related Deferred Outflows

Total Assets and Deferred Outflows of Resources $ 19,949,048 $ 31,133,982

- 41 -

I t

Unexpended

$ (335,499)

371,208 175

1,776,609

43,779

1,856,272

$ 1,856,272

Plant Funds Retirement of Indebtedness

$

2,358,723

2,358,723

$ 2,358,723

$

Investment in Plant

379,179 49,590,624

2,599,570 25,890,303 14,879,412

93,339,088

$ 93,339,088

- 42-

$

$

Agency Funds

765,017

765,017

765,017

Adjustments

$

(35,056,969)

(35,056,969)

1,385,410

$ (33,671,559)

SCHEDULE 2

Total

$ 40,505,581

3,073,213 26,008

8,507,807 16,205

922,247 2,551,991

308,110 151,880

379,179 49,590,624

2,599,570 25,890,303 14,879,412

(35,056,969}

114,345,161

1,385,410

$ 115,730,571

HAWKEYE COMMUNITY COLLEGE COMBINING BALANCE SHEET

JUNE 30, 2015

Current Funds

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE:

Liabilities: Accounts Payable Salaries and Benefits Payable Accrued Interest Payable Unearned Revenue Early Retirement Payable Compensated Absences Assets Held in Custody For Others Certificates Payable Net Pension Liability Net OPEB Liability

Total Liabilities

Deferred Inflows of Resources: Succeeding Year Property Tax Pension Related Deferred Inflows

Total Deferred Inflows of Resources

Fund Balance: Invested in Capital Assets, Net of Related Debt Restricted:

Expendable: Economic Development Property Tax Levies Iowa New Jobs Training Scholarships Loans Cash Reserve Other

Unrestricted Auxilary Enterprises

Total Fund Balance

Total Liabilities, Deferred Inflows of Resources, and Fund Balance

- 43-

$

Unrestricted

2,298,306 2,676,625

977,335

854,060

6,806,326

1,776,609

1,776,609

8,195,868 3,170,245

11,366,113

$ 19,949,048

$

Restricted

32,264

34,509 759,765

1,030,285

15,065,000

16,921,823

2,595,866

2,595,866

3,433,497 3,869,970 2,275,037

52,214 99,946

366,380 1,519,249

11,616,293

$ 31,133,982

Unexpended

$ 116,742

116,742

1,776,609

1,776,609

{37,079)

(37,079)

$ 1,856,272


$

2,358,723

2,358,723

$ 2,358,723

$

$

Investment in Plant

93,339,088

93,339,088

93,339,088

-44-

$

$

Agency Funds

3,149 1,797

760,071

765,017

765,017

Adjustments

$

5,159,327 298,708

5,458,035

1,967,619

1,967,619

{35,056,969)

{6,040,244)

(41,097,213)

$ (33,671,559)

$

SCHEDULE 2

Total

2,450,461 2,678,422

34,509 1,737,100 1,030,285

854,060 760,071

15,065,000 5,159,327

298,708

30,067,943

8,507,807 1,967,619

10,475,426

58,282,119

3,433,497 3,869,970 2,275,037

52,214 99,946

366,380 1,519,249 2,118,545 3,170,245

75,187,202

$ 115,730,571

HAWKEYE COMMUNITY COLLEGE COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND

OTHER CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2015

Current Funds Unrestricted Restricted

REVENUES AND OTHER ADDITIONS: General:

State Appropriations $ 13,717,409 $ 2,930,313 Tuition and Fees 17,732,024 Property Taxes 1,742,218 3,623,615 Federal Appropriations 210,861 13,348,851 Gifts and Grants 95,959 Investment Earnings 274,026 1,331 Iowa Industrial New Jobs Training Program 3,813,684 Expended for Plant Facilities (Including $1,476,012

charged to current funds) Principal Retired Miscellaneous 1,621,105 1,155,072

35,297,643 24,968,825

Auxiliary Enterprises Tuition and Fees 810,144 Sales and Services 1,585,821 Miscellaneous 84,344

2,480,309

Total Revenues and Other Additions $ 37,777,952 $ 24,968,825

- 45 -

l f

i I

Unexpended

$ 451,331

1,742,220

1,713

496,853 2,692,117

$ 2,692,117


$

1,153,955

1,153,955

$ 1,153,955

$

$

Investment in Plant

4,378,266 2,000,000

6,378,266

6,378,266

$

$

SCHEDULE 3

Adjustments Total

$ 17,099,053 (8,214,705) 9,517,319

8,262,008 13,559,712

95,959 277,070

3,813,684

(4,378,266) (2,000,000)

3,273,030 (14,592,971) 55,897,835

(346,651) 463,493 1,585,821

84,344 (346,651) 2,133,658

(14,939,622) $ 58,031,493

- 46 -

HAWKEYE COMMUNITY COLLEGE COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND

OTHER CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2015

Current Funds Unrestricted Restricted

EXPENDITURES AND OTHER DEDUCTIONS: Educational and Support:

Liberal Arts and Sciences $ 7,251,599 $ 118,497 Vocational Technical 10,348,488 5,960,810 Adult Education 3,963,525 730,843 Cooperative Services 5,345,385 General Administration 1,887,072 66,455 Student Services 3,709,559 229,476 Learning Resources 1,143,181 Physical Plant 2,798,289 1,319,928 General Institution 5,014,994 1,194,550

Total Education and Support 36,116,707 14,965,944 Auxiliary Enterprises 2,799,975 Scholarships and Grants 9,669,299 Plant Asset Acquisitions Retirement of Indebtedness Disposal of Plant Assets Interest on Indebtedness 468,355 Loss on Sale of Capital Assets Depreciation

Total Expenditures and Other Deductions 38,916,682 25,103,598

Excess of Revenues and Other Additions Over (Under) Expenditures and Other Deductions (1,138,730) (134,773)

TRANSFERS: Non-mandatory Transfers (140,955) 140,955

Total Transfers (140,955) 140,955

Net Increase (Decrease) for the Year (1,279,685) 6,182

Fund Balance June 30, 2014 12,645,798 11,610,111 Prior Period Adjustment Fund Balance June 30, 2014 - Restated 12,645,798 11,610,111

Fund Balance June 30, 2015 $ 11,366,113 $ 11,616,293

-47 -

Unexpended

$

2,120,317 2,120,317

2,902,254

5,022,571

(2,330,454)

(164,529)

(164,529)

(2,494,983)

2,457,904

2,457,904

$ (37,079)


$

2,000,000

45,833

2,045,833

(891,878)

119,358

119,358

(772,520)

772,520

772,520

$

$

$

Investment in Plant

913,163

913,163

5,465,103

45,171

45,171

5,510,274

87,828,814

87,828,814

93,339,088

SCHEDULE 3

Adjustments Total

$ $ 7,370,096 (44,617) 16,264,681

(5,000) 4,689,368 5,345,385 1,953,527 3,939,035 1,143,181

(438,249) 3,679,968 (1,441,952) 6,887,909 (1,929,818) 51,273,150

(15,662) 2,784,313 (8,561,356) 1,107,943 (2,902,254) (2,000,000)

(913,163) 514,188

176,488 176,488 2,943,761 2,943,761

(13,202,004) 58,799,843

(1,737,618) (768,350)

(1,737,618) (768,350)

(33,154,225) 82,160,922 (6,205,370) (6,205,370)

(39,359,595) 75,955,552

$ (41,097,213) $ 75,187,202

- 48 -

HAWKEYE COMMUNITY COLLEGE UNRESTRICTED FUND

COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCE EDUCATION AND SUPPORT YEAR ENDED JUNE 30, 2015

Education

Liberal Arts Vocational Adult General and Sciences Technical Education Administration

REVENUES: State Appropriations $ $ $ 90,772 $ 22,526 Tuition and Fees 9,325,473 6,208,319 2,198,232 Property Taxes 1,742,218 Federal Appropriations 200,221 10,640 Investment Earnings 274,026 Miscellaneous 28,456 89,147 63,182 338,280

Total Revenues 9,353,929 6,297,466 2,552,407 2,387,690

EXPENDITURES: Salaries and Benefits 6,778,671 9,167,648 3,023,788 1,139,404 Services 66,677 321,307 595,950 449,910 Materials and Supplies 70,414 619,378 129,729 69,078 Travel 85,620 39,861 2,590 51,336 Expended for Plant Facilities 44,617 5,000 Miscellaneous 250,217 155,677 206,468 177,344

Total Expenditures 7,251,599 10,348,488 3,963,525 1,887,072

Excess (Deficiency) of Revenues Over (Under) Expenditures 2,102,330 (4,051,022) (1,411,118) 500,618

TRANSFERS: Non-mandatory Transfers {50,000} {1,651} {58,508}

Total Transfers {50,000} {1,651} {58,508}

Net Increase (Decrease) for the Year $ 2,052,330 $ {4,052,673} $ {1,411,118} $ 442,110

Fund Balance June 30, 2014

Fund Balance June 30, 2015

-49-

SCHEDULE4

sueeort

Student Leaming Physical General Services Resources Plant Institution Total

$ $ 345 $ $ 13,603,766 $ 13,717,409 17,732,024 1,742,218

210,861 274,026

60,032 373 1,656 1,039,979 1,621,105

60,032 718 1,656 14,643,745 35,297,643

3,063,771 638,585 309,432 3,208,769 27,330,068 469,337 21,780 1,854,896 1,019,934 4,799,791 129,248 473,491 597,941 727,774 2,817,053 46,117 9,325 3,911 55,820 294,580

32,109 81,726 1,086 2,697 793,489

3,709,559 1,143,181 2,798,289 5,014,994 36,116,707

(3,649,527) (1,142,463) (2,796,633) 9,628,751 (819,064)

23,173 {86,986}

23,173 {86,986}

$ {3,626,354} $ {1,142,463} $ {2,796,633} $ 9,628,751 (906,050)

9,101,918

$ 8,195,868

- 50-


HAWKEYE COMMUNITY COLLEGE CURRENT UNRESTRICTED FUND

COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCE AUXILIARY ENTERPRISES


Career Adult Farm Food Education Education Oeerations Service Other

REVENUES: Sales and Services $ 922,724 $ $ 208,531 $ 59,624 $ 394,942 Tuition and Fees 378,571 431,573 Miscellaneous 11,918 11,564 658 60,204

Total Revenues 934,642 390,135 209,189 59,624 886,719

EXPENDITURES: Salaries and Benefits 37,274 3,892 5,373 129,863 Services 223,692 145,462 64,497 1,300 383,395 Materials and Supplies 572,974 402,750 205,668 7,282 456,828 Cost of Goods Sold 96,884 Travel 2,262 20,583 19,032 Expended for Plant Facilities 15,662 Miscellaneous 5,155 147

Total Expenditures 953,903 572,687 275,538 8,582 989,265

Excess (Deficiency) of Revenues Over (Under) Expenditures (19,261) (182,552) (66,349) 51,042 (102,546)

TRANSFERS: Non-mandatory Transfers {39,009) (14,960)

Total Transfers (39,009) (14,960)

Net Increase (Decrease) for the Year (58,270) (182,552) (66,349) 51,042 (117,506)

Fund Balance June 30, 2014 1,838,244 191,906 87,778 251,869 1,174,083

Fund Balance June 30, 2015 $ 1,779,974 $ 9,354 $ 21,429 $ 302,911 $ 1,056,577

- 51 -

SCHEDULE 5

Total

$ 1,585,821 810,144

84,344

2,480,309

176,402 818,346

1,645,502 96,884 41,877 15,662 5,302

2,799,975

(319,666)

(53,969)

(53,969)

(373,635)

3,543,880

$ 3,170,245

HAWKEYE COMMUNITY COLLEGE CURRENT RESTRICTED FUND

COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCE YEAR ENDED JUNE 30, 2015

Scholarships and Early Equipment

Grants Retirement Reelacement Insurance REVENUES:

State Appropriations $ 1,279,520 $ 17,201 $ 10,011 $ 2,927 Property Taxes 1,643,995 774,321 1,091,344 Federal Appropriations and Grants 7,388,061 Scholarships, Grants, and Gifts Interest on Investments Iowa Industrial New Jobs Training Program Miscellaneous 686,844 5,991

Total Revenues 9,354,425 1,661,196 784,332 1,100,262

EXPENDITURES AND OTHER DEDUCTIONS: Salaries and Benefits 1,030,285 4,033 Services 4,355 30,260 1,300,395 Materials and Supplies 507,129 Travel Expended for Plant Facilities 406,140 Interest on Indebtedness Federal Pell Grant Program 7,279,876 Federal Supplemental Educational Opportunity Grant 106,225 Private Scholarships 2,132,618 Miscellaneous

Total Expenditures and Other Deductions 9,518,719 1,034,640 943,529 1,304,428

Excess (Deficiency) of Revenues Over (Under) Expenditures and Other Deductions (164,294) 626,556 (159,197) (204,166)

TRANSFERS: Non-mandatory Transfers 164,294 (5,991)

Total Transfers 164,294 (5,991)

Net Increase (Decrease) for the Year 626,556 (159,197) (210,157)

Fund Balance June 30, 2014 52,214 1,754,004 434,091 1,202,291

Fund Balance June 30, 2015 $ 52,214 $ 2,380,560 $ 274,894 $ 992,134

- 52 -

SCHEDULE 6

Iowa Workforce Industrial

Act and Other New Jobs Unemployment Cash JTPA Training Economic Comeensation Reserve Programs Program Develoement Miscellaneous Total

$ 1,909 $ $ $ $ 863,608 $ 755,137 $ 2,930,313 113,955 3,623,615

2,198,418 3,762,372 13,348,851 2,702 93,257 95,959

1,331 1,331 3,423,050 20,998 369,636 3,813,684

417,232 45,005 1,155,072

115,864 2,201,120 3,423,050 1,301,838 5,026,738 24,968,825

35,360 1,705,914 926,682 1,996,930 5,699,204 305,527 1,623,718 22,142 584,218 3,870,615 67,767 119,199 11,978 793,109 1,499,182 23,090 56,822 44,990 126,264 251,166

972,484 1,378,624 468,355 468,355

7,279,876 106,225

150,580 2,283,198 98,823 338,733 1,829,597 2,267,153

35,360 2,201,121 2,606,827 1,005,792 6,453,182 25,103,598

80,504 (1) 816,223 296,046 (1,426,444) (134,773)

!1,599,836) 1,582,488 140,955 !1,599,836) 1,582,488 140,955

80,504 ( 1) 816,223 (1,303,790) 156,044 6,182

141,878 366,380 32,355 1,458,814 4,737,287 1,430,797 11,610,111

$ 222,382 $ 366,380 $ 32,354 $ 2,275,037 $ 3,433,497 $ 1,586,841 $ 11,616,293

- 53 -

SCHEDULE 7 HAWKEYE COMMUNITY COLLEGE

AGENCY FUNDS COMBINING SCHEDULE OF CHANGES IN DEPOSITS HELD IN CUSTODY FOR OTHERS


Student Contracted Organizations Training Miscellaneous

Balance June 30, 2014 $ 233,007 $ 351,282 $ 268,059 $

ADDITIONS: State Appropriations and Grants 163,556 64,946 Tuition and Fees 205,133 Sales and Services 12,602 2,201,522 Miscellaneous 45,429

Total Additions 263,164 163,556 2,266,468

DEDUCTIONS: Salaries and Benefits 38,832 37,019 Services 200,868 252,214 25,978 Materials and Supplies 21,623 2,203,471 Travel 5,054 Miscellaneous 406

Total Deductions 266,783 252,214 2,266,468

Balance June 30, 2015 $ 229,388 $ 262,624 $ 268,059 $

- 54 -

Total

852,348

228,502 205,133

2,214,124 45,429

2,693,188

75,851 479,060

2,225,094 5,054

406

2,785,465

760,071

Arts and Sciences

Career Tech

Non-Credit

Total

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF CREDIT/CONTACT HOUR ENROLLMENT


Credit Hours Eligible Not Eligible Eligible for Aid for Aid Total for Aid

67,207 67,207

47,451 47,451

376,821

114,658 114,658 376,821

- 55 -

SCHEDULE 8

Contact Hours Not Eligible

for Aid Total

18,520 395,341

18,520 395,341


Local (Property Tax)

State

Federal

Total

Local (Property Tax)

State

Federal

Total

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF TAX AND INTERGOVERNMENTAL REVENUES

FOR THE LAST TEN YEARS

Years Ended June 30, 2015 2014 2013 2012

$ 8,262,008 $ 8,410,452 $ 8,125,536 $ 7,616,726

17,099,053 16,097,835 15,606,493 12,860,686

13,559,712 12,217,312 12,662,733 13,900,279

$ 38,920,773 $ 36,725,599 $ 36,394,762 $ 34,377,691

Years Ended June 30, 2010 2009 2008 2007

$ 6,890,306 $ 7,073,144 $ 5,509,468 $ 6,759,565

12,927,107 14,593,950 13,848,935 12,318,253

16,573,673 9,600,696 8,585,768 7,900,156

$ 36,391,086 $ 31,267,790 $ 27,944,171 $ 26,977,974

- 56 -

SCHEDULE 9

2011

$ 7,565,783

12,435,369

15,210,266

$ 35,211,418

2006

$ 6,584,025

12,001,695

8,640,955

$ 27,226,675

HAWKEYE COMMUNITY COLLEGE CURRENT FUND REVENUES BY SOURCE AND EXPENDITURES BY FUNCTION

FOR THE LAST TEN YEARS

Years Ended June 30, 2015 2014 2013 2012

Revenues:

State Appropriations $ 16,647,722 $ 15,697,835 $ 13,549,640 $ 12,424,445

Tuition and Fees 17,732,024 19,168,702 19,133,475 18,571,387

Property Tax 5,365,833 4,277,771 3,276,900 3,066,894

Federal Appropriations 13,559,712 12,217,312 12,662,733 13,900,279

Interest on Investments 275,357 173,207 86,313 109,604

Iowa Industrial New Jobs Training Program 3,813,684 1,194,342 2,809,463 3,930,802

Auxiliary Enterprises 2,480,309 2,186,038 2,116,873 2,396,957

Miscellaneous 2,872,136 1,958,797 1,829,326 2,099,885

Total $ 62,746,777 $ 56,874,004 $ 55,464,723 $ 56,500,253

Expenditures:

Liberal Arts and Sciences $ 7,251,599 $ 6,690,837 $ 7,576,779 $ 7,143,778

Vocational Technical 10,348,488 9,850,670 9,856,494 9,435,893

Adult Education 3,963,525 4,761,973 3,067,166 2,580,395

Cooperative Services 5,345,385 3,899,676 4,599,275 5,389,973

Administration 1,953,527 2,265,799 2,607,332 3,541,248

Student Services 3,709,559 3,399,493 3,072,403 2,970,292

Learning Resources 1,143,181 878,858 790,155 819,601

Physical Plant 4,118,217 4,297,787 4,324,389 4,595,790

General Institution 6,209,544 6,583,374 6,555,564 7,434,657

Auxiliary Enterprises 2,799,975 2,792,120 2,441,526 2,646,111

Scholarships and Grants 9,669,299 9,939,104 10,637,681 11,688,960

Interest on Indebtedness 468,355 625,214 776,146

Total $ 56,980,654 $ 55,984,905 $ 55,528,764 $ 59,022,844

- 57 -

2011

$ 12,295,053

19,021,047

3,333,037

15,184,989

177,646

2,868,437

2,925,415

2,031,041

$ 57,836,665

$ 6,530,382

9,557,818

2,429,625

4,117,198

2,549,778

2,633,091

713,523

3,547,685

7,163,263

2,963,456

12,378,999

907,771

$ 55,492,589

SCHEDULE10

2010 2009 2008 2007 2006

$ 12,268,793 $ 14,345,543 $ 13,707,374 $12, 175,824 $11,650,270

17,097,104 15,085,782 14,167,513 13,689,822 13,120,651

2,671,573 3,077,650 1,753,241 3,168,865 3,099,872

16,008,293 9,600,696 8,585,768 7,900,156 8,640,955

432,153 535,904 1,483,132 1,956,956 1,395,416

3,294,700 4,154,074 3,529,935 3,090,789 5,405,079

3,132,030 3,300,806 3,236,020 2,779,109 2,654,448

2,346,239 2,839,909 1,892,853 1,943,426 1,462,271

$ 57,250,885 $ 52,940,364 $ 48,355,836 $46,704,947 $47,428,962

$ 6,034,637 $ 6,539,305 $ 5,850,308 $ 6,041,749 $ 5,057,359

8,571,867 8,746,126 8,225,880 7,942,304 8,045,658

1,705,003 2,232,503 2,121,382 2,366,688 3,106,555

7,318,191 6,456,505 4,992,297 4,728,957 5,281,009

4,767,847 3,046,212 3,060,923 2,770,850 2,387,875

2,358,329 2,391,466 2,215,574 2,065,897 2,114,127

762,633 799,826 801,075 786,252 777,156

3,415,783 3,396,065 3,042,744 3,419,172 3,137,263

6,415,669 6,225,230 5,742,150 4,308,703 4,911,479

2,314,838 3,002,400 1,989,728 3,070,686 2,718,167

10,573,721 6,834,454 6,259,914 5,541,916 5,788,459

990,577 951,985 920,862 871,687

$ 55,229,095 $ 50,622,077 $ 45,222,837 $43,914,861 $43,325,107

- 58 -

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Granter/Program

DIRECT: U.S. Department of Education:

Student Financial Aid - Cluster: Federal Supplemental Educational Opportunity Grants (FSEOG) Federal Work-Study Program (FWS) Federal Pell Grant Program Federal Direct Student Loans

Total Student Financial Aid Cluster

C-Campis TRIO - Student Support Services

Total Direct U.S. Department of Education

Corporation for National and Community Services: Senior Companion Program

U.S. Department of Labor: Trade Adjustment Assistance Community College and Career Training (Note 2)

Total Direct Expenditures INDIRECT:

U.S. Department of Education: Indirect through the Iowa Department of Education:

Adult Education - State Grant Program Vocational Education - Basic Grants to States

Total Indirect U.S. Department of Education

U.S. Department of Labor: Indirect through Iowa Workforce Development:

Employment Service Cluster: Employment Service - Disability Employment Initiative

Workforce Investment Act - Cluster (WIA): WIA Adult Program WIA Youth Program WIA Dislocated Workers

Indirect through Northeast Iowa Community College: Trade Adjustment Assistance Community College and Career Training

Indirect through Des Moines Area Community College: Trade Adjustment Assistance Community College and Career Training

Total Indirect U.S. Department of Labor

National Science Foundation: Indirect through Iowa State University

Education and Human Resources

U.S. Department of Health and Human Services: Indirect through Iowa Workforce Development:

Temporary Assistance for Needy Families Cluster: Temporary Assistance for Needy Families

Head Start

Total Indirect U.S. Department of Health and Human Services

- 59 -

CFDA Number

84.007 84.033 84.063 84.268

84.335 84.042

94.016

17.282

84.002 84.048

17.207

17.258 17.259 17.278

17.282

17.282

47.076

93.558

93.600

$

Program Expenditures

106,225 138,098

7,279,876

7,524,199

92,801 241,613

7,858,613

329,569

2,051,676

10,239,858

200,221 334,223

534,444

96,226

190,162 212,468 183,828 586,458

167,636

356,832

1,207,152

15,908

1,515,735

700

1,516,435

$

New Loans and New Loan Guarantees

15,403,380 15,403,380

15,403,380

15,403,380

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Grantor/Program

INDIRECT (Continued):

U.S. Department of Agriculture: Indirect through Iowa Department of Education:

Child and Adult Care Food Program

Total Indirect Expenditures

Total Direct and Indirect Expenditures

CFDA Number

10.558

$

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Note 1 - BASIS OF PRESENTATION

Program Expenditures

11,761

3,285,700

13,525,558

SCHEDULE11

New loans and New loan Guarantees

$ 15,403,380

The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of Hawkeye Community College and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of 0MB 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 general purpose financial statements.

Note 2 - SUBRECIPIENTS

Of the federal expenditures presented in the Schedule, Hawkeye Community College provided federal awards to subrecipients as follows:

Amount Provided Program Name CFDA Number to Subrecipients

Trade Adjustment Assistance Community College and Career Training 17.282 $ 1,823,452

-60-


/WILLIAMS* & COMPANY Pc.

Certified Public Accountants

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAITERS BASED ON AN AUDIT

OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of Hawkeye Community College, Waterloo, Iowa, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Hawkeye Community College's basic financial statements and have issued our report thereon dated January 15, 2016. Other auditors audited the financial statements of Hawkeye Community College Foundation, as described in our report on Hawkeye Community College's financial statements. The financial statements of Hawkeye Community College Foundation were not audited in accordance with Government Auditing Standards, and accordingly, this report does not include reporting or instances of reportable noncompliance associated with that portion of the entity.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Hawkeye Community College's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Hawkeye Community College's internal control. Accordingly, we do not express an opinion on the effectiveness of the Community College's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify a certain deficiency in internal control , described in the accompanying Schedule of Findings and Questioned Costs, 2015-001 , to be a material weakness.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Hawkeye Community College's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of non-compliance that are required to be reported under Government Auditing Standards.

203 N orth Grand Avenu e P.O . B 8 0 8 -~ _ S pen cer, Io w a 5 1 3 0 1 -0808 712-262- 1500 ~f=AX 7 1 2-262-2820

Hawkeye Community College's Response to Findings

Hawkeye Community College's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The College's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance results of that testing, and not to provide an opinion on the effectiveness of the entity'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 entity'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 Hawkeye Community College during the course of our audit. Should you have any questions concerning any of the above matters, we would be pleased to discuss them with you at your convenience.


-62 -

w;llffM,\- ~ ~Jrvw)~f .~. Certified Public A;~~~;fnts_J

/WILLIAMS. & COMPANY Pc.

Certified Pub lic Accountants

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED

BY 0MB CIRCULAR A-133


Report on Compliance for Each Major Federal Program

We have audited Hawkeye Community College's compliance with the types of compliance requirements described in the 0MB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Hawkeye Community College's major federal programs for the year ended June 30, 2015. Hawkeye Community College's major federal programs are identified in Part I, Summary of Auditors' Results, 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 grants applicable to its federal programs.

Auditors' Responsibility

Our responsibility is to express an opinion on compliance for each of Hawkeye Community College'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 auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMS Circular A-133 , Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMS Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Hawkeye Community College's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination on Hawkeye Community College's compliance.

Basis for Qualified Opinion on Senior Companion Program

As described in the accompanying schedule of findings and questioned costs, Hawkeye Community College did not comply with requirements regarding CFDA 94.016 Senior Companion Program as described in finding number 2015-004 related to earmarking. Compliance with such requirements is necessary, in our opinion, for the College to comply with the requirements applicable to that program.

Qualified Opinion on Senior Companion Program

In our opinion, except for the noncompliance described in the Basis for Qual ified Opinion paragraph, Hawkeye Community College complied , in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on the Senior Companion Program for the year ended June 30, 2015.

203 North Grand Avenue P.O . B BOB 71 2-262-1 500 -iL Spencer, Iowa 51 3 0 1 -0808

r AX 71 2-262-2820

Unmodified Opinion on Each of the Other Major Federal Programs

In our opinion, Hawkeye Community College 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 other major federal programs identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2015.

Other Matters

Hawkeye Community College's response to the noncompliance finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The College's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control over Compliance

Management of Hawkeye Community College 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 Hawkeye Community College'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 that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to tests and report on internal control over compliance in accordance with 0MB 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 Hawkeye Community College'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 non-compliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as item 2015-002 and 2015-003 that we consider to be significant deficiencies.

Hawkeye Community College's responses to the internal control over compliance findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. The College's responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion the responses.

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 0MB Circular A-133. Accordingly, this report is not suitable for any other purpose.


-64 -

\vitl,~ c» f'~1~.P.t, Certified Public ~c~~~antel

HAWKEYE COMMUNITY COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART 1- SUMMARY OF AUDITORS' RESULTS

(A) An unmodified opinion was issued on the financial statements.

(B) A material weakness in internal control over financial reporting was 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) Significant deficiencies in internal control over major programs were disclosed by the audit of the financial statements.

(E) The auditors' report on compliance for the major federal award programs expresses a qualified opinion regarding the Senior Companion Program and an unmodified opinion on all other major federal programs.

(F) The audit disclosed audit findings which were required to be reported in accordance with Office of Management and Budget Circular A-133, Section .510(a).

(G) Major programs were as follows:

Student Financial Aid Cluster: • CFDA Number 84.007 - Federal Supplemental Educational Opportunity Grant (FSEOG) • CFDA Number 84.033- Federal Work-Study Program • CFDA Number 84.063 - Federal Pell Grant Program • CFDA Number 84.268 - Federal Direct Student Loans

WIA Investment Act Cluster (WIA): • CFDA Number 17.258 - WIA Adult Program • CFDA Number 17.259-WIA Youth Program • CFDA Number 17.278-WIA Dislocated Workers

Other Major Programs: • CFDA Number 94.016 - Senior Companion Program • CFDA Number 93.558 - Temporary Assistance for Needy Families • CFDA Number 17 .282 - Trade Adjustment Assistance Community College and Career Training • CFDA Number 84.048 - Vocational Education - Basic Grants to States

(H) The dollar threshold used to distinguish between Type A and Type B was $300,000.

(I) Hawkeye Community College did not qualify as a low-risk auditee.

-65 -



PART 11- FINDING RELATED TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

MATERIAL WEAKNESS:

2015-001 Criteria - The College is responsible for the accuracy of the financial statements.

Condition - During the audit, we identified material amounts of succeeding year property taxes and the related deferred inflows of resources, and immaterial amounts of receivables and fixed assets recorded or not properly recorded in the College's financial statements.

Effect- As a result of these misstatements, the financial statements were materially misstated related to succeeding year property taxes and the related deferred inflows of resources, and had the potential to be misstated related to the other areas identified above.

Recommendation - The College should implement procedures to ensure all the identified areas above are properly identified, classified, and included. in the College's financial statements.

Response - We will continue to improve closing processes and implement additional procedures to ensure the proper amounts are recorded in the financial statements in the future.

Conclusion - Response accepted.

INSTANCES OF NON-COMPLIANCE: No matters were reported.

PART Ill - FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS

SIGNIFICANT DEFICIENCIES:

CFDA Number 17 .258 - WIA Adult Program CFDA Number 17.259-WIA Youth Program CFDA Number 17.278 -WIA Dislocated Workers CFDA Number 93.558 - Temporary Assistance for Needy Families

2015-002 Criteria - The College is responsible for the accuracy of the allocation of expenses for the programs.

Condition - During our review of internal control procedures over the WIA Cluster and Temporary Assistance for Needy Families Programs, we identified five items out of sixty where the amount of expense allocated between the programs did not have appropriate supporting documentation of the amounts allocated.

Potential Effect - Expenses are not properly allocated between programs.

Recommendation - The College should review allocation procedures and maintaining adequate supporting documentation to ensure the expenses are properly allocated.

Response - The College will take steps to properly identify and maintain supporting documentation for all allocation entries, including corrections.


-66-



PART 111- FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS (Continued)

SIGNIFICANT DEFICIENCIES (continued):

CFDA Number 17.282-Trade Adjustment Assistance Community College and Career Training

2015-003 Criteria - The College is responsible for maintaining proper controls over programs to provide for allowable grant expenses.

Condition - During our review of internal control procedures over the Iowa Advanced Manufacturing Program (T AACCCT grant), we identified one Peard that was missing proper approval by College staff. This Peard accounted for 13 of the 37 items selected for testing.

Potential Effect - Disallowed expenses could be allocated to the program.

Recommendation - The College should review procedures to ensure the expenses are properly approved.

Response - The College will review approval procedures and take steps to insure all appropriate approvals are obtained and documented.


INSTANCES OF NON-COMPLIANCE:

CFDA Number 94.016 - Senior Companion Program

2015-004 Criteria-Compliance requirements require that an amount equal to 80% of the Federal share of the grant must be used for stipend and other direct benefits for Senior Companions.

Condition - During our review of compliance requirements of the Senior Companion Program, we identified that earmarking requirements were not met for the current year.

Questioned Cost- In the year under audit, the College incurred $226,479 related to stipends and other direct benefits for Senior Companions. The Federal share of the grant is equal to $329,569, and 80% of this amount equals $263,655. The difference of $37,176 was received and did not meet the requirement, thus resulting in a questioned cost.

Potential Effect - The portion of the funds received that did not meet the earmarking requirement could be disallowed.

Recommendation - The College should review grant monitoring procedures to ensure the earmarking requirements are being met in the future.

Response - The shortfall continues to be due to a shortage of volunteers. The new program manager has been researching new ways to market and recruit volunteers and is implementing findings. In addition, changes to the grant will be implemented in the next three year term that will allow the program to require a fewer number of volunteers to meet the financial requirements. Orientation and training will also be more readily available so that new volunteers can start service as soon as possible.


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PART IV - OTHER FINDINGS RELATED TO REQUIRED STATUTORY REPORTING

IV-A-15: Certified Budget- Expenditures for the year ended June 30, 2015, did not exceed the amounts budgeted.

IV-8-15: Questionable Disbursements- No expenditures we believe did not meet the requirement 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 Hawkeye Community College money for travel expenses of spouses of College officials or employees were noted. No travel advances to College officials or employees were noted.

IV-D-15: Business Transactions - Business transactions between the Community College and the Community College officials or employees are detailed as follows:

Business Connection Description Amount

Katrina Nagle, Adjunct Professor Spouse of Minority Owner of Nagle Signs Signage and Lettering $ 7,644

In accordance with the Code of Iowa, the above transactions may represent a conflict of interest because the total received during the fiscal year is greater than $2,500.

IV-E-15: Bond Coverage - Surety bond coverage of Community College officials and employees is in accordance with statutory provisions. The amount of coverage should be reviewed annually to insure that 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: Publication - The Community College published a statement showing the receipt and disbursement of all funds, including the names of all persons, firms or corporations to which disbursements were made, as required by Section 260C.14(12) of the Code of Iowa.

IV-H-15: Deposits and Investments - No instances of noncompliance with the deposit and investment provisions of Chapters 128 and 12C of the Code of Iowa and the College's investment policy were noted.

IV-1-15: CrediUContact Hours - Eligible credit and contact hours reported to the Iowa Department of Education by the College were supported by detailed records maintained by the Community College, except for an overstatement of 12, 193 credit hours, as shown below:

Reported

Non Credit: Non-Credit - Eligible for Aid 389,014

Total per Supporting

Documentation

376,821

Difference

(12,193)

Recommendation - The College should develop procedures to ensure the report submitted to the Iowa Department of Education is supported by detailed records.

Response - The College will continue to monitor crediUcontact hours to ensure all reports submitted are supported by the College's detailed records.


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HAWKEYE COMMUNITY COLLEGE SCHEDULE OF PRIOR YEAR FINDINGS

JUNE 30, 2015

2014-002 Finding - During our review of internal control procedures over the Senior Companion Program, we identified two paychecks out of sixty where the amount paid to the senior companion did not agree with the approved timesheet.

Recommendation - The College should review payroll procedures to ensure the calculations on timesheets are being appropriately computed. ·

Current Status -All payroll amounts paid agreed with the approved timesheets during the current year testing, procedures appear to have been implemented.

2014-003 Finding - During our review of internal control procedures over the WIA Cluster and Temporary Assistance for Needy Families Programs, we identified three paychecks out of forty where the amount of payroll expense allocated between the programs did not agree with the approved timesheet.

Recommendation - The College should review payroll procedures to ensure the expenses are properly allocated.

Current Status - The recommendation is still in process.

2014-004 Finding - During our review of internal control procedures over the WIA Cluster and Temporary Assistance for Needy Families Programs, we identified two expenses out of forty that were missing proper approval.


Current Status -All expenses were approved during the current year testing, procedures appear to have been implemented.

2014-005 Finding - During our review of internal control procedures over the WIA Cluster, we identified seven applications out of forty that were missing proper approval.

Recommendation - The College should review procedures to ensure the applications are properly approved.

Current Status -All applications had proper approval during the current year testing, procedures appear to have been implemented.


2014-006 Finding - During our review of compliance requirements of the Senior Companion Program, we identified that earmarking requirements were not met for the current year. Compliance requirements require that an amount equal to 80% of the Federal share of the grant must be used for stipend and other direct benefits for Senior Companions.

Recommendation - The College should review grant monitoring procedures to ensure the earmarking requirements are being met in the future.

Current Status - The recommendation is still in process.

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HAWKEYE COMMUNITY COLLEGE CORRECTIVE ACTION PLAN FOR FEDERAL AUDIT FINDINGS

JUNE 30, 2015

Corporation for National and Community Services, Department of Labor, or Department of Health and Human Services:

Hawkeye Community College, respectfully submits the following corrective action plan for the year ended June 30, 2015.

The audit was performed by Williams & Company, P. C., P. 0. Box 908, Spencer, Iowa, for the fiscal year ended June 30, 2015.

The findings from the June 30, 2015 Schedule of Findings and Questioned Costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Part I of the schedule, Summary of Independent Auditor's Results, does include a finding and is not addressed.

The audit disclosed significant deficiencies and an instance of non-compliance as identified in Part Ill of the accompanying Schedule of Findings and Questioned Costs.


2015-002 Expense Allocation -WIA Adult Program CFDA Number 17.258: WIA Youth Program CFDA Number 17.259: WIA Dislocated Workers CFDA Number 17.278: Temporary Assistance for Needy Families CFDA Number 93.558

Criteria - The College is responsible for the accuracy of the allocation of expenses for the programs.

Condition - During our review of internal control procedures over the WIA Cluster and Temporary Assistance for Needy Families Programs, we identified five items out of sixty where the amount of expense allocated between the programs did not have appropriate supporting documentation of the amounts allocated.

Potential Effect - Expenses are not properly allocated between programs.

Recommendation - The College should review allocation procedures and maintaining adequate supporting documentation to ensure the expenses are properly allocated.

Response - The College will take steps to properly identify and maintain supporting documentation for all allocation entries, including corrections.


2015-003 Expense Approval - Trade Adjustment Assistance Community College and Career Training CFDA Number 17.282

Criteria - The College is responsible for maintaining proper controls over programs to provide for allowable grant expenses.

Condition - During our review of internal control procedures over the Iowa Advanced Manufacturing Program (T AACCCT grant}, we identified one Peard that was missing proper approval by College staff. This Peard accounted for 13 of the 37 items selected for testing.

Potential Effect - Disallowed expenses could be allocated to the program.


Response - The College will review approval procedures and take steps to insure all appropriate approvals are obtained and documented.


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HAWKEYE COMMUNITY COLLEGE CORRECTIVE ACTION PLAN FOR FEDERAL AUDIT FINDINGS (Continued)

JUNE 30, 2015


2015-004 Earmarking Requirements -Senior Companion Program CFDA Number 94.016

Criteria - Compliance requirements require that an amount equal to 80% of the Federal share of the grant must be used for stipend and other direct benefits for Senior Companions.

Condition - During our review of compliance requirements of the Senior Companion Program, we identified that earmarking requirements were not met for the current year.

Questioned Cost - In the year under audit, the College incurred $226,479 related to stipends and other direct benefits for Senior Companions. The Federal share of the grant is equal to $329,569, and 80% of this amount equals $263,655. The difference of $37,176 was received and did not meet the requirement, thus resulting in a questioned cost.

Potential Effect - The portion of the funds received that did not meet the earmarking requirement could be disallowed.

Recommendation -The College should review grant monitoring procedures to ensure the earmarking requirements are being met in the future.

Response - The shortfall continues to be due to a shortage of volunteers. The new program manager has been researching new ways to market and recruit volunteers and is implementing findings. In addition, changes to the grant will be implemented in the next three year term that wlll allow the program to require a fewer number of volunteers to meet the financial requirements. Orientation and training will also be more readily available so that new volunteers can start service as soon as possible.


If the Corporation for National and Community Services, Department of Labor, or Department of Health and Human Services has questions regarding this plan, please call Linda Allen at 319-296-4201.

Sincerely yours,

HA:~ COM~UN~~GE

~J-A~~-~ .. VLin~n~;~sident

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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 Certificates (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 Standard & Poor’s highest rating: 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.



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 College 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 College 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 College, 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 College 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 College 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 College 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 College believes to be reliable, but the College takes no responsibility for the accuracy thereof.



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LEFT BLANK

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C-1

APPENDIX C DRAFT FORM OF LEGAL OPINION



C-2



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D-1

APPENDIX D

DRAFT

CONTINUING DISCLOSURE CERTIFICATE



D-2



D-3



D-4



D-5



D-6

Hawkeye Community College, Merged Area VII, Iowa


E-1

APPENDIX E

IOWA COMMUNITY COLLEGES

Documents

New Issue Investment Rating: Moody’s Investors Service ... Hawkeye CC $1.915...The $1,915,000Industrial New Jobs Training Certificates, Taxable Series2016-1(the “Certificates”)are