Building Upon Council and Community Goals & Objectives City of Flagstaff, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2002 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF FLAGSTAFF, ARIZONA FISCAL YEAR 2001-2002 JOSEPH C. DONALDSON LIBBY SILVA MAYOR VICE-MAYOR KAREN K. COOPER AL WHITE JOSEPH P. HAUGHEY COUNCILMEMBER COUNCILMEMBER COUNCILMEMBER ART BABBOTT PENNY TROVILLION KARA M. KELTY COUNCILMEMBER COUNCILMEMBER (Resigned July 1, 2002) COUNCILMEMBER (Appointed July 29, 2002) DAVID W. WILCOX JERI DUSTIR JAMES S. WINE CITY MANAGER DEPUTY CITY MANAGER DEPUTY CITY MANAGER MARY JO JENKINS BARBARA GOODRICH MATT PAVICH MANAGEMENT SERVICES DIRECTOR BUDGET AND FINANCE MANAGER POLICE LIEUTENANT/O.D. MANAGER RICK TADDER BETH BEAUREGARD LAURA PARKER ACCOUNTANT II ACCOUNTANT II FINANCE SECRETARY NANCY BERNARD NANCY MIGUEL PAYROLL SPECIALIST ACCOUNTANT I DEBBIE NICHOLS MARYELLEN PUGH ACCOUNTANT I ACCOUNTANT I LL INTRODUCTORY SECTION COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF FLAGSTAFF JUNE 30, 2002 TABLE OF CONTENTS INTRODUCTORY SECTION Exhibit Title Page Organizational Chart Table of Contents Letter of Transmittal - Management Services Director Certificate of Achievement for Excellence in Financial Reporting Page i ii iii-viii ix-xix xx FINANCIAL SECTION INDEPENDENT AUDITOR'S OPINION 1-2 GENERAL PURPOSE FINANCIAL STATEMENTS (COMBINED STATEMENTS - OVERVIEW) Combined Balance Sheet - All Fund Types and Account Groups and Discretely Presented Component Unit Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Discretely Presented Component Unit Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types - Budget and Actual Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balance - All Proprietary Fund Types Combined Statement of Cash Flows All Proprietary Fund Types iii A-1 4-7 A-2 8-9 A-3 10-11 A-4 12-13 A-5 14-15 TABLE OF CONTENTS Firemen’s Pension Trust Fund Statement of Plan Net Assets Statement of Changes in Plan Net Assets Notes to Financial Statements Exhibit Page A-6 A-7 16 17 19-43 B-1 45 B-2 46-48 C-1 50-51 C-2 52-53 C-3 54 C-4 55 C-5 56 C-6 57 C-7 58 C-8 59 C-9 60 C-10 61 INDIVIDUAL FUND FINANCIAL STATEMENTS GENERAL FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual SPECIAL REVENUE FUNDS Combining Balance Sheets Combining Statement of Revenues Expenditures and Changes in Fund Balances HIGHWAY USER REVENUE FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual LIBRARY FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual REAL ESTATE PROCEEDS FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual BEAUTIFICATION FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual iv TABLE OF CONTENTS Exhibit ECONOMIC DEVELOPMENT FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual TOURISM FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual ARTS & SCIENCE FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual RECREATION FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual COMMUNITY REDEVELOPMENT FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual METROPOLITAN PLANNING ORGANIZATION FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual TRANSPORTATION FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual v Page C-11 62 C-12 63 C-13 64 C-14 65 C-15 66 C-16 67 C-17 68 C-18 69 C-19 70 C-20 71 C-21 72 C-22 73 C-23 74 C-24 75 TABLE OF CONTENTS Exhibit DEBT SERVICE FUNDS Combining Balance Sheets Combining Statement of Revenues, Expenditures and Changes in Fund Balances GENERAL OBLIGATION BONDS FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual SPECIAL ASSESSMENT BOND FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual SECONDARY PROPERTY TAX REVENUE FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual CAPITAL PROJECTS FUNDS Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual BOND CONSTRUCTION FUND Comparative Balance Sheets Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual ENTERPRISE FUNDS Combining Balance Sheet Combining Statement of Revenues, Expenses and Changes in Retained Earnings Combining Statement of Cash Flows vi Page D-1 77 D-2 78 D-3 79 D-4 80 D-5 81 D-6 82 D-7 83 D-8 84 E-1 85 E-2 86 E-3 87 E-4 88 F-1 89 F-2 F-3 90 91 TABLE OF CONTENTS Exhibit WATER AND WASTEWATER FUND Comparative Balance Sheets Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Comparative Statement of Cash Flows Schedule of Revenues and Expenses Budget and Actual (Budget Basis) AIRPORT FUND Comparative Balance Sheets Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Comparative Statement of Cash Flows Schedule of Revenues and Expenses Budget and Actual (Budget Basis) ENVIRONMENTAL SERVICES FUND Comparative Balance Sheets Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Comparative Statement of Cash Flows Schedule of Revenues and Expenses Budget and Actual (Budget Basis) GENERAL FIXED ASSETS ACCOUNT GROUP Schedule of General Fixed Assets By Source Schedule of General Fixed Assets – By Functions and Activities Schedule of Changes in General Fixed Assets - By Functions and Activities vii Page F-4 92 F-5 F-6 93 94 F-7 95 F-8 96 F-9 F-10 97 98 F-11 99 F-12 100 F-13 F-14 101 102 F-15 103 G-1 105 G-2 106 G-3 107 TABLE OF CONTENTS SUPPORTING SCHEDULES Schedule Debt Service Requirements to Maturity General Obligation Bonds Debt Service Requirements to Maturity - Street Construction Revenue Bonds Debt Service Requirements to Maturity - Special Assessment Bonds Debt Service Requirements to Maturity –Other Debt STATISTICAL SECTION I 109 II 110 III 111 IV 112 Table General Government Expenditures by Function General, Special Revenue, Debt Service, and Capital Project Fund Revenues by Source Tax Revenues by Source Intergovernmental Revenues by Source Property Tax Levies and Collections Primary Assessed and Estimated Actual Value of Taxable Property Property Tax Rates and Tax Levies - Direct and Overlapping Governments Special Assessment Collections Percentage of Net General Bonded Debt to Secondary Assessed Value and Net General Bonded Debt Per Capita Computation of Legal Debt Margin Computation of Direct and Overlapping Debt Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Schedule of Water and Wastewater Revenue Bond Coverage Demographic Statistics Property Value, Construction and Bank Deposits Miscellaneous Statistical Data Insurance Summary viii Page Page I 114-115 II III IV V 116 117 118-119 120-121 VI 122-123 VII VIII 124 125 IX X XI 126 127 128 XII 129 XIII XIV 130 131 XV XVI XVII 132-133 134-136 137 City of Flagstaff December 20, 2002 Honorable Mayor, Members of the City Council, and the Citizens of the City of Flagstaff City of Flagstaff, Arizona The Comprehensive Annual Financial Report of the City of Flagstaff, Arizona, for the fiscal year ended June 30, 2002, is submitted for your review. The City’s Finance Division prepared this report. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe that the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs have been included. The Comprehensive Annual Financial Report is presented in three sections: introductory, financial, and statistical. The introductory section includes a list of principal officials, the City's organizational chart, and this transmittal letter. The financial section includes the generalpurpose financial statements, the combining and individual fund and account group financial statements and schedules, and supporting schedules, as well as the auditors’ report on the financial statements and schedules. The City has included supplemental financial information on debt service requirements. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. This report represents management's report to its governing body, constituents, legislative and oversight bodies, and investors and creditors. Copies of this report will be sent to elected officials, City management personnel, bond rating agencies, and other agencies which have expressed an interest in Flagstaff's financial matters. Copies of this financial report will also be placed in the City library for use by the general public. This report includes all funds and account groups of the City. The City provides a full range of services, including police and fire protection; sanitation services; the construction and maintenance of highways, streets and infrastructure; recreational activities and cultural events; and construction and maintenance of a water and sewer utility. In addition to general governmental activities, standards set by the Governmental Accounting Standards Board ("GASB") regarding the inclusion of certain entities based upon the significance of their operational or financial relationships with the City, require that the activities of the City of Flagstaff Municipal Facilities Corporation and the Greater Flagstaff Economic Council be included in the reporting entity 211 West Aspen Avenue, Flagstaff, Arizona 86001 Main & TDD (928) 774-5281, Arizona Relay 7-1-1, Fax (928) 779-7696 Economic Condition and Outlook Sales tax receipts in fiscal year 2001-2002 increased by 9.0%. Retail sales, 61% of the sales tax base, increased 4.4%. Construction tax revenue increased 29.8% from the previous year. Automobile tax receipts were up 20.3%. Construction, sales of building materials to the end user (rather than contractors), large retail stores, and auto sales accounted for almost all of the increase in sales tax revenue. Bed, Board and Booze revenues increased by 1.8% as compared to 2000-2001 activity. A new transportation tax was implemented in August 2000. The tax was 0.51% at the beginning of the fiscal year and increased to 0.574% on September 1, 2001. The tax is used to support transportation and transit expenditures. The tax generated approximately $6.2 million in revenue for the fiscal year 20012002. Major Initiatives, Service Efforts and Accomplishments For the Year Maintained or improved service levels to citizens. Continued an internal improvement process, the Organizational Development program. Focused on growing needs through the evaluation and enhancement of revenue resources including: Impact fee analysis User fee analysis Establishment of cost allocation rates to charge administrative costs to grant funding (OMB 87) Conducted the first all-mail ballot election in Coconino County. Implemented a wireless communication solution for remote sites, increasing connection and processing speeds. Completed numerous fuel management projects, which provided for the thinning of 1,257 acres and prescribed burning of 498 acres. Acquired a major parcel in Sunnyside for non-profit, affordable housing development. Invited bids for purchase and development of two city-owned parcels for market and affordable housing units. Negotiated both a retention and expansion agreement with Ralston Purina. Ralston will be afforded a property tax break over the next ten to thirteen years under enabling State law. Developed a pay plan for the Police Department to enhance retention as significant numbers of personnel had previously been lost to other police agencies due to compensation differences. Initiated first phase of skill based pay in the Utilities department (pilot program). x The Regional Plan developed by the City and Coconino County was passed by voters on May 21, 2002. Implemented a tax intercept program for the City Court. Drilled two new water wells. For the future Continued investment in the future of the community through Capital Improvement Projects totaling $63 million in FY2003. Major projects include Airport taxiway, Butler/Enterprise intersection, recreational park development, redevelopment in the Eastside area, and Rio de Flag water plant improvements. Remodeling of facilities as designated by the Department of Justice to come into full compliance with the Americans with Disabilities Act. Strengthen the City partnership with the Flagstaff Housing Authority, evaluate all housing programs in the City for effectiveness, and continue to reduce substandard housing stock through redevelopment programs. Issue Request for Proposals for a conference center to encourage year-round business traffic and longer stays within the community. Pursue a number of customer service initiatives including: Continued training and frequent promotion of the City customer service message; incorporate customer service expectations in all job descriptions, employee orientations, and performance appraisals; more effective and uniform complaint processing; and continued recognition of exemplary customer service. Establish a permanent household hazardous waste program and site. Continue current fuel management efforts. Promote greater participation in the residential and commercial recycling program. Develop and manage critical water resources for a sustainable supply. Continue organizational development efforts by examining organizational structural relationships to determine if altering functional alignments may improve efficiency, effectiveness, or both. City Highlight The Fire Department is being highlighted in 2002 for its efforts in fuel management. Wildfire is the #1 threat to the Flagstaff community. The Fire Department’s Fuel Management Program was initiated to reduce risk of catastrophic wildfire and improve forest health in and around the City. The program has grown substantially since inception in 1996 and is unique for a municipal fire service. Support from City Council and Flagstaff residents, the program’s innovation approach, and actual on-the-ground accomplishments have drawn national attention over the last six years. xi Work is done one-on-one with individual home and business owners. Department personnel conduct property inspections to assess wildfire risk and provide site-specific recommendations. Additional services offered include development of Forest Stewardship plans, marking trees targeted for selective thinning, and administration of homeowner/vendor contracts. The Fire Department partners with the City Planning and Development staff to implement “Firewise” construction standards. Collaboration with the State Land Department, U.S. Forest Service, and the Greater Flagstaff Forests Partnership, among others extends the “Firewise” environment well beyond actual city boundaries. The Fuel Crew works year round to reduce hazardous fuel accumulations by selectively thinning dense stands of pine trees and conducting prescribed burns. The fuel management program is currently 100% grant funded at both the State and Federal level. The elected officials, management, and especially the Fire personnel must be commended for their diligence and success with both the operational and funding considerations for this endeavor. Financial Information Internal Control In developing the City's accounting system, consideration is given to the adequacy of internal accounting controls. These internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. 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 evaluation of costs and benefits requires estimates and judgments by management. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Single Audit As a recipient of Federal, State, and County financial assistance, the City is also responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management and the internal audit staff of the City. As part of the City's single audit, tests are made to determine the adequacy of the internal control structure, including that portion related to Federal financial assistance programs, as well as to determine that the City has complied with applicable laws and regulations. The results of the City's single audit for the fiscal year ended June 30, 2002, provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws and regulations. xii Budgetary System The City also maintains budgetary controls to ensure compliance with budgetary and legal provisions embodied in the annual appropriated budget approved by the City Council. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the release of a purchase order. Encumbered appropriations are reappropriated at the end of each fiscal year. The City is subject to both legal and expenditure limitations as set out in the State Constitution. The City cannot adopt a budget that exceeds the expenditure limitation determined annually by the State of Arizona's Economic Estimates Commission. This limitation is based on 1979-80 actual expenditures, adjusted to reflect interim population and cost of living changes. Certain items are specifically exempted, including bond sale proceeds; debt service payments and other long-term obligations; interest earnings; a portion of Highway User Tax revenues; Federal and State grants; and monies received pursuant to intergovernmental agreements. On March 1, 1988, as provided by State statute, the voters of Flagstaff approved a permanent base adjustment of $1,900,000 to the 1979-80 base amount used in determining the annual expenditure limitation. The permanent increase was for the expenditure of the newly authorized Bed, Board and Booze Tax which was also approved in the March, 1988 election. The City's budget process involves input from Division heads, Department heads, Administration, the City Council and the public. Annual budgets are adopted for all funds by department and division with the legal level of control for State budgetary purposes at the department level. Throughout the year budgetary control is maintained through the use of monthly management reports that compare actual or encumbered expenditures and revenues against the budgeted amounts. These reports are utilized to continuously monitor and manage budgets throughout the year. General Governmental Revenues Revenues of the governmental funds totaled $63,197,572 in fiscal year 2001-2002; an increase of 2.8% over the fiscal year ended June 30, 2001. The following schedule represents a summary of the general fund, special revenue funds, debt service funds, and capital project funds revenues for the fiscal year ended June 30, 2002, and the amount and percentage of increases and decreases in relation to prior year revenues. Actual Revenues Revenue Sources Taxes Licenses and permits Intergovernmental Percentage Change From 2000-2001 $ 30,986,091 2,014,357 24,008,885 1,676,615 991,131 350,894 3,169,599 49.0% 3.2 38.0 2.6 1.6 0.6 5.0 $ 2,645,134 695,907 (2,194,765) 650,990 (2,454) 81,100 (130,787) 9.3% 52.8 -8.4 63.5 -0.2 30.1 -4.0 $ 63,197,572 100.0% $ 1,745,125 2.8% Charges for services Fines and forfeiture Special assessments Miscellaneous revenues Total revenues Increase (Decrease) Dollar Amount Percent of Total xiii The increase in taxes is a combined result of sales tax boosts in the various areas for the City. Sales tax increases were experienced in both construction and auto sales. The City’s transportation tax that was enacted August 2000 was in place for a full fiscal year, and both primary and secondary property taxes were greater due to increased assessed valuations. Licenses and permits increased due to very high activity in building permits. This activity is supported by the increase in sales tax receipts. Intergovernmental revenue decreases are the direct result of the 2000 census survey count for Flagstaff. The census count evidenced no growth in the Flagstaff area between the 1995 Special Census and the 2000 regular census. As Flagstaff did not evidence any growth, the City experienced a decline in the population percentage as compared to the rest of the State which translated in an approximate $2 million dollar decrease in state shared revenues. The City of Flagstaff and Coconino County partnered on a new Law Enforcement Administrative Facility (LEAF) with construction complete in April 2000. The City provides a number of administrative services including records management and dispatch services for both entities. The County reimburses the City for its’ appropriate share of these administrative costs, and this reimbursement accounts for the increase in Charges for Services. Special Assessments increase is due to early payoffs on the two city special districts, Downtown and Bow & Arrow Sewer. General Governmental Expenditures The schedule on the following page presents a summary of general, special revenue, debt service, and capital project funds for the fiscal year ended June 30, 2002 and the amount and percentage of increase and decrease in relation to prior year expenditures. The increase in general government expenditures are the result of the addition of the Capital Improvement division, and land purchases for facilities redevelopment in downtown and east Flagstaff. Parks and Recreation decreased due to budget reductions and decreased capital activity as the City awaited final dispensation regarding Department of Justice Americans with Disabilities requirements. Public safety increased due to the operation of a new facility for an entire fiscal year and a new pay plan for police officers to assist in recruitment. Community Development increases are attributed to progress made on the Rio de Flag project and groundwork for the implementation of a stormwater utility. Highways and Streets increases are due to the initiation and near completion of several large projects including the Butler/Enterprise intersection and design for the 4th Street overpass. Library expenses decreased due to the completion of the automation system installation. Recreation increases are due to Foxglenn Park construction and Continental land purchases for parks. Capital project activity increased due to the construction of a new building for the United States Geological Survey. Beautification division’s increase is due to more capital activity in the current year. The Economic Development decrease was the result of less expenditures in the current fiscal year on the incubator project. xiv Function Current Operations: General government Parks and recreation Public safety Public works Cemetery Community development Health & social services Criminal justice Highway & streets Library Real Estate Proceeds Beautification Economic development Tourism Arts and Science Recreation Community Redevelopment Contingencies Percentage Change From 2000-2001 Percent of Total 5,834,543 3,853,094 16,057,019 950,242 162,844 5,359,095 933,583 1,335,400 15,648,877 2,575,113 408,584 475,284 315,168 1,292,951 345,217 1,325,552 1,649,109 186,944 8.5% 5.6 23.2 1.4 0.2 7.8 1.4 1.9 22.7 3.7 0.6 0.7 0.5 1.9 0.5 1.9 2.4 0.3 58,708,619 85.2 12,557,830 27.2 5,788,006 4,422,074 8.4 6.4 3,622,017 215,154 167.2 5.1 68,918,699 100.0% $ Subtotal Capital projects Debt service Total Increase (Decrease) Dollar Amount Actual Expenditures $ $ $ 1,300,661 (301,452) 576,972 (115,932) (706) 1,691,153 (106,831) 189,946 7,913,727 (491,845) 35,401 222,447 (85,678) 39,165 18,953 1,217,953 467,615 (13,719) 16,395,001 28.7% -7.3 3.7 -10.9 -0.4 46.1 -10.3 16.6 102.3 -16.0 9.5 88.0 -21.4 3.1 5.8 1131.9 39.6 -6.8 31.2% Fund Balance Fund balances reflect the accumulated excess of revenues and other financing sources over expenditures and other financing uses for general government functions. Unencumbered appropriations lapse at the close of the fiscal year and revert to unreserved fund balance. Encumbered amounts are reported as reservations of fund balance. Fund Balances Fund General Special Revenue Debt Service Capital Projects Total June 30, 2002 $ $ June 30, 2001 Increase (Decrease) 18,493,931 26,476,529 681,757 425,203 19,420,953 24,317,465 419,259 5,154,410 (927,022) 2,159,064 262,498 (4,729,207) 46,077,420 49,312,087 (3,234,667) xv The General Fund decreased due to expenditure of fund balance towards the Rio de Flag flood control project. The Special Revenue Fund balance is a compilation of numerous changes in the eleven funds however there are several very large capital carryovers for the street construction and park improvements totaling $7.2 million. The Debt Service Fund increase is due to a large number of prepayments in the special improvement districts. The Capital Project Fund decrease is due to the near completion of the USGS facility construction. Enterprise Operations The City's enterprise operations are three separate and distinct activities; the Water and Wastewater Utility, the Airport, and the Environmental Services operations that include residential, commercial and landfill services. Enterprise funds are used to account for operations (a) that are financed and operated in a manner similar to proprietary (private business) enterprises where the intent is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis is to be financed or recovered primarily through user charges, or (b) it has been decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The following schedule presents current year income or loss before operating transfers for the Enterprise funds: Fund Increase/ (Decrease) from 2000-2001 2001-2002 Water and Wastewater Airport Environmental Services $ 7,037,187 5,169,101 367,386 $ (1,025,822) 5,058,835 (294,126) Total $ 12,573,674 $ 3,738,887 Percent of Increase/ (Decrease) -12.7% 4587.8 -44.5 42.3% The decrease in the Water and Wastewater Fund is due to the decrease in capital contributions. The increase in Airport fund is due to the change in recognition of contributed capital as revenue. The Government Accounting Standards Board (GASB) for the fiscal year ended June 30, 2001 mandated this accounting change with the adoption of GASB 33. Retroactive changes were made to the June 30, 2001 unreserved retained earnings. The City applied existing policy to the Environmental Services Fund increasing its’ expenditures as City residential and commercial collection programs are now charged for landfill fees. Pension Trust Fund Operations The operations of the Firemen’s Pension Trust Fund remained very stable in FY2002. The 47% revenue decrease is directly related to lower interest earnings in the fund. The fund continues a relatively stable distribution of benefits to qualified participants. xvi Debt Administration At June 30, 2002 the City had outstanding debt issues of $56,142,726, net of cash deposited with fiscal agents for July 1, 2002 bond maturities. The breakdown was: Balance June 30, 2002 General Obligation-Tax supported General Obligation-Water and Wastewater Street and Highway Special Assessment Bonds Other $ 10,830,000 23,154,726 16,270,000 1,188,000 4,700,000 Total $ 56,142,726 The City received authorization from the voters on November 6, 1990 to issue $40,700,000 in bonds for water and sewer improvements, and on November 5, 1996 authorization to issue $8,200,000 in bonds for Recreation. The 1990 election authorized the City Council to use the water and sewer bond authorization as either general obligation bonds, water and sewer revenue bonds, or water and sewer revenue bonds with a pledge of the City's full faith and credit. Current bond ratings for the City of Flagstaff are: General Obligation - Moody's Investor Service AAa3, Standard and Poor's A+; Water and Sewer Revenue Bonds Moody's Investor Service A-1, and Standard and Poor's A; Street and Highway Revenue Bonds - Moody's Investor Service A-1, and Standard and Poor's A+. The ratio of general obligation bonded debt, supported by the City's General Fund, to secondary assessed valuation and the amount of bonded debt per capita are standard indicators of a City's debt position and debt burden. The following is a summary of selected indicators at June 30, 2002: Amount Net Direct Bonded Debt $ Estimated Overlapping Debt Net Direct and Estimated Overlapping Debt $ Ratio of Debt to Secondary Assessed Value 33,984,726 7.9% 31,336,500 7.3 65,321,226 15.2% Debt Per Capita $ 574.45 529.69 $ 1,104.14 Authorized but unissued bonds as of the date of this report consist of $6,775,760 of water and sewer bonds, and $1,100,000 in general obligation bonds for recreation facilities. Under Arizona law, cities can issue general obligation bonds for purposes of water, sewer, artificial light, open space, parks, playgrounds and recreational facilities up to an amount not exceeding 20% of the secondary assessed valuation and general obligation bonds for all purposes other than those listed up to an amount not exceeding 6% of the secondary assessed valuation. xvii At June 30, 2002, the 20% debt limitation was $85,806,080, providing a debt margin of $57,381,354 and the 6% debt limitation was $25,741,824, providing a debt margin of $20,181,824 based on the 2001 assessed values. Cash Management The City's investment policy is to invest all temporarily idle cash in investments authorized by City resolution or State statute at the highest available interest rate while emphasizing safety of principal and liquidity. Excess funds were invested in the State Treasurer's Local Government Investment Pool (LGIP) and in obligations of the U.S. Treasury and its agencies, demand deposits and repurchase agreements. The City utilizes a pooled cash concept in order to invest greater amounts of cash at one time, thus increasing the yield. The average yield for pooled investments in LGIP for the 2002 fiscal year was 2.8%, and 5.09% for other securities. Risk Management In August of 1986, the Mayor and Council approved the establishment of a self-insurance program. This program is a limited program for workmen's compensation, liability, health and unemployment insurance and claim revenues. Budgeted premiums are paid by the originating fund to the self-insurance fund. For liability insurance the City maintains a $25,000 self-insured retention amount and purchases commercial insurance for claims in excess of coverage. All claims, legal fees and premiums are then paid from the fund. At June 30, 2002, the self-insurance fund had a fund balance of $5.5 million. The City of Flagstaff participates in a risk sharing pool for employee health care, through Northern Arizona Public Employees Trust, a public entity risk pool. Members do not bear any risk of loss. The overall experience rating of the trust determines premium charges. Other Information Independent Audit The City Charter requires an annual audit by independent certified public accountants. The accounting firm of Nordstrom and Associates, has been selected by the City Council. The auditor's report on the general purpose financial statements and combining individual fund and account group statements and schedules is included in the financial section of this report. In addition to this report, the auditors were also contracted to perform the single audit of the City's Federal Grant Programs. This audit was designed to meet the requirements of the Federal Single Audit Act of 1984, and Single Audit Act Amendment of 1996 and the related OMB Circular A-133. Due to the size and complexity of the City's financial system, the single audit report is issued separately from this financial report. Copies are available upon request. xviii Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Flagstaff, Arizona, for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2001. This was the ninth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy 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 requirement and we are submitting it to the GFOA to determine its eligibility for another certificate. The City also received the GFOA's award for Distinguished Budget Presentation for our 2001-2002 annual budget. In order to qualify for the Distinguished Budget Presentation Award, the City's budget document was judged to be proficient as a Policy Document, a Financial Plan, and an Operation Guide and as a Communication Device. Acknowledgements I want to thank the Finance staff for their efforts in preparing this report and City Departments and Divisions for their cooperation and assistance throughout the year. I would also like to thank the Mayor, members of the City Council, the Audit Committee and City Manager for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. The cooperative assistance of our independent auditor, Nordstrom and Associates, also contributed significantly to this report. Respectfully submitted, xix xx FINANCIAL SECTION Bruce J. Nordstrom, CPA MEMBERS Godfrey C. Loper, Jr., CPA American Institute of Certified Public Accountants Marjorie T. McClanahan, CPA T i m o t hy D . H a n s e n , C P A CERTIFIED PUBLIC ACCOUNTANTS Arizona Society of Certified Public Accountants INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Flagstaff, Arizona We have audited the accompanying general purpose financial statements of City of Flagstaff, Arizona (the City), as of and for the year ended June 30, 2002, as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We did not audit the financial statements of Greater Flagstaff Economic Council, a discretely presented component unit of the City. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion on the financial statements insofar as it relates to the amounts included for Greater Flagstaff Economic Council, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit and the report of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the report of the other auditors, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of City of Flagstaff, Arizona, as of June 30, 2002, and the results of its operations and cash flows of its proprietary fund types and the net assets and changes in net assets of its firemen’s pension trust fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. 150 West Dale Avenue Suite 2 • Flagstaff • AZ 86001 MAIL TO Po Box 220 • Flagstaff • AZ 86002 TELEPHONE 928.774.5086 FAX 928.774.7908 EMAIL FindaCPA@NordstromPC.com 2 3 Exhibit A-1 City of Flagstaff Combined Balance Sheet-All Fund Types, Account Groups and Discretely Presented Component Unit June 30, 2002 General Governmental Fund Types Special Debt Revenue Service Capital Projects Proprietary Fund Types Internal Enterprise Service Assets and Other Debits Assets: Cash and Cash Equivalents Receivable from Sale of Property Intergovernmental Receivable Accounts Receivable (Net) Interest Receivable Sales Tax Receivable Bond Proceeds Receivable Grants Receivable Special Assessments Receivable Interfund Receivable Restricted Assets: Cash and Cash Equivalents Interest Receivable Accounts Receivable (Net) Inventory Contractor Performance Bonds Fixed Assets (Net of Applicable Accumulated Depreciation) Miscellaneous Assets Other Debits: Amount Available in Debt Service Fund Amount to be Provided for General Long-term Debt Total Assets and Other Debits $ 17,175,433 -18,221 2,415,441 132,742 2,261,040 -352,093 -1,440,000 25,921,999 143,238 29,152 901,220 133,107 805,873 -885,700 -2,830,000 62,870 --174,932 360,245 88,580 -733,384 --- 2,251,227 -------904,292 -- 115,488 --961,128 --788,587 ---- 25,242,869 --3,255,788 198,559 --4,054,075 --- 5,281,219 --55,571 42,837 ----94,897 ------ ------ 9,039,042 15,799 -428,127 -- ------ 198,532,790 -- --- --- --- --- --- -- -- -- -- -- -- -- -- -- -- -- -- $ 24,393,017 32,472,253 3,155,519 1,865,203 240,767,049 The notes to the financial statements are an integral part of this statement. 4 5,474,524 Fiduciary Fund Types Trust 226,632 ----------------- Account Groups General General Fixed Long-term Assets Debt ----------- ----------- 76,214,867 143,238 47,373 7,589,148 507,245 3,066,913 788,587 5,291,868 904,292 4,364,897 ------ ------ 9,190,492 15,799 733,384 603,059 360,245 --- 274,224,945 -- 75,692,155 -- Component Unit Greater Flagstaff Economic Council Total Primary Government (Memorandum Only) 306,560 --120,421 -----------15,623 2,407 Total Reporting Entity (Memorandum Only) 76,521,427 143,238 47,373 7,709,569 507,245 3,066,913 788,587 5,291,868 904,292 4,364,897 9,190,492 15,799 733,384 603,059 360,245 274,240,568 2,407 -- -- 681,757 681,757 -- 681,757 -- -- 31,478,254 31,478,254 -- 31,478,254 32,160,011 416,206,363 226,632 75,692,155 445,011 416,651,374 (Continued) 5 Exhibit A-1 (Continued) City of Flagstaff Combined Balance Sheet-All Fund Types, Account Groups and Discretely Presented Component Unit June 30, 2002 General Governmental Fund Types Special Debt Revenue Service Capital Projects Proprietary Fund Types Internal Enterprise Service Liabilities, Equity and Other Credits Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Current Bonds and Capital Leases Payable Interest Payable Payable from Restricted Assets: Interest Payable General Obligation Bonds Customer Deposits Landfill Closure and Post-Closure Liability Deferred Revenue Grant Revenue in Advance Guaranty and Other Deposits Insurance Payable Capital Lease Payable Interfund Payable Deferred Revenue Bonds Payable (Less Current Portion): General Obligation Bonds Revenue Bonds Special Assessment Bonds Loans Payable Landfill Closure and Post-Closure Liability Total Liabilities $ 2,518,619 948,515 -101,192 2,876,242 109,034 1,490,000 450,246 1,063 -1,260,000 308,407 -----62,870 1,656,150 ---611,740 ----777,077 44,887 ---105,000 143,238 ----------904,292 -----5,899,086 Equity and Other Credits: Contributed Capital Investment in Fixed Assets Retained Earnings: Reserved for: Renewal and Replacement Airport Construction Unreserved Fund Balances: Reserved for Inventory Reserved for Capital Projects Reserved for Debt Service Reserved for Employee's Pension Benefits Unreserved ------ ------ 5,995,724 2,473,762 -------------1,440,000 ------1,440,000 2,573,303 271,874 --- 235,390 ---- 713,029 1,918,110 556,740 3,886,862 --108,199 -62,684 2,819,897 133,243 -------40,417 ---- 25,049,725 --4,040,319 7,636,068 ------ 49,770,053 --- --- --- --- 90,394,471 -- ---- ---- ---- ---- 1,593,915 386,185 98,622,425 --- --5,198,717 174,932 ---18,318,999 ----26,476,529 --681,757 --- -425,203 ---- Total Retained Earnings/Fund Balance 18,493,931 26,476,529 681,757 425,203 100,602,525 5,198,717 Total Equity and Other Credits 18,493,931 26,476,529 681,757 425,203 190,996,996 5,198,717 $ 24,393,017 32,472,253 3,155,519 1,865,203 240,767,049 5,474,524 Total Liabilities, Equity and Other Credits ------ 275,807 The notes to the financial statements are an integral part of this statement. 6 ------ Fiduciary Fund Types Trust Account Groups General General Fixed Long-term Assets Debt ----- ----- ------------ ------------ ------ ------ -- -- Total Reporting Entity (Memorandum Only) 8,204,617 2,396,434 2,750,000 859,845 75,796 4,464 --- 8,280,413 2,400,898 2,750,000 859,845 713,029 1,918,110 556,740 3,886,862 777,077 107,757 1,764,349 40,417 62,684 4,364,897 1,792,513 ------------ 713,029 1,918,110 556,740 3,886,862 777,077 107,757 1,764,349 40,417 62,684 4,364,897 1,792,513 13,635,000 16,270,000 1,188,000 --- 38,684,725 16,270,000 1,188,000 4,040,319 7,636,068 ------ 38,684,725 16,270,000 1,188,000 4,040,319 7,636,068 32,160,011 98,014,443 80,260 98,094,703 --- 90,394,471 75,692,155 -15,623 90,394,471 75,707,778 ---- ---- 1,593,915 386,185 103,821,142 ---- 1,593,915 386,185 103,821,142 ---226,632 -- ------ ------ 174,932 425,203 681,757 226,632 44,795,528 ----349,128 174,932 425,203 681,757 226,632 45,144,656 226,632 -- -- 152,105,294 349,128 152,454,422 -- 318,191,920 364,751 318,556,671 416,206,363 445,011 416,651,374 --- ---- -75,692,155 226,632 75,692,155 226,632 75,692,155 -1,067,011 --- Component Unit Greater Flagstaff Economic Council Total Primary Government (Memorandum Only) ------------ 32,160,011 7 Exhibit A-2 City of Flagstaff Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types and Discretely Presented Component Unit For the Fiscal Year Ended June 30, 2002 General Revenues: Taxes Licenses and Permits Intergovernmental Revenue Charges for Services Fines and Forfeitures Special Assessments Miscellaneous Revenues Contributions Memberships Total Revenues Expenditures: Current: General Government Parks and Recreation Public Safety Public Works Cemetery Community Development Contributions to Other Agencies Criminal Justice Highways and Streets Library Real Estate Proceeds Beautification Economic Development Tourism Arts and Science Recreation Community Redevelopment Contingencies Capital Outlays Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Governmental Fund Types Special Debt Revenue Service Capital Projects Total Primary Government (Memorandum Only) Component Unit Greater Flagstaff Economic Council Total Reporting Entity (Memorandum Only) $ 16,644,117 2,014,357 12,280,265 1,676,615 991,131 -1,233,912 --- 10,144,197 -11,477,026 ---1,766,231 --- 4,197,777 ----350,894 101,917 --- --251,594 ---67,539 --- 30,986,091 2,014,357 24,008,885 1,676,615 991,131 350,894 3,169,599 --- ------21,116 383,889 45,538 30,986,091 2,014,357 24,008,885 1,676,615 991,131 350,894 3,190,715 383,889 45,538 34,840,397 23,387,454 4,650,588 319,133 63,197,572 450,543 63,648,115 5,834,543 3,853,094 16,057,019 950,242 162,844 5,359,095 933,583 1,335,400 ---------186,944 -- --------15,648,877 2,575,113 408,584 475,284 315,168 1,292,951 345,217 1,325,552 1,649,109 --- ------------------5,788,006 5,834,543 3,853,094 16,057,019 950,242 162,844 5,359,095 933,583 1,335,400 15,648,877 2,575,113 408,584 475,284 315,168 1,292,951 345,217 1,325,552 1,649,109 186,944 5,788,006 ------------429,417 ------- 5,834,543 3,853,094 16,057,019 950,242 162,844 5,359,095 933,583 1,335,400 15,648,877 2,575,113 408,584 475,284 744,585 1,292,951 345,217 1,325,552 1,649,109 186,944 5,788,006 --34,672,764 -------------------- 1,490,000 901,679 1,489,000 541,395 26,427,534 2,030,395 --5,788,006 2,979,000 1,443,074 68,918,699 --429,417 2,979,000 1,443,074 69,348,116 (Continued) The notes to the financial statements are an integral part of this statement. 8 Exhibit A-2 (Continued) City of Flagstaff Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types and Discretely Presented Component Unit For the Fiscal Year Ended June 30, 2002 Other Financing Sources (Uses): Operating Transfers - In Bond Proceeds Operating Transfers - Out Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses Fund Balances at Beginning of Year Fund Balances at End of Year Component Unit Greater Flagstaff Economic Council Total Reporting Entity (Memorandum Only) Governmental Fund Types Special Debt Revenue Service Capital Projects (3,040,080) 2,620,193 (5,468,873) (5,721,127) 21,126 (5,700,001) 4,883,245 -(5,977,900) 5,318,815 3,100,000 (3,219,671) 1,731,044 -(4,088,739) 1,061,000 -(321,334) 12,994,104 3,100,000 (13,607,644) ---- 12,994,104 3,100,000 (13,607,644) (1,094,655) 5,199,144 (2,357,695) 739,666 2,486,460 -- 2,486,460 (927,022) 2,159,064 262,498 (4,729,207) (3,234,667) 21,126 (3,213,541) 19,420,953 24,317,465 419,259 5,154,410 49,312,087 328,002 49,640,089 $ 18,493,931 26,476,529 681,757 425,203 46,077,420 349,128 46,426,548 General Excess (Deficiency) of Revenues Over (Under) Expenditures Total Primary Government (Memorandum Only) $ 167,633 The notes to the financial statements are an integral part of this statement. 9 Exhibit A-3 City of Flagstaff Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types Budget and Actual For the Fiscal Year Ended June 30, 2002 General Fund Budget Revenues: Taxes Licenses and Permits Intergovernmental Revenue Charges for Services Fines and Forfeitures Special Assessments Miscellaneous Revenues $ Total Revenues Expenditures: Current: General Government Parks and Recreation Public Safety Public Works Cemetery Community Development Contributions to Other Agencies Criminal Justice Highways and Streets Library Real Estate Proceeds Beautification Economic Development Tourism Arts and Science Recreation Community Redevelopment Contingencies Capital Outlays Debt Service: Principal Retirement Interest and Fiscal Charges Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses Fund Balances at Beginning of Year Fund Balances at End of Year $ Actual Variance 1,071,253 523,354 180,943 128,793 (56,107) -(943,009) 9,738,052 -14,556,853 ---1,873,268 10,144,197 -11,477,026 ---1,766,231 406,145 -(3,079,827) ---(107,037) 33,935,170 34,840,397 905,227 26,168,173 23,387,454 (2,780,719) 12,007,732 4,979,127 16,957,578 1,484,734 181,207 8,139,522 1,052,385 1,367,933 ---------700,000 -- 5,834,543 3,853,094 16,057,019 950,242 162,844 5,359,095 933,583 1,335,400 ---------186,944 -- 6,173,189 1,126,033 900,559 534,492 18,363 2,780,427 118,802 32,533 ---------513,056 -- --------28,034,002 3,256,239 885,000 1,298,789 379,900 1,644,203 414,493 6,124,308 2,467,189 --- --------15,648,877 2,575,113 408,584 475,284 315,168 1,292,951 345,217 1,325,552 1,649,109 --- --------12,385,125 681,126 476,416 823,505 64,732 351,252 69,276 4,798,756 818,080 --- 1,490,000 904,293 1,490,000 901,679 -2,614 (12,935,048) Other Financing Sources (Uses): Operating Transfers - In Bond Proceeds Copy Center Reserve Operating Transfers- Out Budget 16,644,117 2,014,357 12,280,265 1,676,615 991,131 -1,233,912 46,870,218 Excess (Deficiency) of Revenues Over (Under) Expenditures Variance 15,572,864 1,491,003 12,099,322 1,547,822 1,047,238 -2,176,921 --- Total Expenditures Actual Special Revenue Funds --- --- 34,672,764 12,197,454 46,898,416 26,427,534 20,470,882 167,633 13,102,681 (20,730,243) (3,040,080) 17,690,163 (5,080,383) --5,523,195 5,294,421 -140,000 (6,315,788) 4,883,245 --(5,977,900) (411,176) -(140,000) 337,888 10,399,198 3,100,000 -(8,742,866) 5,318,815 3,100,000 -(3,219,671) (881,367) (1,094,655) (213,288) 4,756,332 5,199,144 442,812 (13,816,415) (927,022) 12,889,393 (15,973,911) 2,159,064 18,132,975 16,946,498 19,420,953 2,474,455 23,252,187 24,317,465 1,065,278 3,130,083 18,493,931 15,363,848 7,278,276 26,476,529 19,198,253 The notes to the financial statements are an integral part of this statement. 10 Debt Service Funds Capital Projects Funds Budget Actual 4,204,927 ----214,413 84,311 4,197,777 ----350,894 101,917 (7,150) ----136,481 17,606 --75,048 ----- --251,594 ---67,539 --176,546 ---67,539 4,503,651 4,650,588 146,937 75,048 319,133 244,085 ------------------4,832,096 ------------------5,788,006 -------------------- -------------------- Variance -------------------- Budget Actual --- --- Variance ------------------(955,910) 1,489,000 607,629 1,489,000 541,395 -66,234 --- 2,096,629 2,030,395 66,234 4,832,096 5,788,006 (955,910) 2,407,022 2,620,193 213,171 (4,757,048) (5,468,873) (711,825) 1,795,816 --(4,111,181) 1,731,044 --(4,088,739) (64,772) --22,442 1,061,000 4,486,343 -(321,334) 1,061,000 --(321,334) -(4,486,343) --- (2,315,365) (2,357,695) (42,330) 5,226,009 739,666 (4,486,343) 91,657 262,498 170,841 468,961 (4,729,207) (5,198,168) 435,977 419,259 (16,718) 660,869 5,154,410 4,493,541 527,634 681,757 154,123 1,129,830 425,203 11 (704,627) Exhibit A-4 City of Flagstaff Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balances All Proprietary Fund Types For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Proprietary Fund Types Internal Enterprise Service Operating Revenues: Water Revenues Sewer Revenues Airport Revenues Environmental Services Revenues Intergovernmental Revenue City Contribution Miscellaneous Revenues 2002 2001 10,438,668 6,454,599 838,596 6,667,016 788 -3,786 -----4,461,009 1,114 10,438,668 6,454,599 838,596 6,667,016 788 4,461,009 4,900 10,560,317 6,468,407 804,056 5,144,988 -4,019,335 10,956 Total Operating Revenues 24,403,453 4,462,123 28,865,576 27,008,059 Operating Expenses Staff Support and Services Administration Water Wastewater Airport Environmental Services Employee Benefit Insurance Other Insurance 2,801,831 644,962 4,126,431 3,100,746 753,331 5,273,607 --- ------4,158,709 636,567 2,801,831 644,962 4,126,431 3,100,746 753,331 5,273,607 4,158,709 636,567 2,905,766 496,247 4,574,334 2,909,411 770,650 3,730,844 3,626,754 832,886 16,700,908 6,800,564 4,795,276 -- 21,496,184 6,800,564 19,846,892 6,685,318 23,501,472 4,795,276 28,296,748 26,532,210 568,828 475,849 Depreciation Total Operating Expenses Operating Income (Loss) Non-Operating Revenues (Expenses): Interest Income Interest Expense and Fiscal Charges Water and Sewer Buy-Ins Net Gain (Loss) on Disposal of Fixed Assets Contributed Revenue Miscellaneous Total Non-Operating Revenues (Expenses) $ Total Memorandum Only 901,981 (333,153) 1,019,530 (1,466,702) 1,595,052 (162,279) 10,653,459 32,633 166,087 ------ 1,185,617 (1,466,702) 1,595,052 (162,279) 10,653,459 32,633 2,155,601 (1,733,528) 1,261,030 14,103 6,554,879 (8,024) 11,671,693 166,087 11,837,780 8,244,061 (Continued) The notes to the financial statements are an integral part of this statement. 12 Exhibit A-4 (Continued) City of Flagstaff Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balances All Proprietary Fund Types - Continued For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Proprietary Fund Types Internal Enterprise Service Income (Loss) Before Operating Transfers $ Operating Transfers In (Out): Operating Transfers - In from: Secondary Property Tax Revenue Fund General Fund Economic Development Fund Beautification Operating Transfers - Out to: General Fund Net Operating Transfers In (Out) 12,573,674 2002 (167,066) 2001 12,406,608 8,719,910 2,523,950 880,969 29,978 -- ----- 2,523,950 880,969 29,978 -- 2,625,000 845,688 -29,247 (2,821,357) -- (2,821,357) (2,809,811) 613,540 Net Income (Loss) Total Memorandum Only 13,187,214 -(167,066) 613,540 690,124 13,020,148 9,410,034 1,475,075 1,517,557 14,495,223 10,927,591 Add Back Depreciation on Fixed Assets Acquired with Capital Grants 1,475,075 Increase (Decrease) in Retained Earnings 14,662,289 Retained Earnings (Deficit) July 1 85,940,236 5,365,783 91,306,019 80,378,428 100,602,525 5,198,717 105,801,242 91,306,019 Retained Earnings at June 30 as Restated $ -(167,066) The notes to the financial statements are an integral part of this statement. 13 Exhibit A-5 City of Flagstaff Combined Statement of Cash Flows All Proprietary Fund Types For the Fiscal Year Ended June 30, 2002 Enterprise Cash Flows From Operating Activities Cash Received From Customers and Users Cash Payments to Suppliers of Goods and Services Cash Payments to Employees for Services Operating Grants Received Increase in Customer Deposits Miscellaneous Operating Revenue (Expense) $ 24,290,599 (7,008,876) (7,915,699) 21,460 34,465 35,281 Net Cash Provided (Used) by Operating Activities 9,457,230 Cash Flows From Non-Capital Financing Activities Operating Transfers In From Other Funds Increase in Interfund Payable Operating Transfers Out to Other Funds Change in Guarantees Net Cash Provided (Used) by Non-Capital Financing Activities Cash Flows From Capital and Related Financing Activities Capital Grants Received Capital Contributed by Contractors Bonds Principal Payments Interest Payments and Related Expenses Proceeds From Sale of Capital Assets Acquisition and Construction of Capital Assets Increase in Arbitrage Liability Principal Paid on ADEQ Loan Capital Lease Principal Payments Interest Payments Capital Loan Principal Payments Interest Payments Increase in Deferred Revenue Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows From Investing Activities Interest From Investments Net Cash From Investing Activities Net Increase (Decrease) in Cash Cash Balance at Beginning of Year Cash Balance at End of Year Internal Service Total Memorandum Only 4,435,243 28,725,842 (4,755,097) ---1,114 (11,763,973) (7,915,699) 21,460 34,465 36,395 (318,740) 9,138,490 3,340,664 1,875,000 (2,727,124) 8,045 ----- 3,340,664 1,875,000 (2,727,124) 8,045 2,496,585 -- 2,496,585 4,360,816 1,595,052 --- 4,360,816 1,595,052 (1,389,735) (1,042,717) 15,641 (14,351,344) (101,726) (289,605) ------- (1,389,735) (1,042,717) 15,641 (14,351,344) (101,726) (289,605) (27,740) (6,899) --- (27,740) (6,899) (23,698) (31,251) (19,033) ---- (23,698) (31,251) (19,033) (11,312,239) -- (11,312,239) 1,058,857 182,631 1,241,488 1,058,857 182,631 1,241,488 1,700,433 (136,109) 1,564,324 32,581,478 5,417,328 37,998,806 $ 34,281,911 5,281,219 39,563,130 (Continued) The notes to the financial statements are an integral part of this statement. 14 Exhibit A-5 (Continued) City of Flagstaff Combined Statement of Cash Flows All Proprietary Fund Types For the Fiscal Year Ended June 30, 2002 Enterprise Internal Service Total Memorandum Only Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income (Loss) $ Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities Depreciation Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventory Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Payroll and Payroll Taxes Increase in Customer Deposits Increase (Decrease) in Operating Grants Receivable Increase (Decrease) in Landfill Closure and Post-Closure Liability Miscellaneous Revenues (Expenses) Total Adjustments 901,981 (333,153) 6,800,564 -- 6,800,564 (109,068) (113,935) 1,312,841 32,345 34,465 21,460 545,082 31,495 (25,766) -40,179 ------ (134,834) (113,935) 1,353,020 32,345 34,465 21,460 545,082 31,495 8,555,249 14,413 8,569,662 (318,740) 9,138,490 Net Cash Provided (Used) by Operating Activities $ 9,457,230 Non-Cash Investing, Capital, and Financing Activities Developers Contributing Assets to Governmental Entity $ 3,645,030 Cash and Cash Equivalents Unrestricted Restricted Cash Balance June 30 $ 25,242,869 9,039,042 $ 34,281,911 -- 5,281,219 -5,281,219 The notes to the financial statements are an integral part of this statement. 15 568,828 3,645,030 30,524,088 9,039,042 39,563,130 Exhibit A-6 City of Flagstaff Firemen's Pension Trust Fund Statement of Plan Net Assets June 30, 2002 (With Comparative Totals as of June 30, 2001) 2002 Assets: Cash and Cash Equivalents $ Total Assets 2001 226,632 $ 226,632 Liabilities: Total Liabilities Net Assets Held in Trust for Pension Benefits (The Funding Status and Progress is presented on page 42 and 43.) $ 226,593 226,593 -- -- -- -- 226,632 $ 226,593 The notes to the financial statements are an integral part of this statement. 16 Exhibit A-7 City of Flagstaff Firemen's Pension Trust Fund Statement of Changes in Plan Net Assets For the Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) Additions: Investment Income: Interest Income Other Income $ Total Additions Deductions: Distributions to Participants Total Deductions Net Increase (Decrease) in Net Assets Net Assets Held in Trust for Pension Benefits: Beginning of Year End of Year $ 2002 2001 Actual Actual 7,125 114 13,620 95 7,239 13,715 7,200 8,800 7,200 8,800 39 4,915 226,593 221,678 226,632 226,593 The notes to the financial statements are an integral part of this statement. 17 18 NOTES TO THE FINANCIAL STATEMENTS The notes to the Financial Statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the financial statements. NOTES TO THE FINANCIAL STATEMENTS CITY OF FLAGSTAFF Notes to Financial Statements Year Ended June 30, 2002 I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Flagstaff was incorporated as a town in 1894 and as a city in 1928. The current City Charter was approved April 10, 1984. The Charter provides for the Council-Manager form of government and the authority to provide municipal services, as limited by the State Constitution. The accounting policies of the City of Flagstaff conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant policies: A Reporting Entity The City of Flagstaff (the City) is a municipal corporation governed by an elected mayor and six-member council. As required by generally accepted accounting principles, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are combined with data of the primary government. The discretely presented component unit is reported in a separate column in the combined financial statement to emphasize it is legally separate from the government. The discretely presented component unit year-end is June 30. Blended Component Unit. The Municipal Facilities Corporation (MFC) is a non-profit corporation created by the City for the purpose of constructing, acquiring and equipping municipal facilities. For financial reporting purposes, transactions of the MFC are included as if it were part of the City's operations. In fiscal year 2001 the MFC issued $4.7 million in bonds for the construction of a new United States Geological Survey (USGS) facility on land owned by the City. The City will make lease payments equal to the debt service and will obtain legal title upon payment in full of the bonds. Discretely Presented Component Unit. The Greater Flagstaff Economic Council (GFEC) is responsible for planning and encouraging economic growth within the City of Flagstaff's jurisdiction. GFEC has an eighteen member Board of Directors, of which the Mayor and Vice Mayor are Directors who can directly or indirectly appoint two additional Directors. The remaining members of the Board are voted on by GFEC members. The economic resources of the GFEC are used almost entirely for the benefit of the City’s constituents. GFEC is presented as a governmental fund type. Complete financial statements for the Greater Flagstaff Economic Council may be obtained at the entity's office: 1300 South Milton #125, Flagstaff, AZ 86001. Related Organizations. The City of Flagstaff's officials are also responsible for appointing members of the board of other organizations. However, as the City's control is limited to making the appointments and there is not a significant operational nor a significant financial relationship between these organizations and the City, they are not included as part of these financial statements. 19 B Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the City are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance/retained earnings, revenues and expenditures, or expenses, as appropriate. The City uses the following fund types and account groups: Governmental Funds are used to account for the City's general government activities. Governmental fund types use the flow of current financial resources measurement focus and modified accrual basis of accounting. Under the modified accrual basis of accounting revenues are recorded when susceptible to accrual, i.e., both measurable and available. Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the fund liability is incurred, except for unmatured interest on general long term debt which is recognized when due, and certain compensated absences and claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Utility franchise taxes, transaction privilege taxes, property taxes, state revenue sharing, state and city sales tax, grant revenues earned, investment earnings and auto lieu taxes are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time. Special assessments are recognized as revenue only to the extent that individual installments are considered current assets. Annual installments not currently receivable are reflected as deferred revenue. Expendituredriven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund types: General Fund - The General Fund is the general operating fund of the City and is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Funds - These funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. The revenue sources are local property taxes levied specifically for debt service and collections from property owners on special assessment districts. Capital Projects Funds - These funds account for the construction of major capital projects not being financed by proprietary or non-expendable trust funds. 20 Proprietary Funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City's Proprietary Funds apply all applicable Governmental Accounting Standards Board (GASB) Statements, as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict or contradict GASB pronouncements: Financial Accounting Standards Board Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins of the Committee on Accounting Procedure. Enterprise Funds - The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. They are designed to accumulate the total cost of providing a particular service and to indicate the extent to which user charges imposed upon service consumers are sufficient to cover these costs. Internal Service Fund - This fund accounts for activities and services performed for other organizational units within the City. Charges to other City divisions are made to support these activities. The only internal service fund of the City is its Self-Insurance Fund. Fiduciary Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. Pension Trust - The Firemen's Pension Fund is a pension trust fund that is used to account for the activity of the City's single-employer retirement system. This fund is accounted for on the same basis as a proprietary fund, using the same measurement focus and basis of accounting. Account Groups are used to establish accounting control and accountability for certain of the City's fixed assets and general long-term debt. General Fixed Assets Account Group is used to account for all fixed assets of the City other than those accounted for in proprietary or trust funds. General Long-Term Debt Account Group is used to account for all long-term debt and certain other liabilities that are not specific liabilities of proprietary or trust funds. C Assets, Liabilities and Equity 1. Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorized the government to invest in the State's Local Government Investment Pool, in obligations of the U.S. Treasury, commercial paper and repurchase agreements. Investments are stated at fair value. 21 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "interfund receivable/payables." All trade and property tax receivables are shown net of an allowance for uncollectibles. The City's property tax is levied each year on or before the third Monday in August based on the previous January 1, full cash value as determined by the Coconino County Assessor. Levies are due and payable in two installments on September 1 and March 1. First half installments become delinquent on November 1; second half installments become delinquent on May 1. Interest at the rate of 12% per annum accrues following delinquent dates. Coconino County bills and collects all property taxes, at no charge to the taxing entities. A lien against property assessed attaches on the first day of January preceding assessment and levy thereon. Under Arizona tax laws, there are two property tax levies, primary and secondary. Primary property taxes are not restricted as to use and are used to finance the general operations of the City. Secondary property taxes are restricted for general obligation bonded debt service. The secondary property tax levy is recorded as revenue in a debt service fund and transferred to the Water and Wastewater Enterprise Fund, the Highway Users Revenue Fund, the Airport Enterprise Fund and the Library General Obligation Bond Fund. General Obligation bonds are serviced by each of these funds. For fiscal year 2001-2002, primary and secondary property tax collections amounted to $3,070,491 and $4,197,776 respectively. Property taxes are recognized on the modified accrual basis, i.e. when both measurable and available. Property taxes receivable at June 30, 2002 represents delinquent amounts. 3. Inventory Inventory is valued at cost, which approximates market, using the weighted average cost method. Inventory consists of expendable supplies held for consumption and is charged to expenditure accounts as consumed. 4. Restricted Assets/Liabilities In accordance with applicable covenants of Enterprise Fund Bond Issues, Mayor and Council Resolutions, or other agreements, appropriate assets and liabilities have been restricted. 5. Fixed Assets General fixed assets have been acquired for general governmental purposes. Assets purchased are recorded as expenditures in the governmental funds and capitalized at historical cost in the general fixed assets account group. Contributed fixed assets are recorded at fair value at date of acquisition. Assets in the general fixed assets account group are not depreciated. Interest incurred during construction is not capitalized in the general fixed asset account group. It is the City's policy not to capitalize public domain ("infrastructure") general fixed assets such as roads, bridges, streets and similar items in the general fixed assets account group. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the general fixed assets account group or capitalized in the proprietary funds. 22 Property, plant and equipment in the proprietary funds are stated at historical cost; or, if donated, at fair value at the date of donation. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Buildings Improvements Machinery and equipment 40-50 years 20-75 years 5-10 years Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are constructed. Interest incurred during the construction phase of proprietary fund fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. The City of Flagstaff amended the accounting estimate for the capitalization of all fixed assets from $1,000 to $5,000. 6. Compensated Absences City employees are granted vacation and sick leave in varying amounts under the City's personnel ordinance. In the event of termination, an employee is reimbursed for accumulated vacation. In accordance with Governmental Accounting Standards Board Statement 16, Accounting and Financial Reporting Principles for Claims and Judgments and Compensated Absences, the City has provided for the current portion of accrued vacation benefits in the governmental funds to be paid out of current resources. A long-term liability of $1,067,011 is recorded in the General Long-Term Debt Account Group for the accrued vacation benefits to be funded by future operations. Proprietary Fund types accrue vacation benefits in the period they are earned. Sick leave benefits provide for ordinary sick pay and are not vested with the employee and, therefore, are not accrued. Such accumulated sick leave benefits totaled $5,838,938 at June 30, 2002. 7. Investment Income Investment income is composed of interest, dividends, and net changes in the fair value of applicable investments. 8. Long-term Obligations The City reports long-term debt of governmental funds at face value in the General Long-Term Debt Account Group. Certain other governmental fund obligations not expected to be financed with current available financial resources are also reported in the General Long-Term Debt Account Group. According to Arizona Revised Statute 48-557, if there is a deficiency in the funds collected from special assessments, the General Fund will furnish an amount sufficient to meet the obligation of the bonds payable and reimburse itself when funds are subsequently received. Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate funds. For governmental fund types, bond premiums and discounts, as well as issuance costs are recognized during the current period. Bond proceeds are reported as an other financing source net of the applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 23 9. Fund Equity Reservations of fund balance and retained earnings are limited to outside third-party restrictions and legal restrictions imposed by City ordinances. The proprietary fund's contributed capital represents equity acquired prior to July 1, 2000 through capital grants and capital contributions from developers, customers or other funds. Effective July 1, 2000, the City implemented changes required by GASB Statement 33, Nonexchange Transactions which requires contributed capital to be reported as non-operating revenue in the Statement of Revenue, Expenses, and Changes in Retained Earnings. The change in accounting principle for FY2001 reflects an increase of $4,600,090 in the Water and Wastewater Fund net income and $1,954,789 in the Airport Fund net income. The retained earnings balances (as previously reported) have been restated for the change in accounting principle. Proprietary fund’s capital grants and contributed capital are treated as contribution revenue. Reservations of fund balance and retained earnings represent amounts that are not appropriable or are legally restricted. 10. Memorandum Only -- Total Columns Total columns on the general purposed financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis and do not represent consolidated financial information. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. 11. Comparative Data Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the City's cash flows and operations. 12. Transactions Between or Among Funds Transactions that would be treated as revenues, expenditures or expenses if they involved organizations external to the governmental unit are accounted for as revenues, expenditures or expenses in the funds involved. These transactions are considered quasi-external transactions. Transactions which constitute reimbursements to a fund for expenditures or expenses initially made from that fund are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed. Other transfers are treated as operating transfers and are included in the results of operations of both governmental and proprietary funds. due to a change in policy to charge the residential and commercial collection programs for landfill fees. 13. Rebateable Arbitrage Rebateable Arbitrage is treated as a reduction of revenue and recorded as a liability in the appropriate fund. II STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. Annual budgets for the enterprise funds are prepared on a basis which differs from GAAP because state law requires capital purchases and debt service payments to be budgeted as expenses, bond proceeds and grants that are to be utilized to be budgeted as revenues and amortization and depreciation are 24 not budgeted. All funds except the Internal Service Fund are budgeted. The Internal Service Fund requires no budget by state law and, therefore, no comparison of budget to actual is presented in the financial statements. All annual appropriations lapse at fiscal year end. The City follows these procedures in establishing the budgetary data reflected in the financial statements: Prior to June 1, the City Manager submits to the City Council a proposed budget for the fiscal year beginning the following July 1. The operating budget includes proposed expenditures and the means of financing them. Two public hearings are held to obtain taxpayer comments. Prior to or immediately following July 1, the budget is adopted through passage of a resolution. The appropriated budget is prepared by fund, function and department. The City's department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Council. The legal level of budgetary control is the department level. With the approval of the City Council, the City Manager may make transfers out of a contingency appropriation into a department's budget. The total departmental budgeted amounts are not changed without Council approval. Council approved certain transfers from the contingency budgeted amounts to various departments on July 2, 2002; however, these transfers were not material in relation to the original department appropriations. Encumbrance accounting is employed by the City. Encumbrance accounting, under which purchase orders, contracts and other commitments for expenditures are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control. Encumbrances outstanding at year-end for goods or services which were not received prior to the end of the fiscal year are canceled. The following table compares actual to budget for expenditures/expenses at the department level for year ended June 30, 2002: Actual Budget Management Services General Administration Community Development Fire Non-Departmental Police Public Works Utilities $ 5,555,667 4,936,762 12,350,955 6,267,283 17,516,316 9,789,736 33,530,498 18,006,983 6,428,450 5,447,276 19,528,620 7,130,600 18,994,579 9,826,978 59,258,029 24,240,480 Total $ 107,954,200 150,855,012 B Budgetary Basis of Accounting The City's adopted budget for all governmental funds is prepared on a basis consistent with generally accepted accounting principles (GAAP). 25 C Excess of Expenditures over Appropriations In the Capital Projects Fund, Bond Construction expenditures exceeded appropriations by $955,910 due to the funding of integrated computer equipment at the Law Enforcement Administrative Facility (LEAF), final road improvements at the LEAF, and bond principal and interest payments for the USGS facility, which had not been budgeted. However, additional General Fund revenues and reimbursements from Coconino County funded these expenditures. This was not in excess of the legal level of control. D Deficit Fund Equity The Airport enterprise fund had a $1,419,170 deficit in unreserved retained earnings at June 30, 2001. This deficit was eliminated in FY2002. The major factor in eliminating the deficit related to the implementation of GASB 33 and which requires contributed capital to be recorded as non-operating revenue. III DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A Deposits and Investments The City maintains a cash and investment pool that is available for use by all funds except the Deferred Compensation Fund. Each fund type's portion of this pool is included on the combined balance sheet in "Cash and Cash Equivalents". The following summarizes the various deposits and investments of the City: Deposits: At year-end, the book value of the City's deposits was $4,670,538 and the bank balance was $7,290,031. The $2,619,493 difference represents deposits in transit, outstanding checks and other reconciling items at June 30, 2002. Of the bank balance, $6,793,721 was covered by federal depository insurance or by collateral held by the City's agent in the City's name, and $496,310 was covered by collateral held in the fiscal agent's trust department but not in the City's name. The trust department pledges a pool of collateral against all trust deposits it holds. At year-end, the book value of deposits for GFEC, a discretely presented component unit, was $306,560 which was covered by federal depository insurance or by collateral held by the entity's agent in GFEC's name. Investments: City resolution and State Statutes authorize the City to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, repurchase agreements, money market accounts, certificates of deposit and the State of Arizona Local Government Investment Pool (LGIP). The LGIP is a part of the State Treasurer's office. The State Board of Deposit provides oversight for the State Treasurer’s pools, and the LGIP Advisory Committee provides consultation and advice to the Treasurer. The fair value of the participant’s position in the pool approximates the value of that participants’ pool shares. Those shares are not identified with specific investments and are not subject to custodial credit risk. All other investments were insured or registered in the City's name, or were held by the City or its agent in the City's name. It is the City’s policy generally to hold investments until maturity. The fair value of the investments is based on quoted market values. The City has no investments held by a counterparty's trust department or agent. The City is in compliance with the provisions of Statement No. 31 of the Governmental Accounting Standards Board (GASB), Accounting and Financial Reporting for Certain Investments and for External Investment Pools, which require certain investments to be reported at fair value rather than at cost. 26 The City’s investments are categorized as follows to give an indication of the level of risk assumed at year-end: Category 1 Investments that are insured or registered or for which the securities are held by the City or its agent in the City’s name. Category 2 Uninsured and unregistered investments for which the securities are held by the counterparty’s trust department or agent in the City’s name. Category 3 Uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City’s name. Investments as of June 30, 2002: Category 1 U.S. Government Securities $ Local Government Securities 3 Carrying Amount Fair Value 30,785,670 - - 30,785,670 30,785,670 120,769 - - 120,769 120,769 88,000 - - 88,000 88,000 30,994,439 - - 30,994,439 30,994,439 49,625,306 49,625,306 115,076 115,076 $ 80,734,821 80,734,821 Municipal Securities $ 2 Investments-Not Categorized: State of Arizona Investment Pool AMFP Investment Pool Total Investments Cash and Investments: Reconciliation of Exhibit A-1 to Note lll.A Exhibit A-1 Amount Cash and cash equivalents $ 76,214,867 Restricted Cash: Other restricted cash 9,190,492 Total $ 85,405,359 Deposits $ 4,670,538 Investments 80,734,821 Total $ The Pension Trust Fund owns less than one percent of the investments. 27 85,405,359 B Receivables Receivables as of year-end, including the applicable allowances for uncollectible accounts, are as follows: Governmental Fund Types General Proprietary Fund Types Special Debt Capital Revenue Service Projects Internal Enterprise Service Total Receivables: Sale of Property $ - 143,238 - - - - 143,238 18,221 29,152 - - - - 47,373 2,712,141 901,220 - 961,128 3,323,949 55,571 7,954,009 132,742 133,107 - - 198,559 42,837 507,245 2,261,040 805,873 - - - - 3,066,913 - - - 788,587 - - 788,587 352,093 885,700 - - 4,054,075 - 5,291,868 Intergovernmental Accounts Interest Sales Tax Bond Proceeds Grants Special Assessments - - 904,292 - - - 904,292 1,440,000 2,830,000 - - - 94,897 4,364,897 Interest - - - - 15,799 - 15,799 Accounts - 733,384 - - - - 733,384 6,916,237 6,461,674 904,292 1,749,715 7,592,382 193,305 23,817,605 (296,700) - - - (68,161) - (364,861) 6,619,537 6,461,674 904,292 1,749,715 7,524,221 193,305 23,452,744 Interfund Restricted: Gross Receivable Less: Allowance for Uncollectibles Net Total Receivables C $ Interfund Receivables and Payables The composition of interfund balances as of June 30, 2002 is as follows: Due to/from other funds: Receivable Fund Payable Fund Amount Highway User Fund Metropolitan Planning Org. Highway User Fund Airport Fund Highway User Fund Community Redevelopment Fund 45,000 Internal Service Fund Airport Fund 94,897 General Fund Public Safety Bond Fund $ 2,725,000 1,440,000 $ 28 60,000 4,364,897 D Fixed Assets A summary of changes in general fixed assets follows: June 30, 2001 Land $ Additions 5,618,012 1,723,309 Deletions Transfers June 30, 2002 36,000 - 7,305,321 1,418 - 20,605,777 - 10,260,066 Buildings 20,607,195 Improvements 10,053,354 206,712 Machinery & Equipment 22,859,145 704,071 2,833,439 - 20,729,777 Construction in Progress 8,931,646 7,901,289 41,721 - 16,791,214 68,069,352 10,535,381 2,912,578 - 75,692,155 $ - Transfers from the enterprise funds to General Fund are included with the additions. Completed Construction in Progress is included in the transfers. Construction in Progress is comprised of the following: Police Station USGS 1997 Bond Building Park Enhancements Rio De Flag $ $ Balance as of June 30, 2002 8,612,621 4,541,973 965,171 2,671,449 16,791,214 A summary of enterprise funds property, plant and equipment as of June 30, 2002 follows: Water and Wastewater Land $ Environmental Airport Services Total 394,567 113,365 1,849,428 2,357,360 59,701,560 5,951,202 1,029,514 66,682,276 162,136,397 31,037,715 988,365 194,162,477 Machinery & Equipment 5,441,937 1,744,271 6,756,196 13,942,404 Construction in Progress 6,017,274 4,796,105 1,169,366 11,982,745 (69,138,137) (16,276,353) (5,179,982) (90,594,472) 164,553,598 27,366,305 6,612,887 198,532,790 Buildings Improvements Less accumulated depreciation $ 29 The summary of changes in fixed assets for the component unit is as follows: Improvements other than building $ Machinery & Equipment Total Less Accumulative Depreciation $ E June 30, 2001 Additions Deletions June 30, 2002 1,208 - - 1,208 63,901 - 11,870 52,031 65,109 - 11,870 53,239 (54,905) (37,616) 10,204 15,623 Leases The City has a number of lease purchase agreements, all of which have been capitalized in the appropriate fund or account group. Fund of Source of Account Group Capitalized Item Purchased Funding Where Capitalized Cost Construct T-hangars & shades Airport Fund Airport Less Accumulated Depreciation and Amortization Net total $ $ 285,218 (86,951) 198,267 Future minimum payments under capital leases are as follows: Airport Fixed Assets Fiscal Year 2003 2004 Minimum lease payments Less: Interest Present Value of Minimum payments $ 34,639 34,640 69,279 (6,595) $ 62,684 At June 30, 2002, the City was in compliance with the terms of all capital lease agreements. Current portion represents lease payments due on July 1, 2002. The City has no non-cancelable operating leases. 30 F Long-term Obligations Following is a summary of changes in the general long-term debt account group: Balance June 30, 2001 General Obligation Assessements with Governmental Commitment Accrued Vacation Benefits Street Construction Revenue Other Debt Total $ 7,095,000 1,417,000 875,771 17,760,000 4,700,000 31,847,771 Additions 3,100,000 Reductions (1,260,000) Balance June 30, 2002 $ 8,935,000 - 191,240 (229,000) 1,188,000 - 1,067,011 (1,490,000) 16,270,000 - 3,291,240 - (2,979,000) 4,700,000 32,160,011 The above amounts have been reduced by deposits made to the City's fiscal agents for the July 1, 2002 maturities. The total general long-term debt of the City is $32,160,011. Special Assessment Bonds Proceeds from special assessment bonds are used for improvements such as paving, sidewalks and sewers. Payments made by the assessed property owners are pledged as collateral. In the event of default by a property owner, the lien created by the assessment is sold at public auction and the proceeds are used to offset the defaulted assessment. If there is no purchase at the public auction, the City is required to buy the property with funds appropriated from the General Fund. Loan Payable In July, 1992 the City of Flagstaff entered into a loan agreement with the Wastewater Management Authority of Arizona for the purpose of constructing reclaimed water lines for the new reclaimed water plant. The $6,000,000 loan is scheduled to be paid in annual installments over twenty years with an interest rate of 3.402%. The unpaid principal amount of the loan at June 30, 2002 is $3,497,183. In September 1999, the City of Flagstaff entered into a loan agreement with Arizona Department of Transportation Aeronautics Division for the purpose of constructing a 14 unit T-hangar and a 12-unit shade hangar. The $600,000 loan is scheduled to be paid in quarterly installments over 17 years with an interest rate of 5.60%. The unpaid principal amount of the loan at June 30, 2002 is $543,137. Landfill Closure Liability The Environmental Services Fund currently operates one landfill, the Cinderlake Landfill. Federal and state regulations require that environmental damage caused by landfills be mitigated and that action be taken to prevent future damage. Closure costs, which include the capping of the landfill with soil and installing such items as drainage and monitoring systems, and post-closure cost estimates are based on a study made by an 31 independent consultant and are subject to change due to inflation, technology changes and applicable legal or regulatory requirements. Total closure and post-closure costs for the Cinderlake Landfill, which is still operating, are currently estimated to be $13,973,187, all of which represents future expenses. $11,522,930 has been recorded as a liability and restricted liability in the accompanying financial statements representing costs associated with the cumulative capacity used to date (82% of the total landfill capacity used as of June 30, 2002). The remaining $2,450,257 will be accrued over the remaining life of the landfill, which is currently estimated to be 7 years. The accrual for these closure and post-closure costs for fiscal year 2002 was $545,082. Based on current estimates for closure and post-closure landfill costs, the City is setting aside legally restricted funds to insure sufficient funds will be available to meet these requirements. The City makes annual contributions to finance closure and post-closure costs. At June 30, 2002 the balance of the investments held for those purposes is $3,871,063. These investments are reported as restricted cash and investments in the City’s Environmental Services Fund, and are held by the State of Arizona’s Local Government Investment Pool. According to state and federal laws and regulations, the City must comply with the local government financial test requirements that assure the City can meet the cost of landfill closure, post-closure and corrective action when needed. The City, which has pledged its full faith and credit to meet state financial responsibility requirements, is in compliance with these requirements. In March of 1999, the City purchased 343.9 acres of land from the Forest Service. This land is adjacent to the existing landfill and will be used to open additional cells as needed. As these cells are utilized, additional liabilities for closure and post-closure requirements will be accrued. The City applied existing policy to the Environmental Services Fund increasing its’ expenditures as City residential and commercial collection programs are now charged for landfill fees. Bonds Payable - Excluding Refunded Debt The following is a summary of bond transactions of the City for the year ended June 30, 2002: General Obligation Bonds Payable June 30, 2001 New Liability Bonds retired or refunded Water and Wastewater General Obligation Airport General Obligation Special Assessments Street Construction Revenue Other Debt Total $ 8,180,000 26,137,570 2,220,000 1,417,000 19,180,000 4,700,000 61,834,570 3,100,000 40,661 - - - - 3,140,661 - (4,454,000) (1,085,000) Total bonds payable June 30, 2002 10,195,000 (1,525,000) (195,000) (229,000) (1,420,000) 24,653,231 2,025,000 1,188,000 17,760,000 4,700,000 60,521,231 1,260,000 1,498,505 130,000 - 1,490,000 - 4,378,505 Long-term bonds payable June 30, 2002 $ 8,935,000 23,154,726 1,895,000 1,188,000 16,270,000 4,700,000 56,142,726 Debt to be retired July 1, 2002 32 The Water and Wastewater General Obligation Bonds are backed by the ultimate taxing power and general revenues of the City; however, these bonds are carried as a liability of the Water and Wastewater Fund to reflect the intention of the City to retire those bonds from resources in the Water and Wastewater Fund. Bonds payable at June 30, 2002, are comprised of the following individual issues: General Obligation Bonds: General Purpose: $5,500,000 Public Safety Bonds, Series 1997 due in annual installments of $1,000,000 to $1,380,000, July 1, 2002 through July 1, 2005; interest at 4.7% to 6.5%. $ 4,665,000 $4,000,000 Parks and Recreation Bonds, Series 1997 due in annual installments of $210,000 to $530,000 through July 1, 2008; interest rate at 4.6% to 6.5%. $3,100,000 Parks and Recreation, Series 2001 due in annual installments of $385,000 to $505,000 through July 1, 2014; interest rate at $4.375% to 4.75%. Water and Wastewater: $924,240 Wastewater Improvement Project of 1991 Capital Appreciation Bonds due in three installments: $595,827 due July 1, 1997, plus interest at 5.8%; $124,349 due July 1, 2002, plus interest at 6.3%; $204,064 due July 1, 2007, plus interest at 6.75%. Shown at combined accreted value. 2,430,000 3,100,000 $10,195,000 $ 648,231 $6,000,000 Water Improvement Project Bonds Series 1993, due in annual installments of $160,000 to $440,000 through July 1, 2013; interest at 4.75% to 6.75%. Fiscal years 2006-2009 were refunded in April, 2001. 2,160,000 $8,000,000 Water Improvement Project Bonds Series 1997, due in annual installments of $185,000 to $1,680,000, July 1, 2002 and July 1, 2007 through July 1, 2013; interest at 4.5% to 6.5%. 8,000,000 $13,845,000 Water and Wastewater Refunding Bonds Series 2001, due in annual installments of $885,000 to $2,350,000 July 1, 2002 through July 1, 2009; interest at 3% to 5%. Airport: $2,025,000 Airport Refunding Bonds Series 2001 due in annual installments of $130,000 to $350,000 July 1, 2002 through July 1, 2009; interest at 3% to 5%. 33 13,845,000 $24,653,231 $ 2,025,000 Special Assessment Bonds: $1,525,000 1994 Improvement District series bonds due in annual installments of $55,000 to $200,000, January 1, 1996 through January 1, 2005; interest at 5.7%. $720,000 1999 Improvement District series bonds due in annual installments of $43,000 to $94,000, January 1, 2001 through January 1, 2010; interest at 4.9%. $ 570,000 618,000 $ 1,188,000 Revenue Bonds: Street Construction: $5,580,000 Junior Lien Street and Highway User Revenue Bonds, Series 1992 serial bonds due in installments of $350,000 to $1,725,000 July 1, 2008 through July 1, 2012; interest at 6.12%. $16,845,000 Street and Highway Revenue Refunding Bonds Series 1993 serial bonds due in installments of $95,000 to $1,880,000 through July 1, 2009; interest at 3.4% to 4.75%. $ 5,580,000 12,180,000 $17,760,000 Other Debt: $4,700,000 USGS Project Bonds Series 12 (2001) due in annual installments of $255,000 to $440,000 August 1, 2003 through August 1, 2016; interest at 4% to 4.75%. See note below. $ 4,700,000 Other Debt The City has collateralized the contract payable to the MFC by a pledge of the City’s State Shared Revenues which comprise sales and income taxes imposed and collected by the State and distributed to counties and municipal governments pursuant to law and State revenue-sharing which the City presently or in the future receives from the State and which are not earmarked by the State for a contrary or inconsistent purpose. Statutory Debt Limitation: Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for combined water, sewer, light, parks and open space purposes may not exceed 20 percent of a City's net assessed valuation, nor may outstanding general obligation bonded debt for all other purposes exceed 6 percent of a City's net assessed valuation. 34 The following is a summary of legal borrowing capacity: Legal Borrowing Capacity Water, Sewer, Light, Parks and Open Space Purpose Bonds 20 percent constitutional limit $ Net such general obligation bonds outstanding Available 20 percent limitation borrowing capacity $ All other General Obligation Bonds 85,806,080 6 percent constitutional limit 28,424,726 Net such general obligation bonds outstanding 57,381,354 Available 6 percent limitation borrowing capacity $ 25,741,824 5,560,000 $ 20,181,824 On June 30, 2002, the City had authorized but unissued bonds approved by the voters totaling $6,775,760 for Water and Wastewater. The City anticipates finalizing the issuance for this total amount through the Wastewater Infrastructure Finance Authority of Arizona (WIFA) by January 2003. The expenditures related to this bond transaction were completed in the fiscal year ending June 30, 2002. There are also a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all limitations and restrictions. The City has no sinking fund requirements. Debt Service Requirements to Maturity The following is a summary of debt service cash requirements to maturity for all bonds and loans payable as of June 30, 2002. Fiscal Year Ending June 30 2003 G eneral O bligation $ W ater and W astewater G eneral O bligation Airport G eneral O bligation Special Assessm ents O ther D ebt Street C onstruction R evenue AD EQ Loan Payable AD O T Loan Payable T otal 1,891,831 2,924,223 299,581 300,074 462,399 2,401,423 418,432 54,949 8,752,912 2004 2,017,581 3,071,985 297,432 301,270 462,199 2,402,562 418,432 54,949 9,026,410 2005 1,780,761 3,058,152 299,781 297,750 461,599 2,398,988 418,432 54,949 8,770,412 2006 664,791 2,837,867 361,556 93,497 460,599 2,420,558 418,432 54,949 7,312,249 2007 707,471 3,693,846 285,500 90,799 459,199 2,410,723 418,432 54,949 8,120,919 3,915,703 14,232,775 720,750 283,991 4,146,619 9,046,609 2,092,156 522,017 34,960,620 10,978,138 29,818,848 2,264,600 1,367,381 6,452,614 21,080,863 4,184,316 796,762 76,943,522 2,043,138 6,664,122 369,600 179,381 1,752,614 4,810,863 687,133 253,625 16,760,476 8,935,000 23,154,726 1,895,000 1,188,000 4,700,000 16,270,000 3,497,183 543,137 60,183,046 2008-2017 Less am ounts representing interest N et am ount outstanding $ Advance Refundings The City of Flagstaff issued $15,870,000 of general obligation refunding bonds in April, 2001 to provide resources to purchase U.S. Government Series securities that were placed in an irrevocable trust for the purpose of generating resources for all future debt service payments of $15,870,000 of general obligation 35 bonds. As a result, the refunded bonds are considered to be defeased. The advance refunding was undertaken to reduce total debt service payments over the next eight years by $150,991 and resulted in an economic gain of $127,779. As of June 30, 2002, the amount of defeased debt outstanding but removed from the General Long-Term Debt Account Group was as follows: Water and Wastewater General Obligation Bonds, Series 1993, dated July 1, 1993. Issues maturing between July 1, 2006 and July 1, 2009 were refunded. $ 2,660,000 G Contributed Capital Contributed capital is recorded in enterprise funds that have received capital grants or contributions from developers, customers, or other funds. During the year contributed capital changed by the following amounts: Contributed Capital July 1, 2001 $ Less: Amortization Contributed Capital - June 30, 2002 H $ Water and Wastewater Fund Airport Fund Environmental Services Fund 70,235,264 20,568,894 1,065,387 91,869,545 (691,892) (783,182) - (1,475,074) 69,543,372 19,785,712 1,065,387 90,394,471 Total Arbitrage Liability The City has no arbitrage liability as of June 30, 2002. IV OTHER INFORMATION A Risk Management The City is exposed to various risks of loss related to torts and public officials’ errors and omissions. The City purchases commercial insurance to cover these losses. However, $25,000 of each claim resulting in a loss is retained by the City. The City provides for the self-insurance retention in the internal service fund. Outstanding claims as of June 30, 2002 have potential exposure to the City of approximately $224,630 based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The City uses an application of historical experience to determine claims payable. However, due to the preliminary status of the claims, no determination can be made as to the likelihood, if any, of an unfavorable outcome. The retained earnings of the Internal Service Fund are designated for future losses related to the self-insurance retention. Settled claims have not exceeded commercial coverage in the last three fiscal years. 36 Year Liability Current Year Claims and Changes in Estimates Claim Payments Year Liability 113,000 161,683 169,683 105,000 2000-01 105,000 475,407 391,407 189,000 2001-02 189,000 198,808 163,178 224,630 Beginning of Fiscal Year 1999-00 $ End of The City of Flagstaff participates in a risk sharing pool for employee health care, through Northern Arizona Public Employees Trust, a public entity risk pool. Members do not bear any risk of loss. The overall experience rating of the trust determines premium charges. B Contingent Liabilities The City is aware of existing environmental contamination at various sites and facilities. The City has annually budgeted monies for these purposes and includes remediation activities in its annual work program. The City has a compliance agreement for Americans with Disability Act with the Department of Justice (DOJ) and until all items are completed to the satisfaction of the DOJ, there remains a minimal amount of liability. C Segment Information -- Enterprise Funds The City maintains three enterprise funds, which provide water and wastewater distribution and collection, an airport facility and an environmental services operation. Selected segment information for the year ended June 30, 2002 is as follows: Water and Environmental Wastewater Operating Revenues $ Airport 16,893,267 Services Total 843,170 6,667,016 24,403,453 Depreciation 4,855,306 1,247,527 697,731 6,800,564 Operating Income (Loss) 2,450,218 (1,565,964) 17,727 901,981 Operating Transfers In (Out) - 948,985 (335,445) 613,540 Net Income (Loss) 7,037,187 6,118,086 31,941 13,187,214 Fixed Asset Additions 6,727,526 7,183,447 440,371 14,351,344 Fixed Asset Deletions Net Working Capital Total Assets Bonds Payable Total Equity (903,682) (57,112) (412,833) (1,373,627) 21,268,158 2,853,039 5,676,718 29,797,915 192,364,501 32,017,350 16,385,198 240,767,049 24,942,835 2,025,000 161,075,649 25,267,810 37 4,653,537 26,967,835 190,996,996 D Interfund Transfers The following is a summary of the interfund transfers for the fiscal year: Operating Transfers Out From: General Fund Operating Transfers In To: $ 5,977,900 Library Fund $ Highway User Revenue Fund 2,391,679 Arts and Science Fund 95,000 Real Estate Proceeds Funds 150,000 Community Redevelopment Fund 416,500 General Capital Projects Fund 1,040,000 Airport Fund 816,714 Environmental Services Fund Highway User Revenue Fund 1,015,108 64,255 General Fund 994,108 General Capital Projects Fund Beautification Fund 738,717 Tourism Fund Recreation Fund Transportation Fund Water and Wastewater Fund Environmental Services Fund $ General Fund 131,640 Environmental Services Fund 29,978 Highway User Revenue Fund 577,099 General Fund 6,238 884,823 General Fund 608,568 General Obligation Bond Fund 166,255 Beautification Fund 110,000 Highway User Revenue Fund 574,785 4,088,739 General Capital Projects Fund 21,000 6,238 574,785 Secondary Property Tax Fund 1,003,752 General Obligation Bond Fund 1,564,789 Water and Wastewater Fund 2,391,679 Airport Fund 132,271 321,334 General Fund 321,334 2,391,679 General Fund 2,391,679 429,678 General Fund 429,678 16,429,001 38 $ 16,429,001 E Retained Earnings All reservations of enterprise fund retained earnings are legal reserves required under bond indenture and are referred to, in title, as specified in the indentures. F Committed Construction At June 30, 2002 there were major uncompleted construction contracts in the Highway Users Revenue Fund, Parks and Recreation Fund, Capital Projects Fund, Environmental Services Fund, Airport Fund and the Utilities Fund. The amounts were $4,913,795 for General Street Improvements, $136,915 for Environmental Services, $548,734 for USGS Building #6, $4,652,959 for the Airport $3,760,832 for Utilities and $2,100,294 for Parks and Recreation. G Deferred Compensation Plan The City offers its employees a deferred compensation plan established in accordance with Internal Revenue Code Section 457. In prior years the Internal Revenue Code specified that the plan's assets were the property of the City until paid or made available to participants, subject only on an equal basis to the claims of the City's general creditors. Therefore, the plan's assets were recorded in an Agency Fund. A 1996 federal law now requires all assets and income of Internal Revenue Code Section 457 deferred compensation plans to be held in trust, custodial accounts, or annuity contracts for the exclusive benefit of the participants and their beneficiaries. Assets of the City's plan are administered by a private corporation under contract with the City. The plan was originally set up in compliance with the new federal law. Consequently, the plan's assets and liabilities have been excluded from the City's general purpose financial statements. H Retirement and Pension Plans Plan Descriptions - The City contributes to the four plans described below. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefit pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, and Article 2. The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a five-member board, known as The Fund Manager, and 162 local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. 39 The Elected Officials Retirement Plan (EORP) is a cost-sharing multiple-employer defined benefit pension plan that covers elected officials and judges of certain state and local governments. The EORP is governed by The Fund Manager of PSPRS according to the provisions of A.S.R. Title 38, Chapter 5, and Article 3. Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by writing or calling the applicable plan. ASRS 3300 N. Central Ave. P.O. Box 33910 Phoenix, AZ 85067-3910 (602) 240-2200/(800) 621-3778 PSPRS and EORP 1020 E. Missouri Ave. Phoenix, AZ 85014 (602) 255-5575 Funding Policy - The Arizona State Legislature establishes and may amend active plan members' and the City's contribution rates. Cost Sharing Plans - For the year ended June 30, 2002, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 2.49% (2.00% retirement and 0.49% longterm disability) of the members' annual covered payroll. The City's contributions to ASRS for the years ended June 30, 2002, 2001, and 2000 were $488,126, $450,703 and $443,402, respectively, which were equal to the required contributions for the year. In addition, active EORP members were required by statute to contribute 7.00% of the members' annual covered payroll. The City was required to contribute 6.97% of the members' annual covered payroll, as determined by actuarial valuation. The City's contributions to EORP for the years ended June 30, 2002, 2001, and 2000 were $3,928, $2,641 and $2,641 respectively, which were equal to the required contributions for the year. In addition, a payment of $4,220 was made in each year as an installment due for its unfunded accrued liability. Agent Plan - For the year ended June 30, 2002, active PSPRS members were required by statute to contribute 7.65% of the members' annual covered payroll, and the City was required to contribute at the actuarially determined rate of 5.62% and 2.00 % for Police and Fire respectively. 40 Annual Pension Cost - The City's pension cost for the agent plan for the year ended June 30, 2002, the date of the most recent actuarial valuation, and related information follow. Contribution rates: PSPRS City – Police City – Fire Plan members Annual pension cost Contributions made Actuarial valuation date Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Amortization method Remaining amortization period from 7-1-00 Asset valuation method 5.62% 2.00% 7.65% $ 378,053 $ 378,053 6/30/02 Individual entry age 9.0% 6.5% - 9.5% 5.5% Level percentage open 20 years Smoothed market value Trend Information - Information for the agent plan as of most recent actuarial valuations follows. Contributions Required and Contributions Made Plan Annual Pension Cost (APC) Percentage of APC Contributed Net Pension Obligation PSPRS 2002 Police $ 252,029 100% $ -0- Fire $ 126,024 100% -0- Police 312,287 100% -0- Fire 122,642 100% -0- 166,815 100% -0- 99,106 100% -0- PSPRS 2001 PSPRS 2000 Police Fire 41 Funding Progress - An analysis of funding progress for each of the agent plans as of the most recent actuarial valuations, June 30, 2002 follows. (6) (2) Unfunded Actuarial (1) Accrued Actuarial Liability Valuation Value of (AAL) Entry Date June 30 Assets Age (3) (4) Percent Unfunded Funded AAL (1) / (2) (2) - (1) AAL as a (5) Annual Covered Payroll Percentage of Covered Payroll (4) / (5) PSPRS 2002 Police 22,375,146 104.5% 33,288,928 27,957,056 119.1% Police 23,526,642 19,303,399 Fire 33,219,516 Police Fire Fire $ 23,377,239 $ $ (1,002,093) $ 4,415,016 -% (5,331,872) 3,944,841 -% 121.9% (4,223,243) 4,330,952 -% 24,683,085 134.6% (8,536,431) 4,545,100 -% 21,580,340 18,497,514 116.7% (3,082,826) 3,983,197 -% 30,387,399 21,940,616 138.5% (8,446,738) 3,982,782 -% PSPRS 2001 PSPRS 2000 VOLUNTEER FIREMEN'S RELIEF AND PENSION FUND The Volunteer Firemen's Relief and Pension Fund ("Fund") is a single-employer defined benefit pension trust fund administered by the City. A fireman having served as a member of the City's Fire Department prior to 1978, and who is not a paid member of a fire department or a member of the Public Safety Retirement System, is eligible to receive benefits. The fund does not issue a stand-alone report or is included in any other report than the City’s. A fireman who has served for 25 years or more, or who has reached sixty years of age, and served twenty years or more, shall be paid a monthly pension not to exceed $250 per month based on the benefits available to members of the fire department as determined by the board of trustees. Such pension may be increased or decreased in amount, or discontinued at the discretion of the Fund's board of trustees. The Fund's funding provisions and all other requirements are established by state statute. At June 30, 2002, the number of firemen covered by the Fund was classified as follows: Retirees and beneficiaries currently receiving benefits Active employees: Non-vested Total covered firemen 42 3 3 6 Funding Status and Progress: Per state statute there is no requirement that an actuarial valuation be performed to determine that the Volunteer Firemen's Relief and Pension Fund is fully funded. If the funds provided in the Fund are insufficient to pay fully the pensions authorized pursuant to the statute, the fund shall be prorated among those entitled thereto. Contributions: State statute requires a 5% contribution of annual compensation each from the City and the employee. Because no compensation was paid by the City to volunteer firemen, no contribution was made during the current fiscal year. No member or City contributions have been made to this fund since fiscal year ended June 30, 1979. Trend Information: Trend information for ten years is presented below: Revenues Fiscal Year June 30 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 $ Expenses Net Assets Available for Benefits Employee Contributions Employer Contributions Investment Income Other Income Benefit Payments 199,578 202,469 209,232 211,198 213,721 216,843 218,401 221,678 226,593 226,632 - - 6,020 7,533 11,396 11,390 11,922 12,332 11,068 12,877 13,620 7,125 219 158 166 177 201 390 89 96 114 4,800 4,800 4,800 9,601 9,600 9,600 9,600 9,600 8,800 7,200 I Implementation of GASB Statement No. 34 Beginning with fiscal year 2003, the City will prepare its external financial reports following the requirements of GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments. Implementing this standard will significantly change the accounting principles and reporting format the City uses in future financial reports. 43 44 GENERAL FUND The General Fund accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government that are not accounted for in other funds. In Flagstaff, these services include general government, parks and recreation, public safety, public works, cemetery, community development, health, criminal justice, and any other activity for which a special fund has not been created. GENERAL FUND Exhibit B-1 City of Flagstaff General Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 2001 Assets Cash and Cash Equivalents Cash with Fiscal Agent Intergovernmental Receivable Accounts Receivable (Net) Interest Receivable Sales Tax Receivable Grants Receivable Interfund Receivable Restricted Assets: Cash and Cash Equivalents Inventory Contractor Performance Bonds $ 17,175,433 19,718,351 18,221 2,415,441 132,742 2,261,040 352,093 1,440,000 18,289 1,473,171 180,689 2,021,037 274,709 -- 62,870 174,932 360,245 92,243 212,379 583,597 Total Assets $ 24,393,017 24,574,465 Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Interest Payable Payable From Restricted Assets: Grant Revenue in Advance Guaranty and Other Deposits Deferred Revenue $ 2,518,619 948,515 101,192 1,996,415 792,882 -- 62,870 1,656,150 611,740 92,243 1,664,731 607,241 5,899,086 5,153,512 Fund Balances: Reserved for Inventory Unreserved 174,932 18,318,999 212,379 19,208,574 Total Fund Balances 18,493,931 19,420,953 $ 24,393,017 24,574,465 Total Liabilities Total Liabilities and Fund Balances 45 Exhibit B-2 City of Flagstaff General Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30,2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Miscellaneous: Interest Sale of Fixed Assets Miscellaneous Total Revenues Expenditures: Current: General Government: Manager Capital Improvement Attorney Information Systems Administrative Services Finance and Budget Human Resources Sales Tax City Clerk Council and Commission Non Departmental Total General Government Contingencies Parks and Recreation: Parks Recreation Total Parks and Recreation Public Safety: Fire Police Total Public Safety Actual 2001 Variance Actual $ 15,572,864 1,491,003 12,099,322 1,547,822 1,047,238 16,644,117 2,014,357 12,280,265 1,676,615 991,131 1,071,253 523,354 180,943 128,793 (56,107) 15,353,792 1,318,450 14,151,140 1,025,625 993,585 650,000 1,022,368 504,553 627,724 51,053 555,135 (22,276) (971,315) 50,582 1,185,889 26,926 382,794 33,935,170 34,840,397 905,227 34,438,201 412,174 82,117 587,924 601,091 432,654 344,862 331,544 424,211 231,241 88,469 8,471,445 360,056 88,842 565,791 593,296 366,607 338,999 319,855 408,272 203,639 76,816 2,512,370 52,118 (6,725) 22,133 7,795 66,047 5,863 11,689 15,939 27,602 11,653 5,959,075 217,263 -440,649 541,697 362,029 262,290 299,800 371,127 130,903 71,417 1,836,707 12,007,732 5,834,543 6,173,189 4,533,882 700,000 186,944 513,056 200,663 2,425,741 2,553,386 1,794,645 2,058,449 631,096 494,937 1,980,309 2,174,237 4,979,127 3,853,094 1,126,033 4,154,546 7,130,600 9,826,978 6,267,283 9,789,736 863,317 37,242 6,264,280 9,215,767 16,957,578 16,057,019 900,559 15,480,047 (Continued) 46 Exhibit B-2 (Continued) City of Flagstaff General Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual - Continued For the Fiscal Year Ended June 30,2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Public Works: Shop Facilities Maintenance Administration USGS Facilities Variance Actual 153,169 966,978 117,428 247,159 76,137 515,662 116,530 241,913 77,032 451,316 898 5,246 89,516 612,265 86,858 277,535 1,484,734 950,242 534,492 1,066,174 181,207 162,844 18,363 163,550 658,045 5,448,259 755,489 1,093,816 183,913 602,415 2,895,470 737,175 956,668 167,367 55,630 2,552,789 18,314 137,148 16,546 413,646 1,663,233 713,434 751,729 125,900 Total Community Development 8,139,522 5,359,095 2,780,427 3,667,942 Contributions to Other Agencies 1,052,385 933,583 118,802 1,040,414 Criminal Justice 1,367,933 1,335,400 32,533 1,145,454 46,870,218 34,672,764 12,197,454 31,452,672 167,633 13,102,681 2,985,529 Total Public Works Cemetery Community Development: Planning Drainage Building Inspection Engineering Administration Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures $ Actual 2001 (12,935,048) (Continued) 47 Exhibit B-2 (Continued) City of Flagstaff General Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual - Continued For the Fiscal Year Ended June 30,2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Other Financing Sources (Uses): Operating Transfer - In Copy Center Reserve Operating Transfer - Out $ Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances at Beginning of Year Fund Balances at End of Year $ 2001 Budget Actual Variance Actual 5,294,421 140,000 (6,315,788) 4,883,245 -(5,977,900) (411,176) (140,000) 337,888 4,660,073 -(5,778,415) (881,367) (1,094,655) (213,288) (1,118,342) (13,816,415) (927,022) 12,889,393 1,867,187 16,946,498 19,420,953 2,474,455 17,553,766 3,130,083 18,493,931 15,363,848 19,420,953 48 Real Estate Proceeds Fund This fund was established by the City Council by resolution in fiscal year 1985-86 to account for the proceeds received from the sale of excess real estate. Beautification, Economic Development, Tourism, Arts & Science, Recreation These five funds were established to account for the Bed, Board and Booze Tax revenue approved by the voters March 3, 1988, and extended March 1996. When this tax was extended, it was designated that it would be distributed on a percentage basis as follows: 20% Beautification; 9.5% Economic Development; 30% Tourism; 7.5% for Arts & Science and 33% for Recreation. Community Redevelopment This fund was established in fiscal year 1997 to account for the funding received for the Community Development Block Grant program and affordable housing activities. Metropolitan Planning Organization This fund was established in fiscal year 1997 to account for funding derived from the City's status as a Metropolitan Planning Organization. Transportation This fund was established as a result of voter authorization on May 16, 2000 to increase sales taxes to support four transportation issues and is valid for twenty years. The four issues include the 4th Street Overpass, Safe to School/Pedestrian and Bike projects, Traffic Flow and Safety Improvements, and Transit Service Enhancements. REVENUE Library Fund The City Library is financed through City sales tax allocations, State and County grants and individual contributions. Funds provided must be used for library activities such as cultural and educational programs and technical services. SPECIAL Highway User Revenue Fund This fund receives and expends the City's allocation of the Highway User Revenue money. The amount available to each City is allocated on a population basis that is determined by the latest Federal census. Money allocated to this Fund must be used for street construction, reconstruction and maintenance. FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or ordinance to finance particular functions or activities. SPECIAL REVENUE FUNDS 49 Exhibit C-1 City of Flagstaff Special Revenue Funds Combining Balance Sheet June 30, 2002 (With Comparative Totals for June 30, 2001) Assets Cash and Cash Equivalents Cash with Fiscal Agent Receivable from Sale of Property Intergovernmental Receivable Accounts Receivable (Net) Interest Receivable Sales Tax Receivable Grants Receivable Interfund Receivable Restricted Assets: Cash and Cash Equivalents Accounts Receivable (Net) Total Assets Highway User Revenue Fund Library Fund $ 1,001,807 ---78,851 ----- --$ 11,866,909 Fund Balances: Unreserved Total Liabilities and Fund Balances 1,100,663 -143,238 -863 ----- 75,800 733,384 --- Beautification Fund Economic Development Fund 1,332,190 --------- 197,337 ---75,440 ----- 12,780 -- --- Tourism Fund 933,607 ---72 --3,246 ---- 1,889,842 1,244,764 1,344,970 272,777 936,925 23,412 44,396 --- 2,439 ---- 9,036 2,514 --- 84,434 ---- 130,953 6,815 --- 777,077 32,107 ---- ---143,238 -- -12,780 ---- ------ 3,951,533 876,992 145,677 24,330 84,434 137,768 7,915,376 1,012,850 1,099,087 1,320,640 188,343 799,157 $ 11,866,909 1,889,842 1,244,764 1,344,970 272,777 936,925 Liabilities and Fund Balances Liabilities: Accounts Payable $ Accrued Wages and Payroll Taxes Current Bonds Payable Interest Payable Payable From Restricted Assets: Deferred Revenue Grant Revenue in Advance Interfund Payable Deferred Revenue Arbitrage Liability Total Liabilities 7,940,972 --29,152 744,781 102,821 -219,183 2,830,000 Real Estate Proceeds Fund 1,958,283 53,004 1,490,000 450,246 ------ 50 ------ Arts and Science Fund 162,235 ----------162,235 Recreation Fund 6,144,442 ----12,270 ------ Community Redevelopment Fund 1,132 ---1,213 --586,368 ---- Metropolitan Planning Organization Fund Transportation Fund 455 ------76,903 -- 7,107,159 ----18,016 805,873 --- Total --- --- 2002 2001 25,921,999 -143,238 29,152 901,220 133,107 805,873 885,700 2,830,000 22,452,534 1,900,066 143,238 -1,203,355 140,384 669,155 342,387 910,000 88,580 733,384 218,473 209,273 6,156,712 588,713 77,358 7,931,048 32,472,253 28,188,865 323,390 ---- 82,112 ---- 15,053 2,305 --- 247,130 ---- 2,876,242 109,034 1,490,000 450,246 1,182,994 89,411 1,420,000 480,066 --45,000 --- --60,000 --- 777,077 44,887 105,000 143,238 -- 319,456 108,290 60,000 143,238 67,945 323,390 127,112 77,358 247,130 5,995,724 3,871,400 162,235 5,833,322 461,601 -- 7,683,918 26,476,529 24,317,465 162,235 6,156,712 588,713 77,358 7,931,048 32,472,253 28,188,865 ----------- ------ ------ 51 Exhibit C-2 City of Flagstaff Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Revenues: Taxes Intergovernmental Miscellaneous Beautification Fund Economic Development Fund --705,378 763,406 4,370 12,409 362,618 -5,002 1,145,108 3,246 101,426 1,556,036 705,378 780,185 367,620 1,249,780 -2,575,113 -------- --408,584 ------- ---475,284 ------ ----315,168 ----- -----1,292,951 ---- Highway User Revenue Fund Library Fund $ -8,784,630 483,709 -1,479,720 76,316 9,268,339 12,630,086 --------- Total Revenues Expenditures: Current: Highway and Streets Library Real Estate Proceeds Beautification Economic Development Tourism Arts and Science Recreation Community Redevelopment Debt Service: Principal Retirement Interest and Fiscal Charges 1,490,000 901,679 Total Expenditures Real Estate Proceeds Fund --- --- --- --- Tourism Fund --- 15,021,765 2,575,113 408,584 475,284 315,168 Excess (Deficiency) of Revenues Over (Under) Expenditures (5,753,426) (1,019,077) 296,794 304,901 52,452 (43,171) Other Financing Sources (Uses): Operating Transfers - In Bond Proceeds Operating Transfers - Out 3,543,563 -(1,015,108) 1,003,752 --- 150,000 --- 110,000 -(738,717) ---- --(6,238) 2,528,455 1,003,752 150,000 (628,717) -- (6,238) 446,794 (323,816) 52,452 (49,409) Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses (3,224,971) Fund Balances Beginning of Year Fund Balances End of Year $ (15,325) 1,292,951 11,140,347 1,028,175 652,293 1,644,456 135,891 848,566 7,915,376 1,012,850 1,099,087 1,320,640 188,343 799,157 52 Arts and Science Fund Recreation Fund Community Redevelopment Fund Metropolitan Planning Organization Fund Transportation Fund Total 2002 2001 286,277 -6,057 1,259,619 47,546 140,190 -979,559 136,257 -130,357 -- 6,327,169 47,598 99,487 10,144,197 11,477,026 1,766,231 9,091,062 11,472,269 1,432,511 292,334 1,447,355 1,115,816 130,357 6,474,254 23,387,454 21,995,842 ------345,217 --- -------1,325,552 -- --------1,649,109 130,357 --------- 2,888,434 --------- 15,648,877 2,575,113 408,584 475,284 315,168 1,292,951 345,217 1,325,552 1,649,109 7,735,150 3,066,958 373,183 252,837 400,846 1,253,786 326,264 107,599 1,181,494 1,490,000 901,679 1,420,000 962,019 2,888,434 26,427,534 17,080,136 3,585,820 (3,040,080) 4,915,706 --345,217 --1,325,552 --1,649,109 --- --- 130,357 (52,883) 121,803 (533,293) -- 95,000 --- -3,100,000 (884,823) 416,500 --- ---- --(574,785) 5,318,815 3,100,000 (3,219,671) 4,221,727 -(2,083,710) 95,000 2,215,177 416,500 -- (574,785) 5,199,144 2,138,017 42,117 2,336,980 (116,793) -- 3,011,035 2,159,064 7,053,723 120,118 3,496,342 578,394 -- 4,672,883 24,317,465 17,263,742 162,235 5,833,322 461,601 -- 7,683,918 26,476,529 24,317,465 53 Exhibit C-3 City of Flagstaff Highway User Revenue Fund Comparative Balance Sheets June 30, 2002 and 2001 Assets Cash and Cash Equivalents Cash with Fiscal Agent Intergovernmental Receivable Accounts Receivable (Net) Interest Receivable Grants Receivable Interfund Receivable 2002 2001 7,940,972 -29,152 744,781 102,821 219,183 2,830,000 9,950,714 1,900,066 -716,388 101,403 122,063 910,000 $ 11,866,909 13,700,634 $ Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Current Bonds Payable Interest Payable $ 1,958,283 53,004 1,490,000 450,246 613,451 46,770 1,420,000 480,066 Total Liabilities 3,951,533 2,560,287 Fund Balances: Unreserved 7,915,376 11,140,347 $ 11,866,909 13,700,634 Total Liabilities and Fund Balances 54 Exhibit C-4 City of Flagstaff Highway Users Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Intergovernmental Miscellaneous: Interest Sale of Fixed Assets Other $ Actual 2001 Variance Actual 9,029,207 8,784,630 (244,577) 8,410,137 555,000 -73,000 427,862 2,935 52,912 (127,138) 2,935 (20,088) 651,151 14,400 100 9,657,207 9,268,339 (388,868) 9,075,788 1,750,489 3,290,129 12,515,649 4,816,972 50,000 1,626,844 2,632,927 7,793,123 572,790 4,402 123,645 657,202 4,722,526 4,244,182 45,598 1,545,745 2,601,130 2,469,410 66,308 -- 22,423,239 12,630,086 9,793,153 6,682,593 1,490,000 904,293 1,490,000 901,679 -2,614 1,420,000 962,019 24,817,532 15,021,765 9,795,767 9,064,612 (15,160,325) (5,753,426) 9,406,899 11,176 8,288,364 (1,015,287) 3,543,563 (1,015,108) (4,744,801) 179 2,380,133 (1,274,311) 7,273,077 2,528,455 (4,744,622) 1,105,822 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (7,887,248) (3,224,971) 4,662,277 1,116,998 Fund Balances at Beginning of Year 11,109,971 11,140,347 30,376 10,023,349 3,222,723 7,915,376 4,692,653 11,140,347 Total Revenues Expenditures: Current: Staff and Support Services Street Maintenance Street Construction Transportation Contingency Total Highways and Streets Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Operating Transfers - Out Total Other Financing Sources (Uses) Fund Balances at End of Year $ 55 Exhibit C-5 City of Flagstaff Library Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) Restricted Assets Cash and Cash Equivalents Accounts Receivable (Net) $ 2001 1,001,807 78,851 747,044 354,286 75,800 733,384 188,443 209,273 $ 1,889,842 1,499,046 $ 23,412 44,396 38,013 35,142 777,077 32,107 319,456 78,260 Total Liabilities 876,992 470,871 Fund Balances: Unreserved 1,012,850 1,028,175 1,889,842 1,499,046 Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Payable from Restricted Assets: Deferred Revenue Grant Revenue in Advance Total Liabilities and Fund Balances $ 56 Exhibit C-6 City of Flagstaff Library Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Intergovernmental Miscellaneous: Interest Sale of Fixed Assets Other $ Total Revenues Expenditures: Current: Staff Support and Services Library Services Contingencies Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses $ Variance 1,479,720 10,000 -20,000 24,704 412 51,200 1,970,237 1,556,036 (414,201) 2,047,013 198,877 2,957,362 100,000 193,115 2,381,998 -- 5,762 575,364 100,000 265,137 2,801,821 -- 3,256,239 2,575,113 681,126 3,066,958 (1,286,002) (1,019,077) 266,925 (1,019,945) 774,240 1,003,752 229,512 1,078,240 774,240 1,003,752 229,512 1,078,240 496,437 58,295 969,880 (15,325) (460,517) Actual 1,940,237 (511,762) Fund Balances at Beginning of Year Fund Balances at End of Year Actual 2001 14,704 412 31,200 1,380,182 1,028,175 (352,007) 868,420 1,012,850 144,430 57 1,989,082 57,939 248 (256) 1,028,175 Exhibit C-7 City of Flagstaff Real Estate Proceeds Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Receivable from Sale of Property Accounts Receivable (Net) Total Assets 2001 $ 1,100,663 143,238 863 $ 755,448 143,238 862 $ 1,244,764 $ 899,548 $ 2,439 143,238 $ 104,017 143,238 Liabilities and Fund Balances Liabilities: Accounts Payable Deferred Revenue Total Liabilities 145,677 247,255 Fund Balances: Unreserved 1,099,087 652,293 Total Liabilities and Fund Balances $ 58 1,244,764 $ 899,548 Exhibit C-8 City of Flagstaff Real Estate Proceeds Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Miscellaneous: Interest Sale of Real Property Other $ Actual 2001 Variance Actual 30,350 717,000 -- 49,838 427,000 228,540 19,488 (290,000) 228,540 46,778 --- 747,350 705,378 (41,972) 46,778 885,000 408,584 476,416 373,183 885,000 408,584 476,416 373,183 (137,650) 296,794 434,444 (326,405) 150,000 150,000 -- 150,000 150,000 150,000 -- 150,000 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 12,350 446,794 434,444 (176,405) Fund Balances at Beginning of Year 883,829 652,293 (231,536) 828,698 896,179 1,099,087 202,908 652,293 Total Revenues Expenditures: Current: Real Estate Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Total Other Financing Sources (Uses) Fund Balances at End of Year $ 59 Exhibit C-9 City of Flagstaff Beautification Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 2001 1,332,190 -- 1,705,571 35,042 12,780 30,030 $ 1,344,970 1,770,643 $ 9,036 2,514 94,288 1,869 12,780 30,030 Total Liabilities 24,330 126,187 Fund Balances: Unreserved 1,320,640 1,644,456 1,344,970 1,770,643 Assets Cash and Cash Equivalents Accounts Receivable (Net) Restricted Assets: Cash and Cash Equivalents $ Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Payable from Restricted Assets: Grant Revenue in Advance Total Liabilities and Fund Balances $ 60 Exhibit C-10 City of Flagstaff Beautification Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Intergovernmental Miscellaneous: Interest Other $ Actual 2001 Variance Actual 755,583 125,000 763,406 4,370 7,823 (120,630) 749,564 -- 20,000 3,000 47,451 (35,042) 27,451 (38,042) 82,654 -- 903,583 780,185 (123,398) 832,218 1,298,789 475,284 823,505 252,837 1,298,789 475,284 823,505 252,837 (395,206) 304,901 700,107 579,381 110,000 (769,278) 110,000 (738,717) -30,561 110,000 (179,448) (659,278) (628,717) 30,561 (69,448) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (1,054,484) (323,816) 730,668 509,933 Fund Balances at Beginning of Year 1,220,351 1,644,456 424,105 1,134,523 165,867 1,320,640 1,154,773 1,644,456 Total Revenues Expenditures: Current: Beautification Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Operating Transfers - Out Total Other Financing Sources (Uses) Fund Balances at End of Year $ 61 Exhibit C-11 City of Flagstaff Economic Development Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) 2001 $ 197,337 75,440 134,488 75,440 $ 272,777 209,928 $ 84,434 74,037 Total Liabilities 84,434 74,037 Fund Balances: Unreserved 188,343 135,891 272,777 209,928 Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Total Liabilities and Fund Balances $ 62 Exhibit C-12 City of Flagstaff Economic Development Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Miscellaneous: Interest $ Actual 2001 Variance Actual 358,902 362,618 3,716 356,043 1,627 5,002 3,375 8,264 360,529 367,620 7,091 364,307 Expenditures: Current: Economic Development 379,900 315,168 64,732 400,846 Total Expenditures 379,900 315,168 64,732 400,846 Excess (Deficiency) of Revenues Over Expenditures (19,371) 52,452 71,823 (36,539) 78,510 135,891 57,381 172,430 59,139 188,343 129,204 135,891 Total Revenues Fund Balances at Beginning of Year Fund Balances at End of Year $ 63 Exhibit C-13 City of Flagstaff Tourism Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) Grants Receivable 2001 $ 933,607 72 3,246 1,016,775 900 6,607 $ 936,925 1,024,282 $ 130,953 6,815 171,949 3,767 Total Liabilities 137,768 175,716 Fund Balances: Unreserved 799,157 848,566 936,925 1,024,282 Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Total Liabilities and Fund Balances $ 64 Exhibit C-14 City of Flagstaff Tourism Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Intergovernmental Miscellaneous: Interest Recovery of Prior Year Expense Other $ Total Revenues Expenditures: Current: Tourism Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Actual 2001 Variance 11,733 (56,754) Actual 1,133,375 60,000 1,145,108 3,246 18,721 -67,469 32,493 -68,933 1,279,565 1,249,780 (29,785) 1,276,471 1,644,203 1,292,951 351,252 1,253,786 1,644,203 1,292,951 351,252 1,253,786 321,467 22,685 13,772 -1,464 1,124,346 6,607 62,803 30,532 52,183 (364,638) (43,171) (6,238) (6,238) -- (6,238) (6,238) (6,238) -- (6,238) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (370,876) (49,409) Fund Balances at Beginning of Year 852,101 848,566 481,225 799,157 Other Financing Sources (Uses): Operating Transfers - Out Total Other Financing Sources (Uses) Fund Balances at End of Year $ 65 321,467 (3,535) 317,932 16,447 832,119 848,566 Exhibit C-15 City of Flagstaff Arts and Science Fund Comparative Balance Sheets June 30, 20012and 2001 2002 Assets Cash and Cash Equivalents Total Assets 2001 $ 162,235 140,118 $ 162,235 140,118 Liabilities and Fund Balances Liabilities: Accounts Payable $ Total Liabilities Fund Balances: Unreserved Total Liabilities and Fund Balances $ 66 -- 20,000 -- 20,000 162,235 120,118 162,235 140,118 Exhibit C-16 City of Flagstaff Arts and Science Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Miscellaneous: Interest Other $ Actual 2001 Variance Actual 283,344 286,277 2,933 281,087 4,431 -- 5,115 942 684 942 9,007 -- Total Revenues 287,775 292,334 4,559 290,094 Expenditures: Current: Arts and Science 414,493 345,217 69,276 326,264 414,493 345,217 69,276 326,264 (126,718) (52,883) 73,835 (36,170) 95,000 95,000 -- 78,354 95,000 95,000 -- 78,354 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (31,718) 42,117 73,835 42,184 Fund Balances at Beginning of Year 88,629 120,118 31,489 77,934 56,911 162,235 105,324 120,118 Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Total Other Financing Sources (Uses) Fund Balances at End of Year $ 67 Exhibit C-17 City of Flagstaff Recreation Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 2001 $ 6,144,442 12,270 3,571,596 7,686 $ 6,156,712 3,579,282 $ 323,390 -- 14,995 67,945 Total Liabilities 323,390 82,940 Fund Balances: Unreserved 5,833,322 3,496,342 6,156,712 3,579,282 Assets Cash and Cash Equivalents Interest Receivable Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Arbitrage Liability Total Liabilities and Fund Balances $ 68 Exhibit C-18 City of Flagstaff Recreation Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Intergovernmental Miscellaneous: Interest Recovery of Prior Year Expense $ Actual 2001 Variance Actual 1,246,712 679,792 1,259,619 47,546 12,907 (632,246) 1,236,781 -- 160,000 -- 129,630 10,560 (30,370) 10,560 178,676 -- 2,086,504 1,447,355 (639,149) 1,415,457 6,124,308 1,325,552 4,798,756 107,599 6,124,308 1,325,552 4,798,756 107,599 (4,037,804) 121,803 4,159,607 1,307,858 3,100,000 (1,078,497) 3,100,000 (884,823) -193,674 -(623,713) 2,021,503 2,215,177 193,674 (623,713) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (2,016,301) 2,336,980 4,353,281 684,145 Fund Balances at Beginning of Year 3,416,471 3,496,342 79,871 2,812,197 1,400,170 5,833,322 4,433,152 3,496,342 Total Revenues Expenditures: Current: Recreation Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Bond proceeds Operating Transfers - Out Total Other Financing Sources (Uses) Fund Balances at End of Year $ 69 Exhibit C-19 City of Flagstaff Community Redevelopment Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) Grants Receivable 2001 $ 1,132 1,213 586,368 452,630 20,437 152,448 $ 588,713 625,515 $ 82,112 45,000 47,121 -- Total Liabilities 127,112 47,121 Fund Balances: Unreserved 461,601 578,394 588,713 625,515 Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Interfund Payable Total Liabilities and Fund Balances $ 70 Exhibit C-20 City of Flagstaff Community Redevelopment Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Intergovernmental Miscellaneous: Interest Other $ Total Revenues Expenditures: Current: Community Redevelopment Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Actual 2001 Variance Actual 1,659,527 979,559 (679,968) 800,367 5,000 -- 5,853 130,404 853 130,404 16,135 105,774 1,664,527 1,115,816 (548,711) 922,276 2,467,189 1,649,109 818,080 1,181,494 2,467,189 1,649,109 818,080 1,181,494 (802,662) (533,293) 425,000 416,500 (8,500) 425,000 425,000 416,500 (8,500) 425,000 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (377,662) (116,793) 260,869 165,782 Fund Balances at Beginning of Year 466,463 578,394 111,931 412,612 88,801 461,601 372,800 578,394 Other Financing Sources (Uses): Operating Transfers - In Total Other Financing Sources (Uses) Fund Balances at End of Year $ 71 269,369 (259,218) Exhibit C-21 City of Flagstaff Metropolitan Planning Organization Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Grant Receivable Total Assets 2001 $ 455 76,903 5,717 61,269 $ 77,358 66,986 $ 15,053 2,305 60,000 5,123 1,863 60,000 77,358 66,986 -- -- 77,358 66,986 Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Interfund Payable Total Liabilities Fund Balances: Unreserved Total Liabilities and Fund Balances $ 72 Exhibit C-22 City of Flagstaff Metropolitan Planning Organization Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Intergovernmental $ 2001 Actual Variance Actual 1,073,090 130,357 (942,733) 123,283 1,073,090 130,357 (942,733) 123,283 Expenditures: Current: Metropolitan Planning 1,073,090 130,357 942,733 123,283 Total Expenditures 1,073,090 130,357 942,733 123,283 Total Revenues Excess (Deficiency) of Revenues Over Expenditures Fund Balances at Beginning of Year Fund Balances at End of Year $ -- -- -- -- -- -- -- -- -- -- -- -- 73 Exhibit C-23 City of Flagstaff Transportation Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 2001 $ 7,107,159 18,016 805,873 3,972,433 31,295 669,155 $ 7,931,048 4,672,883 $ 247,130 -- Total Liabilities 247,130 -- Fund Balances: Unreserved 7,683,918 4,672,883 7,931,048 4,672,883 Assets Cash and Cash Equivalents Grant Receivable Sales Tax Receivable Total Assets Liabilities and Fund Balances Liabilities: Accounts Payable Total Liabilities and Fund Balances $ 74 Exhibit C-24 City of Flagstaff Transportation Fund Statement of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Intergovernmental Miscellaneous: Interest $ Total Revenues Expenditures: Current: Transportation Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - Out Total Other Financing Sources (Uses) Actual 2001 Variance 367,033 47,598 5,960,136 -- 6,327,169 47,598 187,670 99,487 6,147,806 6,474,254 326,448 5,602,157 4,537,673 2,888,434 1,649,239 929,274 4,537,673 2,888,434 1,649,239 929,274 1,610,133 3,585,820 1,975,687 4,672,883 (88,183) 116,123 (574,785) 4,742,187 -- (5,316,972) (574,785) 4,742,187 -- (3,706,839) 3,011,035 6,717,874 Fund Balances at Beginning of Year 3,755,680 4,672,883 917,203 48,841 7,683,918 7,635,077 $ 5,343,241 142,793 (5,316,972) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances at End of Year Actual 75 4,672,883 -- 4,672,883 76 Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. This fund accounts for the accumulation of resources for and the payments of principal, interest and costs of General Obligation Bonds. Special Assessment Bond Fund This fund accounts for the accumulation of resources for and the payment of principal, interest and related costs for all improvement district bonds issued by the City. FUNDS General Obligation Bond Fund DEBT This fund is used to account for secondary property tax revenues. Monies received by this fund are legally restricted to payment of general obligation debt. SERVICE Secondary Property Tax Revenue Fund DEBT SERVICE FUNDS Exhibit D-1 City of Flagstaff Debt Service Funds Combining Balance Sheet June 30, 2002 (With Comparative Totals as of June 30, 2001) General Obligation Bond Fund Assets Cash and Cash Equivalents Cash with Fiscal Agent Special Assessments Receivable Total Assets Special Assessment Bond Fund Secondary Property Tax Revenue Fund Total 2002 2001 $ 1,550,686 --- 387,302 -904,292 313,239 --- 2,251,227 -904,292 419,323 1,346,927 1,255,186 $ 1,550,686 1,291,594 313,239 3,155,519 3,021,436 $ -1,260,000 278,905 -- 1,063 -29,502 904,292 ----- 1,063 1,260,000 308,407 904,292 -1,085,000 261,991 1,255,186 1,538,905 934,857 -- 2,473,762 2,602,177 11,781 356,737 313,239 681,757 419,259 11,781 356,737 313,239 681,757 419,259 1,550,686 1,291,594 313,239 3,155,519 3,021,436 Liabilities and Fund Balances Liabilities: Accounts Payable Current Bonds Payable Interest Payable Deferred Revenue Total Liabilities Fund Balances: Reserved for Debt Service Total Fund Balances Total Liabilities and Fund Balances $ 77 Exhibit D-2 City of Flagstaff Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) General Obligation Bond Fund Revenues: Taxes Special Assessments Miscellaneous $ Total Revenues Expenditures: Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Operating Transfers - Out Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances at Beginning of Year Fund Balances at End of Year $ Special Assessment Bond Fund Secondary Property Tax Revenue Fund Total 2002 2001 --157 -350,894 97,994 4,197,777 -3,766 4,197,777 350,894 101,917 3,896,103 269,794 115,329 157 448,888 4,201,543 4,650,588 4,281,226 1,260,000 471,044 229,000 70,351 --- 1,489,000 541,395 1,288,000 536,901 1,731,044 299,351 -- 2,030,395 1,824,901 (1,730,887) 149,537 4,201,543 2,620,193 2,456,325 1,731,044 -- --- -(4,088,739) 1,731,044 (4,088,739) 1,538,255 (4,069,054) 1,731,044 -- (4,088,739) (2,357,695) (2,530,799) 157 149,537 112,804 262,498 (74,474) 11,624 207,200 200,435 419,259 493,733 11,781 356,737 313,239 681,757 419,259 78 Exhibit D-3 City of Flagstaff General Obligation Bond Fund Comparative Balance Sheets June 30, 2002 and 2001 Assets Cash and Cash Equivalents Cash with Fiscal Agent Total Assets 2002 2001 $ 1,550,686 -- 11,624 1,311,627 $ 1,550,686 1,323,251 $ 1,260,000 278,905 1,085,000 226,627 1,538,905 1,311,627 11,781 11,624 1,550,686 1,323,251 Liabilities and Fund Balances Liabilities: Current Bonds Payable Interest Payable Total Liabilities Fund Balances: Reserved for Debt Service Total Liabilities and Fund Balances $ 79 Exhibit D-4 City of Flagstaff General Obligation Bond Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Miscellaneous Revenues: Interest $ Total Revenues Expenditures: Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances at End of Year Actual $ Variance Actual 600 157 (443) 290 600 157 (443) 290 1,260,000 537,316 1,260,000 471,044 -66,272 1,085,000 454,736 1,797,316 1,731,044 66,272 1,539,736 (1,796,716) (1,730,887) 65,829 (1,539,446) 1,795,816 1,731,044 (64,772) 1,538,255 1,795,816 1,731,044 (64,772) 1,538,255 (900) Fund Balances at Beginning of Year 2001 157 1,057 (1,191) 11,914 11,624 (290) 12,815 11,014 11,781 767 11,624 80 Exhibit D-5 City of Flagstaff Special Assessment Bond Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Cash with Fiscal Agent Special Assessment Receivable 2001 $ 387,302 -904,292 $ 1,291,594 1,497,750 $ 1,063 29,502 904,292 35,364 35,364 1,255,186 Total Liabilities 934,857 1,290,550 Fund Balances: Reserved for Debt Service 356,737 207,200 1,291,594 1,497,750 Total Assets $ 207,264 35,300 1,255,186 Liabilities and Fund Balances Liabilities: Accounts Payable Interest Payable Deferred Revenue Total Liabilities and Fund Balances $ 81 Exhibit D-6 City of Flagstaff Special Assessment Bond Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Special Assessments Miscellaneous Revenues: Interest Miscellaneous $ Total Revenues Expenditures: Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Fund Balances at Beginning of Year Fund Balances at End of Year $ Actual 2001 Variance Actual 214,413 350,894 136,481 269,794 67,611 -- 96,024 1,970 28,413 1,970 103,894 1,181 282,024 448,888 166,864 374,869 229,000 70,313 229,000 70,351 -(38) 203,000 82,165 299,313 299,351 (38) 285,165 (17,289) 149,537 166,826 89,704 101,241 207,200 105,959 117,496 83,952 356,737 272,785 207,200 82 Exhibit D-7 City of Flagstaff Secondary Property Tax Revenue Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Total Assets 2001 $ 313,239 200,435 $ 313,239 200,435 Liabilities and Fund Balances Liabilities: $ Total Liabilities Fund Balances: Reserved for Debt Service Total Liabilities and Fund Balances $ 83 -- -- -- -- 313,239 200,435 313,239 200,435 Exhibit D-8 City of Flagstaff Secondary Property Tax Revenue Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Revenues: Taxes Miscellaneous Revenues: Interest $ Total Revenues Expenditures: Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - Out Total Other Financing Sources (Uses) 2001 Actual Variance Actual 4,204,927 4,197,777 (7,150) 3,896,103 16,100 3,766 (12,334) 9,964 4,221,027 4,201,543 (19,484) 3,906,067 -- -- -- -- -- -- -- -- 4,221,027 4,201,543 (19,484) 3,906,067 (4,111,181) (4,088,739) 22,442 (4,069,054) (4,111,181) (4,088,739) 22,442 (4,069,054) 2,958 (162,987) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 109,846 112,804 Fund Balances at Beginning of Year 322,822 200,435 (122,387) 363,422 432,668 313,239 (119,429) 200,435 Fund Balances at End of Year $ 84 FUNDS This fund was established in fiscal year 1997 to account for the receipt of bond proceeds and construction of capital projects. General obligation bonds were issued on February 1, 1997 in the amount of $5,500,000 for Public Safety facilities and equipment. The Municipal Facility Corporation issued bonds on April 1, 2001 for the construction of a new USGS facility, which will be constructed and leased to the City of Flagstaff. PROJECTS Bond Construction Fund CAPITAL Capital Projects Funds are used to account for the acquisition or construction of major capital facilities other than those financed by proprietary fund operations. CAPITAL PROJECTS FUNDS Exhibit E-1 City of Flagstaff Capital Project Funds Combining Balance Sheet June 30, 2002 (With Comparative Totals as of June 30, 2001) Bond Construction Fund Assets Cash and Cash Equivalents Accounts Receivable (Net) Bond Proceeds Receivable Total Assets Total 2002 2001 $ 115,488 961,128 788,587 115,488 961,128 788,587 1,931,419 850,939 2,445,000 $ 1,865,203 1,865,203 5,227,358 $ 1,440,000 -- 1,440,000 -- -72,948 1,440,000 1,440,000 72,948 425,203 425,203 5,154,410 425,203 425,203 5,154,410 1,865,203 1,865,203 5,227,358 Liabilities and Fund Balances Liabilities: Interfund Payable Arbitrage Liability Total Liabilities Fund Balances: Reserved for Capital Projects Total Fund Balances Total Liabilities and Fund Balances $ 85 Exhibit E-2 City of Flagstaff Capital Project Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Bond Construction Fund Revenues: Intergovernmental Miscellaneous $ Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Operating Transfers - In Operating Transfers - Out Bond Proceeds 2002 2001 251,594 67,539 251,594 67,539 580,241 156,937 319,133 319,133 737,178 5,788,006 5,788,006 2,165,989 5,788,006 5,788,006 2,165,989 (5,468,873) (5,468,873) (1,428,811) 1,061,000 (321,334) -- 1,061,000 (321,334) -- 821,000 -4,475,343 739,666 739,666 5,296,343 Total Revenues Expenditures: Capital Projects Total Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (4,729,207) (4,729,207) 3,867,532 Fund Balance at Beginning of Year 5,154,410 5,154,410 1,286,878 425,203 425,203 5,154,410 Fund Balances at End of Year $ 86 Exhibit E-3 City of Flagstaff Bond Construction Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) Bond Proceeds Receivable Total Assets 2001 $ 115,488 961,128 788,587 1,931,419 850,939 2,445,000 $ 1,865,203 5,227,358 $ 1,440,000 -- -72,948 1,440,000 72,948 425,203 5,154,410 1,865,203 5,227,358 Liabilities and Fund Balances Liabilities: Interfund Payable Arbitrage Liability Total Liabilities Fund Balances: Reserved Total Liabilities and Fund Balances $ 87 Exhibit E-4 City of Flagstaff Bond Construction Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2002 (With Comparative Actual for the Fiscal Year Ended June 30, 2001) 2002 Budget Actual 2001 Variance Actual Revenues: Intergovernmental Miscellaneous Revenues: Interest Other $ 75,048 251,594 176,546 580,241 --- 56,197 11,342 56,197 11,342 15,532 141,405 Total Revenues 75,048 319,133 244,085 737,178 Expenditures: Capital Projects 4,832,096 5,788,006 (955,910) 2,165,989 4,832,096 5,788,006 (955,910) 2,165,989 (4,757,048) (5,468,873) (711,825) (1,428,811) Other Financing Sources (Uses): Operating Transfers - In Operating Transfers - Out Bond Proceeds 1,061,000 (321,334) 4,486,343 1,061,000 (321,334) -- --4,486,343 821,000 -4,475,343 Total Other Financing Sources (Uses) 5,226,009 739,666 4,486,343 5,296,343 Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 468,961 (4,729,207) (5,198,168) 3,867,532 Fund Balance (Deficit) at Beginning of Year 660,869 5,154,410 4,493,541 1,286,878 1,129,830 425,203 Fund Balance at End of Year $ 88 (704,627) 5,154,410 Enterprise Funds are designed to accumulate the total cost of providing a particular service and to indicate the extent to which user charges imposed upon service consumers are sufficient to cover those costs. These funds are maintained on an accrual basis of accounting. Airport Fund The operation of Pulliam Airport is accounted for in this fund, including user charges, rental of airport facilities and the maintenance of runways, buildings and grounds at this location. Environmental Services Fund The collection of residential and commercial refuses and the operation of the City landfill are accounted for in this fund, including user charges and related expenses. ENTERPRISE This fund is used to account for the services that the Water and Wastewater utility provide to city residents and some residents of the County. All revenues generated and expenses incurred for the operation of the water and wastewater plants, the water production and distribution systems, and the wastewater collection system are accounted for in this fund. FUNDS Water and Wastewater Fund ENTERPRISE FUNDS Exhibit F-1 City of Flagstaff Enterprise Funds Combining Balance Sheet June 30, 2002 (With Comparative Totals as of June 30, 2001) Water and Wastewater Fund Assets Cash and Cash Equivalents Accounts Receivable (Net) Interest Receivable Grants Receivable Restricted Assets: Cash and Cash Equivalents Interest Receivable Inventory Fixed Assets (Net of Depreciation) Total Assets $ Airport Fund Environmental Services Fund Totals 2002 2001 20,178,785 2,491,795 164,802 -- 20,442 104,295 1,862 3,903,861 5,043,642 659,698 31,895 150,214 25,242,869 3,255,788 198,559 4,054,075 24,789,435 3,146,720 225,261 1,427,922 4,547,394 -428,127 164,553,598 620,585 --27,366,305 3,871,063 15,799 -6,612,887 9,039,042 15,799 428,127 198,532,790 7,792,043 28,424 314,192 187,513,762 $ 192,364,501 32,017,350 16,385,198 240,767,049 225,237,759 1,319,262 172,773 1,141,194 20,557 112,847 78,544 2,573,303 271,874 1,260,462 239,529 608,629 1,788,110 556,740 -75,189 --116,241 104,400 130,000 --15,670 62,684 2,819,897 17,002 ---3,886,862 17,340 ---- 713,029 1,918,110 556,740 3,886,862 108,199 62,684 2,819,897 133,243 327,194 1,720,000 522,513 3,275,256 99,916 90,424 944,897 152,277 23,154,725 -3,497,183 -- 1,895,000 -543,136 -- ---7,636,068 25,049,725 -4,040,319 7,636,068 26,637,570 101,726 4,353,622 7,702,592 31,288,852 6,749,540 11,731,661 49,770,053 47,427,978 16,608,763 6,228,012 46,706,597 12,870,943 6,914,769 -- -1,065,387 -- 29,479,706 14,208,168 46,706,597 30,954,780 14,208,168 46,706,597 1,593,915 -89,938,362 -386,185 5,095,913 --3,588,150 1,593,915 386,185 98,622,425 1,593,915 381,589 83,964,732 91,532,277 5,482,098 3,588,150 100,602,525 85,940,236 161,075,649 25,267,810 4,653,537 190,996,996 177,809,781 $ 192,364,501 32,017,350 16,385,198 240,767,049 225,237,759 Liabilities and Fund Equity Liabilities: Accounts Payable Accrued Wages and Taxes Payable Payable from Restricted Assets: Interest Payable General Obligation Bonds Customer Deposits Landfill Closure and Post-Closure Liability Guaranty and Other Deposits Capital Lease Interfund Payable Deferred Revenue Bonds Payable (Less Current Portion): General Obligation Bonds Arbitrage Liability Loans Payable Landfill Closure and Post-Closure Liability Total Liabilities Fund Equity: Contributed Capital: Capital Grants (Net) Municipality Contractor Retained Earnings: Reserved for: Renewal and Replacement Airport Construction Unreserved as Restated Total Retained Earnings as Restated Total Fund Equity Total Liabilities and Fund Equity $ 89 Exhibit F-2 City of Flagstaff Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Water and Wastewater Fund Operating Revenues: Water Revenues Sewer Revenues Airport Revenues Environmental Services Revenues Intergovernmental Revenue Miscellaneous Revenues $ Environmental Services Fund Airport Fund Totals 2002 2001 10,438,668 6,454,599 ----- --838,596 -788 3,786 ---6,667,016 --- 10,438,668 6,454,599 838,596 6,667,016 788 3,786 10,560,317 6,468,407 804,056 5,144,988 -9,867 Total Operating Revenues 16,893,267 843,170 6,667,016 24,403,453 22,987,635 Operating Expenses: Staff Support and Services Administration Water Wastewater Airport Environmental Services Depreciation 1,715,604 644,962 4,126,431 3,100,746 --4,855,306 408,276 ---753,331 -1,247,527 677,951 ----5,273,607 697,731 2,801,831 644,962 4,126,431 3,100,746 753,331 5,273,607 6,800,564 2,905,766 496,247 4,574,334 2,909,411 770,650 3,730,844 6,685,318 Total Operating Expenses 14,443,049 2,409,134 6,649,289 23,501,472 22,072,570 Operating Income (Loss) 2,450,218 (1,565,964) 17,727 901,981 915,065 744,441 (1,329,590) 1,595,052 (96,402) 3,645,030 28,438 19,636 (137,112) -(5,674) 6,858,215 -- 255,453 --(60,203) 150,214 4,195 1,019,530 (1,466,702) 1,595,052 (162,279) 10,653,459 32,633 1,831,262 (1,733,528) 1,261,030 14,103 6,554,879 (8,024) Total Non-Operating Revenues (Expenses) 4,586,969 6,735,065 349,659 11,671,693 7,919,722 Income Before Operating Transfers 7,037,187 5,169,101 367,386 12,573,674 8,834,787 2,391,679 --- 132,271 816,714 -- -64,255 29,978 2,523,950 880,969 29,978 2,625,000 845,688 29,247 (429,678) (2,821,357) (2,809,811) Non Operating Revenues (Expenses): Interest Income Interest Expense and Fiscal Charges Water and Sewer Buy-Ins Net Gain (Loss) on Disposal of Fixed Assets Contribution Revenue Miscellaneous Operating Transfers In (Out): Operating Transfers - In from: Secondary Property Tax Revenue Fund General Fund Beautification Operating Transfers - Out to: General Fund (2,391,679) Net Operating Transfers In (Out) -- Net Income (Loss) Add Back Depreciation on Fixed Assets Acquired with Capital Grants Increase (Decrease) in Retained Earnings Retained Earnings (Deficit) July 1 Retained Earnings at June 30 as Restated -- $ 948,985 (335,445) 613,540 690,124 31,941 13,187,214 9,524,911 -- 1,475,075 1,517,557 31,941 14,662,289 11,042,468 7,037,187 6,118,086 691,893 783,182 7,729,080 6,901,268 83,803,197 (1,419,170) 3,556,209 85,940,236 74,897,768 91,532,277 5,482,098 3,588,150 100,602,525 85,940,236 90 Exhibit F-3 City of Flagstaff Enterprise Funds Combining Statement of Cash Flows For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Water and Wastewater Fund Cash Flows From Operating Activities Cash Received From Customers and Users Cash Payments to Other Supplies of Goods and Services Cash Payments to Employees for Services (Increase) Decrease in Operating Grants Receivable Increase in Customer Deposits (Decrease) in Customer Deposits Miscellaneous Operating Revenue (Expense) $ 16,777,736 Net Cash Provided (Used) by Operating Activities Cash Flows From Non-Capital Financing Activities Operating Transfers In From Other Funds Gross Increase (Decrease) in Interfund Payable Operating Transfers Out to Other Funds Change in Guarantees Cash Flows from Investing Activities Interest From State Investment Pool 6,705,523 24,290,599 23,211,712 (2,985,886) (2,530,059) ---4,195 (7,008,876) (7,915,699) 21,460 34,465 -35,281 (6,772,150) (7,419,452) 600 1,645 (33,704) 9,987 7,948,179 315,278 1,193,773 9,457,230 8,998,638 948,985 1,875,000 --- --(335,445) -- 3,340,664 1,875,000 (2,727,124) 8,045 3,408,000 450,000 (2,717,876) 16,405 8,045 2,823,985 (335,445) 2,496,585 1,156,529 -1,595,052 4,360,816 -- --- 4,360,816 1,595,052 972,028 1,261,030 (1,194,735) (1,043,717) 15,555 -(6,727,526) (101,726) (289,605) (195,000) 1,000 --(7,183,447) --- --- (1,389,735) (1,042,717) 15,641 -(14,351,344) (101,726) (289,605) (3,631,891) (2,231,985) 14,102 175,094 (8,341,409) 24,138 (280,077) 86 -(440,371) --- --- (27,740) (6,899) --- (27,740) (6,899) (25,586) (9,053) --(16,605) (23,698) (31,251) (2,428) ---- (23,698) (31,251) (19,033) (22,416) (32,533) 152,277 (7,763,307) (3,108,647) (440,285) (11,312,239) (11,976,281) 273,496 1,058,857 1,993,562 1,993,562 17,774 767,587 17,774 273,496 1,058,857 960,504 48,390 691,539 1,700,433 172,448 23,765,675 592,637 8,223,166 32,581,478 32,409,030 $ 24,726,179 641,027 8,914,705 34,281,911 32,581,478 Net Increase (Decrease) in Cash Cash Balance July 1 Cash Balance June 30 2001 Total 807,340 767,587 Net Cash from Investing Activities 2002 Total 185,171 (702,717) 21,460 238 -3,786 Net Cash Provided (Used) by Non-Capital Financing Activities Net Cash Provided (Used) by Capital and Related Financing Activities Environmental Services Fund (4,208,161) (4,682,923) -34,227 -27,300 2,391,679 -(2,391,679) 8,045 Cash Flows From Capital and Related Financing Activities Capital Grants Received Capital Contributed by Contractors Bonds Principal Payments Interest Payments and Related Expenses Proceeds From Sale of Capital Assets Principal on Loans Receivable Acquisition and Construction of Capital Assets Increase in Arbitrage Liability Principal Paid on ADEQ Loan Capital Lease Principal Payments Interest Payments Capital Loan Principal Payments Interest Payments Increase in Deferred Revenue Airport Fund Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss) $ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventory Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Payroll and Payroll Taxes Increase in Customer Deposits (Decrease) in Customer Deposits (Increase) Decrease in Operating Grants Receivable Increase (Decrease) in Landfill Closure and Post-Closure Liability Miscellaneous Revenues (Expenses) 2,450,218 (1,565,964) 17,727 901,981 915,065 4,855,306 1,247,527 697,731 6,800,564 6,685,318 38,507 -(120,600) 11,131 ---545,082 4,195 (109,068) (113,935) 1,312,841 32,345 34,465 -21,460 545,082 31,495 (115,531) (113,935) 791,671 18,923 34,227 ---27,300 Total Adjustments (32,044) -641,770 2,291 238 -21,460 --- 225,658 (3,194) 580,999 18,344 1,645 (33,704) -599,501 9,006 5,497,961 1,881,242 1,176,046 8,555,249 8,083,573 Net Cash Provided (Used) by Operating Activities $ 7,948,179 315,278 1,193,773 9,457,230 8,998,638 Non-Cash Investing, Capital, and Financing Activities Developers Contributing Assets to Governmental Entity $ 3,645,030 3,645,030 4,600,090 Cash and Cash Equivalents Unrestricted Restricted Cash Balance June 30 $ 20,178,785 4,547,394 $ 24,726,179 25,242,869 9,039,042 34,281,911 24,789,435 7,792,043 32,581,478 91 -20,442 620,585 641,027 -5,043,642 3,871,063 8,914,705 Exhibit F-4 City of Flagstaff Water and Wastewater Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) Interest Receivable Restricted Assets: Cash and Cash Equivalents Inventory Fixed Assets (Net of Depreciation) $ Total Assets Liabilities and Fund Equity Liabilities: Accounts Payable Accrued Wages and Taxes Payable Payable from Restricted Assets: Interest Payable General Obligation Bonds Customer Deposits Guaranty and Other Deposits Deferred Revenue Bonds Payable (Less Current Portion): General Obligation Bonds Arbitrage Liability Loans Payable 22,858,778 2,491,795 164,802 19,801,491 2,376,264 187,948 1,867,401 428,127 164,553,598 3,964,184 314,192 159,147,166 $ 192,364,501 185,791,245 $ 1,319,262 172,773 527,591 153,850 608,629 1,788,110 556,740 75,189 116,241 322,756 1,525,000 522,513 67,144 132,846 23,154,725 -3,497,183 24,612,570 101,726 3,786,788 31,288,852 31,752,784 16,608,763 6,228,012 46,706,597 17,300,655 6,228,012 46,706,597 1,593,915 89,938,362 1,593,915 82,209,282 91,532,277 83,803,197 161,075,649 154,038,461 192,364,501 185,791,245 Total Liabilities Fund Equity: Contributed Capital: Capital Grants (Net) Municipality Contractors Retained Earnings: Reserved for: Renewal and Replacement Unreserved as Restated Total Retained Earnings as Restated Total Fund Equity Total Liabilities and Fund Equity $ 92 2001 Exhibit F-5 City of Flagstaff Water and Wastewater Fund Comparative Statement of Revenues, Expenses and Changes in Retained Earnings For the Fiscal Years Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) 2002 Operating Revenues: Water Revenues Sewer Revenues $ 2001 10,438,668 6,454,599 10,560,317 6,468,407 16,893,267 17,028,724 Operating Expenses: Staff Support and Services Administration Water Wastewater Depreciation 1,715,604 644,962 4,126,431 3,100,746 4,855,306 1,777,456 496,247 4,574,334 2,909,411 4,819,871 Total Operating Expenses 14,443,049 14,577,319 2,450,218 2,451,405 744,441 (1,329,590) 1,595,052 (96,402) 3,645,030 28,438 1,308,586 (1,567,766) 1,261,030 12,300 4,600,090 (2,636) Total Non-Operating Revenues (Expenses) 4,586,969 5,611,604 Income (Loss) Before Operating Transfers 7,037,187 8,063,009 2,391,679 2,380,133 (2,391,679) (2,380,133) Total Operating Revenues Operating Income Non-Operating Revenues (Expenses): Interest Income Interest Expense and Fiscal Charges Water and Sewer Buy-Ins Net Gain (Loss) on Disposal of Fixed Assets Capital Contributions Miscellaneous Operating Transfers In (Out): Operating Transfers - In from: Secondary Property Tax Revenue Fund Operating Transfers - Out to: General Fund Total Operating Transfers In (Out) -- Net Income Add Back Depreciation on Fixed Assets Acquired with Capital Grants Increase (Decrease) in Retained Earnings Retained Earnings July 1 Retained Earnings at June 30 as Restated $ 93 -- 7,037,187 8,063,009 691,893 693,342 7,729,080 8,756,351 83,803,197 75,046,846 91,532,277 83,803,197 Exhibit F-6 City of Flagstaff Water and Wastewater Fund Comparative Statement of Cash Flows For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) 2002 Cash Flows From Operating Activities Cash Received From Customers and Users Cash Payments to Other Suppliers of Goods and Services Cash Payments to Employees for Services Increase (Decrease) in Customer Deposits Miscellaneous Operating Revenue (Expense) $ Net Cash Provided (Used) by Operating Activities Cash Flows From Non-Capital Financing Activities Operating Transfers In From Other Funds Operating Transfers Out to Other Funds Change in Guarantees Net Cash Provided (Used) by Non-Capital Financing Activities Cash Flows From Capital and Related Financing Activities Capital Contributed from Contractors Bonds Principal Payments Interest Payments and Related Expenses Proceeds From Sale of Capital Assets Acquisition and Construction of Capital Assets Increase (Decrease) in Arbitrage Liability Principal Paid on ADEQ Loan Increase (Decrease) in Deferred Revenue Net Cash Provided (Used) by Capital and Related Financing Activities 2001 16,777,736 17,062,012 (4,208,161) (4,682,923) 34,227 27,300 (5,333,241) (4,410,013) (33,704) 14,394 7,948,179 7,299,448 2,391,679 (2,391,679) 8,045 2,380,133 (2,380,133) 16,405 8,045 16,405 1,595,052 1,261,030 (1,194,735) (1,043,717) 15,555 (6,727,526) (101,726) (289,605) (16,605) (3,451,891) (2,044,919) 12,300 (4,620,766) 24,138 (280,077) 132,846 (7,763,307) (8,967,339) Cash Flows From Investing Activities Interest From State Investment Pool 767,587 1,432,311 Net Cash From Investing Activities 767,587 1,432,311 Net Increase (Decrease) in Cash 960,504 Cash Balance July 1 Cash Balance June 30 (219,175) 23,765,675 23,984,850 $ 24,726,179 23,765,675 $ 2,450,218 2,451,405 4,855,306 4,819,871 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventory Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Payroll and Payroll Taxes Increase (Decrease) in Customer Deposits Miscellaneous Operating Revenues (Expenses) (115,531) (113,935) 791,671 18,923 34,227 27,300 Total Adjustments 33,288 (3,194) 6,750 10,638 (33,704) 14,394 5,497,961 4,848,043 Net Cash Provided (Used) by Operating Activities $ 7,948,179 7,299,448 Non-Cash Investing, Capital and Financing Activities: Developers Contributing Assets to Governmental Entity $ 3,645,030 4,600,090 $ 20,178,785 4,547,394 24,726,179 19,801,491 3,964,184 23,765,675 Cash and Cash Equivalents Unrestricted Restricted Cash Balance June 30 $ 94 Exhibit F-7 City of Flagstaff Water and Wastewater Fund Schedule of Revenues and Expenses Budget and Actual (Budget Basis) For the Fiscal Year Ended June 30, 2002 Budget Operating Revenues: Water Revenues Sewer Revenues $ Variance Favorable (Unfavorable) Actual 11,097,947 6,706,302 10,438,668 6,454,599 (659,279) (251,703) 17,804,249 16,893,267 (910,982) Operating Expenses: Staff Support and Services Administration Water Wastewater 1,819,827 2,184,523 4,008,613 3,026,268 1,715,604 644,962 4,126,431 3,100,746 104,223 1,539,561 (117,818) (74,478) Total Operating Expenses 11,039,231 9,587,743 1,451,488 Operating Income (Loss) 6,765,018 7,305,524 540,506 Non-Operating Revenues (Expenses): Paid on Bond Maturity Paid on Loan Maturity Interest Income Interest Expense and Fiscal Charges Water and Sewer Buy-Ins Net Gain (Loss) on Disposal of Fixed Assets Contribution Revenue Capital Outlay Proceeds from Sale of Bonds Miscellaneous (1,285,000) (289,605) 800,000 (1,626,311) 1,266,684 --(11,820,160) 6,800,000 -- (1,788,110) (289,605) 744,441 (1,329,590) 1,595,052 (96,402) 3,645,030 (6,727,526) -28,438 (503,110) -(55,559) 296,721 328,368 (96,402) 3,645,030 5,092,634 (6,800,000) 28,438 Total Non-Operating Revenues (Expenses) (6,154,392) (4,218,272) 1,936,120 610,626 3,087,252 2,476,626 2,394,293 2,391,679 (2,614) (2,394,293) (2,391,679) 2,614 Total Operating Revenues Income (Loss) Before Operating Transfers Operating Transfers In (Out): Operating Transfers - In from: Secondary Property Tax Revenue Fund Operating Transfers - Out to: General Fund Total Operating Transfers In (Out) Net Income (Loss) -$ -- 610,626 3,087,252 GAAP Adjustments to Budget: Depreciation Paid on Bond Maturity Paid on Loan Maturity Capital Outlay Depreciation on Fixed Assets Acquired with Capital Grants (4,855,306) 1,788,110 289,605 6,727,526 691,893 Increase (Decrease) in GAAP Retained Earnings $ 95 7,729,080 -2,476,626 Exhibit F-8 City of Flagstaff Airport Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 Assets Cash and Cash Equivalents Accounts Receivable (Net) Interest Receivable Grants Receivable Restricted Assets: Cash and Cash Equivalents Fixed Assets (Net of Depreciation) $ 20,442 104,295 1,862 3,903,861 2001 $ 620,585 27,366,305 Total Assets 11,610 72,251 -1,427,922 581,027 21,436,060 $ 32,017,350 $ 23,528,870 $ 1,141,194 20,557 $ 499,424 18,266 Liabilities and Fund Equity Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Payable from Restricted Assets: Interest Payable General Obligation Bonds Guaranty and Other Deposits Capital Lease Interfund Payable Deferred Revenue Bonds Payable (Less Current Portion) General Obligation Bonds Loans Payable Total Liabilities Fund Equity: Contributed Capital: Capital Grants (Net) Municipality Retained Earnings: Reserved for: Airport Construction Unreserved (Deficit) as Restated Total Retained Earnings (Deficit) as Restated Total Fund Equity Total Liabilities and Fund Equity $ 96 104,400 130,000 15,670 62,684 2,819,897 17,002 4,438 195,000 15,432 90,424 944,897 19,431 1,895,000 543,136 2,025,000 566,834 6,749,540 4,379,146 12,870,943 6,914,769 13,654,125 6,914,769 386,185 5,095,913 381,589 (1,800,759) 5,482,098 (1,419,170) 25,267,810 19,149,724 32,017,350 $ 23,528,870 Exhibit F-9 City of Flagstaff Airport Fund Comparative Statement of Revenues, Expenses and Changes in Retained Earnings For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) 2002 Operating Revenues: Airport Revenues Intergovernmental Revenue Miscellaneous Revenues $ 2001 838,596 788 3,786 804,056 -9,867 843,170 813,923 Operating Expenses: Staff Support and Services Airport Depreciation 408,276 753,331 1,247,527 576,139 770,650 1,172,257 Total Operating Expenses 2,409,134 2,519,046 Operating Income (Loss) (1,565,964) (1,705,123) 19,636 (137,112) (5,674) 6,858,215 26,209 (165,762) 153 1,954,789 6,735,065 1,815,389 5,169,101 110,266 132,271 816,714 244,867 783,000 948,985 1,027,867 6,118,086 1,138,133 783,182 824,215 6,901,268 1,962,348 (1,419,170) (3,381,518) 5,482,098 (1,419,170) Total Operating Revenues Non-Operating Revenues (Expenses): Interest Income Interest Expense and Fiscal Charges Net Gain (Loss) on Disposal of Fixed Assets Contribution Revenue Total Non-Operating Revenues (Expenses) Income Before Operating Transfers Operating Transfers In (Out): Operating Transfers - In from: Secondary Property Tax Revenue Fund General Fund Total Operating Transfers In (Out) Net Income Add Back Depreciation on Fixed Assets Acquired with Capital Grants Increase in Retained Earnings Retained Earnings (Deficit) July 1 Retained Earnings (Deficit) at June 30 as Restated 97 $ Exhibit F-10 City of Flagstaff Airport Fund Comparative Statement of Cash Flows For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) 2002 Cash Flows From Operating Activities Cash Received From Customers and Users Cash Payments to Other Suppliers of Goods and Services Cash Payments to Employees for Services (Increase) Decrease in Operating Grants Receivable Increase (Decrease) in Customer Deposits Miscellaneous Operating Revenue (Expenses) $ Net Cash Provided (Used) by Operating Activities Cash Flows From Non-Capital Financing Activities Operating Transfers In From Other Funds Gross Increase (Decrease) in Interfund Payable Net Cash Provided (Used) by Non-Capital Financing Activities Cash Flows From Capital and Related Financing Activities Capital Grants Received Bonds Principal Payments Interest Payments and Related Expenses Proceeds From Sale of Capital Assets Principal on Loans Receivable Acquisition and Construction of Capital Assets Capital Lease Principal Payments Interest Payments Capital Loan Principal Payments Interest Payments Increase in Deferred Revenue Net Cash Provided (Used) by Capital and Related Financing Activities 2001 807,340 844,321 185,171 (702,717) 21,460 238 3,786 (27,812) (850,053) -1,645 981 315,278 (30,918) 948,985 1,875,000 1,027,867 450,000 2,823,985 1,477,867 4,360,816 972,028 (195,000) 1,000 --(7,183,447) (180,000) (187,066) 152 175,094 (2,101,838) (27,740) (6,899) (25,586) (9,053) (23,698) (31,251) (2,428) (22,416) (32,533) 19,431 (3,108,647) (1,391,787) Cash Flows From Investing Activities Interest From State Investment Pool 17,774 26,209 Net Cash From Investing Activities 17,774 26,209 48,390 81,371 592,637 511,266 641,027 592,637 Net Increase (Decrease) in Cash Cash Balance July 1 Cash Balance June 30 $ Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss) $ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Payroll and Payroll Taxes Increase (Decrease) in Customer Deposits (Increase) Decrease in Operating Grants Receivable (1,565,964) (1,705,123) 1,247,527 1,172,257 (32,044) 641,770 2,291 238 21,460 Total Adjustments 1,881,242 Net Cash Provided (Used) by Operating Activities Cash and Cash Equivalents Unrestricted Restricted Cash Balance June 30 1,674,205 $ 315,278 (30,918) $ 20,442 620,585 641,027 11,610 581,027 592,637 $ 98 31,379 469,995 (1,071) 1,645 -- Exhibit F-11 City of Flagstaff Airport Fund Schedule of Revenues and Expenses Budget and Actual (Budget Basis) For the Fiscal Year Ended June 30, 2002 Budget Operating Revenues: Airport Revenues Intergovernmental Revenue Miscellaneous Revenues $ Variance Favorable (Unfavorable) Actual 852,879 -1,240 838,596 788 3,786 (14,283) -2,546 854,119 843,170 (10,949) Operating Expenses: Staff Support and Services Airport 432,229 810,010 408,276 753,331 23,953 56,679 Total Operating Expenses 1,242,239 1,161,607 80,632 Total Operating Revenues Operating Income (Loss) Non-Operating Revenues (Expenses): Paid on Bond Maturity Paid on Loan Maturity Interest Income Interest Expense and Fiscal Charges Net Gain (Loss) on Disposal of Fixed Assets Contribution Revenue Capital Outlay Lease Purchase Principal (388,120) (318,437) (130,000) (23,698) 7,500 (141,329) -13,098,712 (13,777,612) (27,740) (130,000) (23,698) 19,636 (137,112) (5,674) 6,858,215 (7,183,447) (27,740) (994,167) (629,820) 364,347 (1,382,287) (948,257) 434,030 153,179 1,123,000 132,271 816,714 (20,908) (306,286) 1,276,179 948,985 (327,194) Total Non-Operating Revenues (Expense) Income (Loss) Before Operating Transfers Operating Transfers In (Out): Operating Transfers - In from: Secondary Property Tax Revenue Fund General Fund Total Operating Transfers In (Out) Net Income (Loss) - Budget Basis $ (106,108) 728 GAAP Adjustments to Budget: Depreciation Paid on Bond Maturity Paid on Loan Maturity Capital Outlay Lease Purchase Principal Depreciation on Fixed Assets Acquired with Capital Grants (1,247,527) 130,000 23,698 7,183,447 27,740 783,182 Increase (Decrease) in GAAP Retained Earnings $ 99 6,901,268 69,683 --12,136 4,217 (5,674) (6,240,497) 6,594,165 -- 106,836 Exhibit F-12 City of Flagstaff Environmental Services Fund Comparative Balance Sheets June 30, 2002 and 2001 2002 2001 5,043,642 659,698 31,895 150,214 4,976,334 698,205 37,313 -- 3,871,063 15,799 6,612,887 3,246,832 28,424 6,930,536 $ 16,385,198 15,917,644 $ 112,847 78,544 233,447 67,413 3,886,862 17,340 7,636,068 3,275,256 17,340 7,702,592 11,731,661 11,296,048 Fund Equity: Contributed Capital: Municipality 1,065,387 1,065,387 Retained Earnings: Unreserved 3,588,150 3,556,209 Total Fund Equity 4,653,537 4,621,596 16,385,198 15,917,644 Assets Cash and Cash Equivalents Accounts Receivable (Net) Interest Receivable Grants Receivable Restricted Assets: Cash and Cash Equivalents Interest Receivable Fixed Assets (Net of Depreciation) $ Total Assets Liabilities and Fund Equity Liabilities: Accounts Payable Accrued Wages and Payroll Taxes Payable from Restricted Assets: Landfill Closure and Post-Closure Liability Guaranty and Other Deposits Landfill Closure and Post-Closure Liability Total Liabilities Total Liabilities and Fund Equity $ 100 Exhibit F-13 City of Flagstaff Environmental Services Fund Comparative Statement of Revenues, Expenses and Changes in Retained Earnings For the Fiscal Years Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) 2002 2001 6,667,016 5,144,988 6,667,016 5,144,988 677,951 4,728,525 697,731 545,082 552,171 3,131,343 693,190 599,501 Total Operating Expenses 6,649,289 4,976,205 Operating Income (Loss) 17,727 168,783 255,453 (60,203) 150,214 4,195 496,467 1,650 -(5,388) Total Non-Operating Revenues (Expenses) 349,659 492,729 Income (Loss) Before Operating Transfers 367,386 661,512 64,255 29,978 62,688 29,247 (429,678) (429,678) (335,445) (337,743) 31,941 323,769 3,556,209 3,232,440 3,588,150 3,556,209 Operating Revenues: Environmental Services Revenues $ Total Operating Revenues Operating Expenses: Staff Support and Services Environmental Services Depreciation Landfill Closure and Post-Closure Accrual Non-Operating Revenues (Expenses): Interest Income Net Gain (Loss) on Disposal of Fixed Assets Contribution Revenue Miscellaneous Operating Transfers In (Out): Operating Transfers - In From: General Fund Beautification Operating Transfers - Out to: General Fund Total Operating Transfers In (Out) Net Income (Loss) Retained Earnings July 1 Retained Earnings (Deficit) June 30 $ 101 Exhibit F-14 City of Flagstaff Environmental Services Fund Comparative Statement of Cash Flows For the Fiscal Year Ended June 30, 2002 (With Comparative Totals for the Fiscal Year Ended June 30, 2001) Cash Flows From Operating Activities Cash Received From Customers and Users Cash Payments to Other Suppliers of Goods and Services Cash Payments to Employees for Services Operating Grant Received Miscellaneous Operating Revenue (Expense) $ Net Cash Provided (Used) by Operating Activities Cash Flows From Non-Capital Financing Activities Operating Transfers Out to Other Funds Net Cash Provided (Used) by Non-Capital Financing Activities Cash Flows From Capital and Related Financing Activities Proceeds From Sale of Capital Assets Acquisition and Construction of Capital Assets Net Cash Provided (Used) by Capital and Related Financing Activities 2002 2001 6,705,523 5,305,379 (2,985,886) (2,530,059) -4,195 (1,411,097) (2,159,386) 600 (5,388) 1,193,773 1,730,108 (335,445) (337,743) (335,445) (337,743) 86 (440,371) 1,650 (1,618,805) (440,285) (1,617,155) Cash Flows From Investing Activities Interest From State Investment Pool 273,496 535,042 Net Cash From Investing Activities 273,496 535,042 Net Increase in Cash 691,539 310,252 Cash Balance July 1 8,223,166 7,912,914 $ 8,914,705 8,223,166 $ 17,727 168,783 697,731 693,190 38,507 (120,600) 11,131 545,082 4,195 160,991 104,254 8,777 599,501 (5,388) Cash Balance June 30 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Payroll and Payroll Taxes Increase (Decrease) in Landfill Closure and Post-Closure Liability Miscellaneous Revenues (Expenses) Total Adjustments Net Cash Provided (used) by Operating Activities Cash and Cash Equivalents Unrestricted Restricted Cash Balance June 30 1,176,046 1,561,325 $ 1,193,773 1,730,108 $ 5,043,642 3,871,063 8,914,705 4,976,334 3,246,832 8,223,166 $ 102 Exhibit F-15 City of Flagstaff Environmental Services Fund Schedule of Revenues and Expenses Budget and Actual (Budget Basis) For the Fiscal Year Ended June 30, 2002 Budget Operating Revenues: Environmental Services Revenues $ Actual Variance Favorable (Unfavorable) 6,049,757 6,667,016 617,259 6,049,757 6,667,016 617,259 Operating Expenses: Staff Support and Services Environmental Services 683,911 8,061,217 677,951 4,728,525 5,960 3,332,692 Total Operating Expenses 8,745,128 5,406,476 3,338,652 Operating Income (Loss) (2,695,371) 1,260,540 3,955,911 Total Operating Revenues Non-Operating Revenues (Expenses): Interest Income Net Gain (Loss) on Disposal of Fixed Assets Contribution Revenue Capital Outlay Miscellaneous Revenues Other Financing Sources 99,000 ----1,000,000 255,453 (60,203) 150,214 (440,371) 4,195 -- 156,453 (60,203) 150,214 (440,371) 4,195 (1,000,000) Total Non-Operating Revenues (Expenses) 1,099,000 (90,712) (1,189,712) Income (Loss) Before Operating Transfers (1,596,371) Operating Transfers In (Out): Operating Transfers - In From: General Fund Beautification Operating Transfers - Out To: General Fund Total Operating Transfers In (Out) Net Income (Loss) $ 1,169,828 64,255 29,978 64,255 29,978 --- (429,678) (429,678) -- (335,445) (335,445) -- (1,931,816) 834,383 GAAP Adjustments to Budget: Depreciation Capital Outlay Landfill Closure and Post-Closure Accrual (697,731) 440,371 (545,082) Increase (Decrease) in GAAP Retained Earnings $ 103 2,766,199 31,941 2,766,199 104 GENERAL FIXED ASSET ACCOUNT GROUP General Fixed Assets are those fixed assets not accounted for in the Enterprise Funds. To be classified as a fixed asset, a specific piece of property must be tangible, have a life longer than one year, and have a significant value. GENERAL FIXED ASSET ACCOUNT GROUP Exhibit G-1 City of Flagstaff Schedule of General Fixed Assets - By Source June 30,2002 General fixed assets: Land Buildings Improvements other than buildings Machinery and equipment Construction in progress Total general fixed assets Investment in general fixed assets from: Federal grants State grants County grants General fund revenues Special revenue fund revenues Gifts Contributed from utility fund Intergovernmental contribution General obligation bonds Total investment in general fixed assets 105 $ 7,305,321 20,605,777 10,260,066 20,729,777 16,791,214 $ 75,692,155 $ 1,151,197 411,919 27,763 46,875,024 13,761,925 53,047 245,109 791,850 12,374,321 $ 75,692,155 Exhibit G-2 City of Flagstaff Schedule of General Fixed Assets - By Functions and Activities June 30, 2002 Total General government: General administration Data processing Library Finance Community development City court Human Resources Municipal complex Tourism Total general government $ Land Buildings Improvements other than Buildings Machinery and Equipment 6,242,085 109,641 1,154,730 69,370 32,851 112,725 7,547 9,310,006 1,365,168 18,404,123 2,374,572 2,460,728 501,365 5,336,665 537,026 85,239 2,640 6,849,278 817,103 8,291,286 126,327 109,641 100,680 18,404 355,052 3,204,160 968,811 69,370 32,851 110,085 7,547 28,296 4,421,120 2,647,741 7,158,545 9,806,286 159,894 159,894 112,492 3,393,322 3,505,814 8,671 36,661 45,332 2,526,578 3,568,668 6,095,246 Parks and Recreation: Parks Recreation Recreation Capital Projects Total parks and recreation 5,543,925 3,578,428 3,780,984 12,903,337 951,070 95,091 1,046,161 244,004 2,286,946 206,464 2,737,414 2,790,116 1,011,153 3,479,429 7,280,698 1,558,735 280,329 1,839,064 Public works: Facilities maintenance Engineering Building inspection Shop Planning Public works administration Total public works 6,272,567 918,460 185,297 871,435 35,701 19,541 8,303,001 5,568,670 8,443 360,104 5,937,217 6,094 281,474 196,789 484,357 697,803 628,543 185,297 314,542 35,701 19,541 1,881,427 Public safety: Police protection Fire protection Total public safety Cemetery - 364,207 44,126 30,443 196,627 93,011 9,119,987 718,475 103,603 1,898,000 6,399,909 Total general fixed assets allocated to functions. 58,900,941 7,305,321 20,605,777 10,260,066 20,729,777 Construction work in progress 16,791,214 Streets Total general fixed assets $ 75,692,155 106 Exhibit G-3 City of Flagstaff Schedule of Changes in General Fixed Assets - By Functions and Activities Year Ended June 30, 2002 General fixed assets at beginning of year General government: General administration Law Data processing Library Finance Community development City court Human Resources Municipal complex Beautification Tourism Total general government $ Additions Deductions Transfers between Departments General fixed assets at end of year 5,412,977 4,316 120,240 1,203,952 73,568 45,654 149,365 7,547 9,310,006 1,705 1,392,629 17,721,959 1,990,767 150,786 2,141,553 1,161,659 4,316 10,599 200,008 4,198 12,803 36,640 1,705 27,461 1,459,389 - 6,242,085 109,641 1,154,730 69,370 32,851 112,725 7,547 9,310,006 1,365,168 18,404,123 Public safety: Police protection Fire protection Total public safety 3,173,370 7,429,092 10,602,462 25,224 25,224 525,629 295,771 821,400 - 2,647,741 7,158,545 9,806,286 Parks and Recreation: Parks Recreation Recreation Capital Projects Total parks and recreation 5,594,823 3,553,513 3,685,893 12,834,229 112,015 89,592 95,091 296,698 162,913 64,677 227,590 - 5,543,925 3,578,428 3,780,984 12,903,337 Public works: Facilities maintenance Engineering Building inspection Shop Planning Public works administration Total public works 6,237,924 997,150 185,297 953,905 44,471 19,541 8,438,288 58,722 58,722 24,079 78,690 82,470 8,770 194,009 - 6,272,567 918,460 185,297 871,435 35,701 19,541 8,303,001 388,335 - 24,128 - 364,207 Streets 9,152,433 111,895 144,341 - 9,119,987 Construction work in progress 8,931,646 7,901,289 41,721 - 16,791,214 68,069,352 10,535,381 2,912,578 - 75,692,155 Cemetery Total general fixed assets $ 107 108 SUPPORTING SCHEDULES SUPPORTING SCHEDULES SCHEDULE I Debt Service Requirements to Maturity - General Obligation Bonds June 30, 2002 Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Principal $ $ Interest 3,565,000 3,880,000 3,790,000 2,840,000 3,609,726 3,345,000 3,370,000 2,105,000 2,240,000 2,385,000 2,350,000 505,000 33,984,726 1,550,635 1,506,998 1,348,694 1,024,214 1,077,090 757,101 592,258 460,333 357,208 247,408 130,933 23,988 9,076,860 109 Total Requirement 5,115,635 5,386,998 5,138,694 3,864,214 4,686,816 4,102,101 3,962,258 2,565,333 2,597,208 2,632,408 2,480,933 528,988 43,061,586 SCHEDULE II Debt Service Requirements to Maturity - Street Construction Revenue Bonds June 30, 2002 Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Principal $ $ Interest 1,565,000 1,635,000 1,705,000 1,805,000 1,880,000 1,370,000 1,445,000 1,520,000 1,620,000 1,725,000 16,270,000 836,423 767,562 693,988 615,558 530,723 441,423 359,723 280,135 190,455 94,873 4,810,863 110 Total Requirement 2,401,423 2,402,562 2,398,988 2,420,558 2,410,723 1,811,423 1,804,723 1,800,135 1,810,455 1,819,873 21,080,863 SCHEDULE III Debt Service Requirements to Maturity - Special Assessment Bonds June 30, 2002 Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Principal $ $ Interest 244,000 259,000 270,000 75,000 76,000 82,000 88,000 94,000 1,188,000 56,074 42,270 27,750 18,497 14,799 10,927 6,761 2,303 179,381 111 Total Requirement 300,074 301,270 297,750 93,497 90,799 92,927 94,761 96,303 1,367,381 SCHEDULE IV Debt Service Requirements to Maturity - Other Debt June 30, 2002 Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Principal $ $ Interest 255,000 265,000 275,000 285,000 295,000 310,000 320,000 335,000 350,000 365,000 385,000 400,000 420,000 440,000 4,700,000 207,399 197,199 186,599 175,599 164,199 152,399 139,534 125,614 110,370 94,446 77,656 59,850 40,850 20,900 1,752,614 112 Total Requirement 462,399 462,199 461,599 460,599 459,199 462,399 459,534 460,614 460,370 459,446 462,656 459,850 460,850 460,900 6,452,614 STATISTICAL SECTION 113 Table I General Government Expenditures by Function Last Ten Fiscal Years Fiscal Year 1993 General Government and Library $ Public Safety Community Development Contributions to Other Agencies Parks and Recreation 5,891,579 9,960,011 1,295,476 734,056 1,973,895 1994 7,263,107 10,419,132 1,200,587 1,017,835 2,023,179 1995 7,142,198 10,793,046 986,219 1,106,599 2,441,776 1996 7,212,411 11,017,376 1,652,750 1,404,276 2,866,078 1997 8,825,304 12,060,567 1,201,352 1,600,649 3,452,107 1998 11,477,923 12,167,725 1,412,182 1,065,899 3,269,940 1999 14,819,049 13,299,094 1,337,131 1,068,915 3,186,846 2000 21,046,910 13,533,876 1,681,507 998,422 3,486,908 2001 13,863,501 15,480,047 2,004,709 1,040,414 4,154,546 2002 20,196,471 16,057,019 5,359,095 933,583 3,853,094 Note: Includes General, Special Revenue, Debt Service and Capital Projects. 114 Public Works and Highway and Streets Criminal Justice Debt Service Cemetery Total 12,025,091 540,617 170,482 3,101,380 35,692,587 8,908,093 584,582 107,142 2,545,881 34,069,538 12,407,830 642,590 117,717 2,582,250 38,220,225 7,738,757 767,706 136,249 2,929,349 35,724,952 6,701,434 865,545 169,226 3,234,752 38,110,936 9,107,198 877,167 123,440 4,108,607 43,610,081 6,289,685 920,826 136,259 4,098,604 45,156,409 8,307,169 1,021,651 148,980 3,881,866 54,107,289 10,464,557 1,145,454 163,550 4,206,920 52,523,698 16,599,119 1,335,400 162,844 4,422,074 68,918,699 115 Table II General Government Revenues by Source Last Ten Fiscal Years Fiscal Year 1993 Taxes $ Licenses and Permits Intergovernmental Revenues Charges for Services Fines and Forfeits Other Revenues Total 15,641,582 613,796 13,269,793 523,482 633,287 1,241,218 31,923,158 1994 16,696,324 653,521 14,637,139 580,640 660,098 1,782,470 35,010,192 1995 17,576,915 834,368 15,322,232 720,238 572,728 3,450,303 38,476,784 1996 18,112,121 1,322,309 16,095,776 872,608 808,543 1,581,552 38,792,909 1997 18,776,929 1,279,410 17,704,496 871,284 782,451 2,333,295 41,747,865 1998 19,576,193 1,246,090 19,079,704 920,566 783,854 2,497,159 44,103,566 1999 20,582,542 1,335,184 22,621,143 837,373 838,306 2,468,401 48,682,949 2000 22,197,133 1,324,340 26,778,117 1,030,249 837,695 5,243,779 57,411,313 2001 28,340,957 1,318,450 26,203,650 1,025,625 993,585 3,570,180 61,452,447 2002 30,986,091 2,014,357 24,008,885 1,676,615 991,131 3,520,493 63,197,572 Note: Includes General, Special Revenue, Debt Service and Capital Projects. 116 Table III Tax Revenues by Sources Last Ten Fiscal Years Fiscal Year Secondary Property Tax Franchise and Other Taxes 15,641,582 1,709,887 3,915,387 1,108,328 6,267,619 2,640,361 - 1994 16,696,324 1,806,265 3,993,710 1,274,705 6,763,872 2,857,772 - 1995 17,576,915 1,868,077 4,062,533 1,304,684 7,362,140 2,979,481 - 1996 18,112,121 2,137,125 3,344,441 1,260,317 8,240,709 3,129,529 - 1997 18,776,929 2,243,818 3,402,803 1,358,283 8,491,913 3,280,112 - 1998 19,576,193 2,405,865 3,355,628 1,512,456 8,966,287 3,335,957 - 1999 20,582,542 2,577,557 3,537,987 1,560,789 9,369,406 3,536,803 - 2000 22,197,133 2,759,130 3,777,091 1,505,710 10,510,380 3,644,822 - 2001 28,340,957 2,853,091 3,896,103 1,690,043 10,810,658 3,747,822 5,343,240 2002 30,986,091 3,070,491 4,197,777 1,790,846 11,782,781 3,817,028 6,327,168 $ 117 City Sales Tax Bed, Board and Booze Tax General Property Tax 1993 Total Taxes Transportation Tax Table IV Intergovermental Revenue by Source Last Ten Fiscal Years Fiscal Year 1993 State Sales Tax Not Available (NA) State Income Tax County Auto In-Lieu Tax Highway User Tax Local Transportation Assistance State HB 2565 NA NA NA NA NA 1994 NA NA NA NA NA NA 1995 NA NA NA NA NA NA 1996 $ 3,734,332 3,553,021 1,355,828 5,700,737 364,931 - 1997 3,845,330 4,170,641 1,504,060 5,852,957 366,453 - 1998 4,061,346 4,725,837 1,533,501 5,371,446 394,318 - 1999 4,353,556 5,489,912 1,847,142 7,207,158 367,911 - 2000 4,785,424 6,062,290 1,902,188 7,427,210 367,461 312,249 2001 4,919,575 6,432,879 1,913,662 7,969,703 360,806 142,793 2002 4,076,034 5,526,159 1,803,900 7,771,416 300,246 47,598 118 Federal Grants State Grants & Other State County Library District Funding Other County Total NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 360,439 115,134 911,354 - 16,095,776 694,916 380,042 890,097 - 17,704,496 1,448,951 553,963 955,342 35,000 19,079,704 1,763,054 272,297 1,101,729 218,384 22,621,143 1,474,751 370,391 1,068,817 3,007,336 26,778,117 1,731,823 317,059 1,835,109 580,241 26,203,650 2,348,793 437,543 1,423,105 274,091 24,008,885 119 Table V Property Tax Levies and Collections Last Ten Fiscal Years Fiscal Year 1993 Total Tax Levy $ 5,257,183 Current Tax Collections $ Percent of Levy Collected 5,431,611 103.3% Delinquent Tax Collections $ 193,663 1994 5,743,129 5,492,103 95.6% 307,872 1995 5,910,644 5,610,061 94.9% 320,549 1996 5,424,449 5,400,777 99.6% 80,789 1997 5,638,222 5,566,676 98.7% 79,945 1998 5,754,253 5,651,170 98.2% 110,323 1999 6,138,071 6,036,950 98.4% 78,594 2000 6,526,010 6,443,879 98.7% 92,342 2001 6,936,955 6,658,250 96.0% 90,944 2002 7,271,109 7,194,162 98.9% 74,106 120 Total Tax Collections $ Total Collections as a Percent of Current Levy 5,625,274 107.0% 5,799,975 Outstanding Delinquent Collections $ Outstanding Delinquent Taxes as a Percent of Current Levy 302,578 5.8% 101.0% 326,269 5.7% 5,930,610 100.3% 186,826 3.2% 5,481,566 101.1% 265,339 4.9% 5,646,621 100.1% 248,572 4.4% 5,761,493 100.1% 217,244 3.8% 6,115,544 99.6% 216,717 3.5% 6,536,221 100.2% 211,305 3.2% 6,749,194 97.3% 218,230 3.1% 7,268,268 100.0% 257,060 3.5% 121 Table VI Primary Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Fiscal Year Real Property Assessed Estimated Value Actual Value Personal Property Assessed Estimated Value Actual Value 1993 $ 253,115,962 1,709,252,294 17,191,129 77,637,687 1994 263,143,187 1,807,219,306 12,656,223 63,521,760 1995 272,017,549 1,972,867,568 22,083,172 88,333,062 1996 285,152,896 2,097,918,383 20,719,183 82,906,354 1997 317,127,846 2,352,739,798 12,461,600 103,490,735 1998 329,932,001 2,458,882,909 22,781,372 97,754,981 1999 353,421,490 2,642,062,329 22,180,026 98,903,475 2000 379,547,012 2,802,287,566 30,717,569 137,001,286 2001 400,324,857 2,834,495,586 52,116,286 234,449,089 2002 427,130,788 3,023,897,189 53,042,977 238,857,013 122 Total Ratio of Total Assessed Value to Total Estimated Actual Value Assessed Value Estimated Actual Value 270,307,091 1,786,889,981 1- 6.6 275,799,410 1,870,741,066 1- 6.8 294,100,721 2,061,200,630 1- 7.0 305,872,079 2,180,824,737 1- 7.1 329,589,446 2,456,230,533 1- 7.5 352,713,373 2,556,637,890 1- 7.2 375,601,516 2,740,965,804 1- 7.3 410,264,581 2,939,288,852 1- 7.2 452,441,143 3,068,944,675 1- 6.8 480,173,765 3,262,754,202 1- 6.8 123 Table VII Property Tax Rates and Tax Levies Direct and Overlapping Governments Last Ten Fiscal Years Fiscal Year City School District Community College County State Total Tax Rates 1993 2.1114 6.4710 0.3589 1.1815 0.4700 10.5928 1994 2.1014 6.3515 0.3671 1.1650 0.4700 10.4550 1995 2.0823 6.3778 0.3706 1.1622 0.4700 10.4629 1996 1.7983 6.7903 0.3728 1.1472 0.4700 10.5786 1997 1.8283 6.5237 0.3784 1.1386 - 9.8690 1998 1.7127 6.6634 0.3869 1.1168 - 9.8798 1999 1.7127 6.5477 0.3952 1.1094 - 9.7650 2000 1.7127 6.5585 0.5947 1.1444 - 10.0103 2001 1.7127 6.6885 0.5724 1.1336 - 10.1072 2002 1.7127 6.6885 0.5724 1.1336 - 10.1072 Note: Tax rates are per $100 assessed valuation. Tax Levies 1993 $ 5,620,237 16,905,293 925,154 3,070,523 1,211,542 27,732,749 1994 5,743,129 17,177,928 987,329 3,146,188 1,264,082 28,318,656 1995 5,910,644 17,960,572 1,038,919 3,269,358 1,317,571 29,497,064 1996 5,424,449 20,199,032 1,096,407 3,401,466 1,382,273 31,503,627 1997 5,638,222 20,034,474 1,157,420 3,492,093 - 30,322,209 1998 5,754,197 22,148,857 1,275,182 3,706,162 - 32,884,398 1999 6,138,071 23,252,495 1,393,923 3,936,405 - 34,720,894 2000 6,526,010 24,786,048 2,252,184 4,324,131 - 37,888,373 2001 6,936,955 26,912,268 2,305,697 4,560,552 - 40,715,472 2002 7,271,109 28,170,830 2,414,069 4,773,684 - 42,629,692 124 Table VIII Special Assessment Collections Last Ten Fiscal Years Fiscal Year 1993 Current Assessments Due $ 116,509 Current Assessments Collected (1) $ 116,219 Ratio of Collections to Amounts Due 99.75% Total Outstanding Current and Delinquent Assessments (2) $ 3,408 1994 - - N/A 3,408 1995 - - N/A 3,408 1996 53,958 53,958 100.00% 3,408 1997 127,535 132,847 104.17% 1,058 1998 136,791 170,026 124.30% - 1999 137,661 157,640 114.51% - 2000 145,142 175,863 121.17% 529 2001 186,494 269,794 144.67% 5,379 2002 207,154 350,894 169.39% 5,923 (1) Includes prepayments. (2) Includes principal and interest. 125 Table IX Percent of Net General Bonded Debt to Secondary Assessed Value and Net General Bonded Debt Per Capita Last Ten Fiscal Years Secondary Assessed Value (2) Gross Bonded Debt Less Current Portion Net Bonded Debt Percent of Net Bonded Debt to Assessed Value 49,536 $ 266,966,479 $ 44,811,087 $ 3,325,000 $ 41,486,087 16% 1994 50,774 270,619,542 47,548,493 3,585,000 43,963,493 16% 865.87 1995 52,701 284,954,647 44,029,701 4,270,000 39,759,701 14% 754.44 1996 53,966 294,100,721 39,830,151 3,595,000 36,235,151 12% 671.44 1997 55,885 310,066,911 53,809,898 4,371,000 49,438,898 16% 884.65 1998 58,145 340,743,258 49,470,273 4,170,000 45,300,273 13% 779.09 1999 59,945 362,625,557 45,333,746 4,465,000 40,868,746 11% 681.77 2000 52,894 ** 385,566,202 40,904,461 4,405,000 36,499,461 9% 690.05 2001 57,700 408,592,733 36,537,570 2,805,000 33,732,570 8% 584.62 2002 59,160 429,030,400 36,873,231 2,888,505 33,984,726 8% 574.45 Fiscal Year Population (1) 1993 * (1) Arizona Department of Economic Security projected population increases except 1995 and 2000, which are official census figures. (2) From County Assessors Office. * 1995 Special Census. ** Census estimates exceeded actual 2000 census results. FY2000 adjusted to reflect population per U.S. Census official results 126 Net Bonded Debt Per Capita $ 837.49 Table X Computation of Legal Debt Margin June 30, 2002 Secondary Assessed Value (1) $ 429,030,400 Special Improvement Legal Debt Margin Debt Limit 20 Percent of Assessed Value - Special Improvements $ 85,806,080 Amount of Debt Applicable to Debt Limit Total Bonded Debt Less: Current Portion Other Deductions Allowed by Law: Special Assessment Bonds $ 31,371,231 1,758,505 1,188,000 Total Amount of Debt Applicable to Debt Limit 28,424,726 Legal Debt Margin Available for Water, Sewer, Light, Parks and Open Space Projects $ 57,381,354 General Legal Debt Margin Debt Limit 6 Percent of Assessed Value - General $ 25,741,824 Amount of Debt Applicable to Debt Limit Total Bonded Debt Less: Current Portion Other Deductions Allowed by Law: Other Debt Highway User Revenue Bonds $ 29,150,000 2,620,000 4,700,000 16,270,000 Total Amount of Debt Applicable to Debt Limit Legal Debt Margin - Available for All Other Projects 5,560,000 $ 20,181,824 (1) Abstract published by the Arizona State Department of Revenue. 127 Table XI Computation of Direct and Overlapping Debt June 30, 2002 The general obligation debt of all local governmental units which provide services within the City's boundaries, and which must be borne by properties in the City (commonly called overlapping debt), is summarized below: Governmental Units City of Flagstaff School District #1 Net Debt Outstanding Percentage Applicable to the City Direct and Overlapping Debt $ 33,984,726 48,210,000 100.0% 65.0% $ 33,984,726 31,336,500 $ 65,321,226 128 Table XII Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years Fiscal Year 1993 Principal $ Total Debt Service Interest Total General Expenditures Ratio of Debt Service to General Expenditures (Percent) 3,325,000 2,980,662 6,305,662 35,692,587 17.67% 1994 3,585,000 2,986,494 6,571,494 34,069,538 19.29% 1995 4,270,000 2,937,532 7,207,532 38,220,225 18.86% 1996 3,595,000 2,612,598 6,207,598 35,742,952 17.37% 1997 4,371,000 2,660,912 7,031,912 38,110,976 18.45% 1998 4,170,000 2,826,759 6,996,759 43,610,081 16.04% 1999 4,465,000 2,516,329 6,981,329 45,156,409 15.46% 2000 4,405,000 2,242,254 6,647,254 54,107,289 12.29% 2001 2,805,000 1,953,098 4,758,098 52,523,698 9.06% 2002 2,979,000 1,443,074 4,422,074 68,918,699 6.42% 129 Table XIII Schedule of Water and Wastewater Revenue Bond Coverage Last Ten Fiscal Years Fiscal Year Gross Revenues 1993 $ 14,032,383 6,723,474 1994 14,719,682 1995 Expenses Net Revenue Available for Debt Service Debt Service Requirements Principal Interest 7,308,909 - - - - 6,991,300 7,728,382 - - - - 14,916,620 7,097,153 7,819,467 - - - - 1996 16,475,146 7,136,236 9,338,910 - - - - 1997 16,515,478 7,973,540 8,541,938 - - - - 1998 16,767,650 7,916,657 8,850,993 - - - - 1999 16,773,884 7,700,535 9,073,349 - - - - 2000 17,606,349 8,311,186 9,295,163 - - - - 2001 18,337,310 9,757,448 8,579,862 - - - - 2002 17,637,708 9,587,743 8,049,965 - - - - 130 Total Coverage Table XIV Demographic Statistics Last Ten Fiscal Years Fiscal Year Population (1) School Enrollment (2) Unemployment Rate (3) 1993 49,536 11,463 6.8% 1994 50,774 11,727 7.9% 1995 52,701 11,880 6.6% 1996 53,966 11,826 6.1% 1997 55,885 12,679 6.5% 1998 58,145 13,249 6.6% 1999 59,945 12,880 6.6% 2000 52,894 12,682 5.2% 2001 57,700 13,969 4.6% 2002 59,160 14,036 4.9% (1) Arizona Department of Economic Security estimated projected population except for the years, 2000, which are official census figures and 1995, which represent the special census figures. (2) Flagstaff School District (includes charter schools). (3) Arizona Department of Economic Security. Note: Per capita income, median age, and education level data are not available. 131 Table XV Property Value, Construction and Bank Deposits Last Ten Fiscal Years Residential Construction (1) Commercial and Industrial Construction (1) Quarterly Bank Deposits Coconino County ($000) (2) Fiscal Year Number of Permits Value Number of Permits Value 1993 416 $ 24,963,304 151 $ 19,640,070 1994 465 25,187,262 118 2,597,561 448,839 1995 488 46,305,342 181 15,953,231 464,764 1996 564 68,880,721 169 24,418,924 462,848 1997 513 58,580,988 198 39,495,278 347,956 1998 528 45,783,140 182 33,570,116 482,770 1999 524 78,015,349 183 35,999,041 458,285 2000 586 46,399,420 122 43,592,693 460,217 2001 550 50,615,526 127 35,722,301 490,905 2002 758 69,026,395 152 43,642,285 615,806 (1) City Building Department. (2) Arizona Bankers Association. This represents deposits in the 2nd quarter of the fiscal year for banks which reported. (3) Abstract published by the Arizona State Department of Revenue. * Number is exclusive of one large non-participating financial institute in Coconino County. 132 $ 439,139 * Property Value (3) Estimated Cash Value Commercial Residential Nontaxable $ 1,784,221,265 752,633,737 921,566,263 110,021,265 1,833,875,883 751,566,336 970,906,145 111,403,402 1,929,201,462 768,914,972 1,041,012,663 119,273,827 2,170,269,429 818,081,181 1,205,903,371 146,284,877 2,219,561,893 832,894,205 1,238,946,076 147,721,612 2,458,001,305 849,315,340 1,446,181,407 162,504,558 2,644,019,764 867,782,208 1,609,395,170 166,842,386 2,813,033,675 930,939,338 1,698,835,707 183,258,630 2,991,862,619 992,147,419 1,795,884,090 203,831,110 3,134,105,000 1,037,581,165 1,886,615,936 209,907,899 133 Table XVI Miscellaneous Statistical Data Date of Incorporation - 1894 Fire Protection Number of Stations Number of Employees (FTE) 6 98 Date First Charter Adopted October 3, 1958 Police Protection Number of Employees Number of Calls for Service Annual Report-12/31/01 Average Personnel for 24 hour period Vehicular Patrol Units Coconino County Jail Prisoner Capacity Date Present Charter Adopted April 10, 1984 Form of Government Council, City Manager Area - Square Miles 2002 2001 2000 1995 1985 1975 1965 Miles of Streets, Alleys and Sidewalks Streets Alleys Total Sidewalks Miles of Sewer Storm Sanitary 73.600 73.600 65.926 65.926 65.049 64.500 62.500 204.58 10.08 214.66 135.28 39.25 231.76 Number of Street Lights 2,898 Number of Fire Hydrants 2,435 Number of Manholes 5,979 Other City Buildings Includes City Buildings in Addition to Fire Stations and Recreation Buildings Employees as of June 30, 2002 Merit System Exempt Temporary Elected Officials Total Payroll for the Year Ending 2002: Pulliam Airport Fixed Base Operators Locally Based Aircraft Tiedowns Enclosed Hangars Open Hangars 142 55,801 32 32 562 1 130 49 42 38 Elections Number of Registered Voters May 2002 Number of Votes Cast Last Municipal Election May 2002 Percentage of Registered Voters Voting in Last Municipal Election 34.70% Parks and Recreation Number of Developed Parks Number of Un-developed Parks Park Acreage Flagstaff Urban Trail System-Miles 27 3 585.95 21.64 Number of Other Facilities: Swimming Pools (School Owned) Recreation Centers Tennis Courts Handball Courts Ramadas Softball/Baseball Fields Ice/Roller Rinks Playgrounds Skate Tracks Soccer Fields Disc Golf Course Basketball Courts 34 544 115 218 7 $ 29,243,651 134 24,167 8,381 2 5 17 5 8 17 1 19 1 1 1 15 Miscellaneous Statistical Data (Continued) Education Number of Schools: Public Elementary Public Middle School Public High School Private and Parochial K-12 Technical Schools Coconino Community College Northern Arizona University Number of Teachers: Public Elementary, Middle, High and Ungraded (Certified) Schools Northern Arizona University Professional Staff Coconino Community College Professional/Staff Number of Students: Public Schools Charter, Private and Parochial K-12 Northern Arizona University Coconino Community College Sales Tax Retail Sales by Fiscal Year: $ 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 13 2 3 12 3 1 1 Population Census Population Count-Last Five Censuses: 2002 (Estimate) 2001 (Estimate) 2000 1995* 1990 1985 1980 *Special Census 2000 Census Information: Age Distribution of Population for Urbanized Areas Only 1-4 Years 5-17 Years 18-24 Years 25-44 Years 45-64 Years 65+ Years 916 737 322 11,573 2,463 14,185 2,621 1,404,232,492 1,324,735,136 1,238,195,104 1,117,197,604 1,065,133,746 1,016,570,260 965,100,588 905,801,130 867,566,687 776,546,307 686,784,204 659,778,700 631,835,742 595,358,235 546,806,636 525,528,924 469,294,230 453,236,712 59,160 57,700 52,894 52,701 45,854 38,247 34,743 3,546 9,288 11,487 16,111 8,309 4,153 52,894 Average Persons per Housing Unit 2.59 Average Family Size 3.13 Median Household Income $ 37,146 Per Capita Income (2000) $ 18,637 2000 Census information available at the following websites: http://www.census.gov/census2000/states/az.html http://www.de.state.az.us/links/economic/webpage/index.html Utility Enterprise Total Active Accounts on June 30, 2002 Water Sewer Average Gallons/Household/Month Plants Capacity (Million Gallons per Day): Water Treatment Plant Reservoir Filtration Plant Wildcat Hill Plant Rio de Flag Reclaim Plant Miles of Water Lines Wells Reservoirs Reclaimed Reservoirs Miles of Reclaimed Lines Miles of Sewer Lines Total Sales Tax Revenue for Fiscal Year 2002 $ 11,277,121 135 16,356 15,956 6,727 7.2 3 6 4 348.80 24 8 1 16.57 232.91 Miscellaneous Statistical Data (Continued) 2001-2002 Major Taxpayers City of Flagstaff, Arizona Estimated 2001-02 Net Secondary Assessed Valuation Company Name $ As % of the City's 2001-02 Net Secondary Assessed Valuation 12,690,610 3.11% 10,577,757 2.59% Northern Arizona Gas Division (Citizens Utilities) 9,194,655 2.25% U. S. West Communications Inc. 7,081,338 1.73% Ralston Purina Co. 5,274,488 1.29% Little America Refining Company 5,149,226 1.26% Consolidated Investments Company Inc. 3,086,173 0.76% Flagstaff Mall Associates Ltd. Partnership 2,996,319 0.73% Walstaff Associates (Walgreens) 2,940,753 0.72% SACO Management Inc. 2,498,291 0.61% 61,489,610 15.05% Arizona Public Service Company W L Gore & Associates Inc. $ Source: Arizona Department of Revenue 136 Table XVII Insurance Summary In Effect June 1, 2002 to May 30 , 2003 Coverage Limit of Liability Liability Insurance: General Liability* $ $ $ $ $ $ $ Law Enforcement Liability* Auto Liability* Public Officials Errors & Omissions* (Claims Made Retro Date 6-1-95) 1,000,000 2,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 / / / / / / / per occurrence aggregate each wrongful act aggregate each accident each claim aggregate * Liability Claims are Subject to a $50,000 Self Insurance Retention Skate Track General Liability ($10,000 Deductible per Claimant) $ 1,000,000 / each occurrence $ 1,000,000 / general aggregate Employee Benefits Liability (Claims Made Retro Date 6-1-95) ($1,000 Deductible Each Employee) $ 1,000,000 / each employee $ 1,000,000 / aggregate Employer's Liability $ 1,000,000 / each accident $ 1,000,000 / disease employee $ 1,000,000 / disease policy limit Statutory Worker's Compensation Excess Liability #1 Following Form Over General Liability, Auto, Law Enforcement, Public Officials E&O, Skatepark & Employers Liability $ 10,000,000 / each occurrence Wrongful Act / aggregate Excess Liability #2 Following Form Over Excess Liability # 1 Excluding Abuse & Molestation, Asbestos, Employment Discrimination, Employment-related Practices, and Landfills $ 15,000,000 / each occurrence Wrongful Act / aggregate Property Insurance: Blanket Building and Contents, incuding light and signals Flood Zones B and C Earthquakes Flood Zone A Properties Municipal Court City Hall, Library Contractors Equipment (actual cash value) Computer Equipment and Peripherals Computer Data and Media Laptops and Portables - Replacement Cost Coverage Fine Arts Exhibition Floater City Hall, Visitor Center, Airport Terminal Boiler and Machinery Crime: Blanket Public Employees and Treasurer Dishonesty Bond Including Faithful Performance of Duty Computer Fraud Aviation: Products/Completed Operations Liability,Contractual, Construction & Demolition Hangar Keepers Liability 137 $ 86,609,282 / $25,000 deductible $ 15,000,000 / $25,000 deductible $ 15,000,000 / $25,000 deductible $ $ $ $ $ $ $ $ $ $ 220,000 / building 116,900 / contents 500,000 / each building 500,000 / contents each ($5,000 deductible) 6,292,799 / $5,000 deductible 5,818,610 / $1,000 deductible 500,000 / $1,000 deductible 248,500 / $1,000 deductible 25,000 / $1,000 deductible each location 25,000,000 / $5,000 deductible $ 1,000,000 / $5,000 deductible $ $ $ $ $ 250,000 / $5,000 deductible 20,000,000 20,000,000 20,000,000 20,000,000 / / / / each occurrence aggregate each aircraft each occurrence 138 City of Flagstaff, Arizona 211 W. Aspen Avenue Flagstaff, Arizona 86001 (928) 774-5281