C I T Y O F Y U M A A R I ZON A Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 City of Yuma Arizona Comprehensive Annual Financial Report CITY COUNCIL Douglas J. Nicholls, Mayor William Craft, Deputy Mayor Gary Knight Jacob Miller Michael Shelton Edward C. Thomas Gary Wright ___________________________________________ City Administration Gregory K. Wilkinson City Administrator Ricky Rinehart Deputy City Administrator City Departments For the Fiscal Year Ended June 30, 2017 Prepared by: Finance Department Donald (Pat) Wicks, CPA Director Lisa Marlin, MBA Accounting Manager Linda Johnson Accounting Supervisor Maura Luna Lucia Zavala Liz Walker Accountants City Attorney Richard W. Files City Clerk Lynda L. Bushong Community Development Laurie L. Lineberry Engineering Jay Simonton, Acting Finance Donald (Pat) Wicks Fire Department Steven Irr, Chief Human Resources Ron Corbin Information Technology Ron Corbin, Acting Municipal Court James F. Coil, Judge About the Cover: In Fiscal Year 2017, the City completed a major improvement of a primary intersection at 16th Street and 4th Avenue. As one of the City’s most congested intersections, this project has increased capacity by adding dual left-turn lanes, dedicated right-turn lanes as well as other important features. Traffic flow has improved dramatically and the result of the project has provided an added level of safety to road traffic and pedestrians. This project is referred to as “Center Pointe” and has attracted additional businesses to the general area. Cover Art by Miriam Limon, City of Yuma Marketing Specialist Parks and Recreation Deborah Wendt Police Department John J. Lekan, Chief Public Works Joel Olea Utilities Jay Simonton CITIZENS OF YUMA MAYOR and COUNCIL MUNICIPAL COURT CITY ADMINISTRATOR CITY ATTORNEY General Counsel Litigation Prosecution CITY ADMINISTRATION PARKS & RECREATION Administration Parks/Mall Maintenance Community Relations Recreation Heritage Area Parks Development City Clerk Civic Center Baseball Complex Economic Development Arts and Culture Facilities Maintenance Golf Courses Risk Management HUMAN RESOURCES Human Resources POLICE DEPARTMENT FINANCE COMMUNITY DEVELOPMENT Administration and Budget Field Services Administration Accounting Support Services Building Safety Customer Service Neighborhood Services FIRE DEPARTMENT Purchasing Community Planning Professional Services INFORMATION TECHNOLOGY SERVICES PUBLIC WORKS Operations Business Application And Support Fleet Services Community Risk Reduction Telecommunications And Support Streets/Solid Waste Special Operations UTILITIES ENGINEERING Engineering/Capital Improvement Projects Utility Treatment Utility Systems City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis (Required Supplementary Information) BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Position Statement of Activities FUND FINANCIAL STATEMENTS Governmental Funds: Balance Sheet Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund BalancesGovernmental Funds to the Statement of Activities Proprietary Funds: Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows NOTES TO THE FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Proportionate Share of Net Pension Liability-Cost-Sharing Pension Plans Schedule of Pension Contributions Schedule of Agent OPEB Plans' Funding Progress Budgetary Comparison Schedules-General Fund and Major Special Revenue Funds: General Fund City Road Tax Fund NOTES TO REQUIRED SUPPLEMENTARY INFORMATION OTHER SUPPLEMENTARY INFORMATION Combining Balance Sheet-Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances-Nonmajor Governmental Funds Budgetary Comparison Schedules: Major Governmental Funds Not Included In Required Supplementary Information Debt Service Fund Capital Projects Fund Nonmajor Governmental Funds Public Safety Tax Special Revenue Fund Highway User Revenue Fund Grants Fund Community Redevelopment Fund Two Percent Tax Special Revenue Fund Yuma Mall Maintenance Special Revenue Fund i Page v ix 3 5 20 21 24 25 26 27 28 29 30 31 68 71 72 73 76 77 82 84 86 87 88 89 90 91 92 93 City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2017 TABLE OF CONTENTS (Concluded) FINANCIAL SECTION (Concluded) Nonmajor Proprietary Funds: Enterprise Funds: Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Fund Net Position Combining Statement of Cash Flows Budgetary Comparison Schedules: Water Enterprise Fund Wastewater Enterprise Fund Solid Waste Enterprise Fund Radio Communication Enterprise Fund Desert Hills Golf Course Enterprise Fund Internal Service Funds: Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Fund Net Position Combining Statement of Cash Flows Budgetary Comparison Schedule - Equipment Replacement Internal Service Fund Budgetary Comparison Schedule - Equipment Maintenance Internal Service Fund Budgetary Comparison Schedule - Insurance Reserve Internal Service Fund Budgetary Comparison Schedule - Workers Compensation Internal Service Fund Page 96 97 98 99 100 101 102 103 106 107 108 109 110 111 112 STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years Changes in Net Position - Last Ten Fiscal Years Fund Balances of Governmental Funds - Last Ten Fiscal Years Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years Governmental Funds Tax Revenues by Source - Last Ten Fiscal Years Governmental Funds Intergovernmental Shared Revenues - Last Ten Fiscal Years Intergovernmental Revenues - Grants and Other - Last Ten Fiscal Years Taxable Sales by Category - Last Ten Fiscal Years Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years Ratio of Outstanding Debt by Type - Last Ten Fiscal Years Ratio of General Bonded Debt to Assessed Value and General Bonded Debt per Capita - Last Ten Fiscal Years Computation of Direct and Overlapping Debt Legal Debt Margin Information Schedule of Municipal Property Corporation Debt Service Requirements to Maturity and Coverage Pledged Tax Collections - Last Ten Fiscal Years Demographic and Economic Statistics - Last Ten Calendar Years Principal Employers - Current Year and Nine Fiscal Years Ago Full-Time Equivalent City Government Employees by Function - Last Ten Fiscal Years Operating Indicators by Function - Last Ten Fiscal Years Capital Asset Statistics by Function - Last Ten Fiscal Years ii 116 117 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 INTRODUCTORY SECTION iii iv FINANCE DEPARTMENT One City Plaza Yuma, Arizona 85364-1436 (928) 373-5087 Fax: (928) 373-5084 November 29, 2017 To the Citizens, Honorable Mayor and City Council, and City Administrator The Finance Department is pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Yuma, Arizona for the fiscal year ended June 30, 2017. The report includes the Independent Auditor’s Report as required by City Charter Article XIII, Section 12, and by Arizona Revised Statutes, Section 9-481. The report is prepared in conformity with generally accepted accounting principles and standards set forth by the Governmental Accounting Standards Board (GASB). Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including disclosures, rests with the City. Management of the City is responsible for establishing and maintaining internal controls to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles as they apply to governmental units. Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived; and, 2) the calculation of costs and benefits requires estimates and judgments by management. To the best of our knowledge and belief, the enclosed data is accurate, in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. Heinfeld, Meech & Co., P.C., a public accounting firm fully licensed and qualified to perform audits of local governments within the State of Arizona, have audited the City’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Yuma, Arizona for the fiscal year ended June 30, 2017, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that the City of Yuma’s financial statements for the fiscal year ended June 30, 2017, are fairly presented in conformity with accounting principles generally accepted in the United States. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of Federal awards. These reports are available in the City’s separately issued Single Audit Reporting Package. This report has been prepared using the financial reporting requirements as outlined in GASB Statement No. 34, v Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This standard requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditors’ report. PROFILE OF THE CITY OF YUMA The City of Yuma was incorporated in 1914 and adopted its first charter in June of that year. Yuma is the economic hub and county seat of Yuma County. The City is located along the Colorado River in southwestern Arizona and is equidistant from the major population centers of Phoenix, Arizona and San Diego, California. The City operates under a council-manager form of government. The City Council consists of six members elected at large for staggered four-year terms. The elected Mayor is the seventh voting member of council, who, along with the remaining council members is elected on a non-partisan basis. The City Council is responsible for passing ordinances, adopting the budget, appointing members of commissions and hiring the City Administrator. The City Administrator carries out the policies and ordinances of the City Council, oversees the day-to-day operations of the City and appoints the various department heads. The City provides a full range of municipal services. These include public safety (police, fire and municipal court), street construction and maintenance, water and wastewater utility services, sanitation and residential refuse collection, parks, recreation and culture, planning and zoning, and general administrative and support services. This CAFR includes the financial activity of the primary government, which includes several enterprise activities, as well as its blended component units. Component units are legally separate units for which the primary government is financially accountable. Blended component units, while legally separate, are part of the City’s operations and are combined within the report. The Yuma Municipal Property Corporation and the City of Yuma Employee Benefits Trust have been included in the reporting entity. Conversely, the report does not include the City of Yuma Housing Authority as the City is not financially accountable for the authority, nor does the City directly or indirectly rely upon or benefit from the financial activity of the authority. ECONOMIC CONDITION AND OUTLOOK Industrial Expansion. Yuma’s economy is based primarily in agriculture, tourism and government, although further diversification continues. Agriculture remains the Yuma area’s dominant industry, producing more than $3.2 billion in revenues annually1. Several major agricultural companies maintain operations here. Their chief consumer products of packaged produce and salad mixes continue to be popular products for today’s convenience-minded customers. The Yuma area’s stable allocation of Colorado River water will assure that agriculture remains the foundation of Yuma’s economy. The United States Marine Corps Air Station (MCAS) and United States Army Yuma Proving Ground (YPG) help provide economic stability. These two installations continue to be cornerstones in the military’s flight training and equipment testing programs. Both should survive any continued base closure efforts by the federal government. In fact, both installations are enjoying new construction and expansion to meet their needs into the 21st century. MCAS is the home of one of the first squadrons of the new Joint Strike Fighter, the new generation aircraft being adopted by all military services. Although manufacturing currently accounts for less than 10% of countywide employment, the City’s partnership with the Greater Yuma Economic Development Corporation continues to attract attention to the area. More and more companies are calling Yuma home as Yuma has become a strategic location for prominent manufacturing operations on the west coast. 1 Source: Greater Yuma Economic Development Corporation vi As of the fiscal year-end, at least three major companies have moved or announced plans to move to the City, in part because of the City’s stance on promoting new enterprise through a variety of economic incentives, workforce development, and stable, visionary leadership. Economic Growth. Yuma’s most reliable indicator of the condition of its economy is sales tax. The graph below reflects the last ten years of data. General sales tax saw an increase of 3.3% for fiscal year 2017. Tax data show that Retail Trade, annually the largest segment of the sales tax measure, increased by 1.7% over 2016. Construction sales tax again declined some (4.7)% for the year, however, compared to 2016’s decrease of (19.1)%, this category is certainly headed in the right direction. Construction has begun on the new Almark processing facility and several new businesses, such as Sprouts Farmers Market and Sportsman’s Warehouse have opened their doors for business here in Yuma. Overall, sales taxes are anticipated conservatively to grow 3.5% for fiscal year 2018. Tourism. Yuma has enjoyed an influx of seasonal residents for decades. Visitors from throughout the United States and Canada continue to call Yuma their winter home. This contributes to the strengthening of sales tax collections. LONG-TERM FINANCIAL PLANNING Yuma Crossing National Heritage Area. Plans to restore, preserve and interpret the Yuma Crossing National Heritage area began more than thirty years ago and work continued throughout 2017. This much-needed expansion of beach area along the Colorado River not only enhances the beauty of the river’s edge but provides access to the river for recreation. The river, once the primary reason for Yuma’s existence, was ignored for years as community growth and new development moved away from the riverfront. Awareness of the river’s importance has re-emerged, culminating in the establishment of the Yuma Crossing National Heritage Area in 2000, the first such National Heritage Area west of the Mississippi River. During fiscal year 2017, city and federal funding continued to manage and improve both the West and East Wetlands to restore natural vegetation and wildlife habitat, and improve recreational opportunities for area residents. The City will continue its focus in developing historic and cultural activities in these areas as these are so important in meeting the Council’s goals in enriching the area’s cultural attributes. Progress in providing opportunities for local residents and in attracting employers to the area to diversify the economy is dependent on continuing these plans. vii Downtown redevelopment. Revitalization of the downtown area is a vital component of management of the Heritage Area. The Hilton Hotel and Conference Center continue as the cornerstones of the public/private partnership that is developing the river area. Several recent developments have emerged with the intent of adding additional restaurant space and office availability, which will add economic value to the area. FINANCIAL INFORMATION Budgetary Controls. The annual budget serves as the foundation for City financial planning and control. The City maintains budgetary controls with the objectives to ensure compliance with legal provisions embodied in the annual appropriated budget, approved by the City Council. Activities of the General Fund, Special Revenue Funds, Debt Service Funds, Capital Projects Fund, Enterprise Funds, and three of the City’s Internal Service Funds are included in the annual appropriated budget. As with the governmental funds, the City’s proprietary funds are presented on a current financial resources basis to account for capital and debt-related expenditures. The City maintains an encumbrance accounting system as one technique of accomplishing budgetary controls. Encumbered amounts lapse at year-end. However, encumbrances generally are re-appropriated as part of the following year’s budget. As demonstrated by the budgetary schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. In addition to budgetary schedules, Note I-E in the Notes to the Financial Statements beginning on page 32 describes in detail the budget process used by the City. AWARDS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended June 30, 2016. This is the thirty fifth consecutive year the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report. The report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another award. I wish to express my sincere thanks to the employees of the Accounting Division for their dedicated service in preparing this report. Their work, along with those services provided by other members of the Finance Department, has made this report possible. The cooperation and assistance of the accounting firm of Heinfeld, Meech & Co., P.C., also contributed significantly to its production. Finally, I wish to thank the Mayor and Council, City Administrator, and the City Staff for their continued support. Respectfully submitted, Donald (Pat) Wicks, CPA Finance Director viii ix x FINANCIAL SECTION 1 2 INDEPENDENT AUDITOR’S REPORT Honorable Mayor, Members of the City Council, and City Administrator City of Yuma, Arizona Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Yuma, Arizona (the City), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Yuma, Arizona, as of June 30, 2017, 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. Change in Accounting Principle As described in Note 1.J, the city implemented the provisions of the Governmental Accounting Standards No. 77, Tax Abatement Disclosures, for the year ended June 30, 2017, which represents a change in the accounting principle. Our opinion is not modified with respect to this matter. 3 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, budgetary comparison information, net pension liability information, and other postemployment benefit information as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Introductory Section, Combining Fund Financial Statements and Schedules, and Statistical Section, as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Combining Fund Financial Statements and Schedules, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Combining Fund Financial Statements and Schedules, as listed in the table of contents, information is fairly stated in all material respects in relation to the basic financial statements as a whole. The Introductory Section and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our November 29, 2017, on our consideration of City of Yuma, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Yuma, Arizona’s internal control over financial reporting and compliance. Heinfeld, Meech & Co., P.C. Phoenix, Arizona November 29, 2017 4 MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information) As management of the City of Yuma, we offer readers of the City of Yuma's financial statements this narrative overview and analysis of the financial activities of the City of Yuma for the fiscal year ended June 30, 2017. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal in the introductory section of this report. FINANCIAL HIGHLIGHTS  On a government-wide basis, the City’s net position decreased by $3.8 million for the fiscal year, governmental activities decreased $10.4 million while business-type activities of the City increased $6.6 million  The City’s government-wide net position totaled $352.6 million at June 30, 2017. Due to implementation of GASB pension standards, while the City has a net positive unrestricted net position, it includes a deficit unrestricted net position of $91.0 million in governmental programs and negative $30.7 million in government-wide basis overall. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City of Yuma's basic financial statements. The City of Yuma's basic financial statements comprise three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Yuma's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City's assets and deferred outflows of resources, and liabilities and deferred inflows of resources, with the difference between the assets and outflows minus the liabilities and inflows reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (uncollected taxes and earned but unused vacation leave are two examples). Both of the government-wide financial statements distinguish functions of the City of Yuma that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, streets, environmental health and protection, community design and development and parks, recreation and culture. The business-type activities of the City include water, wastewater, solid waste, radio communications and golf course operations. The government-wide financial statements can be found on pages 20-21 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Yuma, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable 5 MANAGEMENT’S DISCUSSION AND ANALYSIS resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the four funds considered to be major funds. Data from the other six governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements beginning on page 82. Major Governmental Funds: General City Road Tax Debt Service Capital Projects Nonmajor Governmental Funds continued: Public Safety Tax Highway User Revenue Grants Two Percent Tax Yuma Mall Maintenance Nonmajor Governmental Funds: Community Redevelopment The City adopts annual appropriated budgets for all of its governmental funds. Budgetary comparison statements have been provided to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found starting on page 24 of this report. Proprietary funds. The City of Yuma maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Yuma uses enterprise funds to account for its Water, Sewer, and Solid Waste Authority and for its Radio Communications and golf courses. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City of Yuma uses internal service funds to account for its equipment replacement and maintenance programs, liability insurance, and for its workers compensation and employee health insurance. Because these services predominantly benefit governmental rather than businesstype functions, they have been included within governmental activities in the government-wide financial statements. Major Enterprise Funds: Water Fund Wastewater Fund Nonmajor Enterprise Funds: Solid Waste Radio Communications Desert Hills Golf Course Nonmajor Internal Service Funds: Equipment Replacement Equipment Maintenance Insurance Reserve Employee Benefits Trust Workers Compensation Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements group major and nonmajor proprietary funds in a manner similar to governmental fund statements. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements, beginning on page 106. The City adopts annual appropriated budgets for all of its proprietary funds with the exception of one internal service funds: Employee Benefits Trust. Budgetary comparison statements for the remaining proprietary funds are included within the report to demonstrate compliance with these budgets. The basic proprietary fund financial statements can be found on pages 28-30 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found beginning on page 31 of this report. 6 MANAGEMENT’S DISCUSSION AND ANALYSIS Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Yuma's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found starting on page 68 of this report. The combining statements referred to earlier in connection with nonmajor governmental, proprietary and internal service funds are presented immediately following the required supplementary information on pensions and budgets. Combining and individual fund statements and schedules can be found starting on page 82. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Position. As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Yuma, assets and deferred outflows exceeded liabilities and deferred inflows by $352.7 million at the close of the fiscal year. Governmental Activities Business-type Activities June 30, 2017 Net Position: (millions) Current and other assets Capital assets Total assets Pension Deferred Charges on Refunding Total Deferred Outflows of Resources Long-term liabilities outstanding Other liabilities 2017 $ 99.6 291.1 2016 $ 2017 111.9 285.4 $ 81.7 276.0 390.7 397.3 36.2 2016 $ Total 2017 2016 76.6 286.7 $ 181.3 567.1 $ 188.5 572.1 357.7 363.3 748.4 760.6 25.8 2.5 1.2 38.7 27.0 3.4 3.8 5.3 5.2 8.7 9.0 39.6 257.1 29.6 256.8 7.8 137.5 6.4 158.6 47.4 394.6 36.0 415.4 22.5 12.0 14.9 5.3 37.4 17.3 279.6 268.8 152.4 163.9 432.0 432.7 9.3 9.3 6.4 6.4 1.8 1.8 1.1 1.1 11.1 11.1 7.5 7.5 Net Investment in capital assets 194.3 193.7 150.9 152.3 345.2 346.0 Restricted Unrestricted 38.1 (91.0) 49.6 (91.6) 60.4 2.7 49.7 38.1 (30.6) 52.3 (41.9) Total liabilities Pension Total Deferred Inflows of Resources Net position: Total net position - $ 141.4 $ 151.7 $ 211.3 $ 204.7 $ 352.7 $ 356.4 The largest portion of the City of Yuma's net position reflects its investment in capital assets (e.g., land, buildings, machinery), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to pay these liabilities. The remaining balance of unrestricted net position may be used to meet the government’s ongoing obligations to citizens and creditors. Net position decreased to $352.6 million, down $3.8 million from the prior year. Governmental activities decreased $10.4 million while business-type activities increased $6.6 million. Capital asset acquisitions were higher than the depreciation expense this year attributing to the increase in Capital assets in governmental activities. Unrestricted net position are those assets available to finance programs in the upcoming fiscal year and would increase when the portion of taxes and other revenues exceed operating expenses but are not invested in capital assets. 7 MANAGEMENT’S DISCUSSION AND ANALYSIS Statement of Activities. Already noted was the statement of activities’ purpose in presenting information in how the government's net position changed during the most recent fiscal year. A chart of changes in net position follows. Changes in Net Position Fiscal Year Ended June 30, 2017 Governmental activities (millions) Revenues Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Sales taxes Franchise taxes Intergovernmental, unrestricted Unrestricted investment earnings 2016 2017 $ Total revenues 13.1 1.9 1.8 Business-type activities $ Total 2016 2017 $ 44.5 6.4 2016 2017 14.8 2.5 0.6 $ 47.4 5.9 $ 60.5 1.9 7.7 $ 59.3 2.5 7.0 12.3 41.6 3.1 31.7 0.7 11.0 40.2 3.2 30.2 0.4 0.4 0.3 12.3 41.6 3.1 31.7 1.1 11.0 40.2 3.2 30.2 0.7 106.2 102.9 53.7 51.2 159.9 154.1 8.7 68.1 16.1 14.9 4.5 4.4 - 9.1 55.9 12.3 14.2 0.7 4.3 4.5 - 22.8 16.5 3.7 2.3 1.7 23.4 16.6 3.3 2.2 1.9 8.7 68.1 16.1 14.9 4.5 4.4 22.8 16.5 3.7 2.3 1.7 9.1 55.9 12.3 14.2 0.7 4.3 4.5 23.4 16.6 3.3 2.2 1.9 116.7 101.0 47.0 47.4 163.7 148.4 6.7 (0.1) 3.8 (0.3) Expenses: General government Public safety Streets Parks, recreation and culture Environmental health and protection Community design and development Interest on long-term debt Water Wastewater Solid Waste Radio Communications Golf courses Total expenses Increase/(Decrease) in net position before transfers Transfers (10.5) 0.1 1.9 0.3 (3.8) - Increase/(Decrease) in net position (10.4) 2.2 6.6 3.5 Net Position - July 1 151.7 149.5 204.7 201.2 356.4 350.7 141.3 $ 151.7 $ 211.3 $ 204.7 $ 352.6 $ 356.4 Net Position - June 30 $ (3.8) 5.7 5.7 For the fiscal year, net position decreased $3.7 million, with $10.3 million of the decrease coming from governmental activities. 8 MANAGEMENT’S DISCUSSION AND ANALYSIS Governmental Activities Revenues Governmental activities revenues totaled $106.2 million for fiscal year 2017, an increase of $3.3 million from 2016, primarily in Sales Tax Revenues. Local sales taxes remain the largest revenue source for the City and are comprised of the 1% general sales tax along with a .5% road tax and a .2% public safety tax. State-shared revenues are the City’s second largest revenue source. State-shared revenues include state sales tax, urban revenue sharing (income tax), auto in-lieu tax and highway user funds (gas tax). Sales taxes and state shared revenues account for 58.7% of governmental revenues for the year. Capital grants and contributions, the third segment of governmental activities revenues, include donations and capital asset contributions. Charges for services count building permits and inspections, fines, recreation fees, police services and civic center rental fees among its largest sources. The charges for services category amounts to 13.1% of governmental revenues. Property taxes represent 12.3% of governmental revenues. The large majority of property taxes are levied for general purposes with a small levy for downtown mall maintenance. No property taxes are levied for debt service. Various grants and contributions and franchise taxes account for most of the remaining governmental revenues. Some of the more significant changes in governmental activities revenues are noted:    Sales taxes increased 3.3% from 2016, reflecting an improvement in the economy over last year. Charges for services decreased by $1.7 million primarily from a decrease in public safety usage by the public and a slight increase in development revenue. Property taxes increased 12.7% to $12.3 million as the City Council allowed the property tax rate to increase to offset the increased need for public safety and road repair. RevenuesGovernmental Activities Sales taxes 39% Franchise taxes 3% Intergovernmental, unrestricted 30% Property taxes 11% Capital grants and contributions 2% Unrestricted investment earnings <1% Operating grants and contributions 2% Charges for services 12% Expenses Governmental expenses totaled $116.8 million for the fiscal year. Of the expenses, 58.4% or $68.2 million is related to public safety for police, fire and municipal court services. Parks, recreation and culture expenses amounted to $14.7 million, or 12.6% and Streets was $16.1 million, 13.8%, while community design and development expenses amounted to 3.9%. General government expenses came to $8.7 million, or 7.5%. Interest on long-term debt was 9 MANAGEMENT’S DISCUSSION AND ANALYSIS $4.4 million, or 3.8% of governmental expenses. Overall, governmental activities expenses increased $15.6 million from 2016, driven primarily by an increase in Public Safety expenditures of $12.3 million. The chart above compares governmental activities with their respective program revenues, if any. Because the ultimate beneficiary of services of these types is often difficult to ascertain or the services apply to a broad spectrum of users (such as in fire protection), user fees are not created and general revenues provide the funding support for most of these services. Moreover, where ultimate users of the services are determinable, program revenues may generate only a portion of the funding, such as in recreation programs. Business-type activities Revenues General revenues do not support the City’s business-type activities; thus, the largest source of revenues comes from charges for services. Of the $47.4 million in charges for services, 88% comes from the City’s two utility operations, water and wastewater. The remaining charges are from solid waste, radio communications and the City’s two golf courses, Desert Hills and Desert Hills Par 3. The $5.9 million in contributions are payments for capacity charges, development fees, and constructed additions to the City’s water and wastewater infrastructure by subdivision and other developers as well as grant funds for the water, wastewater and radio communications funds. Finally, investment earnings make up .74% of revenues for the City’s business activities. 10 MANAGEMENT’S DISCUSSION AND ANALYSIS Expenses Water and wastewater services account for 83.6% of the City’s business-type activities with solid waste, radio communication and golf courses making up the remaining 16.4%. Water expenses amounted to $22.8 million while wastewater expenses totaled $16.5 million. Solid Waste, Radio Communications, and Desert Hills Golf Courses recorded expenses of $3.7 million, $2.3 million and $1.7 million, respectively, for a total of $7.7 million. Expenses vs. Program Revenues-Business-type Activities A B C D E F 30 Contributions G H I J Charges for Services Expenses 25 Millions 20 15 10 5 0 Water Wastewater Solid Waste 11 Radio Communications Golf MANAGEMENT’S DISCUSSION AND ANALYSIS Because the City’s business-type activities are supported by user charges, the chart above shows more reliance on program revenues. Moreover, for both water and wastewater, program revenues include capacity charges for new service and developer additions to the utility infrastructure. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental funds. The combined fund balances of governmental funds for the fiscal year ended June 30, 2017, is $59.0 million, a decrease from 2016 of $15.0 million. A review of some of the more significant funds follows. General Fund The fund balance of the General Fund decreased by $0.8 million for the fiscal year 2017. Revenues increased by $3.8 million. Sales taxes, the city’s largest source of General Fund revenues, increased $0.7 million (1.68%) to $21.2 million, representing a robust increase in retail sales. Property taxes increased by $1.3 million to $12.3 million. State-shared vehicle registration tax (auto lieu tax) increased 1.3% to $3.7 million. Total expenditures increased $5.1 million to $67.4 million. Most of the increase occurred in Public Safety expenditures, in part due to the City again needing to use current staff operating ambulance services in an overtime status. Public Safety Retirement contributions were also increased this year. City Road Tax Fund This fund accounts for the one-half cent sales tax for use on the City’s roadways in conjunction with HURF. The fund balance decreased by $0.2 million for the year. In the same manner as general sales tax in the General Fund, sales taxes increased in 2017 by $0.3 million to $10.6 million. Operational expenditures increased by $2.9 million from 2016. Debt Service Debt Service Fund expenditures increased $0.5 million to $11.5. Highway User Revenue Fund (HURF) This fund, which accounts for the expenditure of state-shared gasoline taxes, showed an increase in fund balance of $0.8 million for the year, increasing to $4.7 million. The City’s portion of those taxes increased by 2% for the fiscal year to $7.5 million. All maintenance expenditures for streets and retention basins are made in the HURF Fund. Expenditures increased from 2016 by $0.8 million to $6.7 million. Grants Fund The City continues to receive much needed assistance from both the state and federal levels. During 2017, revenues decreased to 2.1 million, due the expiration of several grants. Again this year, Homeland Security was the primary source of grants, funding the Operation Stone Garden. In addition, the City of Yuma received funding from the Environmental Protection Agency for conducting community wide assessments at potential Brownfields sites contaminated with Petroleum or Hazardous Substances. Community Redevelopment Fund The City continued to utilize, in part, its Community Development Block Grant funding for eligible street infrastructure improvements and for affordable housing rehabilitation. Community Development Block Grant revenues increased to $0.8 million for 2017. Capital Projects Fund The Capital Projects Fund’s fund balance has decreased to $19.5 million this year and the city continues to expend the proceeds of the 2007 bond sale. Capital expenditures in fiscal year 2017 were $17.7 million. Proprietary funds. The City’s enterprise funds posted an overall increase in net position of $6.6 million for the fiscal year ended June 30, 2017. Results were mixed between the various funds. Water and Wastewater posted 12 MANAGEMENT’S DISCUSSION AND ANALYSIS increases while Wastewater, Solid Waste, Radio Communications and Desert Hills Golf Course Funds posted decreases in net position. Water Fund Operating revenues for the Water Fund increased by $1.2 million or 5% for the year ending June 30, 2017. Operating expenses decreased by 4.0% with attendant improvements implemented. With these changes, operating income increased to $3.8 million. Capital contributions held steady at $2.7 million, leading to the fund’s net position increase of $3.8 million. Wastewater Fund The Wastewater Fund operating revenues increased 6% from fiscal 2016. Rate-based charges increased 6% to $16.0 million. Operating expenses increased by 2% with income from operations increasing to $756 thousand. Capital contributions remained steady at $3.2 million, increasing the fund’s net position by $3.7 million. Radio Communications With the reclassification of the Radio Communications fund to an enterprise fund, federal grants for the Yuma Regional Communications System were classified in the fund. Operating revenues increased 10.3% to $1.9 million due to an increase in other agencies communication product purchases through the YRCS. Operating expenses increased 2.7% to $1.9 million, with the fund’s net position decreasing to $1.9 million. GENERAL FUND BUDGETARY HIGHLIGHTS A detailed budgetary comparison schedule for the fiscal year ended June 30, 2017, can be found starting on page 73. A summary of that schedule follows: Budget Original Revenues and Transfers In Taxes Intergovernmental Other $ Transfers In Total Expenditures and Transfers Out Expenditures Transfers Out Total Change in Fund Balance $ 37.1 24.5 8.5 70.1 Final $ Variance with Final Actual 37.1 24.5 8.5 70.1 $ 36.7 24.2 10.3 71.2 $ (0.4) (0.3) 1.8 1.1 67.9 4.6 67.9 4.6 67.4 4.6 0.5 - 72.5 72.5 72.0 0.5 (2.4) $ (2.4) $ (0.8) $ 1.6 General Fund revenues and transfers ended the year $1.1 million over expectations. Ambulance billing collections and Auto-in-Lieu Tax accounted for $1.0 million and $0.2 million of the increase, respectively, while State Revenue Sharing, Franchise Tax, Property Tax and State Sales Tax decreased this by $0.4 million, $0.2 million, $0.2 million, and $0.1 million respectively. The important revenue source of city sales tax decreased by less than $0.1 million. Expenditures for the fund came in at $0.5 million below budget mostly due to contingency budget not being used. General Government and Community Development showed savings of $1.8 million and $0.3 million, respectively. However, Public Safety exceeded budget by $1.7 million due to overtime needed in excess of projections by the Ambulance Transport division. Savings in budget occurred in most departments with the City’s drive to reduce expenditures throughout the year. The City continued to target all areas of expenditure reduction. Due to the departments’ diligence, the General Fund’s anticipated reduction of fund balance decreased from a reduction of $2.4 million to a reduction of $0.8 million. 13 MANAGEMENT’S DISCUSSION AND ANALYSIS CAPITAL ASSETS At June 30, 2017, the City of Yuma’s investment in capital assets in both governmental and business-type activities amounted to $566.8 million, net of depreciation. This includes land, buildings, equipment, and infrastructure (roadways and bridges). Capital assets for governmental activities increased by 2% while business-type capital assets decreased by 4%. These changes included the following:       Improvements to Police Parking Garage building were completed. 24th Street: Avenue B to Avenue C The 16th and 4th Avenue Intersection Improvements construction project was completed. A number of major water and sewer lines were completed. Several land exchanges and land sales were finalized this year. The largest decrease was due to fewer new assets being acquired and/or constructed than depreciation expense on existing assets in the Business-Type Activities. Change in Capital Assets (In Millions) Governmental Activities July 1, 2016 Net Additions/ June 30, Deletions 2017 Land $ 56.0 Buildings 95.4 Improvements 50.0 Infrastructure 253.5 Equipment 58.3 Construction in Progress 10.5 Accumulated Depreciation (238.2) $ Total $ $ 285.5 Business-type Activities (3.5) 0.1 0.2 13.9 1.1 (262.8) 256.4 5.4 July 1, 2016 Total Net Additions/ June 30, Deletions 2017 $ 52.5 95.5 50.2 267.4 59.4 (252.3) 18.2 $ 10.6 164.6 274.3 13.6 5.1 (181.6) $ 7.3 0.2 (201.7) 183.5 $ 10.6 164.6 281.6 13.8 (196.6) 1.9 $ 63.1 260.1 331.8 267.4 73.2 (448.9) 20.1 $ 290.9 $ 286.6 $ (10.7) $ 275.9 $ 566.8 Additional information on capital assets can be found in Note II-E starting on page 44. DEBT ADMINISTRATION At June 30, 2017, after scheduled debt payments, governmental activity debt decreased by $7.3 million while business activity debt increased to $132.7 million. The state limits the amount a municipality may issue in general obligation debt to 20% of the City’s secondary assessed valuation for combined water, wastewater, artificial light, parks, open space preserves, playgrounds and recreational facilities. Debt related to other projects is limited to 6% of the valuation. The current debt limitation for the former type is $119.1 million. This City currently has no outstanding general obligation debt nor is there any debt outstanding for the other type of issuance. The City’s improvement district bonds were rated by Fitch Ratings as “A+”. All other bonds are rated “AA-”. The underlying ratings of Moody’s Investor Services and Standard and Poor’s are “Aa3” and “AA-“, respectively. With the exception of the improvement district bond, all City bond issues are insured, and while the city enjoys higher ratings, the guarantors can no longer provide “AAA” rating as a result of ratings downgrades of the insurance companies. A summary of the City’s long-term debt follows. Additional information on the City’s long-term debt can be found in Note II-F on pages 46-50. 14 MANAGEMENT’S DISCUSSION AND ANALYSIS Summary of Long-Term Debt (Millions) Governmental activities Yuma Municipal Property Corporation Bonds Net Unamortized Premium/Issuance Costs Improvement Districts Contracts Payable Pension Compensated Absences Total Long-Term Debt Business-type activities 2017 2016 2017 $ 104.7 $ 111.0 $ 123.8 8.0 1.4 145.9 8.7 1.7 129.3 8.9 13.6 6.4 6.1 $ 266.4 $ 256.8 Total 2016 $ 89.7 2017 $ 2016 228.5 $ 200.7 9.5 45.0 13.4 16.9 1.4 159.5 18.2 1.7 45.0 142.7 1.1 1.0 7.5 7.1 $147.4 $ 158.6 413.8 $ 415.4 $ ECONOMIC FACTORS Yuma County’s growth is sluggish but improving. The county grew by an estimated 1,028 residents to 204,275 with the City of Yuma representing 46% of the county’s population. Since 2000, the City has grown by 3% to an estimated 93,400 for 2014 (the most recent available). The City’s economy is based on a triad of agriculture, tourism and military/government spending. Agribusiness continues to lead the economy, contributing well over $3 billion annually. The area’s 85,000-plus winter visitors add over $500 million to the mix, while two prominent military installations infuse some $300 million to the economy. Property taxes are limited constitutionally in Arizona, so other local revenues make up the most significant reflectors of the condition of the economy. Sales tax, the City’s primary source of general revenues, posted a 3.3% increase this year, compared to its historic growth rate of 7%. For fiscal year 2017, General Fund revenues were projected with a 5.4% increase. With sales tax statistics improving, the economy continues to strengthen. economic events occurred:   During 2017, the following major MarTech Medical Products, arriving in late 2017, will ship $100 million worth of products across the globe. Almark Company began construction on its new plant, which will bring 100 full-time, year-round jobs to Yuma by spring 2018. Not all economic statistics reflect positive results; however, in that Yuma County continues to suffer what appear to be higher unemployment figures than most of the state, according to the Arizona Department of Economic Security (DES). Seasonal farm employment continues to skew this statistic. The City combats this problem as the largest contributor to the Greater Yuma Economic Development Corporation whose two-fold mission is to encourage new employers to the area and to assist local employers in their expansion efforts. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to familiarize our citizens, taxpayers and customers with the City’s finances and to demonstrate the City’s fiscal accountability for its operations. Questions concerning this report, or requests for additional financial information, should be directed to Mr. Donald (Pat) Wicks, Finance Director, One City Plaza, Yuma, AZ 85364, telephone (928) 373-5087. The reader may also visit the City’s website at www.yumaaz.gov for an electronic version of this report. 15 16 BASIC FINANCIAL STATEMENTS 17 18 GOVERNMENT-WIDE FINANCIAL STATEMENTS 19 City of Yuma, Arizona Statement of Net Position June 30, 2017 Assets Cash and Investments Receivables, Net Internal Balances Inventory, at cost Prepaid Items Capital Assets: Non-depreciable Depreciable, Net Total Assets Governmental Activities $ Deferred Outflows of Resources Pension Investments PSPRS Police - Projection/Actual diff Pension Investments PSPRS Fire - Projection/Actual diff Pension Contributions ASRS - Current Year Pension Contributions PSPRS Police - Current Year Pension Contributions PSPRS Fire - Current Year Other Pension Items ASRS Other Pension Items PSPRS Police Other Pension Items PSPRS Fire Deferred Charges on Refunding Total Deferred Outflows of Resources 85,502,927 12,808,849 422,411 762,306 151,954 Business-type Activities $ 77,015,282 4,842,625 (422,411) 211,691 18,363 Total $ 162,518,209 17,651,474 973,997 170,317 70,781,086 220,175,985 390,605,518 12,485,924 263,575,113 357,726,587 83,267,010 483,751,098 748,332,105 3,447,427 2,363,872 2,388,682 4,871,869 3,723,304 4,159,906 8,787,128 6,496,903 3,420,350 39,659,441 899,701 1,566,837 5,307,309 7,773,847 3,447,427 2,363,872 3,288,383 4,871,869 3,723,304 5,726,743 8,787,128 6,496,903 8,727,659 47,433,288 5,169,544 3,576,532 2,319,515 2,207,415 2,314,958 369,432 2,182,932 161,922 7,484,502 3,945,964 4,502,447 2,369,337 2,410,678 6,805,000 348,368 9,522,001 2,759,046 16,327,001 3,987,931 145,870,705 107,292,877 279,640,197 723,753 13,594,323 123,137,909 152,355,598 4,711,684 159,465,028 230,430,786 431,995,795 1,909,583 850,538 586,391 2,976,688 387,419 2,591,028 9,301,647 719,247 1,121,176 1,840,423 2,628,830 850,538 586,391 4,097,864 387,419 2,591,028 11,142,070 194,292,220 150,899,026 345,191,246 Liabilities Accounts Payable and Deposits Accrued Liabilities Accrued Interest Payable Unearned Revenue Noncurrent Liabilities: Due within one year Current portion of Accrued Compensated Absences Current portion of Debt Due in more than one year Accrued Compensated Absences Pension Debt Total Liabilities Deferred Inflows of Resources Pension Investments ASRS - Projection/Actual difference Pension Investments PSPRS Police - Projection/Actual diff Pension Investments PSPRS Fire - Projection/Actual diff Other Pension Items ASRS Other Pension Items PSPRS Police Other Pension Items PSPRS Fire Net Position Net Investment in capital assets Restricted for: Debt Service Community Development Road Maintenance and Construction Public Works Projects PS Police equipment and facilities PS Fire equipment and facilities Parks, recreation and cultural facilties Unrestricted Total Net Position 1,371,968 809,823 16,945,261 10,117,459 1,676,702 558,901 6,576,548 (91,025,767) $ 141,323,115 The accompanying notes are an integral part of these financial statements. 20 60,405,387 $ 211,304,413 1,371,968 809,823 16,945,261 10,117,459 1,676,702 558,901 6,576,548 (30,620,380) $ 352,627,528 City of Yuma, Arizona Statement of Activities For the Year Ended June 30, 2017 Functions/Programs Government Activities: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Interest on Long-Term Debt Total Governmental Activities Business-type Activities: Water Wastewater Solid Waste Radio Communications Golf Courses Total Business-type Activities Total Charges for Services Expenses $ 8,741,283 68,133,891 16,063,406 $ 14,891,709 2,724,006 5,036,941 - $ 1,195,296 25,821 - 4,524,183 4,204,900 4,400,887 13,161,143 22,815,907 16,474,087 3,726,997 2,312,633 1,679,735 23,786,900 16,752,173 3,509,738 1,949,337 1,421,959 47,009,359 60,581,250 Capital Grants and Contributions $ $ (5,792,912) (61,771,724) (15,241,890) Business-type Activities $ (13,290,179) - $ (5,792,912) (61,771,724) (15,241,890) - 84,265 58,444 - 58,444 231 512,632 - 512,632 1,817,478 - 2,672,080 3,239,221 - - 5,911,301 1,876,043 General Revenues: Property taxes Sales taxes Franchise taxes Intergovernmental, unrestricted Unrestricted investment earnings Total general revenues Transfers Total general revenues and transfers Change in net position Net position-beginning Net position-ending $ 7,728,779 - (4,400,887) (99,926,516) - (99,926,516) - 3,643,073 3,517,307 (217,259) (363,296) (257,776) - 6,322,049 6,322,049 6,322,049 (93,604,467) 12,354,493 41,653,489 3,066,678 31,712,561 687,053 89,474,274 85,344 89,559,618 (10,366,898) 151,690,013 141,323,115 (0) 21 (13,290,179) (4,400,887) (99,926,516) $ The accompanying notes are an integral part of these financial statements. - Total 326,219 1,876,043 $ 211,357 373,890 821,516 Governmental Activities 80,015 - 47,420,107 $ 13,008 951,336 - Net (Expense) Revenue and Changes in Net Position 831,684 - 116,781,180 $ 163,790,539 Program Revenues Operating Grants and Contributions $ 352,669 352,669 (85,344) 267,325 6,589,374 204,715,039 211,304,413 3,643,073 3,517,307 (217,259) (363,296) (257,776) 12,354,493 41,653,489 3,066,678 31,712,561 1,039,722 89,826,943 89,826,943 (3,777,524) 356,405,052 $ 352,627,528 (0) 22 FUND FINANCIAL STATEMENTS 23 City of Yuma, Arizona Balance Sheet Governmental Funds June 30, 2017 Assets City Road Tax General Cash and Investments $ 12,944,632 Cash with Fiscal Agents Receivables, Net of Allowances for Uncollectibles: Accounts Receivable 4,398,115 Intergovernmental 2,398,277 Special Assessments 20,169 Delinquent Property Taxes 533,775 Accrued Interest 24,080 Due from Other Funds 1,991,793 Inventory, at cost 27,221 Prepaid Items 90,895 Total Assets and Other Debits 22,428,957 Capital Projects Debt Service $ 12,363,377 - $ 39,890 544,189 18,709 4,094 12,970,259 1,101 8,803,415 $ 22,743,846 - 6,905 1,370,000 10,181,421 145,518 310,531 6,954 23,206,849 Other Nonmajor Governmental Funds $ Total 9,559,917 - $ 57,612,873 8,803,415 1,163,705 1,785,195 3,427 13,203 7,849 53,915 12,587,211 5,754,133 5,038,192 1,390,169 537,202 62,946 1,991,793 35,070 148,904 81,374,697 Liabilities Accounts Payable Accrued Payroll, Taxes and Benefits Payable Long-Term Debt - Current Portion Due to Other Funds Accrued Interest Payable Deposits Unearned Revenues Total Liabilities Deferred Inflows of Resources Unavailable Revenues Fund Balances: Nonspendable: Inventory Prepaid Items Spendable Restricted Committed Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balance $ 795,632 1,953,181 381,214 15,564 3,145,591 $ 868,112 69,918 13,672 900 952,602 1,729,669 - 4,094 $ 6,485,000 4,940 2,319,515 8,809,455 1,370,000 1,858,384 1,806,235 3,664,619 $ 687,092 173,184 586,509 32,063 384,716 1,863,564 $ 4,209,220 2,196,283 6,485,000 591,449 2,319,515 426,949 2,207,415 18,435,831 - 813,251 3,912,920 - 7,849 53,915 35,070 148,904 27,221 90,895 17,435,581 17,553,697 12,013,563 12,017,657 1,966 1,966 14,012,675 5,529,555 19,542,230 9,848,632 9,910,396 35,876,836 5,529,555 17,435,581 59,025,946 $ 22,428,957 $ 12,970,259 $ 10,181,421 $ 23,206,849 $ 12,587,211 $ 81,374,697 The accompanying notes are an integral part of these financial statements. 24 - $ City of Yuma, Arizona Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Position June 30, 2017 Amounts reported for governmental activities in the Statement of Net Position are different because: Total Fund Balances per the Balance Sheet-Governmental Funds: $ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Revenues deferred to later years recognized in year levied in governmental activities. Special Assessment/Loan Principal Property Tax Ambulance Billings $ 59,025,946 283,331,682 2,179,818 537,202 1,195,900 3,912,920 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: Compensated absences Pension Liability MPC bonds payable Improvement District #68 Net unamortized deferred charges or premiums are not recorded in the governmental funds (6,333,056) (119,237,286) (98,250,000) (1,370,000) (7,992,877) Deferred charges on debt refunding are not recognized in the current period 3,420,350 Net position of internal service funds that are used by management to charge the cost of equipment replacement and employee-related insurance to individual funds are included in governmental activities in the Statement of Net Position Net position - Governmental Activities per the Statement of Net Position The accompanying notes are an integral part of these financial statements. 25 24,815,436 $ 141,323,115 City of Yuma, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2017 Revenues: Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Special Assessments Use of Money and Property Contributions and Donations Miscellaneous Total Revenues Expenditures: Current: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Capital Projects: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Debt Service Principal Interest and Fiscal Agent Fees Total Expenditures Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Transfers In Transfers Out Total Other Financing Sources/(Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending General City Road Tax $ 36,713,465 2,063,660 24,210,198 5,966,022 1,228,496 304,488 745,558 $ 10,601,757 21,378 244,120 391,982 71,231,887 11,259,237 377,502 7,835,951 47,971,752 8,059,752 683,631 2,518,689 - - - 3,409,401 136,800 - Capital Projects Debt Service $ $ 2,493,846 184,465 - $ 57,022,480 2,063,660 34,489,349 9,151,797 1,228,496 305,000 889,600 170,003 1,447,009 21,220,457 106,767,394 - 86,678 3,190,882 5,739,860 5,121,852 7,922,629 51,846,265 8,258,549 13,181,604 - - 50,298 50,298 18,924 - - 1,075,892 1,547,465 4,485,293 1,703,189 2,768,232 383,305 477,522 - 173,895 34,834 4,968,866 12,342,941 158,764 287,103 36,535 357,212 184,720 - 460,998 71,369 8,094,310 12,910,966 636,286 - 6,790,000 4,720,309 17,678,497 121,132,065 3,541,960 (14,364,671) 123,775 (2,718,091) 11,255,191 (11,885,669) (2,594,316) (630,478) 2,678,311 6,790,000 4,720,309 67,413,656 6,850,303 11,510,309 17,679,300 3,818,231 4,408,934 (11,132,807) (15,000,989) (4,610,060) (4,557,518) 11,131,416 - (4,610,060) (4,557,518) 11,131,416 (791,829) (148,584) 18,345,526 12,166,241 $ 17,553,697 $ 12,017,657 The accompanying notes are an integral part of these financial statements. 26 - (1,391) (15,000,989) 3,357 $ 1,966 $ $ Total Governmental Funds 9,707,258 10,279,151 670,551 84,025 170,003 309,469 - 305,000 72,502 - Other Nonmajor Governmental Funds 947,644 (14,995,149) 34,543,219 8,962,752 74,021,095 19,542,230 $ 9,910,396 $ 59,025,946 City of Yuma, Arizona Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances-Governmental Funds to the Statement of Activities For the Year Ended June 30, 2017 Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances-governmental funds $ Portions of revenues recorded on the Statement of Activities do not provide current financial resources and are not recorded as revenues in the funds: Property taxes revenue Public safety ambulance revenue (14,995,149) 40,727 (1,224,144) Loan Payments are recorded as revenues in the funds. In the Statement of Activities, however, these amounts are recorded as a reduction in receivables: Community Redevelopment Loan Payments Special Assessment Principal Payments (3,996) (305,000) Governmental funds report capital outlays as expenditures. In the Statement of Activities, however, the cost of those assets is allocated over their useful lives as depreciation Depreciation recorded in Statement of Activities Capital outlay expenditures reported as additions to assets: Capital outlay expenditures-governmental funds Infrastructure maintenance expenditures recorded as capital outlay but not capitalized as asset additions (13,668,604) 23,877,118 (898,167) Governmental funds report debt principal service payments as expenditures. The reduction in liability is recorded on the Statement of Net Position in the government-wide statements 6,790,000 Increase in compensated absences expense not recorded in governmental funds (251,569) Governmental funds report pension contributions as expenditures. GASB 68 requires the actual pension expense to be recorded on government-wide statements. In addition, contributions for current year are recorded as deferred outflows of resources in government-wide statements. This amount is the net difference between the amounts. (8,976,369) The net effect of miscellaneous transactions involving capital assets (trades of land for rights-of-way) is to decrease net position. (3,575,572) Investment earnings of the internal service funds are general revenues on the statement of activities 83,902 Internal Service fund transfers are eliminated on Statement of Activities as they are combined with governmental. Statement of Activities only shows transfers between governmental and business-type activities 715,822 Arizona state pension refunds accrued in government-wide statements are not recorded in governmental activities until paid (304,027) Interest payments accrued in government-wide statements are not recorded in governmental activities until paid 319,422 Net revenues of internal service funds in excess of expenses reduce governmental activities expenses on the Statement of Activities 1,230,921 Contributions of infrastructure assets are not recorded as revenues in the governmental funds Change in net position of governmental activities 777,787 $ The accompanying notes are an integral part of these financial statements. 27 (10,366,898) City of Yuma, Arizona Statement of Net Position Proprietary Funds June 30, 2017 Assets Current Assets: Cash and Investments Receivables, Net of Allowance for Uncollectibles: Accounts Receivable Intergovernmental Accrued Interest Inventory, at cost Prepaid Expenses Total Unrestricted Current Assets Restricted Assets: Cash and Investments: Cash with Fiscal Agents Advancement for Future Expansion Customer Deposits Total Restricted Current Assets Total Current Assets Noncurrent Assets: Capital Assets: Land Buildings Improvements Other than Buildings Equipment Construction In Progress Less Accumulated Depreciation Total Capital Assets Total Noncurrent Assets Total Assets Deferred Outflows of Resources Pension Contributions - Current Year Other Pension Items Deferred Charges on Refunding Total Deferred Outflows of Resources Liabilities Current Liabilities Payable from Current Assets: Accounts Payable Accrued Payroll and Related Taxes Current Portion-Bonds Payable Current Portion-Accrued Compensated Absences Estimated Claims and Judgements Due to Other Funds Accrued Interest Payable Unearned Revenue Total Current Liabilities Payable from Current Assets Current Liabilities Payable from Restricted Assets: Accounts Payable Deposits Unearned Revenue Total Current Liabilities Payable from Restricted Assets Total Current Liabilities Noncurrent Liabilities: Bonds Payable Pension Liability Accrued Compensated Absences Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources Pension Investments - Projection/Actual difference Other Pension Items Total Deferred Inflows of Resources Net Position Net investment in capital assets Unrestricted Total Net Position Water Fund Business-Type Activities-Enterprise Funds Wastewater Other Fund Funds $ 21,815,998 $ 23,028,898 $ 3,163,735 $ Totals 48,008,631 Governmental Activities Internal Service Funds $ 19,086,639 2,626,097 1,691 31,586 88,656 14,185 24,578,213 1,459,373 230,822 43,216 3,842 24,766,151 368,555 77,458 3,827 123,035 336 3,736,946 4,454,025 309,971 78,629 211,691 18,363 53,081,310 7,560 24 18,623 727,236 3,050 19,843,132 7,531,887 4,354,652 555,771 12,442,310 37,020,523 4,178,804 12,385,537 16,564,341 41,330,492 3,736,946 11,710,691 16,740,189 555,771 29,006,651 82,087,961 19,843,132 1,867,721 106,000,530 159,048,486 2,836,944 1,487,070 (109,419,197) 161,821,554 161,821,554 198,842,077 8,735,438 55,545,009 119,250,026 2,190,021 395,695 (73,952,326) 112,163,863 112,163,863 153,494,355 3,102,865 3,341,093 8,817,123 (13,185,461) 2,075,620 2,075,620 5,812,566 10,603,159 164,648,404 281,639,605 13,844,088 1,882,765 (196,556,984) 276,061,037 276,061,037 358,148,998 219,610 19,251 222,733 29,688,166 (22,524,371) 7,625,389 7,625,389 27,468,521 425,188 740,468 3,995,671 5,161,327 302,860 527,433 1,311,638 2,141,931 171,653 298,936 470,589 899,701 1,566,837 5,307,309 7,773,847 728,165 171,276 5,877,138 152,134 1,607,363 8,536,076 307,146 127,845 3,644,863 113,920 575,569 4,769,343 221,576 70,311 82,314 136,302 510,503 1,256,887 369,432 9,522,001 348,368 2,182,932 136,302 13,815,922 229,350 33,906 21,828 1,346,343 1,400,344 3,031,771 475,349 577,521 1,052,870 9,588,946 5,201 25,620 30,821 4,800,164 510,503 480,550 577,521 25,620 1,083,691 14,899,613 3,031,771 88,325,645 6,424,510 350,624 95,100,779 104,689,725 34,812,264 4,576,159 228,027 39,616,450 44,416,614 2,593,654 145,102 2,738,756 3,249,259 123,137,909 13,594,323 723,753 137,455,985 152,355,598 43,725 43,725 3,075,496 339,908 529,854 869,762 242,115 377,413 619,528 137,224 213,909 351,133 719,247 1,121,176 1,840,423 73,805,032 24,638,885 75,018,374 35,581,770 2,075,620 607,143 150,899,026 60,827,798 $ 98,443,917 $ 110,600,144 2,682,763 211,726,824 Adjustment to reflect consolidation of internal service fund activities related to enterprise funds Net position of business-type activities The accompanying notes are an integral part of these financial statements. $ (422,411) $ 211,304,413 28 - - 7,625,389 16,767,636 $ 24,393,025 City of Yuma, Arizona Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2017 Water Fund Operating Revenues: Metered Water Sales Commercial Raw Water Wastewater Charges Meters, Connections and Services Charges for Services Green Fees and Concessions Equipment Rental Miscellaneous Charges Total Operating Revenues $ Operating Expenses: Operations and Maintenance Depreciation Total Operating Expenses Operating Income/(Loss) Non-Operating Revenues/(Expenses): Interest Gain/(Loss) on Disposal of Assets Interest and Fiscal Agent Fees Miscellaneous Revenues Total Non-Operating Revenues/(Expenses) Business-Type Activities-Enterprise Funds Wastewater Other Fund Funds 22,133,979 119,739 - $ 16,043,416 $ - Totals $ 22,133,979 119,739 16,043,416 Governmental Activities Internal Service Funds $ - 1,355,632 23,609,350 50,915 16,094,331 5,442,180 1,206,411 167,196 6,815,787 1,406,547 5,442,180 1,206,411 167,196 46,519,468 5,470,799 2,122,521 2,149,638 9,742,958 11,437,313 8,355,205 19,792,518 9,433,398 5,903,422 15,336,820 7,305,171 699,786 8,004,957 28,175,882 14,958,413 43,134,295 5,767,977 2,301,696 8,069,673 3,816,832 757,511 (1,189,170) 3,385,173 1,673,285 159,019 (3,014,018) 177,550 177,523 (1,077,612) 657,842 16,126 65,247 352,668 (4,091,630) 900,639 83,902 (237,434) - (2,677,449) (242,247) 81,373 (2,838,323) (153,532) 1,139,383 515,264 2,672,080 (59,563) 3,239,221 (65,939) Change in Net Position 3,751,900 3,688,546 Net Position - Beginning 94,686,517 106,907,681 3,748,183 98,438,417 $ 110,596,227 $ 2,680,544 Income/(Loss) before Contributions and Transfers Capital Contributions Transfers In Transfers Out Net Position - Ending $ (1,107,797) 546,850 242,655 (202,497) 5,911,301 242,655 (327,999) (1,067,639) 29 2,235,575 22,157,450 $ 204,930 $ The accompanying notes are an integral part of these financial statements. 719,813 (3,991) 6,372,807 Adjustment for consolidation of internal service fund activities related to enterprise funds Change in net position of business-type activities 1,519,753 6,577,737 24,393,025 City of Yuma, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2017 Governmental Activities Business-Type Activities-Enterprise Funds Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Cash Paid for Operating Expenses Other Operating Activity Revenue Net Cash Provided by/(used for) Operating Activities Water Fund Wastewater Fund $ 23,778,532 (5,254,982) (5,826,151) 177,550 $ 16,132,395 (3,943,033) (5,728,975) 657,842 12,874,949 Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Provided by/(Used for) Noncapital Financing Activities Cash Flow from Capital and Related Financing Acitivities: Contributions of Capital Acquisition and Construction of Assets Proceeds from Sale of Capital Assets Issuance of Debt - 2016 Sr Utility Bond Premiums - Revenue Bonds Principal Payments on Bonds WIFA - Contracted Loan Interest and Fiscal Agent Fee Payments Net Cash (Used for) Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities Cash and Cash Equivalents, June 30 Reconciliation of Operating Income/(Loss) to Net Cash Provided by/(used for) Operating Activities: Operating Income/(Loss) Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense Decrease in Accounts Receivable (Increase)/Decrease in Inventories (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accounts Payable Increase/(Decrease) in Accrued Payroll and Related Taxes Increase in Due from Other Gov't Units (Decrease) in Claims Incurred but Not Reported Increase in Customer Dep/Unearned Rev Increase in Due to Other Funds (Decrease) in Pension Exp/Def Outflows/Inflows Other Operating Activity Revenue Total Adjustments Net Cash Provided by/(Used for) Operating Activities Noncash Transactions Affecting Financial Position Contributions of Capital Assets Total Noncash Transactions Affecting Financial Position Totals 6,921,464 (2,187,013) (5,079,106) 65,246 $ 46,832,391 (11,385,028) (16,634,232) 900,638 (279,409) Internal Service Funds $ 19,713,769 9,688,526 (1,069,438) (1,371,579) (2,226,091) 5,021,418 (59,563) (65,939) 242,655 (202,498) 242,655 (328,000) 719,813 (3,991) (59,563) (65,939) 40,157 (85,345) 715,822 2,478,328 (2,751,928) 21,187,609 (2,891,350) (24,831,766) (3,846,866) 2,888,261 (1,022,877) 16,647,400 (863,650) (20,221,883) (1,547,598) (32,259) - 5,366,589 (3,807,064) 37,835,009 (3,755,000) (45,053,649) (5,394,464) (1,480,075) 34,538 - (10,655,973) (4,120,347) (32,259) (14,808,579) (1,445,537) 161,847 161,847 2,304,585 3,093,790 31,953,723 36,499,449 $ 34,258,308 $ 39,593,239 Cash and Cash Equivalents, July 1 $ 7,118,229 145,172 145,172 Net Increase/(Decrease) in Cash and Cash Equivalents Other Funds 15,021 15,021 322,040 322,040 77,387 77,387 5,141,884 4,369,090 3,420,226 71,873,398 14,717,549 3,163,735 $ 77,015,282 $ 19,086,639 $ $ 1,673,285 (256,491) $ (0) $ 3,816,832 0 $ 757,511 $ (1,189,170) 8,355,205 74,200 22,331 (11,902) 480,426 5,903,422 41,091 (3,841) (181,510) 62,147 35,193 (137,033) 177,550 9,058,117 $ 12,874,949 41,322 (97,608) 657,842 6,360,718 $ 7,118,229 $ $ 193,752 $ 350,960 $ $ 193,752 $ 350,960 $ The accompanying notes are an integral part of these financial statements. 30 699,786 98,063 34,889 33,612 15,229 18,136 (903) 1,023 (55,321) 65,246 909,761 (279,409) 3,385,173 14,958,413 213,354 57,220 17,869 314,145 2,301,696 20,317 204,714 871,457 89,490 121,605 (903) 36,216 (289,962) 900,638 16,328,596 $ 19,713,769 (4,635) (285,081) 150,175 3,348,133 5,021,418 $ - $ 544,712 $ - - $ 544,712 $ - City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Yuma (City) was incorporated April 14, 1914 under Arizona Revised Statute (A.R.S.) Title 9, Chapter 9, Section 101, and adopted its first charter on June 11, 1914. The City presently operates under a charter that was last amended on November 8, 2011. The Charter provides for a Council-Manager form of government and provides such services as are authorized by the Charter. Among these services are general government services, public safety (police and fire), parks, recreation, culture, streets, environmental health and protection, and community design and development. The accounting policies of the City conform to generally accepted accounting principles (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant policies. A. Reporting Entity The City is a municipal entity governed by an elected mayor and council. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations, and so data from these units are combined with data of the City, the primary government. The component units presented have a June 30 year-end. Blended Component Units Yuma Municipal Property Corporation. The Yuma Municipal Property Corporation's board members are appointed by the City Council. The Corporation was formed to finance the acquisition of certain improvements such as the Yuma Civic and Convention Center, Baseball Complex and Desert Hills Golf Course. The Corporation was also used to finance the acquisition of three public safety buildings (the police headquarters, a fire station and the Municipal Court facility) and Public Works facilities, along with a clubhouse for the municipal golf course and the new Municipal Complex. The Corporation conducts no business other than with the City and that business is solely the retirement of debt related to the aforementioned acquisitions. Complete financial statements may be obtained at the City of Yuma, City Clerk’s Office, One City Plaza, Yuma, AZ 85364. City of Yuma Employee Benefits Trust. The City of Yuma Employee Benefits Trust is responsible for providing health insurance for the City employees. The City Council appoints the Trust’s Board of Directors. The Trust provides services entirely to the City and therefore has been included as an Internal Service Fund as of June 30, 1997 in accordance with the criteria established in GASB Statement No. 14, The Financial Reporting Entity. Complete financial statements may be obtained at the City of Yuma Employee Benefit Trust’s administrative offices, One City Plaza, Yuma, AZ 85364. B. Accounting Pronouncements During the year ended June 30, 2017, the City did not adopt any new accounting pronouncements. C. Government-wide and fund financial statements The government-wide financial statements report financial information on all the activities of the City of Yuma and its component units. These financial statements include the Statement of Net Position and the Statement of Activities, a statement showing changes in net position. Most interfund activities have been removed from these statements to avoid duplicating the information, with some exceptions such as proprietary fund sales to governmental funds (i.e., water bills paid by a governmental fund). Eliminating these transactions would distort both the measurement of income generated in serving proprietary customers as well as the direct cost of governmental functions serving the citizenry. In these government-wide statements, governmental activities, normally supported by taxes and intergovernmental revenues, are separated from business-type activities that rely on fees and charges for services. 31 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 The statement of activities presents direct expenses of a given function or segment and the degree to which these expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who use or directly benefit from the services of the function; and 2) grants and contributions that are restricted to the operational or capital needs of a particular function. Taxes and other revenues that are identifiable with a particular function or segment are reported as general revenues. In addition to government-wide presentations, fund financial statements are provided for all governmental and proprietary funds. The financial statements are segregated by their respective significance to City operations with individual major governmental and proprietary funds separated from nonmajor funds (aggregate nonmajor financial activity is reported as a column on the major funds presentation for both governmental and proprietary funds). The City uses GASB Statement No. 34 to determine which funds are to be presented as major funds. In addition to those minimum requirements, the City will, from time to time, include within its major funds presentations of other funds that because of their significance, preclude aggregate reporting outside the basic financial statements. The City of Yuma reports the following funds: GOVERNMENTAL FUNDS General Fund – The General Fund is the general operating fund of the City. It is used to account for all financial resources except those for which another fund is required or used. City Road Tax Fund – This fund accounts for the collection and expenditure of a local one-half percent transaction privilege tax approved by voters in 1994 for maintenance and construction of roadways. Debt Service Fund – This fund accounts for and reports financial resources for the payment of long-term debt principal, interest, and related costs of the City of Yuma Municipal Property Corporation, a blended component unit, and Special Assessment Improvement Districts. Pledged excise tax and other revenues are transferred to this fund along with property owner’s revenue for payments of long-term bonded debt. Capital Projects Funds – This fund is used to account for and report financial resources to be used for acquisition or construction of capital facilities and other capital assets (other than those financed by General, Special Revenue, or Proprietary Funds). Other Nonmajor Governmental Funds – Other nonmajor governmental funds of the City of Yuma are aggregated and are presented in a combining statement in the Other Supplementary Information section. These include the Highway Users Revenue, Grants, Community Redevelopment, Public Safety Tax, Two Percent Tax, and Yuma Mall Maintenance Special Revenue Funds. PROPRIETARY FUNDS Water Fund – The operations of the City’s drinking water treatment and distribution system are accounted for in this enterprise fund. Wastewater Fund – This enterprise fund accounts for the City’s wastewater collection and treatment system. Other Nonmajor Enterprise Funds – Other nonmajor enterprise funds of the City of Yuma are aggregated along with the major enterprise funds and are also presented in a combining statement in the Other Supplementary Information section. These funds include the Solid Waste, Radio Communications, and Desert Hills Golf Course Funds. Internal Service Funds – Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost-reimbursement basis. They are also presented in the aggregate with major enterprise funds and are included in a combining internal service fund presentation in the Other Supplementary Information section. Because they service primarily governmental funds, they are not included within the business-type activities of the Statement of Net Position. Rather, they are 32 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 combined with the governmental activities on that statement. Moreover, because of their essentially duplicative nature in accounting for their operations (revenues of the internal service funds are expenses of the operating funds), the operations of the internal service funds have been eliminated from the operations of the Statement of Activities. Internal service funds include the Equipment Replacement, Equipment Maintenance, Insurance Reserve, Employee Benefits Trust Funds, and Workers Compensation. D. Measurement focus and basis of accounting The government-wide financial statements, as well as the proprietary fund financial statements, use the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred. Property taxes are recognized as revenue in the year levied. Grants are recognized as revenue when all eligibility requirements are met and the underlying expenses have been recorded. Governmental fund financial statements are presented using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period (within 60 days). Grant revenues are recognized when all eligibility requirements are met, not necessarily when received. Grant monies that have been received but are as yet unearned are carried forward as unearned revenue. However, earned but not yet received grant monies are recognized as revenue and carried forward as receivables. This practice is defined and supported by GASB Statement 33, as it pertains to “government-mandated nonexchange transactions,” paragraphs 19-25. Expenditures are recorded when the liability is incurred with the exception of debt service. Debt service expenditures are recorded when the payment is due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Property taxes, along with franchise taxes, licenses and sales taxes are susceptible to accrual and have been recognized as revenues of the current period. Delinquent property taxes and property taxes for which there is an enforceable legal claim as of the fiscal year, but which were levied to finance operations of the subsequent fiscal year, have been recorded as unavailable revenue. Grants and similar awards received before the eligibility requirements are met are recorded as unearned revenue. Receivables that will not be collected within the available period have also been reported as unavailable revenue on the governmental fund financial statements. All other revenue items are considered measurable and available only when cash is received. Proprietary funds classify revenues and expenses as operating or nonoperating items. Operating revenues and expenses relate to the fund’s ongoing operations in providing goods and services. Operating revenues for the City’s proprietary funds are customer charges for sales and services. Operating expenses include the cost of sales or services, administrative expenses and depreciation. All other revenues and expenses are classified as nonoperating revenues and expenses. E. Budget Information 1) The City follows these procedures in establishing the budgetary data reflected in the financial statements: i. On or before the first Monday in June, the City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. ii. Two public hearings are held prior to the budget's final adoption in order to obtain taxpayer comments. iii. On or before the third Monday in August, the budget is legally enacted through passage of an ordinance. iv. At any time during the fiscal year, the City Administrator may transfer part or all of any unencumbered appropriation balance among programs within a fund. Upon written request by the City Administrator, the Council may, by ordinance, transfer part or all of any unencumbered appropriation balance from one fund to another. 33 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 v. Formal budgetary integration is employed as a management control device during the fiscal year for all funds with legally adopted budgets (only the Employee Benefits Trust Internal Service Funds is not budgeted). Appropriations not expended at fiscal year-end lapse. vi. Budgetary amounts include those as originally adopted, and as amended by Council or City Administrator through the end of the fiscal year. Arizona State Statute does not allow supplemental budgets. vii. Expenditures incurred during the fiscal year may not legally exceed the publicly published budget. The maximum legal expenditure permitted for the fiscal year is the total adopted budget. 2) Budgetary Reporting and Budgetary Basis of Accounting: The City has opted to display budgetary information schedules in a manner similar to its adopted budget; therefore, the information is displayed outside its basic financial statements. Budgetary comparisons are presented for the General Fund and the major Special Revenue Funds in the Required Supplementary Information section. Budgetary comparisons for the Debt Service Fund, the Capital Projects Fund, the nonmajor governmental funds and the proprietary funds are presented in the Other Supplementary Information sections. For proprietary funds, the budgetary comparison includes reconciliation to the accrual-based operating statements. F. Assets, Liabilities and Fund Equity Disclosures 1) Transactions between Funds: Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as a reimbursement reducing expenditures in the fund performing the services. Exceptions to this include: (1) sales of water and wastewater treatment are treated as revenue by the Enterprise Fund, radio and software annual maintenance fees are treated as revenue by the Enterprise Fund and expenses in the governmental funds, and in-lieu property taxes are recorded as revenues in the General Fund and expenses in the Enterprise Funds; (2) transfers are made in certain other funds to shift resources from a fund legally required to receive revenue to a fund authorized to expend the revenue; and (3) charges for services of the Internal Service Funds are recorded as expenses/expenditures in the funds receiving the service. For purposes of government-wide presentation, these latter transactions are eliminated. 2) Cash and Investments: Cash balances of the City’s funds are pooled and invested by the City. The policy of the City is to invest public funds in a manner which provides the maximum security of principal invested, conforms to all applicable State statutes and City ordinances, delivers the highest yield, and meets the City’s daily cash flows. Income earned or loss arising from the investment of the pooled cash is allocated on a monthly basis to the individual funds based upon average daily balance. The City considers short-term investments (including restricted assets) in the State of Arizona Local Government Investment Pool (LGIP), mutual fund-money market, U.S. Treasury bills and notes with original maturities of three months or less at acquisition date to be cash equivalents. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, the City reports its investments at fair value based on quoted market information obtained from fiscal agents or other sources. 3) Inventories and Prepaid Items: Inventories consist primarily of expendable supplies held for consumption. Prepaid items represent services for which payment is made in advance. Both inventories and prepaid items are accounted for using the consumption method; therefore, expenditures are recorded at the time inventories are used or the services incurred. Inventories are maintained on a perpetual inventory basis, verified through annual physical counts, and valued 34 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 using the weighted average method. Nonspendable governmental fund balance for both inventories and prepaid items indicate that a portion of fund balance is not available for future expenditures. 4) Grants Revenue: The City follows the policy that, grants and similar items are recognized as revenue or contributed revenue as soon as all eligibility requirements imposed by the provider have been met. 5) Unbilled Accounts Receivable: The City records as receivables and as revenues the amount of water sales, sewer service charges and commercial refuse collection charges accrued but unbilled at fiscal year end. At June 30, 2017, the estimated amounts of unbilled revenues for the Water, Wastewater and Solid Waste Enterprise Funds are $981,681, $641,870, and $151,356, respectively. 6) Capital Assets: In Fiscal Year 2017, the City amended its policy with regard to the capitalization of assets. In previous years, the City booked all capital assets acquired during a given fiscal year as of June 30 of said year. In its amended policy, the City books all acquired assets on a monthly basis and all CIP assets on a quarterly basis. Capital assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets include property, plant, equipment and infrastructure (e.g., roads, bridges and similar items) and are defined as assets with an individual cost of more than $5,000 and a useful life exceeding one year. These assets are valued at cost or estimated historical cost if original cost is not available. Donated capital assets, donated works of art and similar items, and capital assets received in service concession arrangements are reported at acquisition value. Depreciation and amortization have been provided over the estimated useful lives using the group life method on a straight-line basis and the following useful lives: Buildings Improvements 33 to 100 years 20 to 50 years Infrastructure Equipment 35 years 2 to 50 years For proprietary fund assets constructed with bond proceeds, interest costs have been capitalized, net of interest revenue. Gains or losses are recognized when assets are retired from service or are otherwise disposed. 7) Capital Contributions: Capital contributions, as shown in the Enterprise Funds, represent sub-dividers' costs of installing water and sewer mains, water service connections installed at the customers' expense, transfers of equipment from other City funds, and contributions from customers to defray future expansion costs. 8) Long-term Obligations: In the government-wide financial statements, and proprietary fund types in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as insurance premiums, are amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or bond discount. Bond insurance premium costs are reported as unamortized discounts and amortized over the life of the debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 35 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 9) Pensions: For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plans’ fiduciary net position and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. 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. 10) Fund Balance Policies: In the fund financial statements, fund balance is reported in classifications that comprise a hierarchy based on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The classifications of fund balance are Nonspendable, Restricted, Committed, and Unassigned. Nonspendable and Restricted fund balances represent the restricted classifications and Committed and Unassigned represent the unrestricted classifications. Nonspendable fund balance includes amounts that cannot be spent because either 1) it is not in a spendable form, such as inventory or prepaid items or 2) it is legally or contractually required to be maintained intact. Restricted fund balance is comprised of externally (outside the City) enforceable limitations imposed by creditors, grantors, contributors, laws and regulations of other governments, or laws through constitutional provisions or enabling legislation (changes in City Charter). Committed fund balance includes self-imposed limitations adopted at the highest level of decision making authority, namely, City Council. City Council approval, through adoption of an ordinance, is required to commit resources or to rescind the commitment. Unassigned fund balance represents the residual net resources in excess of the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance and any governmental fund can report a negative unassigned fund balance. When both restricted and unrestricted resources are available for specific expenditures, unrestricted resources are considered spent before restricted resources. Within unrestricted resources, committed is considered spent (if available) before unassigned amounts. 36 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 The constraints placed on fund balance for the major governmental funds and all other governmental funds are presented in the following table. City Road Tax General Fund Balances: Nonspendable: Inventory Prepaid Items Restricted for: Debt Service Road Maintenance and Construction PS-Police equipment and facilities PS-Fire equipment and facilities Parks, recreation and cultural facilities Public works projects Committed to: General government projects Road Maintenance and Construction PS-Police equipment and facilities PS-Fire equipment and facilities Parks, recreation and cultural facilities Sanitation facilities Public works projects Unassigned: Total Fund Balances $ 27,221 90,895 - 17,435,581 $ 17,553,697 $ 4,094 Debt Service $ - Capital Projects $ - Other Nonmajor Governmental Funds $ 7,849 53,915 Total $ 35,070 148,904 12,013,563 - 1,968 - 219,125 129,443 43,148 3,503,500 10,117,459 4,712,573 1,547,258 515,753 3,073,048 - 1,968 16,945,261 1,676,702 558,901 6,576,548 10,117,459 $ 12,017,657 $ 1,968 24,136 831,946 1,800,714 846,670 1,988,995 2,439 34,655 $ 19,542,230 $ 9,910,396 24,136 831,946 1,800,714 846,670 1,988,995 2,439 34,655 17,435,581 $ 59,025,948 G. Revenues, Expenditures, Expenses and Other Disclosures 1) Property Tax Revenue Recognition: Yuma County is responsible for billing and collecting property taxes. Collections by the County in one month are remitted to the City in the next month. For government-wide presentation, revenues equal the taxes levied for the fiscal year. No allowance for uncollectible taxes has been recorded as the City’s experience shows that after five years the amount uncollected represents less than one-half percent of the original levy. For governmental fund statement purposes, revenues are recorded as received, with the exception of taxes collected within 60 days by the County Treasurer and reported as current year revenues (County Treasurer collections for June of the current fiscal year). Delinquent property taxes (collections of noncurrent years) are recorded similarly. The balance of delinquent taxes is recorded in the property tax receivable account with a corresponding entry to the unavailable revenue account. 2) Compensated Absences: The City's administrative regulations provide permanent City employees with general and major illness leave in varying amounts based on years of service. In addition, employees may accrue hours worked on holidays for absences or payment in the future. General leave vests with the employee as it is earned. General and holiday leave with related benefits for the governmental funds, $5,304,048, and for the internal service funds, $44,456, are recorded in the governmental activities column of the government-wide financial statements. The amounts of general and holiday leave pay and related benefits attributable to the Water, Wastewater, Solid Waste, Radio Communications, and Desert Hills Enterprise Funds are $399,606, $271,636, $67,769, $67,345 and $49,031, respectively, and are recorded in those funds and in the business-type activities of the government-wide statements and accrued as earned. 37 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Major illness leave benefits provided for ordinary sick pay are not vested with the employee. Unused benefits are payable only upon the death or retirement of the employee. At June 30, 2017, the amount accumulated in sick pay and related benefits is $7,795,583 including $48,559 attributable to Internal Service Funds and $1,440,150 to Enterprise Funds. Under GASB Statement No. 16, Accounting for Compensated Absences, the City uses the “termination payment” method to determine its provision for major illness leave liability. The portion of the major illness leave liability related to governmental fund types, $1,029,008, is reported within the governmental activities column of the government-wide financial statements, as current amounts of that liability have been determined to be immaterial and are not recorded within the respective governmental funds. The provision for probable future major illness leave and related benefits attributable to the Equipment Maintenance and Insurance Reserve Internal Service Funds is $17,656 and $3,441, respectively, and Water, Wastewater, Solid Waste, Radio Communications, and Desert Hills Golf Course Enterprise Funds of $103,152, $70,311, $16,396, $16,162 and $10,713, respectively, are recorded in those funds and are accrued as earned. H. Investment Income Investment income is composed of interest and net changes in the fair value of applicable investments. I. Use of Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Primarily, the City uses estimates to determine useful lives of capital assets as well as the estimated claims and judgements in the Insurance Reserve fund and the Workers Compensation fund. Actual results could differ from those estimates. J. Tax Abatement The City of Yuma has entered into tax abatement agreements as defined by GASB Statement 77. The tax abatements include the abatement of excise tax under Arizona Revised Statutes 42-6201 through 42-6209 relating to Government Property Lease Excise Tax, as incentive to improve property in certain geographic/economic areas of the city. It is the City’s policy to review each agreement individually and in the aggregate annually. For the fiscal year ended June 30, 2017, each agreement and all agreements in the aggregate are deemed immaterial for financial reporting purposes. II. DETAIL NOTES ON ALL FUNDS A. Cash and Investments The City maintains a cash and investments pool that is available to all funds. Each fund’s portion of the cash and investment pool is shown in the accompanying balance sheet as “Cash and Investments”, including the portion listed under “Restricted Assets”. The City also records cash and investments, held by fiscal agents, which are restricted by bond indenture requirements for the payment of principal and interest at the end of the fiscal year. Deposits At June 30, 2017, the City’s deposits had a carrying value of $876,542 and a bank balance of $3,653,560. The difference represents outstanding checks and other reconciling items. The main City checking account is fully collateralized and is disclosed with investments. All pledged bank collateral for demand deposits are held by an independent institution outside the bank’s holding company. Cash on hand at June 20, 2017 included petty cash and change fund balances of $34,720. 38 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City’s deposits may not be covered. The City requires all demand deposits be covered by federal depository insurance or by pledged collateral held by the financial institution’s trust department in the name of the City at 102% of market value. At June 30, 2017, there are no deposits exposed to custodial credit risk. Investments The City adheres to State Law and its adopted Investment Policy to invest public funds in a manner which will provide the maximum security of principal invested while providing the highest yield which will also meet the daily cash flow needs of the City. Per GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, the City reports certain money market investments with a remaining maturity of one year or less at time of purchase at amortized cost instead of fair value. The City’s investment balances at June 30, 2017, were as follows: Investment Type US Treasury Notes/Bills Commercial Paper US Agencies: Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mtg. Corp. Federal National Mtg. Assoc. Federal Agricultural Mtg.Corp. Money Market Funds Wells Fargo-Bus Market Fund State Investment Pool 5 Total Value Fair Value $ 5,598,332 Investment Maturities in Years $ < 1 Year 3,994,698 3,999,720 3,999,720 8,986,421 9,503,610 26,905,070 4,968,407 3,996,682 27,156,473 70,492,449 $ 161,607,164 8,986,421 1,499,312 10,991,912 2,995,041 1,997,852 27,156,473 70,492,449 $ 132,113,878 1-2 Years $ 1,603,626 6,004,492 9,963,420 1,973,366 1,998,830 $ 21,543,734 2-3 Years $ 1,999,806 3,985,752 $ 5,985,558 3-5 Years $ 1,963,986 $ 1,963,986 Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The City’s investment policy reduces exposure to investment credit risk by limiting authorized securities to the following: 1. Obligations of the United States Government, its agencies and instrumentalities, excluding mortgage-backed securities; 2. Fully insured or collateralized certificates of deposit and other evidence of deposit at banks and savings and loan associations; 3. Bankers acceptances issued by the ten largest domestic banks; 4. Commercial paper rated A-1/P-1; 5. Repurchase agreements whose underlying collateral consists of the foregoing, provided a signed PSA Master Repurchase Agreement is on file with the counter party bank or broker/dealer; 6. Money Market Funds whose portfolio consists of the foregoing; 7. The State of Arizona Local Government Investment Pool. At June 30, 2017, all investments, with the exception of the State Investment Pool, are rated A-1 by Standard and Poor’s and Aaa by Moody’s. The State Investment Pool 5 was rated AAA/s1+ by Standard and Poor’s at year end. 39 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investments in a single issuer. The City reduces this risk by diversifying its investment portfolio. Diversification strategies are established and monitored on a monthly basis. The allowed diversification standard and actual percentage at year end by security type and issuer are as follows: Maximum % Actual % U. S. Treasuries and securities having principal and interest guaranteed by the U.S. Government .......................................................................................... 100% 3.46% U. S. Government agencies, instrumentalities and government sponsored enterprises ....................................................................... No more than 80% 33.64% Fully insured or collateralized CD’s ........................................................ No more than 30% 0% Banker’s Acceptances ............................................................................ No more than 25% 0% A-1/P-1 Commercial Paper ..................................................................... No more than 35% 2.47% Maximum per issuer ........................................................................... 10% of total C. P 0% Repurchase Agreements .............................................................................................. 100% 0% Money Market Funds .................................................................................................... 100% 16.80% State Investment Pool .................................................................................................. 100% 43.62% Interest Rate Risk Interest Rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with State law and its investment policy, the City sets a maximum maturity on any investment of five years. Unless matched to a specific requirement, no more than 25% of the portfolio may have maturities greater than three years. There are no investments with maturities greater than five years, and there are no holdings with a stated maturity beyond five years. The portfolio at June 30, 2017, had a weighted average maturity of 378 days. The policy does not set a maximum for this measurement. Custodial Credit Risk The custodial credit risk for investments is the risk that in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City reduces exposure to custodial credit risk in its safekeeping and collateralization policies. All security transactions are conducted on a delivery versus payment basis and are held by a third party custodian, in the City of Yuma’s name. The custodian is required to issue a safekeeping receipt listing the specific instrument, rate, and maturity. Although there were no certificate of deposit or repurchase agreements at June 30, the collateralization level of at least 102% of market value is required for these securities. Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted process; Level 3 inputs are significant unobservable inputs. 40 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 The City has the following recurring fair value measurements as of June 30, 2017: Investments Measured at Fair Value Fair Value Measurements Using Investments by fair value level: U.S. Treasury Notes/Bills Commerical Paper US Agencies: Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mtg. Corp. Federal National Mtg. Assoc. Federal Agricultural Mtg.Corp. Total investments by fair value level June 30, 2017 Quoted Prices in Active Markets for identical Assets (Level 1) Significant Other Observable inputs (Level 2) Significant Unobservab le inputs (Level 3) $ $ $ $ 5,598,324 3,999,511 8,986,421 9,503,610 26,905,070 4,968,407 3,996,682 63,958,025 5,598,324 3,999,511 8,986,421 9,503,610 26,905,070 4,968,407 3,996,682 $ 63,958,025 - $ - - $ - Investments measured at the net asset value (NAV) Money Market Funds $ 27,156,473 State Investment Pool 5 70,492,449 Total investments measured at the NAV 97,648,922 Total investments measured at fair value $ 161,606,947 B. Property Tax The City's property tax is levied by the Yuma County Treasurer on or before the third Monday in August based upon the previous January 1 full cash value as determined by the Yuma County Assessor. Under Arizona law, two assessed valuations are used. One is for primary taxes (used to fund operating expenditures) and the other is for secondary taxes (used to meet general obligation debt service requirements). The primary tax levy is limited to a two percent increase over the previous year with adjustments for growth and annexation. Secondary taxes are tied to the annual debt service requirements of voter-approved general obligation bonds. Taxes are due in two equal installments on October 1 and March 1 following the levy date and are delinquent on the first day of November and May, respectively. Liens are filed when taxes are delinquent for two years. Assessed values, levies and collections for fiscal year 2015-16 (Tax Year 2015) and fiscal year 2016-17 (Tax Year 2016), follow: 41 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Tax Year 2015 Primary Assessed Valuation $ 521,876,027 $ Primary Tax Rate Tax Year 2016 516,395,727 2.0704 Primary Tax Levy Secondary Assessed Valuation 2.0704 10,854,190 12,144,078 591,748,335 557,377,145 Secondary Tax Rate/Levy None Current Tax Collections None 10,562,850 11,965,580 Delinquent Tax Collections 194,190 223,021 Delinquent Taxes Outstanding as of June 30 486,090 533,775.15 C. Receivables Receivable balances are stated net of an allowance for doubtful accounts. Within the Solid Waste Enterprise Fund, an allowance account is established to record the estimated uncollectible refuse collection billings. Within the Water and Wastewater Enterprise Funds, allowance accounts have been established to record estimated uncollectible water and wastewater billings. No allowance account has been made for other types of receivables. The balances of these accounts are as follows: Accounts General $ 4,398,115 City Road Tax 39,890 Debt Service 6,905 Capital Projects 145,518 Water 2,626,097 Wastewater 1,459,373 Other Funds-Governmental 1,163,705 Other Funds-Enterprise 368,555 Internal Service 7,560 Total $ 10,215,718 Intergovernm ental Special Assessm ent Delinquent Property Taxes Accrued Interest Total $ 2,398,277 544,189 310,531 1,691 230,822 1,785,195 77,458 24 $ 20,169 1,370,000 - $ 533,775 3,427 - $ 24,080 18,709 6,954 31,586 43,216 13,203 3,827 18,623 $ 7,374,416 602,788 1,376,905 463,003 2,659,374 1,733,411 2,965,530 449,840 26,207 $ 5,348,187 $ 1,390,169 $ 537,202 $ 160,198 $ 17,651,474 Allow ance Am ount 2017 Enterprise Funds: Solid Waste Water Wastewater $ 9,575 85,661 47,770 2016 $ 10,483 106,482 56,440 During the year, the City issued a $1.9 million short-term loan to the Housing Authority of the City of Yuma, which is a separate legal entity and not presented in the City of Yuma’s financial statements. This loan is receivable in October of FY18. 42 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 D. Due from Other Governments (Intergovernmental Receivables) Amounts due from other government units at June 30, 2017, are as follows: Agencies Federal State County Local Total $ 1,998,312 543,821 308,846 $ 225,052 1,685 $ 174,913 368 $ 2,398,277 544,189 310,531 669,027 217,454 264,596 37,957 - 7,153 - Governmental Funds Major Funds General $ City Road Tax Capital Projects Non-major Funds Highway User Revenue Public Safety Tax Two Percent Tax Mall Maintenance Grants 402,380 Community Redevelopment 186,628 Enterprise Funds: Major Funds Water Wastewater 193,821 Non-major Funds Solid Waste Radio Communications Desert Hills Golf Course Internal Service Funds Equipment Maintenance Total $ 782,829 1,691 382 4,690 26 1,631 24 $ 4,048,457 43 4,525 $ 238,415 - 669,027 217,454 264,596 7,153 440,337 186,628 36,619 1,691 230,822 66,586 - 4,690 71,137 $ 278,486 1,631 24 $ 5,348,187 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 E. Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2017, follows: Capital Assets Not Being Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated Balance June 30, 2016 $ Increases 55,923,403 10,568,523 $ 152,044 21,138,243 Decreases $ 3,543,432 13,457,695 Balance June 30, 2017 $ 52,532,015 18,249,071 66,491,926 21,290,287 17,001,127 70,781,086 95,383,062 50,033,314 253,447,145 58,271,371 104,617 133,824 13,997,041 3,350,154 2,259,671 95,487,679 50,167,138 267,444,186 Total Other Capital Assets 457,134,892 17,585,636 2,259,671 472,460,857 Less Accumulated Depreciation for: Buildings Improvements Infrastructure Equipment 40,404,735 39,315,670 114,415,218 44,113,361 3,126,375 1,986,222 6,578,648 4,279,055 1,934,412 43,531,110 41,301,892 120,993,866 Total Accumulated Depreciation 238,248,984 15,970,300 1,934,412 46,458,004 252,284,872 218,885,908 1,615,336 325,259 220,175,985 22,905,623 $ 17,326,386 $ 290,957,071 Other Capital Assets: Buildings Improvements Infrastructure Equipment Other Capital Assets, Net Total Capital Assets, Governmental Activities $ 285,377,834 $ Government activities capital assets net of accumulated depreciation at June 30, 2017, include: Governmental Funds Capital Assets, Net Internal Service Funds Capital Assets, Net $ 283,331,682 7,625,389 Total $ 290,957,071 Depreciation was charged to governmental functions as follows: General Government and Unclassified Public Safety Streets Parks, Recreation, and Culture Environmental Health and Protection Community Design and Development Assets held by Internal Service Funds are charged based on usage of assets Total 44 $ 1,992,889 3,332,421 6,612,599 1,460,709 98,536 171,450 2,301,696 $ 15,970,300 59,361,854 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Capital asset activity for business-type activities for the year ended June 30, 2017, follows: Balance June 30, 2016 Capital Assets Not Being Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated $ 10,603,159 5,180,162 Increases $ Balance June 30, 2017 Decreases 3,516,924 $ 6,814,322 $ 10,603,159 1,882,764 15,783,321 3,516,924 6,814,322 12,485,923 Other Capital Assets: Buildings Improvements Equipment - - - - 164,648,404 274,280,569 13,581,693 7,359,034 290,140 27,747 164,648,404 281,639,603 13,844,086 Total Other Capital Assets 452,510,666 7,649,174 27,747 460,132,093 Less Accumulated Depreciation for: Buildings Improvements Equipment Total Accumulated Depreciation - - - - 21,429,316 148,522,780 11,674,224 3,301,003 10,960,781 696,627 27,747 24,730,319 159,483,561 12,343,104 181,626,320 14,958,411 27,747 196,556,984 Other Capital Assets, Net 270,884,344- (7,309,237) -- 263,575,109- 6,814,322 $ 276,061,032 Total Capital Assets, Business-type activities $ 286,667,667 $ (3,792,313) $ Depreciation was charged to programs as follows: Water Wastewater Solid Waste Radio Communications Golf courses Total $ 8,355,204 5,903,421 32,380 499,024 168,382 $ 14,958,411 Construction in progress is comprised mainly of Streets, Parks Projects as well as waterline replacements and water transmission lines) and wastewater projects (wastewater treatment plant upgrades and improvements, and collection facilities). Estimated cost to complete these projects is $7.7 million. 45 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 F. Noncurrent Liabilities The following changes occurred in noncurrent liabilities during the fiscal year ended June 30, 2017: Governmental activities: Yuma Municipal Property Corporation Improvement District #68 Unamortized Premium Pension Compensated Absences Total Governmental Activity Noncurrent Liabilities Business-type activities: Yuma Municipal Property Corporation Unamortized Premium Contracts Payable Pension Compensated Absences Total Business-type Activity Noncurrent Liabilities Balance July 1, 2016 Balance June 30, 2017 Due Within One Year 6,275,000 305,000 666,609 129,306,805 9,477 $ 104,735,000 1,370,000 7,992,877 145,870,705 6,398,611 $ 6,485,000 320,000 2,410,678 Additions Retirements 145,870,705 253,898 $ $111,010,000 1,675,000 8,659,486 129,306,805 6,154,190 $ $256,805,481 $ 146,124,603 $ 136,562,891 $ 266,367,193 $ 9,215,678 $ 89,675,000 9,498,560 45,053,649 13,371,326 993,826 $ 37,835,000 13,594,323 99,776 $ 3,755,000 593,660 45,053,649 13,371,326 21,476 $ 123,755,000 8,904,900 13,594,323 1,072,126 $ 9,522,001 348,367 $ 158,592,361 $ 51,529,099 $ 62,795,111 $ 147,326,349 $ 9,870,368 The City has adopted GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and IntraEntity Transfers of Assets and Future Revenues. The following disclosures are due in part to that statement. Bonded Debt - Excluding Refunded Debt New Debt Issues MPC Senior Utility System Revenue Refunding Bonds, Series 2016 - On November 8, 2016 the Yuma Municipal Property Corporation issued $37,835,000 in private placement bonds with a true interest cost of 1.50 percent, for a refunding of $40,414,511 of three outstanding loans issued by the Water Infrastructure Finance Authority of Arizona (WIFA) with interest rates of 2.252% and 3.311%. The net proceeds of $37,699,720 (after payment of $135,280 in issuance cost) along with $2,714,791 of Debt Service Reserve funds, were used to pay off the full outstanding balance of the loans. As a result, the outstanding balances on the loans have been paid in full and the liability for those bonds has been removed from the government-wide financial statements. The acquisition price exceeded the net carrying amount of the old debt by $495,005. This amount is reported as deferred charges and amortized over the new debt’s life. This refunding was undertaken to reduce total debt service payments over the next 8 years by $5,856,110 and resulted in an economic gain of $2,807,574. The following is a description of bonded indebtedness at June 30, 2017. In each instance, all bonds have been issued. For each issue, a number of covenants and restrictions are included in the bond indentures. The City is in compliance with these covenants and restrictions. Defeasances – The City defeased WIFA Loans by using 2016 Senior Utility Bond proceeds and City funds to pay off the outstanding total loan amount of $39,919,507. In prior years, the City defeased certain Revenue bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the defeased bonds. At year end, $153.8 million of the defeased bonds are still outstanding. The following is a description of bonded indebtedness at June 30, 2017. In each instance, all bonds have been issued. For each issue, a number of covenants and restrictions are included in the bond indentures. The City is in compliance with these covenants and restrictions. 46 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Special Assessment Bonds – Special assessment bonds are issued by the City on behalf of improvement districts created by property owners for a specific purpose. Property owners in the designated districts agree to be assessed for the principal and interest costs of repaying the bonds. As trustee for improvement districts, the City is responsible for collecting the assessments levied against the owners of the property within the improvement districts and for disbursing these amounts to retire the bonds issued to finance the improvements. Special assessment bonds are secured by liens against the property within each district. In the event of delinquency, the City may secure payment of the bonds through sale of the property. All activity related to these bonds is recorded in the City’s Debt Service Fund. Municipal Property Corporation Bonds – In 1970, the City created the Municipal Property Corporation to finance the acquisition or construction of various City projects. Bonds are issued by the corporation and are repaid through unrestricted revenues, primarily excise taxes, by the City. For each issue, the City has pledged its excise tax collections as follows: Excise Taxes – transaction privilege taxes, license fees and franchise fees, along with transaction privilege taxes, income taxes and excise taxes imposed by the State and distributed to the City (except public safety, city road and special sales taxes); City Road Taxes – a special one-half percent (.5%) privilege license tax approved by qualified voters in 1994 for maintenance and construction of roadways; Public Safety Taxes – a special two-tenths of one percent (.2%) privilege license tax approved by qualified voters in 1994 for public safety and criminal justice facilities and communication equipment; and Special Sales Taxes – a special two percent (2%) privilege license tax approved by qualified voters in 1993 on the gross proceeds of sales or gross income from the business of bars, restaurants and hotels. For each bond series, the corresponding pledged tax was: Issue 2010 – Series B 2015 Sr Lien Excise Tax 2015 Sr Lien Road Tax Pledged Tax Project(s) funded Excise Taxes Refunding 2001 issue Excise, Public Safety, Special Sales Taxes Refunding 2003B & 2007B issues PAAC/Fleet Maintenance facility Excise and City Road Taxes Refunding 2007D issue In addition to, or in lieu of, excise taxes, the City may use other operational revenues to repay the debt, as budgeted in each fund. These include payments from the Water, Wastewater, Solid Waste and Desert Hills Golf Course Enterprise Funds, and Highway User Revenue Special Revenue Fund, as determined by the projects acquired or constructed by the debt proceeds. The Municipal Property Corporation issued a Utility Series in 2007, refunded in 2015. An additional Utility Series was funded in 2016 to pay of the remaining balance of WIFA Loan Contracts. The water and wastewater system’s net revenues were pledged as collateral for each issue as additional parity obligations. Issue 2015 Sr Lien Utility 2016 Sr Lien Utility Pledged Revenues Net Utility System Revenues Net Utility System Revenues Project(s) funded Refunding 2007 Utility issue Refunding WIFA Loan Contracts For the year ended June 30, 2017, the pledged revenues described above amounted to $77,881,834 for governmental activities and $46,242,202 for business-type activities. The bonded debt collateralized by such revenues is presented below. Total future pledged revenues are not determinable for comparison to total collateralized debt; however, for the year ended June 30, 2017, debt service for governmental activities totaled $11,510,309 and for business-type activities $13,820,470, or 15% and 30% of pledged revenues, respectively. 47 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Summary of Bonded Debt Net Yuma Municipal Property Corporation Bonds: 2010 - Series B Refunding 2015 - Sr Lien Excise Rev & Refunding 2015 - Sr Lien Road Tax Refunding 2015 - Sr Lien Utility System Rev Refunding 2016 - Sr Lien Utility System Rev Refunding Unamortized Premium/ (discount) Interest Rate Issue Date Maturity Date Authorized and Issued Outstanding 4.23% 3.5 - 5.0% 2.0 - 5.0% 3.25 - 5.0% 1.50% 6/29/2010 10/21/2015 10/21/2015 10/21/2015 11/8/2016 2025 2035 2027 2032 2024 $ 29,530,000 48,105,000 40,280,000 89,675,000 37,835,000 $ 20,785,000 46,375,000 37,575,000 85,920,000 37,835,000 $ $ 245,425,000 $ 228,490,000 $ 16,897,777 Total MPC Bonds 259,897 3,131,461 4,601,519 8,904,900 - Legal Debt Margin Under Arizona's Constitution, outstanding general obligation bonded debt for combined water, sewer, artificial light, parks, open space preserves, playgrounds and recreational facilities may not exceed 20% of a City's net secondary assessed valuation. Outstanding general obligation debt for all other purposes may not exceed 6% of a City's net secondary assessed valuation. The legal borrowing capacity of the City of Yuma at June 30, 2017, follows: Water, Etc. (20%) Secondary Assessed Valuation All Other (6%) Legal Limit Outstanding G.O. Debt $595,290,568 $ 119,058,114 $ - 35,717,434 - Available Debt Margin $ 119,058,114 35,717,434 48 $ City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Annual Debt Service Requirements to Maturity BONDS AND IMPROVEMENT DISTRICTS July 1 Principal Interest Total Principal MPC Bonds 2016 WIFA Repayment 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 5,617,000 5,501,000 5,583,000 5,667,000 5,752,000 5,838,000 1,924,000 1,953,000 $ 37,835,000 July 1 $ Principal 367,315 483,270 400,755 317,010 232,005 145,725 58,155 29,295 2,033,530 2,760,000 2,855,000 2,970,000 3,110,000 3,250,000 3,390,000 3,535,000 3,685,000 3,845,000 4,015,000 4,160,000 - MPC Bonds 2015 Excise 1,815,000 1,910,000 2,005,000 2,110,000 2,210,000 2,320,000 1,790,000 1,870,000 1,960,000 2,050,000 2,120,000 2,645,000 2,740,000 2,855,000 2,960,000 3,070,000 3,195,000 3,315,000 3,435,000 $ 46,375,000 1,931,300 1,840,550 1,745,050 1,644,800 1,539,300 1,428,800 1,312,800 1,223,300 1,129,800 1,031,800 949,800 886,200 806,850 697,250 583,050 486,850 364,050 236,250 120,225 $ 19,958,025 3,746,300 3,750,550 3,750,050 3,754,800 3,749,300 3,748,800 3,102,800 3,093,300 3,089,800 3,081,800 3,069,800 3,531,200 3,546,850 3,552,250 3,543,050 3,556,850 3,559,050 3,551,250 3,555,225 $ 66,333,025 Total Principal Interest Total Interest $ 37,575,000 $ 1,767,950 1,657,550 1,514,800 1,366,300 1,210,800 1,048,300 878,800 702,050 517,800 325,550 124,800 - $ 11,114,700 Total 5,984,315 5,984,270 5,983,755 5,984,010 5,984,005 5,983,725 1,982,155 1,982,295 $ 39,868,530 MPC Bonds 2015 Road Refunding 2007 2017 $ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Interest $ MPC Bonds 2015 Series Utility Refunding 2007 4,527,950 4,512,550 4,484,800 4,476,300 4,460,800 4,438,300 4,413,800 4,387,050 4,362,800 4,340,550 4,284,800 - $ 48,689,700 49 $ 3,905,000 4,045,000 4,205,000 4,395,000 4,600,000 4,790,000 4,990,000 5,205,000 5,425,000 5,655,000 5,920,000 6,200,000 6,410,000 6,560,000 6,720,000 6,895,000 $ 3,798,338 3,603,088 3,400,838 3,190,588 2,970,838 2,740,838 2,501,338 2,251,838 1,991,588 1,720,338 1,437,588 1,141,588 831,588 639,288 442,488 224,088 $ 7,703,338 7,648,088 7,605,838 7,585,588 7,570,838 7,530,838 7,491,338 7,456,838 7,416,588 7,375,338 7,357,588 7,341,588 7,241,588 7,199,288 7,162,488 7,119,088 $ 85,920,000 $ 32,886,258 $ 118,806,258 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 July 1 Principal Interest Total MPC Bonds 2010 Refunding 2001 2017 $ 1,910,000 2018 2,010,000 2019 2,110,000 2020 2,210,000 2021 2,305,000 2022 2,400,000 2023 2,500,000 2024 2,610,000 2025 2,730,000 $ 20,785,000 $ $ 939,781 844,282 743,781 638,281 549,881 454,800 352,800 240,300 122,850 4,886,756 Principal Interest Total Improvement District No. 68 Bonds $ 2,849,781 2,854,282 2,853,781 2,848,281 2,854,881 2,854,800 2,852,800 2,850,300 2,852,850 $ 25,671,756 $ $ 320,000 335,000 350,000 365,000 1,370,000 $ $ 64,390 49,350 33,605 17,155 164,500 $ $ 384,390 384,350 383,605 382,155 1,534,500 G. Pensions and Other Postemployment Benefits The City has adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, which requires the following disclosures. Plan Descriptions - The City contributes to four plans, three of which are described below. The Arizona Elected Officials Retirement Plan is not described because of its relative insignificance to the City’s financial statements. The plans are component units of the State of Arizona. At June 30, 2017, the City reported the following aggregate amounts related to pensions for all plans to which it contributes: Statement of Net Position and Statement of Activities Net pension liabilities Deferred outflows of resources Deferred inflows of resources Pension expense Governmental Activities $ 145,870,705 36,183,896 9,301,647 19,984,518 Business-Type Activities Total $ 13,594,323 $ 159,465,028 2,454,902 38,638,798 1,840,423 11,142,070 598,101 20,582,619 Arizona State Retirement System Plan Description – City employees not covered by the other pension plans described below or the Elected Official Retirement Plan participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing multiple-employer defined benefit pension plan, a cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plan, and a cost-sharing multiple-employer defined benefit long-term disability (OPEB) plan. The Arizona State Retirement System Board governs the ASRS according to the provisions of A.R.S. Title 38, Chapter 5, Articles 2 and 2.1. The ASRS issues a publicly available financial report that includes its financial statements and required supplementary information. The report is available on its Web site at www.azasrs.gov. 50 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Benefits Provided – The ASRS provides retirement, health insurance premium supplement, long-term disability, and survivor benefits. State statute establishes benefits terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: ASRS Years of service and age required to receive benefit Retirement Initial membership date: Before July 1, 2011 On or after July 1, 2011 Sum of years and age equals 80 30 years age 55 10 years age 62 25 years age 60 5 years age 50* 10 years age 62 any years age 65 5 years age 50* any years age 65 Final average salary is based on Highest 36 months of last 120 months Highest 60 months of last 120 months Benefit percent per year of service 2.1% to 2.3% 2.1% to 2.3% *With actuarially reduced benefits Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic costof-living adjustments based on excess investment earning. Members with a membership date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are payable upon a member’s death. For retired members, the survivor benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to the member’s account balance that includes the member’s contributions and employer’s contributions, plus interest earned. Contributions – In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. For the year ended June 30, 2017, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.48 percent (11.34 percent for retirement and 0.14 percent for long-term disability) of the members annual covered payroll, and the City was required by statute to contribute at the actuarially determined rate of 11.48 percent (10.78 percent for retirement, 0.56 percent for health insurance premium benefit, and 0.14 percent for long-term disability) of the active members’ annual covered payroll. In addition, the City was required by statute to contribute at the actuarially determined rate of 9.47 percent (9.17 percent for retirement, 0.21 percent for health insurance premium benefit, and 0.09 percent for long-term disability) of annual covered payroll of retired members who worked for the City in positions that would typically be filled by an employee who contributes to the ASRS. The City’s contributions to the pension plan for the year ended June 30, 2017 were $3,288,383. The City’s contributions for the current and 2 preceding years for OPEB, all of which were equal to the required contributions, were as follows: ASRS Health Benefit Supplement Fund $ 169,211 142,902 168,848 Year ended June 30 2017 2016 2015 Long-Term Disability Fund $ 42,205 34,404 34,420 During fiscal year 2017, the City paid for ASRS pension and OPEB contributions as follows: approximately 55 percent from the General Fund, 26 percent from major funds, and 18 percent from other funds. 51 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Pension Liability – At June 30, 2017, the City reported a liability of $49,686,854 for its proportionate share of the ASRS’ net pension liability. The net pension liability was measured as of June 30, 2016. The total pension liability used to calculate the net pension liability was determined using update procedures to roll forward the total pension liability from an actuarial valuation as of June 30, 2015, to the measurement date of June 30, 2016. The total pension liability as of June 30, 2016 reflects a change in the actuarial assumption for a decrease in loads for future potential permanent benefit increases. The City’s reported liability at June 30, 2016, increased by $815,048 from the City’s prior year liability of $48,871,806 because of changes in the ASRS’ net pension liability and the City’s proportionate share of that liability. The ASRS’ publicly available financial report provides details on the change in the net pension liability. The City’s proportion of the net pension liability was based on $16,141,004,583. The City’s proportion measured as of June 30, 2016, was 0.307830 percent, which was a decrease of 0.005920 from its proportion measured as of June 30, 2015. Pension Expense and Deferred Outflows/Inflows of Resources – For the year ended June 30, 2017, the City recognized pension expense for ASRS of $2,184,062. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: ASRS Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between city contributions and proportionate share of contributions City contributions subsequent to the measurement date Total Deferred Outflows of Resources $ 301,944 Deferred Inflows of Resources $ 3,418,092 5,384,401 2,628,831 - 40,398 679,772 3,288,383 $ 9,015,126 $ 6,726,695 The $3,288,383 reported as deferred outflows of resources related to ASRS pensions resulting from city contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pension will be recognized in pension expense as follows: Year ending June 30 2018 $ 2019 2020 2021 52 (2,618,195) (2,024,461) 2,132,933 1,509,770 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Actuarial Assumptions – The significant actuarial assumptions used to measure the total pension liability are as follows: ASRS Actuarial valuation date Actuarial roll forward date Actuarial cost method Asset Valuation Investment rate of return Projected salary increases Inflation Permanent base increase Mortality rates June 30, 2015 June 30, 2016 Entry age normal Fair Value 8.0% 3.0-6.75% 3.0% Included 1994 GAM Scale BB The actuarial assumptions used in June 30, 2015 valuation were based on results from an actuarial experience study for the 5-year period ended June 30, 2012. The long-term expected rate of return on ASRS pension plan investments was determined to be 8.79 percent using a building-block method in which best-estimate ranges of expected future real rates of return (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: ASRS Asset Class Equity Fixed Income Real estate Commodities Multi-asset class Total Target Allocation 58% 25% 10% 2% 5% 100% Long-Term Expected Real Rate of Return 6.73% 3.70% 4.25% 3.84% 3.41% Discount Rate – The discount rate used to measure the ASRS total pension liability was 8 percent, which is less than the long-term expected rate of return of 8.75 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statute. 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 plan members. 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. Sensitivity of the City’s Proportionate Share of the ASRS Net pension Liability to Changes in the Discount Rate – The following table presents the City’s proportionate share of the net pension liability calculated using the discount rate of 8 percent, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (7 percent) or 1 percentage point higher (9 percent) than the current rate. 53 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 ASRS City's proportionate share of the net pension liability Current 1% Decrease Discount Rate 1% Increase (7%) (8%) (9%) $ 63,354,512 $ 49,686,854 $ 38,728,380 Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position is available in a separately issued ASRS financial report. The report is available on the ASRS website at www.azasrs.gov 54 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Public Safety Personnel Retirement System Plan Description – City public safety personnel who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS). The PSPRS administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) plan (agent plans). A nine-member board known as the Board of Trustees and the participating local boards govern the PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The PSPRS issue publicly available financial reports that include their financial statements and required supplementary information. The reports are available on the PSPRS Web site at www.psprs.com. Benefits Provided – The PSPRS provides retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefits terms. Retirement, disability, and survivor benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: PSPRS Retirement and Disability Years of service and age required to receive benefit Final average salary is based on Normal Retirement Accidental Disability Retirement Catastrophic Disability Retirement Ordinary Disability Retirement Retirement Initial membership date: Before January 1, 2012 On or after January 1, 2012 20 years any age 15 years age 62 25 years and age 52.5 Highest 36 months of last 20 years Highest 60 months of last 20 years 50% less 2.0% for each year of credited service less than 20 years OR plus 2.0% to 2.5% for each year of credited service over 20 years not to exceed 80% 2.5% per year of credited service, not to exceed 80% 50% or normal retirement, whichever is greater 90% for the first 60 months then reduced to either 62.5% or normal retirement, whichever is greater Normal retirement calculated with actual years of credited service or 20 years of credited service, whichever is greater, multiplied by years of credited service (not to exceed 20 years) divided by 20 Survivor Benefit Retired Members 80% to 100% of retired member's pension benefit Active Members 80% of accidental disability retirement or 100% of average monthly compensation if death was the result of injuries received on the job Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess investment earning. In addition, from and after December 31, 2015 the Legislature may enact permanent one-time benefit 55 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 increases after a Joint Legislative Budget Committee analysis of the increase’s effects on the plan. PSPRS also provides temporary disability benefits of 50 percent of the member’s compensation for up to 12 months. Employees Covered by Benefit Terms – At June 30, 2017, the following employees were covered by the agent pension plans’ benefit terms: PSPRS PSPRS Police Fire Inactive employees or beneficiaries 120 79 currently receiving benefits Inactive employees entitled to but 42 6 not yet receiving benefits Active employees 164 108 Total 326 193 Contributions and Annual OPEB Cost – State statutes establish the pension contribution requirements for active PSPRS employees. In accordance with state statutes, annual actuarial valuations determine employer contribution requirements for PSPRS pension and health insurance premium benefits. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2017, are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members--Pension City Pension Health insurance premium benefit PSPRS Police 11.65% PSPRS Fire 11.65% 53.43% 0.00% 59.46% 0.34% For the agent plans, the City’s contributions to the pension plan and annual OPEB cost and contributions for the health insurance premium benefit for the year ended June 30, 2017, were: PSPRS PSPRS Police Fire $ 4,871,869 $ 3,723,304 Pension Contributions made Health Insurance Premium Benefit Annual OPEB cost Contributions made - 14,831 14,831 During fiscal year 2017, the City paid for PSPRS pension and OPEB contributions as follows: approximately 97 percent from the General Fund, 3 percent from other funds. Pension Liability (Asset) – At June 30, 2017, the City reported the following net pension liabilities: 56 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Net Pension Liability $ 59,214,489 50,563,685 PSPRS Police PSPRS Fire The net pension liabilities were measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Pension Actuarial Assumptions – The significant actuarial assumptions used to measure the total pension liability are as follows: Actuarial valuation date June 30, 2016 Actuarial cost method Entry age normal Investment rate of return 7.50% Projected salary increases 4.0% - 8.0% Inflation 4.0% Permanent benefit increase Included RP-2000 mortality table (adjusted by Mortality rates 105% for both males and females) Actuarial assumptions used in the June 30, 2016, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2011. The target allocation and best estimates of arithmetical real values of return for each major asset class are summarized in the following table: PSPRS Asset Class U.S. equity Non-U.S. equity Credit opportunities Private equity GTAA Real Estate Real Assets Fixed income Absolute Return Risk Parity Short Term Inv Total Target Allocation 16% 14% 13% 11% 10% 10% 8% 7% 5% 4% 2% 100% Long-Term Expected Real Rate of Return 6.23% 8.25% 7.08% 9.50% 4.38% 4.48% 4.77% 2.92% 4.11% 5.13% 0.75% Pension Discount Rates – The following discount rates were used to measure the total pension liabilities: PSPRS Police 7.50% Discount rates PSPRS Fire 7.50% The projection of cash flows used to determine the PSPRS discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rate and the member rate. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments 57 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 of current plan members. 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. Changes in Agent Plans Net Pension Liability (Asset) PSPRS Yuma Police Department Balances at June 30, 2016 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions-employer Contributions-employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balances at June 30, 2017 Total Pension Liability (a) $ 91,492,762 Increase (Decrease) Plan Fiduciary Net Position (b) $ 41,658,507 $ Net Pension Liability (a) - (b) 49,834,255 2,001,398 7,036,487 2,526,647 29,904 - 2,001,398 7,036,487 2,526,647 29,904 3,687,996 - 3,687,996 (5,713,372) 9,569,060 $ 101,061,822 58 $ 4,511,261 1,286,467 242,213 (5,713,372) (4,511,261) (1,286,467) (242,213) - (35,254) (102,489) 188,826 41,847,333 35,254 102,489 9,380,234 59,214,489 $ City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 PSPRS Yuma Fire Department Balances at June 30, 2016 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions-employer Contributions-employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balances at June 30, 2017 Total Pension Liability (a) $ 72,687,330 $ Increase (Decrease) Plan Fiduciary Net Position (b) $ 28,715,260 $ Net Pension Liability (a) - (b) 43,972,070 1,504,175 5,580,799 3,597,460 (2,260,983) - 1,504,175 5,580,799 3,597,460 (2,260,983) 2,732,266 - 2,732,266 (4,692,861) 3,700,007 947,173 166,820 (4,692,861) 6,460,856 79,148,186 (24,404) (227,494) (130,759) 28,584,501 $ $ (3,700,007) (947,173) (166,820) 24,404 227,494 6,591,615 50,563,685 Sensitivity of the City’s Net Pension Liability to Changes in the Discount Rate-The following table presents the City’s net pension liabilities calculated using the discount rates noted above, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current rate. 1% Decrease PSPRS Police Rate Net pension liability PSPRS Fire Rate Net pension liability Current Discount Rate 1% Increase 6.50% 7.50% 8.50% $ 72,110,750 $ 59,214,489 $ 48,585,969 6.50% 7.50% 8.50% $ 60,468,721 $ 50,563,685 $ 42,358,535 Pension Plan Fiduciary Net Position-Detailed information about the pension plans’ fiduciary net position is available in the separately issued PSPRS financial report. The report is available on the PSPRS website at www.psprs.com. 59 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Pension Expense - For the year ended June 30, 2017, the City recognized the following pension expense: Pension Expense $ 9,526,986 9,011,859 PSPRS Police PSPRS Fire Pension Deferred Outflows/Inflows of Resources-At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PSPRS Police Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments City contributions subsequent to the measurement date Total Deferred Outflows of Resources $ 25,545 Deferred Inflows of Resources $ 387,419 8,761,583 3,447,427 850,538 4,871,869 - $ PSPRS Fire Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments City contributions subsequent to the measurement date Total $ 1,237,957 Deferred Outflows of Resources $ 644,124 Deferred Inflows of Resources $ 2,591,028 5,852,779 2,363,872 586,391 3,723,304 - $ 60 17,106,424 12,584,079 $ 3,177,419 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 The amounts reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (or an increase in the net pension asset) in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Deferred outflow/inflow amortization PSPRS Police Year ending June 30 2018 2019 2020 2021 2022 Thereafter $ 2,371,060 2,371,060 2,796,329 2,454,088 537,873 466,188 PSPRS Fire $ 1,261,505 1,261,502 1,554,700 1,313,593 189,695 102,361 Agent Plan OPEB Trend Information-The table below presents the annual OPEB cost information for the health insurance premium benefit for the current and two preceding years: Year Ended June 30 PSPRS Police 2017 2016 2015 PSPRS Fire 2017 2016 2015 Annual OPEB Cost $ Percentage of Annual Cost Contributed 144,073 100.00% 100.00% 100.00% 14,831 24,296 120,263 100.00% 100.00% 100.00% Net OPEB Obligation $ - Agent Plan OPEB Actuarial Assumptions-Actuarial valuations involve estimates of the reported amounts value and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions are subject to continual revision as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress for the health insurance premium benefit presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on (1) the plans as understood by the City and plans’ members and include the types of benefits in force at the valuation date, and (2) the pattern of sharing benefit costs between the City and plans’ members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The significant actuarial methods and assumptions used are the same for all PSPRS plans and related benefits (unless noted), and the actuarial methods and assumptions used to establish the fiscal year 2017 contribution requirements are as follows: 61 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 PSPRS - OPEB Contribution Requirements Actuarial valuation date June 30, 2015 Actuarial cost method Entry age normal Amortization method Level of percent closed for unfunded actuarial accrued liability, open for excess Remaining amortization period 21 years for unfunded actuarial accrued liability, 20 years for excess Asset valuation method 7-year smoothed market value; 80%/120% market Actuarial assumptions: Investment rate of return 7.85% Projected salary increases 4.0% - 8.0% includes inflation at 4.0% The funded status of the PSPRS health insurance premium benefit plans in the June 30, 2016, actuarial valuation was determined using the following actuarial methods and assumptions, applied to all periods included in the measurement. PSPRS - OPEB Funded Status Actuarial valuation date June 30, 2016 Actuarial cost method Entry age normal Amortization method Level of percent closed for unfunded actuarial accrued liability, open for excess Remaining amortization period 20 years for unfunded actuarial accrued liability, 20 years for excess Asset valuation method 7-year smoothed market value; 80%/120% market Actuarial assumptions: Investment rate of return 7.50% Projected salary increases 4.0%-8.0% includes inflation at 4.0% Agent Plan OPEB Funded Status—The following table presents the funded status of the health insurance premium benefit plans as of the most recent valuation date, June 30, 2016. The Schedule of Funding Progress follows the notes to the financial statement, it is included in the required supplementary information. PSPRS Police Actuarial value of assets (a) Actuarial accrued liability (b) Unfunded actuarial accrued liability (funding excess) (b) - (a) Funded ratio (a)/(b) Annual covered payroll (c) Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll (b) - (a) / (c) $ 2,877,257 PSPRS Fire $ 2,023,929 1,645,109 (853,328) 142.16% $ 10,042,139 -8.50% 62 1,800,027 (154,918) 109.42% $ 7,513,360 -2.06% City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 H. Interfund Transfers INTERFUND TRANSFERS Transfers Out General City Road Tax Public Safety Tax Two Percent HURF Transfers In Governmental funds - major funds: Equipment Replacement $ 381,923 Debt Service Mall Maintenance 123,775 Debt Service 4,104,362 Equipment Replacement Debt Service General $ Public Safety Tax Two Percent Tax 11,792 4,545,726 Debt Service $ Equipment Replacement Debt Service Desert Hills Golf Course Equipment Replacement Debt Service Total Governmental Activities $ Desert Hills Golf Course Water Wastewater HURF Solid Waste City Road Tax Nonmajor funds: 946,928 Yuma Mall Maint 274,998 1,125,080 242,655 11,792 116,638 11,885,669 4,104,362 946,928 1,125,080 2,099 59,563 65,939 116,638 165,081 4,545,726 General $ 123,775 Total Governmental Activities $ 11,255,191 Two Percent Tax $ 242,655 Total Enterprise Funds $ 242,655 General $ 381,923 11,792 11,792 274,998 23,525 11,792 3,991 719,813 12,217,659 Enterprise funds: Desert Hills Equipment Replacement $ Debt Service Solid Waste Debt Service Equipment Replacement Water Wastewater Internal Service funds: Equipment Maintenance Debt Service Debt Service Total Enterprise Funds $ 23,525 2,099 165,081 11,792 59,563 65,939 327,999 Equipment Replacement $ 3,991 Desert Hills Equipment Replacement HURF Total Internal Service Funds $ 3,991 City Road Tax Two Percent Tax Desert Hills Golf Course Solid Waste Equipment Maintenance Total Internal Service Funds $ Total Transfers Out $ 12,217,659 Total Transfers In $ The majority of the transfers listed above are for debt service requirements and are recognizable by the fund from which the transfer is made. This includes Enterprise Fund transfers to debt service as the majority of the related bond debt service is governmental in nature and is recorded in the Debt Service Fund rather than within the Enterprise Funds. Interfund activity is eliminated within the governmental activities column of the Statement of Activities. Only transfers between governmental and business-type activities appear on that statement. The net transfers of $85,344 are for debt service ($292,628), payment of Equipment Replacement rent funds ($35,317), and a transfer to Desert Hills Golf Course from the Two Percent Tax fund $242,655. 63 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 I. Interfund Receivables and Payables Interfund balances at June 30, 2017, follow: Interfund Receivable Major Funds Interfund Payable General Major Governmental Funds: Debt Service Fund Nonmajor Governmental Funds: Community Redevelopment Fund Grants Fund Internal Service Funds: Equipment Maintenance Fund Total Receivable $ 4,940 170,323 416,186 1,400,344 $ 1,991,793 Because they serve primarily governmental funds, the interfund activity noted above in the Internal Service Equipment Maintenance Fund is combined within the governmental activities for government-wide reporting. As such, the interfund activity is eliminated in the governmental activities column of the Statement of Net Position. The internal balances amount appearing on that statement, $422,411, represents net balances allocated to businesstype activities for consolidation of internal service funds net profits. J. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; job-related illnesses and injuries to employees; and natural disasters. The City purchases commercial insurance for Property, Public Employee Fidelity Bonds, Crime, Cyber Security, Excess Workers Compensation, Liability, Environmental, and Miscellaneous (i.e. surety bonds, special event insurance as needed, and fine arts coverage.) The City retains all the risk not covered by commercial carriers and has effectively managed risk through various employee education and prevention programs. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. The City provides health benefits to its employees and their dependents through the Yuma Area Benefit Consortium (trust). The trust is comprised of four participating entities and provides benefits through a self-funding trust agreement with its members. The consortium purchases insurance for claims in excess of $210,000 per individual per plan year. A third-party administrator provides claim processing and record keeping services. The City is responsible for paying premiums while employees must contribute for costs of dependent coverage. The trust sets rates through projection of claims cost and administrative expenses, along with a determination of sufficient fund balance to maintain rate stability and trust integrity. Should the Consortium become insolvent or otherwise unable to discharge its liabilities, the participating entities shall be assessed a pro rata share. This assessment may not exceed the amount of each participating entity’s annual contribution. Benefit payments to beneficiaries are limited to the amount in the trust. Should the assessment not yield sufficient funds to pay outstanding claims, the trust’s obligation to pay claims is limited to the amount in the trust after assessment and the trustees and the participating entities have no further obligation of any type. The City uses two Internal Service Funds, Insurance Reserve Fund and Workers Compensation Fund, to account for the financing of its risk of loss relating to claims. As the City is self-insured up to $300,000 for liability claims, the Insurance Reserve Fund manages these claims. Claims exceeding this self-insured limit are covered under the City’s Liability Insurance. For the Workers Compensation Fund, the stop-loss thresholds are $700,000 for public safety employees and $600,000 for all other employees, after which the City’s Excess Workers Compensation Insurance becomes liable for claims. Charges assessed to the funds are based on historical claims, exposure to risk, and funding necessary reserves. Annually, the City estimates the liabilities for unpaid claims using a historical cost information method. Claims and expenses are recognized when it is probable that a loss has been incurred, and the amount of the loss can be reasonably estimated. Claims accounted for include, reported and paid claims, 64 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 reported but unpaid claims, and incurred but not reported (IBNR) claims. The funds’ claims liabilities are presented below. K. Construction Commitments The City has active construction projects as of June 30, 2017. At year-end the government’s commitments with contractors for specific projects are as follows: L. Deficits in Fund Equity At June 30, 2017, no funds, as shown in the basic financial statements, were in a deficit position. The Equipment Maintenance Internal Service Fund, as shown in the Combining Statement of Net Position in Other Supplementary Information, has a deficit balance of $358,297 at June 30, 2017. The City intends to adjust its internal charges in future fiscal years to eliminate this deficit. M. Subsequent Event On June 15, 2017, the City of Yuma loaned the Housing Authority of the City of Yuma (HACY), a non-profit organization and independent agency of the City of Yuma, a principal sum of $1,900,000. This loan was due and payable within 90 days of the Promissory Note date of June 15, 2017. Subsequent to the close of these financial statements, HACY paid the full principal of the loan on October 2, 2017. 65 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2017 III. CONTINGENT LIABILITIES A. Pending Litigation The City is contingently liable in respect to lawsuits and other claims incidental to the ordinary course of its operations. It is the opinion of the City management, based on the advice of the City Attorney, that such matters will not have a material adverse effect on the City's financial position at June 30, 2017. B. Compliance The City participates in federally-funded and state-funded programs administered by various government agencies. The programs included in these financial statements may be subject to program compliance and/or financial monitoring by the granting agency or its representatives. The amount, if any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time. 66 REQUIRED SUPPLEMENTARY INFORMATION 67 City of Yuma, Arizona Required Supplementary Information Schedule of the City’s Proportionate Share of the Net Pension Liability Cost-Sharing Pension Plans June 30, 2017 Arizona State Retirement System City's proportion of the net pension liability City's proportionate share of the net pension liability City's covered payroll City's proportionate share of the net pension liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total pension liability Reporting Fiscal Year (Measurement Date) $ $ 2017 (2016) 0.307830% 49,686,854 30,108,876 165.02% 67.06% $ $ 2016 (2015) 0.313750% 48,871,806 28,462,610 171.71% 63.85% $ $ 2015 (2014) 0.313075% 46,324,403 28,442,751 162.87% 2014 through 2006 Information not available 69.49% NOTE: The pension schedules in the required supplementary information are intended to show information for ten years, and additional information will be displayed as it becomes available. 68 City of Yuma, Arizona Required Supplementary Information Schedule of the City’s Proportionate Share of the Net Pension Liability Cost-Sharing Pension Plans June 30, 2017 PSPRS Police Reporting Fiscal Year (Measurement Date) 2017 (2016) Total pension liability Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) Plan fiduciary net position Contributions - employer Contributions - employee Net investment income Benefity payments, including refunds of employee contributions Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) City's net pension liability - ending (a) - (b) $ $ $ 2,001,398 7,036,487 2,526,647 29,904 3,687,996 (5,713,372) 9,569,060 91,492,762 101,061,822 2016 (2015) $ $ $ $ 4,511,261 1,286,467 242,213 (5,713,372) (35,254) (102,489) 188,826 41,658,507 41,847,333 $ 59,214,489 (500,429) (5,926,760) 2,474,041 89,018,721 91,492,762 $ $ 2,043,247 5,718,621 2,022,309 2014 through 2006 Information not available (53,936) 9,770,998 (4,619,148) 14,882,091 74,136,630 89,018,721 $ $ 3,321,709 1,313,708 1,497,736 (5,926,760) (36,917) (106,535) 62,941 41,595,566 41,658,507 $ 3,099,353 1,103,885 5,100,174 (4,619,148) (41,075) (80,531) 4,562,658 37,032,908 41,595,566 $ 49,834,255 $ 47,423,155 PSPRS Police Reporting Fiscal Year (Measurement Date) 2017 (2016) 41.41% Plan fiduciary net position as a percentage of the total pension liability Covered payroll 2,064,841 6,836,389 - 2015 (2014) $ City's net pension liability as a percentage of covered payroll 10,042,139 589.66% 2016 (2015) 45.53% $ 10,739,726 481.89% 2015 (2014) 46.73% $ 2014 through 2006 Information not available 10,916,220 464.63% NOTE: The pension schedules in the required supplementary information are intended to show information for ten years, and additional information will be displayed as it becomes available. 69 City of Yuma, Arizona Required Supplementary Information Schedule of the City’s Proportionate Share of the Net Pension Liability Cost-Sharing Pension Plans June 30, 2017 PSPRS Fire Reporting Fiscal Year (Measurement Date) 2017 (2016) Total pension liability Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) Plan fiduciary net position Contributions - employer Contributions - employee Net investment income Benefity payments, including refunds of employee contributions Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) City's net pension liability - ending (a) - (b) $ $ $ 1,504,175 5,580,799 3,597,460 (2,260,983) 2,732,266 (4,692,861) 6,460,856 72,687,330 79,148,186 2016 (2015) $ $ $ $ 3,700,007 947,173 166,820 (4,692,861) (24,404) (227,494) (130,759) 28,715,260 28,584,501 $ 50,563,685 894,372 (4,395,817) 3,275,168 69,412,162 72,687,330 $ $ 1,511,371 4,671,699 1,370,597 2014 through 2006 Information not available (1,120,811) 6,122,119 (3,798,443) 8,756,532 60,655,630 69,412,162 $ $ 2,750,517 899,220 1,040,382 (4,395,817) (25,761) (251,349) 17,192 28,698,068 28,715,260 $ 2,603,104 754,968 3,516,237 (3,798,443) (28,319) 949 3,048,496 25,649,572 28,698,068 $ 43,972,070 $ 40,714,094 PSPRS Fire Reporting Fiscal Year (Measurement Date) 2017 (2016) 36.12% Plan fiduciary net position as a percentage of the total pension liability Covered payroll 1,443,632 5,332,981 - 2015 (2014) $ City's net pension liability as a percentage of covered payroll 7,513,360 672.98% 2016 (2015) 39.51% $ 7,592,493 569.09% 2015 (2014) 41.34% $ 2014 through 2006 Information not available 7,516,425 569.78% NOTE: The pension schedules in the required supplementary information are intended to show information for ten years, and additional information will be displayed as it becomes available. 70 City of Yuma, Arizona Required Supplementary Information Schedule of City Pension Contributions June 30, 2017 Arizona State Retirement System Statutorily required contribution City's contributions in relation to the statutorily required contribution City's contribuiton deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll Reporting Fiscal Year $ $ $ 2017 3,288,383 $ 3,288,383 2016 3,129,314 $ 3,129,314 2015 3,145,752 $ 3,145,752 2014 2,960,244 2,960,244 $ 30,108,876 $ 10.92% $ 28,462,610 $ 10.99% $ 28,442,751 $ 11.06% 27,663,180 10.70% PSPRS Police Statutorily required contribution City's contributions in relation to the statutorily required contribution City's contribuiton deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll Reporting Fiscal Year $ $ $ 2017 4,871,869 $ 4,871,869 2016 4,514,793 $ 4,514,793 2015 3,301,671 $ 3,301,671 2014 3,099,836 3,099,836 $ 11,327,293 $ 43.01% $ 10,739,726 $ 42.04% $ 10,916,220 $ 30.25% 10,475,959 29.59% PSPRS Fire Statutorily required contribution City's contributions in relation to the statutorily required contribution City's contribuiton deficiency (excess) City's covered payroll City's contributions as a percentage of covered payroll 2013 through 2006 Information not available 2013 through 2006 Information not available Reporting Fiscal Year $ $ $ 2017 3,723,304 $ 3,723,304 2016 3,543,790 $ 3,543,790 2015 2,608,314 $ 2,608,314 2014 2,441,615 2,441,615 $ 7,806,048 $ 47.70% $ 7,592,493 $ 46.67% $ 7,516,425 $ 34.70% 7,294,375 33.47% 2013 through 2006 Information not available NOTE: The pension schedules in the required supplementary information are intended to show information for ten years, and additional information will be displayed as it becomes available. 71 City of Yuma, Arizona Required Supplementary Information Schedule of Agent OPEB Plans’ Funding Progress June 30, 2017 Health Insurance Premium Benefit Actuarial Valuation Date Actuarial value of assets (a) Actuarial accrued liability (b) Unfunded actuarial accrued liability (UAAL) (funding excess) (b) - (a) PSPRS Police 6/30/2016 $ 2,877,257 $ 2,023,929 $ (853,328) 6/30/2015 2,820,572 1,712,824 (1,107,748) 6/30/2014 2,614,548 1,692,255 (922,293) 6/30/2013 1,593,473 1,593,473 PSPRS Fire 6/30/2016 6/30/2015 6/30/2014 6/30/2013 1,800,027 1,742,539 1,617,986 - 1,645,109 1,609,310 1,684,184 1,634,614 (154,918) (133,229) 66,198 1,634,614 72 Funded ratio (a)/(b) 142.16% $ 164.67% 154.50% 0.00% 109.42% 108.28% 96.07% 0.00% Annual covered payroll (c) UAAL (funding excess) as a percentage of covered payroll ((b) - (a)/c) 10,042,139 10,341,453 10,206,675 10,013,175 0.00% 0.00% 0.00% 15.91% 7,513,360 7,376,810 7,145,551 7,295,392 0.00% 0.00% 0.93% 22.41% City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budgetary Fund Balance, July 1 Resources (inflows): Taxes: Property Tax - Primary Property Tax - Delinquent City Sales Tax Public Enterprise In-Lieu Franchise Tax Total Taxes Licenses: Business Licenses Liquor Licenses Building Permits Alcohol Permits Animal Licenses Total Licenses Intergovernmental: Sales Tax - State State Revenue Sharing Auto Lieu Tax Other Governmental Charges Total Intergovernmental Charges for Services: Building Inspection Fees Recreation Fees Police Services Fire Ambulance Services Other Charges Total Charges for Services Fines and Forfeitures: City Court Fines Total Fines and Forfeitures Use of Money and Property: Interest Rental Receipts Total Use of Money and Property Miscellaneous Sales of Surplus Property Other Total Miscellaneous Total Revenues Amounts Available for Appropriation Budget Original Final $ 16,459,853 $ 16,459,853 Actual Amounts $ 18,345,526 Variance with Final Budget Positive (Negative) $ 1,885,673 12,144,078 175,000 21,231,745 242,000 3,265,000 37,057,823 12,144,078 175,000 21,231,745 242,000 3,265,000 37,057,823 11,965,580 223,021 21,207,119 251,067 3,066,678 36,713,465 (178,498) 48,021 (24,626) 9,067 (198,322) (344,358) 250,350 33,000 1,639,600 9,000 105,000 2,036,950 250,350 33,000 1,639,600 9,000 105,000 2,036,950 250,890 30,140 1,708,329 8,672 65,629 2,063,660 540 (2,860) 68,729 (328) (39,371) 26,710 9,000,000 11,900,000 3,570,000 25,000 24,495,000 9,000,000 11,900,000 3,570,000 25,000 24,495,000 8,902,248 11,517,228 3,759,665 31,057 24,210,198 (97,752) (382,772) 189,665 6,057 (284,802) 328,100 466,706 827,000 3,196,000 42,466 4,860,272 328,100 466,706 827,000 3,196,000 42,466 4,860,272 390,827 465,281 771,219 4,261,370 77,325 5,966,022 62,727 (1,425) (55,781) 1,065,370 34,859 1,105,750 1,210,000 1,210,000 1,210,000 1,210,000 1,228,496 1,228,496 100,000 186,968 286,968 100,000 186,968 286,968 95,984 208,504 304,488 123,000 123,000 70,070,013 86,529,866 123,000 123,000 70,070,013 86,529,866 See accompanying notes to this schedule 73 18,496 18,496 (4,016) 21,536 17,520 43,916 43,916 701,642 578,642 745,558 622,558 71,231,887 1,161,874 89,577,413 3,047,547 Continued on next page City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Charges to Appropriations (outflows): General Government: Mayor and Council Elections City Administrator Strategic Communications Economic Development Facilities Maintenance General Government City Clerk City Attorney City Prosecutor Finance-Administration Accounting Customer Services Information Technology Services Purchasing Human Resources Intragovernmental Charges Total Public Safety Expenditures Actual Amounts 237,901 847,831 624,747 335,990 899,203 2,082,911 330,044 1,223,726 335,588 409,026 1,128,544 113,265 3,024,179 465,503 1,130,434 (3,660,269) 237,901 847,831 617,647 335,990 899,203 2,082,911 330,044 1,223,726 335,588 409,026 1,128,544 113,265 3,078,563 465,503 1,130,434 (3,660,269) 292,743 35,201 832,189 592,811 275,853 857,222 650,621 322,308 1,152,157 290,400 391,245 971,547 104,113 3,077,538 436,768 1,122,280 (3,569,045) (54,842) (35,201) 15,641 24,836 60,137 41,981 1,432,290 7,736 71,569 45,188 17,781 156,997 9,152 1,025 28,735 8,154 (91,224) 9,528,620 145,200 9,673,820 9,575,904 97,916 9,673,820 7,835,951 78,549 7,914,500 1,739,953 19,367 1,759,320 22,234,905 730,882 2,036,501 2,371,567 859,882 331,420 10,269,681 3,536,095 525,831 1,524,461 24,635 1,838,219 46,284,078 - 22,225,705 730,882 2,036,501 2,371,567 859,882 334,420 10,266,681 3,536,095 525,831 1,503,499 24,635 1,838,219 46,253,916 30,162 23,215,270 712,793 1,792,885 2,316,951 963,569 345,875 10,842,784 4,264,210 500,530 1,321,976 18,676 1,676,233 47,971,752 58,251 (989,565) 18,089 243,616 54,616 (103,687) (11,455) (576,103) (728,115) 25,301 181,523 5,959 161,986 (1,717,836) (28,089) 46,284,078 46,284,078 Total General Government Operating Expenditures Capital Outlay Total General Government Expenditures Public Safety: Police Administration - Field Operations Police Animal Control Police Support Services Police Communication Center Fire Administration Fire Training Fire Suppression Fire Suppression - Ambulance Community Risk Reduction Facilities Maintenance Fire Special Operations Municipal Court Total Public Safety Operating Expenditures Capital Outlay Final Variance with Final Budget Positive (Negative) See accompanying notes to this schedule 74 48,030,003 (1,745,925) Continued on next page City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Parks, Recreation and Culture: Parks and Recreation Administration Parks Maintenance Parks Development Recreation Administration Senior Adult Activities Adult Activities Youth Activities Aquatics Yuma Readiness Center Facilities Maintenance Intragovernmental Charges Total Parks, Recreation and Culture Operating Expenditures Total Parks, Recreation and Culture Expenditures Community Design and Development: Community Development Administration Development Engineering Planning and Building Safety Neighborhood Services Total Community Design and Development Operating Expenditures Total Community Design and Development Expenditures Total Operating Expenditures Capital Outlay Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Final Actual Amounts Variance with Final Budget Positive (Negative) 666,810 4,560,495 154,165 647,860 69,741 231,907 264,237 357,665 92,399 1,424,987 (280,165) 666,810 4,560,495 154,165 647,860 69,741 231,907 264,237 357,665 92,399 1,424,987 (280,165) 663,483 4,643,833 160,556 620,883 39,892 195,565 278,618 300,110 87,221 1,349,756 (280,165) 3,327 (83,338) (6,391) 26,977 29,849 36,342 (14,381) 57,555 5,178 75,231 - 8,190,100 8,190,100 8,190,100 8,190,100 8,059,752 8,059,752 130,348 130,348 496,935 280,559 2,582,625 362,408 496,935 280,559 2,582,625 362,408 478,789 294,475 2,281,763 354,374 18,146 (13,916) 300,862 8,034 3,722,527 3,722,527 3,409,401 313,126 3,722,527 67,725,325 145,200 67,870,525 4,604,076 72,474,601 3,722,527 67,742,447 128,078 67,870,525 4,604,076 72,474,601 3,409,401 67,276,856 136,800 67,413,656 4,610,060 72,023,716 313,126 465,591 (8,722) 456,869 (5,984) 450,885 $ 14,055,265 $ 14,055,265 $ 17,553,697 See accompanying notes to this schedule 75 $ 3,498,432 Concluded City of Yuma, Arizona Budgetary Comparison Schedule City Road Tax Fund For the Year Ended June 30, 2017 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Special Road Sales Tax Use of Money and Property Rent Interest Charges For Services Developer Charges Miscellaneous Other Total Revenues Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Public Safety Traffic Signals, Signs, and Striping Streets Engineering Street Maintenance Pathways and Trails Right-Of-Way Management Capital Outlay Capital Projects Parks, Recreation and Culture Streets Environmental, Health and Safety Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Positive (Negative) $ 351,072 Original $ 11,815,169 Final $ 11,815,169 Actual Amounts $ 12,166,241 10,614,070 10,614,070 10,601,757 135,000 30,000 135,000 30,000 163,252 80,868 28,252 50,868 - - 21,378 21,378 - - 391,982 391,982 (12,313) 10,779,070 - 10,779,070 - 11,259,237 - 480,167 - 22,594,239 22,594,239 23,425,478 831,239 816,776 816,776 683,631 133,145 2,689,017 41,901 163,836 191,013 21,000 2,683,448 41,901 163,836 191,013 26,569 2,158,832 34,467 154,264 171,126 18,924 524,616 7,434 9,572 19,887 7,645 385,000 5,488,000 478,000 385,000 5,488,000 478,000 383,305 2,768,232 477,522 1,695 2,719,768 478 10,274,543 4,556,317 14,830,860 10,274,543 4,556,317 14,830,860 6,850,303 4,557,518 11,407,821 3,424,240 (1,201) 3,423,039 $ 7,763,379 $ 7,763,379 $ 12,017,657 See accompanying notes to this schedule 76 $ 4,254,278 City of Yuma, Arizona NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2017 A. Pension Plan Schedule Note 1. Actuarially Determined Contribution Rates Actuarial determined contribution rates for PSPRS are calculated as of June 30 two years prior to the end of the fiscal year in which contributions are made. The actuarial methods and assumptions used to establish the contribution requirements are as follows: Actuarial cost method Amortization method Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess Remaining amortization period 23 years for unfunded actuarial accrued liability, 20 years for as of the 2013 actuarial excess (2012 actuarial used 24 years for unfunded actuarial valuation accrued liability, 20 years for excess) Asset valuation method 7-year smoothed market value, 80%/120% market Actuarial assumptions: Investment rate of return In the 2013 actuarial valuation, the investment rate of return was decreased from 8.0% to 7.85% Projected salary increases In the 2013 actuarial valuation, projected salary increases were decreased from 5.0%-9.0% to 4.5%-8.5% for PSPRS Wage growth In the 2013 actuarial valuation, wage growth was decreased from 4.0% to 5.0% for PSPRS Retirement age Experience-based table of rates that is specific to the type of eligibility condition. Last updated for the 2012 valuation pursuant to an experience study of the period July 1, 2006 June 30, 2011. Mortality RP-2000 mortality table (adjusted by 105% for both males and females) B. Schedule of Agent OPEB Plans’ Funding Progress Note 1. Factors That Affect the Identification of Trends Beginning in fiscal year 2014, PSPRS established separate funds for pension benefits and health insurance premium benefits. Previously, the plans recorded both pension and health insurance premium contributions in the same Pension Fund. During fiscal year 2014, the plans transferred prior-year health insurance premium benefit contributions that exceeded benefit payments from each plan’s Pension Fund to the new Health Insurance Fund. C. Budgetary Reporting and Budgetary Basis of Accounting Budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP), with the exception of the Enterprise Funds and Internal Service Funds for which budgets are adopted. As such, reconciliations between budgetary schedules and financial statements are not necessary for governmental funds. For Enterprise Funds and Internal Service Funds, expenditures related to debt service and to capital acquisition are budgeted in the same manner as governmental funds. Depreciation is not budgeted. Reconciliations from budgetary schedules and financial statements of these funds are presented on the face of the respective budgetary statements. D. Excess of Expenditures Over Appropriations The City’s expenditures exceeded appropriations in one fund. The Downtown Mall Maintenance Fund had expenditures exceed appropriations by $2,946 due to a slight increase in maintenance costs. In this case, the fund was not significantly impaired by the excess expenditures. 77 78 OTHER SUPPLEMENTARY INFORMATION 79 80 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds account for the proceeds of special revenue sources that are used to finance projects or activities as required by law or contractual agreements. Public Safety Tax To account for the two-tenths percent sales tax designated for public safety and criminal justice facilities and equipment. Highway Users Revenue To account for the state-shared gasoline taxes designated for maintenance and construction of roadways. Grants The Grant Fund accounts for all of the federal and state grants provided to the City with the exception of the grants received for the Yuma Regional Communication System (recorded in Radio Communications Enterprise Fund), the Water Fund (recorded in Water Enterprise Fund), the Community Development Block Grant, and the Economic Development grant. Community Redevelopment This fund accounts for the financial activities of Community Development Block Grant and the Economic Development Grant. Two Percent Tax To record the financial activities of the Two Percent Special Revenue Excise Tax on hotel, motel, restaurant and bar sales. This tax can finance the operations of the Art Center, the Civic and Convention Center, Baseball Complex, Golf Courses, the Yuma Crossing Area and Convention and Tourism. Yuma Mall Maintenance To record the special maintenance levy for the Yuma Downtown Mall District. The assessment supports cleaning, maintenance, landscaping and utility costs of common areas. Costs in excess of the assessment are financed by a transfer from the General Fund. 81 City of Yuma, Arizona Combining Balance Sheet Nonmajor Governmental Funds June 30, 2017 Public Safety Tax Assets Cash and Investments Receivables (Net of Allowances for Uncollectibles): Accounts Receivable Intergovernmental Delinquent Property Taxes Accrued Interest Inventory, at cost Prepaid Items Total Assets Special Revenue Highway Users Revenue $ 1,816,782 $ 92,970 217,454 2,787 2,129,993 $ 4,284,232 $ 9,299 669,027 5,146 194 4,967,898 Grants $ 406,936 $ 90,986 440,337 206 938,465 Liabilities Liabilities: Accounts Payable Accrued Payroll, Taxes and Benefits Payable Due to Other Funds Deposits Unearned Revenues Total Liabilities $ Deferred Inflows of Resources Unavailable Revenues Fund Balances: Nonspendable: Inventory Prepaid Items Spendable Restricted Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balance 31,675 2,899 32,408 66,982 $ 82 $ 222,463 20,069 416,186 3,354 276,393 938,465 - - - - 194 - 4,712,573 4,712,767 - 2,063,011 2,063,011 $ 182,002 73,129 255,131 2,129,993 $ 4,967,898 $ 938,465 Special Revenue Community Redevelopment $ $ $ $ - 819,275 186,628 1,005,903 23,509 2,245 170,323 1 196,078 Two Percent Tax $ 3,035,822 $ 150,815 264,596 5,064 7,849 53,721 3,517,867 $ 206,846 71,780 28,709 75,914 383,249 $ 16,145 $ 360 7,153 3,427 27,085 $ 20,597 3,062 23,659 809,825 - - 7,849 53,721 - - 3,073,048 3,134,618 - 1,005,903 $ 3,517,867 Total Nonmajor Governmental Funds Yuma Mall Maintenance $ 9,559,917 $ 1,163,705 1,785,195 3,427 13,203 7,849 53,915 12,587,211 $ 3,426 $ 27,085 83 687,092 173,184 586,509 32,063 384,716 1,863,564 813,251 7,849 53,915 9,848,632 9,910,396 $ 12,587,211 City of Yuma, Arizona Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2017 Special Revenue Highway User Revenue Public Safety Tax Revenues: Taxes Intergovernmental Charges for Services Use of Money and Property Contributions/Donations Miscellaneous Total Revenues $ Expenditures: Current: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Capital Projects General Government Public Safety Streets Parks, Recreation and Culture Total Expenditures $ 1,626,402 - Transfers In Transfers Out Total Other Financing Sources/(Uses) Net Changes in Fund Balances Fund Balances, Beginning $ 7,533,420 20,460 126,513 7,680,393 $ 1,914,047 341 170,003 2,084,391 442,237 5,739,860 - 13,008 1,122,243 77,172 6,569 43,729 882,175 161,540 503,750 36,535 2,545,112 357,212 6,707,418 287,103 37,386 2,084,391 1,854,032 972,975 - (946,928) (128,430) - (946,928) (128,430) - 907,104 844,545 - 1,155,907 3,868,222 - - Revenues Over/(Under) Expenditures Fund Balances, Ending 4,239,261 43,112 116,771 4,399,144 Grants 2,063,011 84 $ 4,712,767 $ - Special Revenue Community Redevelopment $ 831,684 4,063 835,747 Two Percent Tax $ - 5,354,285 670,551 20,112 59,464 6,104,412 $ 113,712 2,658 116,370 73,670 5,044,680 Total Nonmajor Governmental Funds $ 9,707,258 10,279,151 670,551 84,025 170,003 309,469 21,220,457 - 86,678 3,190,882 5,739,860 5,121,852 50,298 - - - 835,747 - - 240,145 - 1,075,892 1,547,465 240,145 287,103 36,535 357,212 184,720 17,678,497 (123,775) 3,541,960 835,747 147,334 5,265,684 - 838,728 - (1,642,733) 123,775 - 123,775 (2,718,091) - (1,642,733) 123,775 (2,594,316) - (804,005) $ Yuma Mall Maintenance - 3,938,623 $ 3,134,618 $ - 947,644 - 8,962,752 - 85 $ 9,910,396 City of Yuma, Arizona Budgetary Comparison Schedule Debt Service Fund For the Year Ended June 30, 2017 Budgetary Fund Balance, July 1 Resources (inflows): Special Assessments: Principal Payments Use of Money and Property: Interest Total Revenues Transfers In Budget Original Final $ 3,286 $ 3,286 Amounts Available for Appropriation Charges to Appropriations (outflows): Debt Service: Bond Principal Bond Interest Fiscal Agent Fees Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 3,357 Variance with Final Budget Positive (Negative) $ 71 305,000 305,000 305,000 71,558 376,558 11,128,982 11,508,826 71,558 376,558 11,128,982 11,508,826 72,502 377,502 11,131,416 11,512,275 944 944 2,434 3,449 6,790,000 4,713,890 2,400 11,506,290 11,506,290 6,790,000 4,713,890 2,400 11,506,290 11,506,290 6,790,000 4,717,159 3,150 11,510,309 11,510,309 (3,269) (750) (4,019) (4,019) 2,536 86 $ 2,536 $ 1,966 - $ (570) City of Yuma, Arizona Budgetary Comparison Schedule Capital Projects Fund For the Year Ended June 30, 2017 Original $ 34,568,909 Final $ 34,568,909 Actual Amounts $ 34,543,219 Variance with Final Budget Positive (Negative) $ (25,690) 3,016,770 3,016,770 2,493,846 (522,924) 36,525 3,053,295 37,622,204 36,525 3,053,295 37,622,204 184,465 2,678,311 37,221,530 147,940 (374,984) (400,674) 477,500 5,380,000 23,225,000 29,082,500 29,082,500 608,403 97,500 5,382,630 22,993,967 29,082,500 29,082,500 173,895 34,834 4,968,866 12,342,941 158,764 17,679,300 17,679,300 434,508 62,666 413,764 10,651,026 (158,764) 11,403,200 11,403,200 8,539,704 $ 19,542,230 Budget Budgetary Fund Balance, July 1 Resources (inflows): Charges for Services Developer Charges Use of Money and Property Interest Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Capital Outlay: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 8,539,704 87 $ $ 11,002,526 City of Yuma, Arizona Budgetary Comparison Schedule Public Safety Tax Fund For the Year Ended 30, 2017 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Public Safety Sales Tax Use of Money and Property Rent Interest Miscellaneous Other Total Revenues Amounts Available for Appropriation Variance with Final Budget Positive (Negative) $ (505,425) (4,919) Original $ 1,661,332 Final $ 1,661,332 Actual Amounts $ 1,155,907 4,244,180 4,244,180 4,239,261 30,547 2,000 30,547 2,000 31,463 11,649 4,276,727 5,938,059 4,276,727 5,938,059 116,771 4,399,144 5,555,051 116,771 122,417 (383,008) 946,182 737,873 25,000 1,042,500 955,319 760,020 25,000 1,011,216 953,227 665,476 7,699 882,175 2,092 94,544 25,000 (7,699) 129,041 2,751,555 2,751,555 36,535 2,545,112 (36,535) 206,443 946,613 3,698,168 946,613 3,698,168 946,928 3,492,040 (315) 206,128 $ 2,239,891 $ 2,239,891 $ 2,063,011 916 9,649 Charges to Appropriations (outflows): Current: Public Safety Police Support Services Fire Support Services Facility Maintenance General Government Capital Outlay Capital Projects: Public Safety Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 88 $ (176,880) City of Yuma, Arizona Budgetary Comparison Schedule Highway User Revenue Fund For the Year Ended June 30, 2017 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Gasoline Tax Use of Money and Property Interest Miscellaneous Other Total Revenues Budget Original Final $ 3,235,390 $ 3,235,390 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Public Safety Traffic Signals, Signs, and Striping Streets Street Maintenance Street Lighting Street Sweeping Storm Drain Maintenance Curbs, Gutters, and Sidewalks Retention Basin Maintenance Code Enforcement Capital Outlay Capital Projects Streets Total Expenditures Transfers Out Budgetary Fund Balance, June 30 7,000,000 7,000,000 7,533,420 533,420 4,000 4,000 20,460 16,460 2,000 7,006,000 10,241,390 2,000 7,006,000 10,241,390 126,513 7,680,393 11,548,615 124,513 674,393 1,307,225 523,782 527,782 442,237 85,545 3,180,517 886,784 444,383 382,418 377,276 1,120,515 64,168 3,168,938 882,784 444,383 382,418 377,276 1,120,515 64,168 2,790,987 879,233 463,069 305,909 389,273 911,389 6,569 167,200 178,779 161,540 17,239 - - 357,212 (357,212) 6,707,418 128,430 6,835,848 439,626 (39) 439,587 7,147,044 128,391 7,275,435 Total Charges to Appropriations $ Actual Amounts $ 3,868,222 Variance with Final Budget Positive (Negative) $ 632,832 2,965,955 89 7,147,044 128,391 7,275,435 $ 2,965,955 $ 4,712,767 377,951 3,551 (18,686) 76,509 (11,997) 209,126 57,599 $ 1,746,812 City of Yuma, Arizona Budgetary Comparison Schedule Grants Fund For the Year Ended June 30, 2017 Budget Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government State Government County Government Budget Authority Reserve Use of Money and Property Interest Contributions/Donations Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current: General Government Public Safety Parks, Recreation and Culture Environmental Health and Protection Capital Outlay Capital Projects General Government Parks, Recreation and Culture Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Original - Final $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 1,233,720 657,221 18,300 10,802,458 2,092,648 986,065 18,300 9,201,003 1,462,123 440,874 11,050 - (630,525) (545,191) (7,250) (9,201,003) 812,002 13,523,701 13,523,701 921,981 13,219,997 13,219,997 341 170,003 2,084,391 2,084,391 341 (751,978) (11,135,606) (11,135,606) 7,571 10,560,052 263,778 278,500 207,000 18,293 9,579,085 333,544 278,500 742,479 13,008 1,122,243 77,172 43,729 503,750 5,285 8,456,842 256,372 234,771 238,729 525,000 1,681,800 13,523,701 13,523,701 525,000 1,681,800 13,158,701 13,158,701 287,103 37,386 2,084,391 2,084,391 237,897 1,644,414 11,074,310 11,074,310 $ - 90 $ - $ - $ - City of Yuma, Arizona Budgetary Comparison Schedule Community Redevelopment Fund For the Year Ended June 30, 2017 Budget Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government Miscellaneous Loan Repayments Total Revenues Amounts Available for Appropriation Original $ - Charges to Appropriations (outflows): Current: Community Design and Development Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Final $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 1,119,183 1,484,183 831,684 (652,499) 1,119,183 1,119,183 1,484,183 1,484,183 4,063 835,747 835,747 4,063 (648,436) (648,436) 1,119,183 1,119,183 1,119,183 1,484,183 1,484,183 1,484,183 835,747 835,747 835,747 648,436 648,436 648,436 - 91 $ - $ - $ - City of Yuma, Arizona Budgetary Comparison Schedule Two Percent Tax Fund For the Year Ended June 30, 2017 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Two PercentTax Charges for Services Rents and Concessions Recreation Fees Use of Money and Property Interest Miscellaneous Other Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Parks, Recreation and Culture Administration Outside Agencies Civic and Convention Center Baseball Complex Art Center Heritage Events Heritage Area Development Facilities Maintenance General Government Capital Projects: Parks, Recreation and Culture Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Original Final $ 3,499,658 $ 3,499,658 Actual Amounts $ 3,938,623 Variance with Final Budget Positive (Negative) $ 438,965 5,004,337 5,004,337 5,354,285 349,948 336,000 112,750 336,000 112,750 506,543 164,008 170,543 51,258 7,500 7,500 20,112 12,612 13,000 5,473,587 8,973,245 13,000 5,473,587 8,973,245 59,464 6,104,412 10,043,035 46,464 630,825 1,069,790 342,982 950,000 1,212,990 656,839 757,020 159,433 468,785 912,267 72,936 342,982 950,000 1,212,990 656,839 757,020 159,433 468,785 912,267 72,936 326,029 737,070 1,172,498 628,192 795,298 127,195 468,913 789,485 73,670 16,953 212,930 40,492 28,647 (38,278) 32,238 (128) 122,782 (734) 291,200 5,824,453 1,399,705 7,224,158 291,200 5,824,453 1,399,705 7,224,158 147,334 5,265,684 1,642,733 6,908,417 143,866 558,769 (243,028) 315,741 $ 1,749,087 $ 1,749,087 $ 3,134,618 92 $ 1,385,531 City of Yuma, Arizona Budgetary Comparison Schedule Yuma Mall Maintenance Fund For the Year Ended June 30, 2017 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Mall Assessments Property Tax - Delinquent Total Taxes Miscellaneous Other Total Revenues Transfers In Budget Original Final $ $ - Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Mall Maintenance Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 105,000 12,000 117,000 105,000 12,000 117,000 103,720 9,992 113,712 (1,280) (2,008) (3,288) 2,000 119,000 118,200 237,200 2,000 119,000 118,200 237,200 2,658 116,370 123,775 240,145 658 (2,630) 5,575 2,945 237,200 237,200 237,200 237,200 237,200 237,200 240,145 240,145 240,145 (2,945) (2,945) (2,945) - 93 $ - $ - $ - 94 NONMAJOR ENTERPRISE FUNDS Enterprise funds are used to account for activities that are financed and operated in a manner similar to private businesses. The intent of the City Council is that the costs of providing the goods or services be recovered primarily through user charges. Enterprise funds are designed so that creditors, legislators and the general public can evaluate the performance of the municipal enterprise on the same basis as commercial enterprises in the same industry. Solid Waste To record the financial activities of the city-owned and operated residential garbage collection service. Radio Communication Communication Fund. To record the financial activities of the Radio Desert Hills Golf Course To account for the financial activity of the operation of the Desert Hills and Desert Hills Par 3 Municipal Golf Courses. 95 City of Yuma, Arizona Combining Statement of Net Position Nonmajor Proprietary Funds June 30, 2017 Solid Waste Assets Current Assets: Cash and Investments Receivables, Net of Allowance for Uncollectibles: Accounts Receivable Intergovernmental Accrued Interest Inventory, at cost Prepaid Expenses Total Current Assets $ 1,372,668 $ 1,787,330 339,559 4,690 1,743 336 1,718,996 1,950 71,137 2,084 82,312 1,944,813 Noncurrent Assets: Capital Assets: Buildings Improvements Other than Buildings Equipment Gross Capital Assets Less Accumulated Depreciation Captial Assets Net of Depreciation Total Noncurrent Assets Total Assets 50,738 331,971 382,709 (380,827) Deferred Outflows of Resources Pension Contributions - Current Year Other Pension Items Total Deferred Outflows of Resources Liabilities Current Liabilities: Accounts Payable Accrued Payroll and Related Taxes Current Portion-Accrued Compensated Absences Unearned Revenue Total Current Liabilities Payable from Current Assets Noncurrent Liabilities: Pension Liability Accrued Compensated Absences Total Long-Term Liabilities Total Liabilities Deferred Inflows of Resources Pension Investments - Projection/Actual difference Other Pension Items Net Position Net investment in capital assets Unrestricted (deficit) Total Net Position Enterprise Funds Radio Desert Hills Communication Golf Course $ $ Total Nonmajor Proprietary Funds 3,737 $ 3,163,735 27,046 1,631 40,723 73,137 368,555 77,458 3,827 123,035 336 3,736,946 8,159,554 8,159,554 (7,441,228) 3,102,865 3,290,355 325,598 6,718,818 (5,363,406) 3,102,865 3,341,093 8,817,123 15,261,081 (13,185,461) 1,882 1,882 1,720,878 718,326 718,326 2,663,139 1,355,412 1,355,412 1,428,549 2,075,620 2,075,620 5,812,566 60,506 105,372 165,878 38,145 66,430 104,575 73,002 127,134 200,136 171,653 298,936 470,589 142,838 26,809 42,644 19,928 36,094 23,574 221,576 70,311 23,677 - 27,558 32,342 31,079 103,960 82,314 136,302 193,324 122,472 194,707 510,503 914,238 60,488 974,726 1,168,050 576,368 55,949 632,317 754,789 1,103,048 28,665 1,131,713 1,326,420 2,593,654 145,102 2,738,756 3,249,259 48,370 75,401 123,771 30,494 47,535 78,029 58,360 90,973 149,333 137,224 213,909 351,133 1,882 593,053 718,326 1,216,570 594,935 $ 1,934,896 96 1,355,412 (1,202,480) $ 152,932 2,075,620 607,143 $ 2,682,763 City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Proprietary Funds For the Year Ended June 30, 2017 Enterprise Funds Radio Communication Solid Waste Operating Revenues: Charges for Services Green Fees Cart and Club Rental Pro Shop Sales Restaurant Sales Total Operating Revenues $ Operating Expenses: Operations and Maintenance Depreciation and Amortization Total Operating Expenses 3,494,185 3,494,185 $ 3,685,814 32,380 3,718,194 Operating Income/(Loss) $ 841,929 167,196 202,460 162,022 1,373,607 $ 1,798,889 168,382 1,967,271 (369,278) 7,505 15,553 23,058 Income/(Loss) before Contributions and Transfers Desert Hills Golf Course 1,818,249 499,024 2,317,273 (224,009) Non-Operating Revenues/(Expenses): Interest Miscellaneous Revenues Net Non-Operating Revenues 1,947,995 1,947,995 Total Nonmajor Proprietary Funds 7,302,952 699,786 8,002,738 (593,664) 8,584 1,342 9,926 5,442,180 841,929 167,196 202,460 162,022 6,815,787 (1,186,951) 37 48,352 48,389 16,126 65,247 81,373 (200,951) (359,352) (545,275) (1,105,578) (176,873) - 242,655 (25,624) 242,655 (202,497) Change in Net Position (377,824) (359,352) (328,244) (1,065,420) Net Position-beginning 972,759 481,176 3,748,183 Transfers In Transfers Out Net Position-ending $ 594,935 97 2,294,248 $ 1,934,896 $ 152,932 $ 2,682,763 City of Yuma, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Year Ended June 30, 2017 Solid Waste Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Other Operating Activity Revenue Net Cash Provided by/(used for) Operating Activities $ 3,491,878 (862,804) (2,857,933) 15,553 (213,306) Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Flows Provide by/ (Used for) Noncapital Financing Activities Cash Flow from Capital and Related Financing Acitivities: Acquisition and Construction of Assets Net Cash Provided by/(Used for) Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities Enterprise Funds Radio Desert Hills Communication Golf Course $ 2,077,192 (522,514) (1,216,441) 1,342 339,579 Cash and Cash Equivalents, June 30 $ 6,921,464 (2,187,013) (5,079,106) 65,246 (279,409) - 242,655 (25,625) 242,655 (202,498) (176,873) - 217,030 40,157 (957) (31,302) - (32,259) (957) (31,302) - (32,259) 7,467 7,467 (383,956) Cash and Cash Equivalents, July 1 $ 1,352,394 (801,695) (1,004,732) 48,351 (405,682) (176,873) 7,180 7,180 Net Increase/(Decrease) in Cash and Cash Equivalents 374 374 315,743 1,756,624 1,471,587 $ 1,372,668 $ 1,787,330 Net Cash Provided by/(used for) Operating Activities $ (224,791) 32,380 (2,307) (336) (3,117) (11,188) (19,500) 15,553 11,485 $ (213,306) 98 $ (369,771) $ 339,579 (256,491) 192,015 3,420,226 3,737 $ 3,163,735 0 $ 499,024 120,681 6,164 33,948 27,349 24,620 8,515 (12,294) 1,342 709,350 $ 15,021 15,021 (188,278) 0 Reconciliation of Operating Income/(Loss) to Net Cash Provided by/(used for) Operating Activities: Operating Income/(Loss) Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense (Increase)/Decrease in Accounts Receivables (Increase) in Inventories (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accounts Payable Increase/(Decrease) in Accrued Wages and Taxes Payable Increase/(Decrease) in Due from Other Gov't Units Increase/(Decrease) in Unearned Revenue Increase/(Decrease) in Pension Exp/Def Outflows/Inflows Other Operating Activity Revenue Total Adjustments Total Nonmajor Proprietary Funds $ (594,608) $ (1,189,170) 168,382 (20,311) 28,725 (9,003) 4,704 (903) (7,492) (23,528) 48,351 188,926 699,786 98,063 34,889 33,612 15,229 18,136 (903) 1,023 (55,321) 65,246 909,761 (405,682) $ (279,409) City of Yuma, Arizona Budgetary Comparison Schedule Water Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Inside City Outside City Commercial Raw Water Meters, Connections and Services Capital Contributions: System Development Capacity Rights Intergovernmental: Federal Government Issuance of Long-Term Debt Interest Miscellaneous $ Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Administration Treatment Water Transmission Customer Services Water Transfer Laboratory Facilities Maintenance Environmental Health and Protection Infrastructure Maintenance Capital Outlay: Capital Outlay Capital Projects Debt Service: Principal Retirement Interest and Fiscal Agent Fees Total Expenditures Transfers Out Payment to Refunded Bond Escrow Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ Final 20,038,600 2,506,700 120,000 1,001,450 20,038,600 2,506,700 120,000 1,001,450 $ 19,834,171 2,299,808 119,739 1,355,632 125,000 1,500,000 125,000 1,500,000 122,164 2,356,164 (2,836) 856,164 350,000 33,700 30,050 25,705,500 25,705,500 350,000 33,700 30,050 25,705,500 25,705,500 21,187,600 159,019 177,550 47,611,847 47,611,847 (350,000) 21,187,600 125,319 147,500 21,906,347 21,906,347 2,428,981 7,320,711 1,801,225 1,070,640 65,750 349,435 193,986 350,000 - 2,412,898 7,296,905 1,809,107 1,051,140 65,750 349,435 193,986 350,000 - 2,310,093 6,149,125 1,684,711 972,187 29,453 271,571 146,570 10,627 102,805 1,147,780 124,396 78,953 36,297 77,864 47,416 350,000 (10,627) 111,200 7,775,000 162,707 7,775,000 126,467 2,625,460 36,240 5,149,540 5,618,672 3,746,170 30,831,771 59,543 30,891,314 5,618,672 3,746,170 30,831,771 59,543 30,891,314 5,877,138 3,186,278 23,389,680 59,563 22,589,170 46,038,413 (258,466) 559,892 7,442,091 (20) (22,589,170) (15,147,100) (5,185,814) 1,573,434 (5,185,814) Reconciliation to Change in Net Position: Capital Outlay Capital Projects Principal Retirement Issuance of Long-Term Debt Payment to Refunded Bond Escrow Capital Contributions for Developer Additions to System Amortization of Deferred Charges on Refunding Pension Contributions in excess of Expense Depreciation and Amortization Change in Net Position $ Actual Amounts Variance with Final Budget Positive (Negative) $ $ $ 126,467 2,625,460 5,877,138 (21,187,600) 22,589,170 193,752 172,260 137,024 (8,355,205) $ 3,751,900 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 99 (204,429) (206,892) (261) 354,182 6,759,248 City of Yuma, Arizona Budgetary Comparison Schedule Wastewater Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Inside City Outside City Contractual/Industrial Services Meters, Connections and Services Capital Contributions: Capacity Rights Wastewater Interceptor Wastewater Trunk Line Charges Issuance of Long-Term Debt Interest Miscellaneous $ Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Administration Treatment Pretreatment Collection Laboratory Facilities Maintenance Capital Outlay: Capital Outlay Capital Projects Debt Service: Principal Retirement Interest and Fiscal Agent Fees Total Expenditures Transfers Out Payment to Refunded Bond Escrow Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 13,119,800 1,080,000 1,513,000 29,000 Actual Amounts Final $ 13,119,800 1,080,000 1,513,000 29,000 $ 13,073,731 1,067,718 1,901,967 50,915 Variance with Final Budget Positive (Negative) $ (46,069) (12,282) 388,967 21,915 2,500,000 150,000 15,000 67,100 5,000 18,478,900 18,478,900 2,500,000 150,000 15,000 67,100 5,000 18,478,900 18,478,900 2,697,843 175,218 15,200 16,647,400 177,523 657,842 36,465,357 36,465,357 197,843 25,218 200 16,647,400 110,423 652,842 17,986,457 17,986,457 1,475,790 7,204,656 514,224 1,392,735 297,025 193,972 1,465,238 7,229,158 514,224 1,392,735 297,025 193,972 1,425,633 6,097,640 383,077 1,291,700 188,181 144,773 39,605 1,131,518 131,147 101,035 108,844 49,199 242,200 6,101,000 228,250 6,101,000 131,414 891,462 96,836 5,209,538 3,599,054 1,456,983 22,477,639 65,917 - 3,599,054 1,456,983 22,477,639 65,917 - 22,543,556 22,543,556 3,644,863 1,112,191 15,310,934 65,939 17,825,341 33,202,214 (4,064,656) 3,263,143 (4,064,656) Reconciliation to Change in Net Position: Capital Outlay Capital Projects Principal Retirement Issuance of Long-Term Debt Payment to Refunded Bond Escrow Amortization of Deferred Charges on Refunding Capital Contributions for Subdivider Additions to System Pension Contributions in excess of Expense Depreciation and Amortization Change in Net Position $ 131,414 891,462 3,644,863 (16,647,400) 17,825,341 34,579 350,960 97,606 (5,903,422) $ 3,688,546 0 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 100 (45,809) 344,792 7,166,705 (22) (17,825,341) (10,658,658) $ 7,327,799 City of Yuma, Arizona Budgetary Comparison Schedule Solid Waste Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Final Actual Amounts 3,305,000 3,000 $ 3,305,000 3,000 $ 3,494,185 7,505 20,500 3,328,500 3,328,500 20,500 3,328,500 3,328,500 15,553 3,517,243 3,517,243 (4,947) 188,743 188,743 3,128,075 394,865 131,423 5,000 3,659,363 176,818 3,836,181 3,074,194 394,865 184,423 5,881 3,659,363 176,818 3,836,181 3,152,729 368,482 184,886 957 3,707,054 176,873 3,883,927 (78,535) 26,383 (463) 4,924 (47,691) (55) (47,746) Budget Original Resources (inflows): Charges for Service Collection Fees Interest Miscellaneous Other Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Environmental Health and Protection Residential Services Uncontained Waste Recycling Capital Outlay Total Expenditures Transfers Out Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ Variance with Final Budget Positive (Negative) (507,681) $ (507,681) (366,684) Reconciliation to Change in Net Position: Capital Outlay Pension Contributions in excess of Expense Depreciation and Amortization $ $ 189,185 4,505 140,997 957 19,501 (32,380) Change in Net Position $ (378,606) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 101 City of Yuma, Arizona Budgetary Comparison Schedule Radio Communication Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Charges for Service Radio Equipment Fees Software Fees 911 Admin Fees Intergovernmental: Federal Government Budget Authority Reserve Use of Money and Property Interest Miscellaneous Other Total Revenues $ Final $ 826,181 917,676 98,336 $ 929,883 919,776 98,336 $ 27,903 1,650,000 3,500 3,500 8,584 3,523,596 3,523,596 3,523,596 3,523,596 1,342 1,957,921 1,957,921 927,451 1,163,524 83,094 1,650,000 927,451 1,163,524 83,094 1,650,000 780,448 982,587 68,001 - 147,003 180,937 15,093 1,650,000 72,903 3,896,972 3,896,972 72,903 3,896,972 3,896,972 31,302 1,862,338 1,862,338 41,601 2,034,634 2,034,634 $ (373,376) $ (373,376) Reconciliation to Change in Net Position: Capital Outlay Pension Contributions in excess of Expense Depreciation and Amortization Change in Net Position - 103,702 2,100 - 27,903 1,650,000 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Environmental Health Radio Communications Radio Software 911 Administration Public Safety Capital Outlay Capital Outlay Total Expenditures Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations 826,181 917,676 98,336 Actual Amounts Variance with Final Budget Positive (Negative) 95,583 $ (27,903) (1,650,000) 5,084 1,342 (1,565,675) (1,565,675) $ 468,959 31,302 12,294 (499,024) (359,845) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 102 City of Yuma, Arizona Budgetary Comparison Schedule Desert Hills Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Green Fees Cart and Club Rental Pro Shop Sales Restaurant Sales Interest Miscellaneous $ Total Revenues Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Maintenance Concession Restaurant Facility Maintenance Total Expenditures Transfers Out Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 955,000 260,700 210,500 132,631 500 1,559,331 1,559,331 Actual Amounts Final $ 955,000 260,700 210,500 132,631 500 1,559,331 1,559,331 $ 841,929 167,196 202,460 162,022 37 48,352 1,421,996 242,655 1,664,651 Variance with Final Budget Positive (Negative) $ (113,071) (93,504) (8,040) 29,391 (463) 48,352 (137,335) 242,655 105,320 1,137,559 650,330 69,947 261,192 2,119,028 25,624 1,137,559 650,330 69,947 261,192 2,119,028 25,624 1,010,671 596,809 17,630 198,251 1,823,361 25,624 126,888 53,521 52,317 62,941 295,667 - 2,144,652 2,144,652 1,848,985 295,667 (585,321) $ (585,321) (184,334) Reconciliation to Change in Net Assets: Pension Contributions in excess of Expense Depreciation and Amortization $ 400,987 23,528 (168,382) Change in Net Assets $ (329,188) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 103 104 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments of the City and to other governmental units, on a costreimbursement basis. Equipment Replacement To account for the associated costs of purchasing vehicles and equipment for rental to other departments. Equipment Maintenance maintenance operations. To record the financial activity of fleet Insurance Reserve To record the financial activity related to insurance and risk retention for liability and casualty issues. Employee Benefits Trust To record the financial activity of a self funded insurance trust fund that covers eligible employees and dependent health, life, and dental claims. Workers Compensation To record the financial activity of a selffunded worker’s compensation insurance trust fund. 105 City of Yuma, Arizona Combining Statement of Net Position Internal Service Funds June 30, 2017 Equipment Replacement Assets Current Assets: Cash and Investments Accounts Receivable Intergovernmental Receivable Accrued Interest Inventory, at cost Prepaid Items $ Total Current Assets Noncurrent Assets: Capital Assets: Land Buildings Improvements Other than Buildings Equipment Less Accumulated Depreciation Total Noncurrent Assets Total Assets $ 29,442,677 (22,236,808) 7,205,869 18,607,758 Liabilities Liabilities: Current Liabilities: Accounts Payable Accrued Payroll, Taxes and Benefits Payable Current Portion-Accrued Compensated Absences Estimated Claims and Judgements Due to Other Funds Total Current Liabilities Payable Noncurrent Liabilities: Accrued Compensated Absences Total Long-Term Liabilities Total Liabilities Net Position Net investment in capital assets Unrestricted (deficit) Total Net Position 11,385,420 4,136 12,333 11,401,889 Equipment Maintenance 219,610 19,251 222,733 245,489 (287,563) 419,520 1,150,941 Employee Benefits Trust Workers Compensation Totals $ 2,924,540 1,418 3,280 2,929,238 $ 279,435 323 279,758 $ 4,497,244 895 2,687 4,500,826 $ 19,086,639 7,560 24 18,623 727,236 3,050 19,843,132 2,929,238 279,758 4,500,826 219,610 19,251 222,733 29,688,166 (22,524,371) 7,625,389 27,468,521 8,725 27,271 152,685 - 40,669 229,350 - 31,109 2,797 - - 33,906 8,725 19,140 1,400,344 1,477,864 2,688 104,145 262,315 - 1,242,198 1,282,867 21,828 1,346,343 1,400,344 3,031,771 8,725 31,374 31,374 1,509,238 12,351 12,351 274,666 - 1,282,867 43,725 43,725 3,075,496 7,205,869 11,393,164 $ 1,111 24 727,236 3,050 731,421 Insurance Reserve 18,599,033 $ 419,520 (777,817) 2,654,572 279,758 3,217,959 7,625,389 16,767,636 (358,297) $ 2,654,572 $ 279,758 $ 3,217,959 $ 24,393,025 106 City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds For the Year Ended June 30, 2017 Operating Revenues: Charges For Services Contributions City Equipment Rental Miscellaneous Total Operating Revenues Operating Expenses: Claims Incurred Premiums to Insurance Carriers Administration Depreciation Total Operating Expenses Operating Income/(Loss) Employee Benefits Trust Equipment Replacement Equipment Maintenance Insurance Reserve $ $ 3,488,819 $ 1,981,980 2,122,521 65,182 2,187,703 9,567 3,498,386 4,588 1,986,568 - 2,064,026 6,275 2,070,301 2,064,026 2,122,521 85,612 9,742,958 36,032 2,278,345 2,314,377 (126,674) 3,512,736 23,351 3,536,087 (37,701) 144,095 781,132 680,914 1,606,141 380,427 - 409,858 155,470 47,740 613,068 1,457,233 553,953 936,602 4,277,422 2,301,696 8,069,673 1,673,285 - $ - Workers Compensation $ - Totals $ 5,470,799 Non-Operating Revenue/(Expenses): Interest Gain on the Sale of Assets Total Non-Operating Revenues 47,924 (237,434) (189,510) - 10,890 10,890 1,441 1,441 23,647 23,647 Income/(Loss) before Transfers (316,184) (37,701) 391,317 1,441 1,480,880 Transfers In Transfers Out Net Transfers 719,813 719,813 (3,991) (3,991) - - 403,629 (41,692) 391,317 1,441 1,480,880 2,235,575 18,195,404 (316,605) 2,263,255 278,317 1,737,079 22,157,450 $ 18,599,033 $ (358,297) $ 2,654,572 $ 279,758 $ 3,217,959 $ 24,393,025 Change in Net Position Net Position, Beginning Net Position, Ending 107 - 83,902 (237,434) (153,532) 1,519,753 719,813 (3,991) 715,822 City of Yuma, Arizona Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2017 Equipment Replacement Cash Flows from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Cash Paid For Operating Expenses Net Cash Flows Provided by Operating Activities $ $ (2,743) 36,032 2,155,810 Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Flows Provided by/(Used for) Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from Sale of Capital Assets Payments for Capital Acquisitions Net Cash Flows Used for Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Flows Provided by Investing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, July 1 Cash and Cash Equivalents, June 30 2,122,521 Equipment Maintenance $ Insurance Reserve 3,502,219 (982,420) (2,504,030) 9,567 $ 1,993,485 (87,018) 1,135,194 (1,519,122) 25,336 Employee Benefits Trust Workers Compensation $ $ 1,522,539 - 2,070,301 (752,568) Totals $ 1,317,733 9,688,526 (1,069,438) (1,371,579) (2,226,091) 5,021,418 719,813 - (3,991) - - - 719,813 (3,991) 719,813 (3,991) - - - 715,822 34,538 (1,458,730) (21,345) - - - 34,538 (1,480,075) (1,424,192) (21,345) - - - (1,445,537) 45,481 45,481 1,496,912 - 9,229 9,229 1,531,768 1,118 1,118 1,118 21,559 21,559 1,339,292 77,387 77,387 4,369,090 9,888,508 - 1,392,772 278,317 3,157,952 14,717,549 11,385,420 $ 0 $ 2,924,540 0 $ 279,435 $ 4,497,244 $ 19,086,639 $ $ $ 1,457,233 $ Reconciliation of Operating Income/(Loss) to Net Cash Provided by/(Used for) Operating Activities: Operating Income/(Loss) $ Adjustments to Reconcile Operating Income/(Loss) to Net Cash Provided by/(Used for) Operating Activities: Depreciation Expense Decrease in Accounts Receivable (Increase)/Decrease in Inventory (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accounts Payable Increase in Payroll Liabilities Increase in Due to Other Funds Increase/(Decrease) in Estimated Claims Total Adjustments Net Cash Provided by Operating Activities $ Noncash Transactions Affecting Financial Position: Contributions of Capital Assets Total Noncash Transactions Affecting Financial Position $ (126,674) $ 2,278,345 4,139 2,282,484 2,155,810 - (37,701) 23,351 13,400 (97,650) (3,050) (16,822) (6,367) 150,175 63,037 380,427 6,917 302,364 747,590 68,997 1,732 14,512 1,142,112 $ 25,336 $ 1,522,539 $ (3,528) (3,528) $ 108 - - - 126,917 33,176 (299,593) (139,500) $ - $ $ - $ 1,317,733 - 1,673,285 2,301,696 20,317 204,714 871,457 89,490 (4,635) 150,175 (285,081) 3,348,133 $ $ 5,021,418 (3,528) (3,528) City of Yuma, Arizona Budgetary Comparison Schedule Equipment Replacement Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Charges for Services Interest Miscellaneous Total Revenues Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current Administration Capital Outlay Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations $ Actual Amounts Final 2,065,718 25,000 2,090,718 719,813 2,810,531 $ 36,029 5,670,000 5,706,029 5,706,029 2,065,718 25,000 2,090,718 719,813 2,810,531 36,029 5,670,000 5,706,029 5,706,029 $ (2,895,498) $ (2,895,498) Reconciliation to Change in Net Position: Capital Outlay Gain/(Loss) on Sale of Assets Depreciation and Amortization Change in Net Position Variance with Final Budget Positive (Negative) $ 2,122,521 47,924 65,182 2,235,627 719,813 2,955,440 $ 36,032 1,458,730 1,494,762 1,494,762 1,460,678 56,803 22,924 65,182 144,909 144,909 (3) 4,211,270 4,211,267 4,211,267 $ 4,356,176 1,458,730 (237,434) (2,278,345) $ 403,629 0 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 109 City of Yuma, Arizona Budgetary Comparison Schedule Equipment Maintenance Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Charges for Services Miscellaneous Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current Administration Capital Outlay $ 3,687,355 3,687,355 3,991 3,691,346 Total Expenditures Transfers Out Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 3,630,868 3,630,868 3,630,868 $ (60,478) Reconciliation to Change in Net Position: Capital Outlay Depreciation and Amortization Change in Net Position Actual Amounts Final 3,630,868 3,630,868 3,630,868 $ 3,687,355 3,687,355 3,991 3,691,346 $ 3,488,819 9,567 3,498,386 3,498,386 Variance with Final Budget Positive (Negative) $ 3,512,736 17,817 3,530,553 3,991 3,534,544 (60,478) (36,158) $ (142,049) 9,567 (132,482) (132,482) 174,619 (17,817) 156,802 156,802 $ 24,320 17,817 (23,351) (41,692) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 110 City of Yuma, Arizona Budgetary Comparison Schedule Insurance Reserve Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Original Resources (inflows): Charges for Services Miscellaneous Interest Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current Premiums to Insurance Carriers Claims Incurred Administration $ 825,464 292,000 727,439 1,844,903 1,844,903 Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 1,981,981 3,000 1,984,981 1,984,981 $ 140,078 Reconciliation to Change in Net Position: Change in Net Position Actual Amounts Final 1,981,981 3,000 1,984,981 1,984,981 $ 825,464 292,000 727,439 1,844,903 1,844,903 $ 140,078 1,981,980 4,588 10,890 1,997,458 1,997,458 Variance with Final Budget Positive (Negative) $ 781,132 144,095 680,914 1,606,141 1,606,141 $ 391,317 $ 391,317 (1) 4,588 7,890 12,477 12,477 44,332 147,905 46,525 238,762 238,762 $ 251,239 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 110 City of Yuma, Arizona Budgetary Comparison Schedule Workers Compensation Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2017 Budget Final Actual Amounts 2,032,631 3,000 2,035,631 2,035,631 $ 2,032,631 3,000 2,035,631 2,035,631 $ 2,064,026 6,275 23,647 2,093,948 2,093,948 235,808 1,372,657 32,400 1,640,865 1,640,865 235,808 1,372,657 32,400 1,640,865 1,640,865 155,470 409,858 47,740 613,068 613,068 394,766 $ 1,480,880 Original Resources (inflows): Contributions - City Miscellaneous Interest Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current Premiums to Insurance Carriers Claims Incurred Administration Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations $ 394,766 Reconciliation to Change in Net Position: Change in Net Position $ Variance with Final Budget Positive (Negative) $ 31,395 6,275 20,647 58,317 58,317 80,338 962,799 (15,340) 1,027,797 1,027,797 $ 1,086,114 $ 1,480,880 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 111 STATISTICAL SECTION 113 114 STATISTICAL SECTION This part of the City of Yuma's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial condition. Contents Page Financial Trends 116 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 124 These schedules contain information to help the reader assess the City's most significant local revenue source - sales tax. Debt Capacity 126 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and it's ability to issue additional debt in the future. Demographic and Economic Information 132 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 135 These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the respective year. 115 City of Yuma, Arizona Net Position by Component Last Ten Fiscal Years (amounts expressed in thousands) Business-type activities Net investment in capital assets Restricted Unrestricted Total business-type activites net position Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activites net position $ 320,435 18,103 69,433 $ 407,971 $ 151,032 151 24,079 $ 175,262 $ 169,403 17,952 45,354 $ 232,709 2008 $ 287,595 72,341 65,783 $ 425,719 $ 158,367 1,952 27,344 $ 187,663 $ 129,228 70,389 38,439 $ 238,056 2009 $ 353,028 18,516 69,288 $ 440,832 $ 160,883 3,754 29,027 $ 193,664 $ 192,145 14,762 40,261 $ 247,168 2010 $ 363,619 21,329 76,056 $ 461,004 $ 166,782 5,556 31,699 $ 204,037 $ 196,837 15,773 44,357 $ 256,967 2011 $ 373,672 32,192 74,693 $ 480,557 $ 164,295 7,357 37,842 $ 209,494 $ 209,377 24,835 36,851 $ 271,063 $ 371,674 31,465 82,477 $ 485,616 $ 163,246 9,009 43,362 $ 215,617 $ 208,428 22,456 39,115 $ 269,999 $ 357,455 28,175 90,121 $ 475,751 $ 159,458 9,009 46,877 $ 215,344 $ 197,997 19,166 43,244 $ 260,407 2014 $ 342,336 32,232 (23,855) $ 350,713 $ 147,573 9,009 44,607 $ 201,189 $ 194,763 23,223 (68,462) $ 149,524 2015 $ 346,030 52,367 (41,992) $ 356,405 $ 152,343 2,715 49,657 $ 204,715 $ 193,687 49,652 (91,649) $ 151,690 2016 $ 345,191 38,057 (30,621) $ 352,627 $ 150,899 60,405 $ 211,304 $ 194,292 38,057 (91,026) $ 141,323 2017 Fiscal Year 2012 2013 As restated Primary government Net investment in capital assets Restricted Unrestricted Total primary government net position Source: The source of this information is the City financial records. 116 117 11,875 38,511 18,943 14,353 4,604 5,807 5,331 99,424 11,559 41,080 15,966 16,282 4,969 5,486 6,592 101,934 2009 $ $ 22,463 13,372 2,027 1,098 9,924 48,884 69,247 390 4,911 865 7,607 1,807 4,783 20,363 20,754 13,859 2,819 37,432 $ 139,366 $ Source: The source of this information is the City financial records. 21,027 13,126 2,140 1,181 8,874 46,348 70,689 710 6,657 764 8,916 2,294 5,000 24,341 18,389 13,270 2,889 34,548 $ 133,972 $ Program Revenues Governmental activities: Charges for Services Building Inspection Fees $ Developer Charges Ambulance Services Police Services Other Charges Operating Grants and Contributions Capital Grants and Contributions Total governmental activities program revenues Business-type activities: Charges for Services Metered Water Sales Wastewater Charges Radio Communications Solid Waste Charges Green Fees and Concessions Other Charges Capital Grants and Contributions Total business-type activities program revenues Total primary government program revenues $ Expenses Governmental activities: General government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Interest on Long-Term Debt Total governmental activites expenses Business-type activities: Water Wastewater Solid Waste Radio Communications Golf Courses Total business-type activites expenses Total primary government expenses 2008 10,563 39,224 13,969 13,863 4,905 4,981 6,291 93,796 $ $ 21,651 13,699 1,964 1,041 3,969 42,324 63,297 384 2,674 821 7,491 3,659 5,944 20,973 20,277 13,673 2,496 36,446 $ 130,242 $ 2010 9,684 40,232 14,536 13,804 1,538 5,007 5,803 90,604 $ $ 21,598 14,854 3,147 1,890 961 7,391 49,841 70,163 333 4,369 471 6,936 4,968 3,245 20,322 20,555 13,882 2,902 2,377 39,716 $ 130,320 $ 2011 $ $ $ $ 20,710 14,485 3,266 1,919 775 9,071 50,226 82,051 307 1,589 477 567 5,775 3,965 19,145 31,825 23,353 16,191 2,948 2,403 44,895 136,917 $ $ $ $ 21,233 14,625 1,714 3,301 2,152 562 7,776 51,363 69,448 413 1,419 3,830 617 6,082 3,980 1,744 18,085 23,227 16,165 3,213 4,663 2,469 49,737 141,343 10,345 43,051 14,980 12,787 156 5,134 5,153 91,606 Fiscal Year 2013 12,534 41,735 12,741 14,226 804 4,521 5,461 92,022 2012 Changes in Net Position Last Ten Fiscal Years (amounts expressed in thousands) City of Yuma, Arizona $ $ $ $ 21,809 14,785 1,564 3,325 2,230 670 7,044 51,427 67,079 545 2,326 2,490 701 5,708 3,305 577 15,652 24,762 17,073 3,085 4,153 3,474 52,547 158,375 10,335 46,585 25,265 13,606 89 5,167 4,781 105,828 2014 $ $ $ $ 20,532 14,400 1,739 3,351 1,789 960 5,748 48,519 63,558 368 1,104 3,444 840 4,283 3,519 1,481 15,039 25,259 17,253 3,070 2,623 2,518 50,723 153,971 9,056 55,785 14,964 14,364 178 4,439 4,462 103,248 2015 9,102 55,883 12,272 14,219 686 4,331 4,505 100,998 351 1,458 4,241 776 7,933 2,528 609 17,896 8,741 68,133 16,063 14,892 26 4,524 4,400 116,779 $ 391 2,515 4,261 771 5,223 1,876 1,817 16,854 22,821 16,478 3,728 2,313 1,681 47,021 $ 163,800 $ 2017 20,999 22,254 15,107 16,043 1,765 1,948 3,327 3,494 1,681 1,374 1,631 2,307 6,405 5,911 50,915 53,331 $ 68,811 $ 70,185 Continued on next page $ 23,337 16,643 3,347 2,184 1,864 47,375 $ 148,373 $ 2016 2008 $ $ Net (expense)/revenue Governmental activities Business-type activities Total primary government net expense $ $ $ (75,083) 11,800 $ (63,283) General Revenues and Other Changes in Net Position Governmental activities: Property taxes $ 8,250 Sales taxes 39,478 Franchise taxes 2,893 Shared revenues 32,788 Grants and contributions not restricted to specific programs 2,600 Unrestricted investment earnings 4,842 Gain from sale of fixed assets Transfers (96) Total governmental activities 90,755 Business-type activities: Investment earnings 1,916 Transfers 96 Total business-type activities 2,012 Total primary government $ 92,767 $ $ $ $ 15,865 13,620 29,485 Change in Net Position Governmental activities Business-type activities Total primary government Source: The source of this information is the City financial records. City of Yuma, Arizona Changes in Net Position Last Ten Fiscal Years (amounts expressed in thousands) 2014 $ $ 222 730 952 77,774 2015 2017 Fiscal Year 2013 2016 2012 2011 $ $ 2010 2009 $ $ $ $ (99,927) 6,322 $ (93,605) $ $ $ (83,100) 3,540 $ (79,660) $ (88,209) (2,204) (90,413) 12,354 41,653 3,067 31,713 $ $ 10,955 40,149 3,163 30,272 $ (90,176) (1,120) (91,296) 9,650 38,283 3,095 29,441 $ 9,451 37,994 3,010 26,552 26 122 148 76,955 (73,521) 1,626 (71,895) $ (70,282) 10,125 $ (60,157) 9,549 37,624 3,043 25,917 (60,197) 5,331 (54,866) $ (72,823) 5,878 $ (66,945) 10,099 36,304 3,059 23,936 $ (81,571) 11,452 (70,119) 9,986 34,644 3,002 25,379 687 85 89,559 $ $ (10,368) 6,590 $ (3,778) Concluded $ $ $ 9,498 34,177 3,010 28,239 449 280 85,268 $ 8,856 36,857 3,013 31,330 269 (1,323) 79,415 89 37 126 74,417 $ 2,166 3,526 5,692 353 (85) 268 89,827 545 (730) 76,822 $ $ $ (13,354) (168) (13,522) 265 (280) (15) 85,253 796 (122) 76,807 130 (126) 4 80,330 $ $ 3,391 1,669 5,060 $ 930 (37) 74,291 $ $ $ 14,095 5,457 19,552 165 1,323 1,488 80,903 5,929 1,001 259 126 80,326 217 (95) 122 82,056 $ $ 10,044 10,128 20,172 $ 5,776 1,139 95 81,934 $ $ $ 9,112 6,000 15,112 (8,794) (715) (9,509) 3,895 2,872 95 86,918 1,045 (95) 950 87,868 $ $ 5,347 12,402 17,749 118 119 277 18,608 - $ 54,777 552 $ 77,066 $ 6,876 47,349 - 543 262 15,493 - $ 15,755 $ 8,791 67,732 - $ $ 18,885 $ 2009 156 18,796 - 7,848 31,267 - 553 $ 39,668 $ $ 18,952 $ 2010 103 2,383 88 19,060 141 2,388 34,441 2,037 - $ 39,007 $ $ 21,634 $ 2011 169 1,864 868 15,655 187 935 18,693 $ 29,727 19 22,456 7,252 - 18 24,834 11,235 633 - $ $ 19,815 $ 2013 - - $ 36,720 $ $ 18,556 $ Fiscal Year 2012 178 17,732 16 19,167 7,018 - - - $ 26,201 $ $ 17,910 $ 2014 144 17,348 20 20,280 7,847 - - - $ 28,147 $ $ 17,492 $ 2015 127 18,218 2016 17 47,003 8,655 - - - $ 55,675 $ $ 18,345 $ Source: The source of this information is the City financial records. Note: For FY 2011 GASB Statement No 54 was implemented. See Note I-F, Sec 10 of the Notes to Basic Financial Statements. All other Governmental funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Nonspendable Restricted Committed Assigned Total all other governmental funds Total General Fund General Fund Reserved Unreserved Nonspendable Committed Assigned Unassigned 2008 Fund Balances of Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) City of Yuma, Arizona 118 17,436 66 35,877 (5,530) - - - $ 30,413 $ $ 17,554 $ 2017 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special Assessments Use of money and property Contributions and donations Miscellaneous Total revenues Expenditures General government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Debt Service Principal Interest and fiscal agent fees Issuance Cost City of Yuma, Arizona 2010 $ 47,606 1,292 32,510 7,055 1,484 1,039 1,665 77 2,442 95,170 2011 $ 49,450 1,288 33,173 4,160 1,550 1,089 1,365 47 493 92,615 2012 9,409 40,769 7,662 10,964 104 5,134 11,792 $ 50,282 1,723 30,780 7,293 1,526 1,134 819 69 1,053 94,679 2013 8,964 42,938 7,592 11,200 72 5,096 8,702 $ 50,425 1,880 30,254 7,086 1,210 1,183 971 88 456 93,553 2014 7,566 45,692 7,718 12,117 70 4,288 5,502 $ 50,991 1,858 32,951 6,846 1,162 280 643 1,021 555 96,307 2015 6,565 3,777 914 7,875 47,635 7,551 12,593 20 4,237 9,321 $ 54,166 1,932 32,947 7,965 1,298 290 766 436 899 100,699 2016 6,790 4,720 - 7,923 51,846 8,259 13,182 50 4,485 23,878 $ 57,022 2,064 34,489 9,152 1,229 305 889 170 1,447 106,767 2017 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2009 $ 46,561 1,413 36,984 7,007 1,437 817 1,752 85 763 96,819 9,451 38,475 7,945 10,688 733 4,458 12,666 8,080 4,566 2008 $ 48,569 1,363 37,064 8,913 1,238 949 3,309 97 1,646 103,148 6,969 36,285 8,186 10,171 1,556 4,899 13,659 8,700 4,885 $ 50,503 2,068 39,238 11,599 1,143 914 5,358 65 633 111,521 7,740 35,234 8,195 10,619 4,480 4,870 25,249 8,350 5,209 9,575 37,908 9,716 11,857 4,781 5,370 35,734 8,010 5,516 9,723 37,874 8,913 11,547 4,757 5,726 51,148 7,680 5,858 121,133 6,315 6,764 100,488 7,075 6,646 95,599 8,312 5,885 98,149 95,263 99,393 109,466 97,942 128,662 (14,366) 143,885 211 (5,327) 708 (93) (4,596) (12,647) (4,714) (25,514) Total expenditures Proceeds from long-term debt Payment to Refunded Bond Escrow Transfers in Transfers out Other financing sources (uses) (32,364) 11,255 (11,886) Excess of revenues over (under) expenditures 97,386 (72,265) 13,551 (10,502) 12,772 (12,893) 14,416 (13,595) 14,522 (14,559) 13,474 (14,204) 14,675 (14,548) 16,213 (16,118) 30,017 (29,378) 14,564 (14,468) 93,686 29,685 (29,589) (631) (730) $ 28,170 (121) 14.0% 1,529 821 (37) 735 127 95 $ $ (14,996) $ 3,299 16.6% 34 $ (5,326) 93,782 Total other financing sources (uses) Net change in fund balances $ $ (4,835) $ (11,912) 5,364 $ 25,419 11.8% $ 61,418 11.3% 15.2% 15.5% 15.5% 14.8% 15.9% 15.3% Debt service as a percentage of noncapital expenditures Source: The source of this information is the City financial records. 120 121 10,757,040 12,188,601 2016 2017 21,207,119 20,531,463 19,536,924 19,517,306 19,248,864 4,239,261 4,104,199 10,263,987 10,601,757 3,905,392 3,901,471 3,847,810 3,692,304 3,525,292 3,490,546 3,790,422 $ 4,093,839 5,354,285 5,007,109 4,832,187 4,576,061 4,652,121 4,665,296 4,425,556 4,253,079 4,383,419 $ 4,424,358 Public Safety Two Percent Sales Tax Tax 9,766,802 9,756,994 9,622,796 9,233,899 8,816,228 17,635,454 18,470,938 8,729,333 9,479,279 18,961,780 17,461,635 $ 10,238,080 City Road Sales Tax $ 20,479,641 General Sales Tax Source: The source of this information is the City financial records. 9,508,914 9,944,517 2012 2015 9,740,940 2011 9,339,855 9,256,633 2010 2014 8,545,562 2009 9,495,271 $ 8,026,861 2008 2013 Property Tax Fiscal Year 3,066,678 3,162,691 3,095,540 3,009,904 3,043,054 3,058,634 3,001,939 3,009,794 3,013,453 $ 2,893,077 Utility Franchise 251,067 242,000 242,000 242,000 252,413 242,000 242,000 242,000 242,000 $ 242,000 Public Enterprise In-Lieu Governmental Funds Tax Revenues by Source Last Ten Fiscal Years City of Yuma, Arizona 103,720 97,151 103,350 81,320 119,403 142,151 218,925 117,798 154,174 $ 105,394 Mall District Levy $ 57,012,488 54,165,640 50,991,109 50,424,911 50,281,732 49,449,739 47,606,334 46,560,818 48,570,089 50,503,250 Total 2010 2009 2008 Fiscal Year 6,856,996 6,553,759 7,105,468 $ 8,183,395 Sales Tax 7,854,670 8,692,400 11,530,342 13,355,612 12,518,215 Revenue Sharing 2,948,529 3,108,562 3,250,436 3,302,490 3,445,491 $ 3,518,863 Auto In-Lieu 6,276,058 5,862,202 5,700,428 6,503,532 6,626,027 7,029,312 $ 8,144,889 Highway Users $ - - - 75,764 226,308 394,161 423,058 Local Transportion Assistance 3,702,063 4,862,601 9,237,197 7,131,364 8,744,867 5,734,617 $ 6,448,868 Grants and Others* 30,253,872 30,779,948 33,172,906 32,510,492 36,983,793 37,064,661 City of Yuma, Arizona Governmental Funds Intergovernmental Shared Revenues Last Ten Fiscal Years 2011 7,272,049 9,506,288 3,111,124 2015 8,576,180 8,285,303 11,517,228 10,915,452 10,974,954 3,759,665 3,558,978 3,271,810 7,533,420 7,221,111 6,908,773 - - - 2,776,788 2,674,791 3,510,123 34,489,349 32,946,512 32,950,963 39,237,288 Total 2012 7,600,328 9,656,745 2016 8,902,248 $ 2013 7,507,882 $ 2014 2017 Source: The source of this information is the City financial records. *See 'Intergovernmental Revenues - Grants and Others' for detail information. 122 123 252,169 271,296 373,294 459,826 700,071 799,620 502,853 175,143 2010 2011 2012 2013 2014 2015 2016 2017 $ - - - 64,489 726,689 635,092 741,740 1,446,751 1,469,327 621,480 Interior $ 608,000 769,760 941,585 1,249,005 1,207,608 786,120 1,059,135 1,167,310 1,121,334 899,272 Housing/Urban Development (CDBG) $ - - - 223,685 - - 93,283 - 87,292 255,855 Other HUD Source: The source of this information is the City financial records. 583,702 2009 1,001,408 2008 $ Justice Fiscal Year Federal $ 1,049,438 966,898 1,517,358 1,465,997 1,855,100 2,501,119 4,165,343 5,336,400 2,176,628 1,335,165 Other $ 324,488 20,355 10,000 10,400 5,125 - 5,607 - 505,838 Parks $ - - - - 296,263 - - 1,840 297,024 1,844,645 Commerce $ - 53,175 5,599 62,592 240,044 2,893,392 - - 5,393 214,649 Transportation State of Arizona Intergovernmental Revenues - Grants and Other Last Ten Fiscal Years City of Yuma, Arizona $ 353,926 103,619 185,812 29,549 66,670 1,588,327 637,996 533,859 81,210 26,411 Other $ - - 42,109 258,131 60,149 27,077 - 367,436 - 931 Local Government $ 2,776,788 2,674,791 3,510,123 3,702,063 4,862,601 9,237,197 7,131,364 8,744,867 5,734,617 6,448,868 Total 2008 2009 2010 City of Yuma, Arizona 2012 Fiscal Years 2013 Taxable Sales by Category Last Ten Fiscal Years (amounts expressed in thousands) 2011 2014 2015 34 $ 2016 38 $ 2017 68 106,814 $ 111,924 52,315 24 138,657 55,173 210,261 $ 174,693 51,945 205,077 52,872 20 190,260 43,626 205,300 51,912 1,191,484 $ 190,490 50,539 206,056 42,766 1,172,122 224,191 44 121,132 38,167 197,687 39,897 1,110,680 194,761 158,526 $ 118,996 50,676 194,646 36,578 1,068,106 200,951 151,109 37,630 6 207,592 44,764 197,764 38,720 1,036,092 174,309 114,418 33,051 $ 249,315 48,964 207,112 42,580 987,416 172,056 131,450 32,624 82 59,931 206,089 35,334 973,426 168,358 129,208 29,049 $ 207,693 33,785 962,699 160,742 129,208 32,054 6 22,480 1,001,579 157,024 123,876 33,368 60,651 $ Construction 1,089,001 162,404 116,046 29,507 54,437 155 Manufacturing 162,560 115,857 29,502 49,819 $ Restaurants and Bars 132,593 36,093 49,649 Mining Finance, Insurance and Real Estate 33,642 51,404 Retail Trade Wholesale Trade Transportation, Communications, and Utilities Hotels and Other Lodging Accomodation 45,804 1.70% 2,120,585 45,208 $ 43,356 1.70% 2,052,936 50,858 $ 52,012 1.70% 1,974,430 Services $ 25,774 1.70% 1,951,516 23,332 $ 27,236 1.70% 1,918,769 Revised $ 34,656 $ 1,846,891 22,871 $ 1,763,351 20,670 $ 1,745,970 18,434 1,895,970 1.70% 31,055 $ 1.70% 32,743 2,047,885 1.70% 38,503 $ 1.70% 1.70% Arts, Entertainment, Government and All Others Not Specified City direct sales tax rate Source: Arizona Department of Revenue 124 125 1.70% 2017 Source: Arizona Department of Revenue 1.70% 1.70% 2013 2016 1.70% 2012 1.70% 1.70% 2011 2015 1.70% 2010 1.70% 1.70% 2009 2014 1.70% 2008 Fiscal Year City Sales Tax Rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% City Hospitality Sales Tax Rate 1.112% 1.112% 1.112% 1.11% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% Yuma County Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years City of Yuma, Arizona 5.60% 5.60% 5.60% 5.60% 5.60% 6.60% 6.60% 6.60% 5.60% 5.60% Arizona State City of Yuma, Arizona Ratio of Outstanding Debt by Type Last Ten Fiscal Years - 126,683,860 ** 5,200,528 ** 131,638,694 ** 6,358,872 ** 72,431,684 76,473,462 80,379,513 342,360,429 357,444,691 375,289,326 6.11% 6.85% 7.38% 8.05% 1,645 1,749 1,849 1,931 Percentage of Personal Per Income* Capita* 8,820,000 - 123,597,128 ** 3,999,805 ** 323,764,485 Total Primary Government General Obligation Bonds 148,092,247 ** 7,840,000 - 68,249,441 1,528 Business-Type Activities Municipal Property General Long-term Corporation Obligation Contracts Bonds Bonds Payable Fiscal Year 141,246,841 ** 6,815,000 120,350,368 ** 2,736,957 ** 5.64% Long-term Contracts Payable 2008 135,516,812 ** - 306,901,876 Governmental Activities Municipal Property Special Corporation Assessment Bonds Bonds 2009 5,745,000 63,921,836 2010 126,682,719 ** 116,931,350 ** 1,406,662 ** - - 1,446 2011 4,625,000 5.36% 120,017,028 ** 289,310,491 - 59,443,795 2012 - 3,460,000 113,335,361 ** 113,071,335 ** - - 1,358 2013 4.94% - 273,202,398 2,245,000 54,810,083 106,355,784 ** - - 109,791,531 ** 2014 105,872,834 1,256 - 3.98% 1,965,000 256,619,528 98,766,464 - 50,015,230 - 89,675,000 - 2015 - - N/A 1,675,000 - N/A 111,010,000 123,755,000 247,413,649 - - 45,053,649 2016 1,370,000 N/A 104,735,000 N/A - 229,860,000 2017 Source: The source of this information is the City financial records. Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. *See the Schedule of Demographic and Economic Statistics on page 130 for personal income and population data. **Revised due to GASB65 implementation in FY2014 - removed amortized debt issuance costs - revised all years. 126 127 94,139 94,906 2016 2017 Note: 595,290,568 622,921,086 615,552,203 632,734,838 625,801,724 666,827,282 733,033,525 747,149,498 699,754,765 572,280,942 Assessed Value 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.4% 0.5% 0.8% 1.1% Ratio of General Bonded Debt to Assessed Value General obligation debt issued for utility system improvements is paid through user charges. No property taxes are levied for this purpose. - - - - - 1,420,000 2,765,000 4,040,000 5,250,000 6,420,000 * Actual through 2010, projected by US Dept of Commerce thereafter. Yuma County Assessor U.S. Department of Commerce 93,400 2015 Source: 91,923 2014 91,359 2011 93,013 90,660 2010 2013 93,719 2009 93,814 93,212 2008 2012 Population * Fiscal Year General Obligation Debt (Business-type Activities) Ratio of General Bonded Debt to Assessed Value and General Bonded Debt Per Capita Last Ten Fiscal Years City of Yuma, Arizona - - - - - 15 30 45 56 69 General Bonded Debt per Capita City of Yuma, Arizona Debt Percent Computation of Direct and Overlapping Debt June 30, 2017 2017 Outstanding 100.00% 3,669,992 6,330,000 47.30% 47.30% 47.30% 1,371,163 12,141,910 1,735,906 2,994,090 106,105,000 Yuma County 25,670,000 47.30% 25,104,774 $ Amount Allocable to City of Yuma Jurisdiction $ 106,105,000 Yuma County Jail District 2,898,864 46.14% 20,906,925 City of Yuma Yuma County Special Assessment District 54,410,000 52.30% 10,293,400 106,105,000 Yuma County Community College District 39,975,000 55.64% 13,705,021 $ Yuma Union High School District No. 70 18,500,000 69.46% Total Direct Debt Yuma School District No. 1 19,730,810 Total Overlapping Debt $ $ 194,358,189 88,253,189 Yuma County Library District Crane Elementary School District No. 13 Total Direct and Overlapping Debt Valuation applicable percentage obtained from Yuma County Treasurer's Office Source: Yuma County Finance Department Yuma County Assessor's Office Arizona Western College Yuma School District No. 1 Crane Elementary School District No. 13 Yuma Union High School Dist No. 70 Note: 128 129 6,420 $ 108,036 34,337 5.61% 0.00% Total net debt applicable to limit Water, Sewer, Lights, Parks (20%) All Others (6%) Legal debt margin Water, Sewer, Lights, Parks (20%) All Others (6%) Total net debt applicable to the limit as a percentage of debt limit Water, Sewer, Lights, Parks (20%) All Others (6%) 3.75% 0.00% $ 134,701 41,985 5,250 - $ 139,951 41,985 2009 2.70% 0.00% $ 145,390 44,829 4,040 - $ 149,430 44,829 2010 1.06% 0.00% $ 131,945 40,010 1,420 - 0.00% 0.00% $ 125,160 37,548 - $ 125,160 37,548 Fiscal Year 2013 $ 133,365 40,010 2012 0.00% 0.00% $ 123,110 36,933 - $ 123,110 36,933 2015 Outstanding General Obligation Debt: Project 1997 Total General Obligation Debt $ 595,291 (2) Under the Arizona Constitution, cities may issue General Obligation Bonds for all purposes other than those listed in (1) above up to an amount not to exceed 6% of secondary assessed valuation. Source: The sourceof this information is the City financial records. 0.00% 0.00% $ 124,584 37,375 - $ 124,584 37,375 2016 $ $ 0.00% 0.00% 119,058 35,717 - 119,058 35,717 2017 $ 119,058 - $ 119,058 Water, Sewer, Lights, Parks (20%) $ $ 35,717 - 35,717 All Others (6%) Legal Debt Margin Calculation for Fiscal Year 2017 General Obligation Bonds 0.00% 0.00% $ 126,547 37,964 - $ 126,547 37,964 2014 2017 Tax Year Secondary Assessed Valuation 1.89% 0.00% $ 143,842 - 2,765 - $ 146,607 43,982 2011 (1) Under the Arizona Constitution, cities may issue General Obligation Bonds for purposes of water, sewer, artificial light and parks, open space preserves, playgrounds and recreational facilities up to an amount not exceeding 20% of secondary assessed valuation. $ 114,456 34,337 Debt Limit Water, Sewer, Lights, Parks (20%) All Others (6%) 2008 Legal Debt Margin Information June 30, 2017 (amounts expressed in thousands) City of Yuma, Arizona $ 2010B Ref 2001B $ $ 55,414,798 2,854,282 19.4 3.0 2,854,282 - 55,414,798 55,414,798 $ $ $ 11,117,382 5.0 3.0 City of Yuma, Arizona 2015 Excise Rev Ref 2003/2007B $ $ $ 64,526,106 3,750,550 17.2 1.5 3,750,550 - 64,526,106 64,526,106 $ $ $ 11,117,382 5.8 1.5 65,678,785 65,678,785 2015 Road Tax Ref 2007D $ $ 25,136,862 25,136,862 2015 & 2016 Utility System Revenue $ $ 4,512,550 - 25,136,862 $ $ 4,512,550 14.6 1.5 $ $ $ 65,678,785 $ 11,117,382 $ $ 13,632,358 1.8 1.2 7,648,088 5,984,270 13,632,358 1.8 1.2 $ 11,117,382 5.9 1.5 Total $ 2,854,282 3,750,550 4,512,550 - Schedule of Municipal Property Corporation Debt Service Requirements to Maturity and Coverage 2016-17 Pledged Taxes 2016-17 Net Revenue Total Taxes/Net Revenue 2017-18 Debt related to pledge: 2010 Series B 2015 Excise Rev & Refunding 2015 Road Tax Refunding 2015 Utility System Rev Refunding 2016 Utility System Rev Refunding Total Debt Coverage Required Coverage Collective Coverage Total 2016-17 Taxes/Net Revenue Total 2017-18 Debt Coverage Required Coverage 2010B Refunding Series, 2015 Excise Revenue & Refunding, and 2015 Road Tax Refunding Series: Bond covenants require that each series cover both its related debt and the collective debt for the succeeding year. 2015 & 2016 Utilities System Revenue Refunding: Net Revenue is comprised of all income, monies, and receipts from ownership and operation of utility system to include interest income minus operation and maintenance expenses. Source: The source of this information is the City financial records. 130 2008 Local Taxes Sales Tax (1%) $ 20,479,641 3,135,077 Franchise Fee Intergovernmental Revenues: 12,518,215 State Revenue Sharing State Sales Tax 8,183,395 3,518,863 Auto In-Lieu Tax Emergency Services and Other 133,560 Licenses: Business Licenses 332,122 34,700 Liquor Licenses Fees for Services: 2,401,049 Building Permits and Inspection Fees Recreation Fees 546,680 Police Services and Other Public Safety Fees 1,852,400 Use of Money and Property: 1,021,862 Investment Income Fines, Forfeitures and Penalties: City Court Fines 1,143,006 Total Series B Pledged Taxes 55,300,570 Additional Excise Series Pledged Taxes City Public Safety Taxes (.2%) 4,093,839 City Special Taxes (2%) 4,424,358 Total Excise Series Pledged Taxes 59,724,928 $ 74,056,847 1,436,928 47,608,462 1,237,672 51,586,940 $ 69,240,060 $ 64,081,420 8,729,333 $ 56,337,795 9,479,279 $ 61,066,219 51,861,541 166,500 504,146 55,970,359 1,447,064 1,226,013 4,253,079 1,435,276 628,264 1,386,593 563,437 3,490,546 315,580 34,130 319,631 35,715 4,383,419 11,530,342 6,553,759 3,302,490 44,700 13,355,612 7,105,468 3,445,491 189,929 3,790,422 $ 17,461,635 3,251,794 2010 $ 18,961,780 3,255,453 2009 $ 60,964,298 $ 53,013,450 8,816,228 48,622,778 4,425,556 3,525,292 1,484,105 44,197,222 108,396 603,253 1,319,507 609,192 302,668 35,131 8,692,400 6,856,996 3,250,436 55,745 $ 17,635,454 3,243,939 2011 Source: The source of this information is the City financial records. Fiscal Year 2013 250,365 32,560 2,036,965 513,535 3,190,974 99,738 261,323 32,955 1,751,071 478,911 4,447,101 14,717 1,526,176 50,897,291 53,277 1,549,889 44,482,853 $ 62,074,352 $ 53,716,752 $ 69,020,018 $ 60,520,087 9,622,796 55,549,412 49,148,149 9,233,899 3,847,810 4,652,121 3,692,304 4,665,296 1,043,802 1,170,037 546,940 288,133 31,670 $ 68,395,039 $ 59,917,507 9,756,994 54,736,574 3,901,471 4,576,061 1,209,502 50,160,513 9,656,745 7,507,882 3,111,124 23,913 9,506,288 7,600,328 2,948,529 37,974 7,854,670 7,272,049 3,108,562 34,252 $ 19,517,306 3,009,904 2014 $ 19,248,864 3,043,054 $ 18,470,938 3,058,634 2012 Pledged Tax Collections Last Ten Fiscal Years City of Yuma, Arizona The Excise Series Pledged Taxes consist of the Excise Taxes, City Public Safety Taxes, and the City Special Taxes. The Road Tax Series Pledged Taxes consist of the Excise Taxes and the City Road Tax. Gross Excise Tax Pledged Revenues Additional Road Tax Series Pledged Taxes City Road Tax (.5%) 10,238,080 Total Road Tax Series Pledged Taxes $ 65,538,650 131 $ 71,862,963 $ 63,125,384 9,766,802 58,190,769 3,905,392 4,832,187 1,161,809 53,358,582 47,095 4,283,521 1,829,085 544,212 250,957 33,310 10,974,954 8,285,303 3,271,810 44,062 $ 19,536,924 3,095,540 2015 $ 74,790,093 $ 65,678,785 10,263,987 64,526,106 $ 77,881,834 $ 68,288,288 10,601,757 67,280,077 4,239,261 5,354,285 1,228,496 57,686,531 1,298,418 55,414,798 4,104,199 5,007,109 95,984 5,032,589 2,099,156 465,281 250,890 30,140 11,517,228 8,902,248 3,759,665 31,057 $ 21,207,119 3,066,678 2017 64,755 4,427,053 1,916,567 487,166 246,528 33,090 10,915,452 8,576,180 3,558,978 196,457 $ 20,531,463 3,162,691 2016 City of Yuma, Arizona Demographic and Economic Statistics Last Ten Calendar Years 2008 2007 Year 193,299 194,322 190,557 Population 4,994,489 4,840,484 4,661,000 4,320,000 Personal Income 27 26 25 24 23 Per Capita Personal Income 27.10% 26.30% 21.30% 17.10% 13.90% Unemployment Rate 610 546 510 740 1,141 No. 52,240,172 33,118,172 17,348,000 101,217,617 105,194,398 Value 782 759 748 972 801 No. 26,660,688 40,924,654 48,260,000 50,218,987 61,578,063 Value Building Permits 2009 195,751 5,300,165 2014 2013 2012 204,275 201,201 200,022 200,870 6,436,250 6,449,702 5,529,669 5,399,670 5,441,761 31.3 31.6 27.5 27 27 20.40% 21.80% 23.30% 28.70% 28.40% 160 148 27 21 325 15,400,222 47,907,579 23,994,422 28,859,856 19,892,725 448 271 321 378 787 82,887,676 73,948,000 58,424,149 61,650,122 24,553,421 Residential 2010 196,830 Commercial 2011 2015 201,631 Unemployment rate and population presented represents the Yuma Metropolitan Statistical Area and it reflects revised inputs, reestimation, and new statewide controls through 2016. 2016 Note: Source: U.S. Department of Commerce Bureau of Economic Analysis U.S. Department of Labor Bureau of Labor Statistics Building permits: Department of Community Development (calendar year basis) 2016 data: US Census Bureau ACS S1901 132 133 Employees 6,156 3,000 1,995 1,700 1,416 998 925 1,200 1,000 879 19,269 6 7 10 8 9 1 2 3 4 5 Rank 9.05% 4.41% 2.93% 2.50% 2.08% 1.47% 1.36% 1.76% 1.47% 1.29% 28.34% Percentage of Total Employment Full Time and Part Time Source: Greater Yuma Economic Development Corporation/Employers Note: Figures presented represent the Yuma Metropolitan Statistical Area. Employer Marine Corps Air Station U. S. Army Yuma Proving Ground Yuma Regional Medical Center Yuma School District #1 Yuma County DatePac, LLC TRAX City of Yuma Yuma Union High School District United States Border Patrol Growers Company Salyer American Fresh Other Total 2007 17,697 4,723 2,510 1,991 1,400 1,336 1,275 1,262 1,200 1,000 1,000 Employees Principal Employers Current Year and Ten Fiscal Years Ago City of Yuma, Arizona 1 2 3 4 5 6 7 8 9 10 Rank 2016 26.69% 14.18% 11.25% 7.91% 7.55% 7.20% 7.13% 6.78% 5.65% 5.65% 100.00% Percentage of Total Employment City of Yuma, Arizona Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years 208 277 131 208 2017 205 276 131 28 48 13 77 53 120 2016 198 272 125 28 48 13 77 53 119 955 2015 192 259 125 35 47 13 69 52 124 953 2014 201 258 125 24 52 13 76 52 117 942 2013 192 249 131 32 46 13 76 52 116 916 2012 235 239 129 32 46 13 73 49 116 910 2011 241 267 133 33 46 13 73 49 116 910 2010 228 266 122 41 56 17 80 51 133 890 2009 269 122 44 56 17 76 47 133 1,013 2008 44 47 16 75 52 145 1,002 Function Public Safety Police Fire Public Works Engineering Maintenance Solid Waste Water Wastewater Parks and recreation 998 General government Total Source: City of Yuma Annual Budget, Fiscal Year 2016-2017 134 135 2,673 27,622 60.0 8.2 15.6 3,160 27,174 48.0 9.5 15.6 11 22 33,996 11,045 2,322 11,455 2,059 34,919 84,332 13,740 81,347 13,746 2009 Source: Various city departments. Note: Indicators are not available for the general government function. *Numbers presented are for calendar year. Police Calls for service* Case reports Fire Number of calls answered* Inspections* Streets Streets slurry sealed (miles) Solid Waste Refuse collected (tons) Parks and recreation Ramada rentals Water Connections Daily treatment capacity (million gallons) Annual quantity processed (billion gallons) Wastewater Daily processing capacity (million gallons) Function 2008 15.6 28,058 64.0 7.5 2,519 33,288 2 11,565 745 83,226 13,434 2010 15.6 28,984 65.0 8.4 2,554 32,638 15 12,067 864 76,232 13,535 2011 Operating Indicators by Function Last Ten Fiscal Years City of Yuma, Arizona 15.6 29,009 65.0 8.3 2,327 32,177 10 12,037 NA NA NA 15.6 27,396 65.0 8.1 2,551 32,010 24 12,664 1,399 76,080 14,651 Fiscal Year 2012 2013 15.6 29,361 65.0 7.1 2,097 26,650 30 12,529 1,460 89,027 12,855 2014 15.6 29,945 65.0 8.0 2,171 26,848 30 13,191 883 93,463 12,905 2015 15.6 30,400 65.0 7.8 1,946 25,622 23 13,888 2,448 90,694 12,185 2016 15.6 30,921 65.0 7.8 1,625 30,710 32.60 14,205 2,438 91,603 12,371 2017 Function Public Safety Police stations Police vehicles Fire stations Streets Streets (miles) Streetlights Traffic Signals Solid Waste Collection trucks Parks and Recreation Parks acreage Parks/Athletic Fields Swimming pools Tennis courts Community centers Water Water mains (miles) Fire hydrants Wastewater Sanitary sewers (miles) Manholes City of Yuma, Arizona Capital Asset Statistics by Function Last Ten Fiscal Years 2 181 6 2017 2 194 6 454 6,795 81 2016 2 181 6 450 6,773 79 2015 2 179 6 448 6,757 79 2014 2 172 6 442 6,757 79 Fiscal Year 2012 2013 1 156 6 421 5,764 79 2011 1 163 6 420 5,753 50 2010 1 164 6 395 5,750 50 2009 1 163 6 389 5,606 49 2008 1 150 6 384 5,463 42 682 96 4 9 9 361 5,375 42 682 90 4 9 9 530 3,859 11 633 84 4 9 9 527 3,831 356 5,510 11 620 80 4 9 9 527 3,790 362 5,376 11 607 79 4 9 9 527 3,754 350 5,318 11 607 79 4 9 9 525 3,646 350 5,318 11 607 79 4 9 9 525 3,573 350 11 607 79 4 9 9 520 3,450 341 13 607 79* 4 2 9 507 3,438 340 13 607 32 3 1 9 501 3,400 342 13 501 3,267 320 13 320 Sources: Various city departments. Note: No capital asset indicators are available for the general government function. *Change in the inventory of athletic fields from counting athletic complexes versus individual fields. 136