TABLE OF CONTENTS I. INTRODUCTORY SECTION Page Letter of Transmittal............................................................................................................................... GFOA Certificate of Achievement......................................................................................................... City of Casa Grande Officials ................................................................................................................ Organizational Chart .............................................................................................................................. v xii xiii xiv II. FINANCIAL SECTION Independent Auditors’ Report .............................................................................................................. 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (required supplementary information)....... 3 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets .................................................................................................................. Statement of Activities .................................................................................................................... 13 14 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet............................................................................................................................. Reconciliation of the Balance Sheet to the Statement of Net Assets ......................................... Statement of Revenues, Expenditures and Changes in Fund Balances...................................... Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances Of Governmental Funds to the Statement of Activities.......................................................... Budgetary Comparison Statements – General Fund and major Special Revenue funds: General Fund .......................................................................................................................... Highway Users Special Revenue Fund .................................................................................. System Development Special Revenue Fund ......................................................................... Grants and Subsidies Special Revenue Fund.......................................................................... Community Development Block Grant Special Revenue Fund ............................................. Self-Help Technical Assistance Special Revenue Fund ......................................................... Home Special Revenue Fund ................................................................................................. 16 18 19 21 22 23 24 25 26 27 28 Proprietary Fund Financial Statements Statement of Net Assets ............................................................................................................. Statement of Revenues, Expenses and Changes in Fund Net Assets ......................................... Statement of Cash Flows............................................................................................................ 29 31 33 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets............................................................................................. Statement of Changes in Fiduciary Net Assets .......................................................................... i 37 38 TABLE OF CONTENTS (continued) Notes to Financial Statements: Note 1. Summary of Significant Accounting Policies................................................................ 2. Cash and Investments .................................................................................................... 3. Cash with Fiscal Agent.................................................................................................. 4. Receivables.................................................................................................................... 5. Direct Loans .................................................................................................................. 6. Property Taxes............................................................................................................... 7. Capital Assets ................................................................................................................ 8. Retirement and Pension Plans ....................................................................................... 9. Risk Management.......................................................................................................... 10. Capital Leases................................................................................................................ 11. Bond Debt ..................................................................................................................... 12. Excise Tax Revenue Obligations................................................................................... 13. Changes in General Long-Term Obligations................................................................. 14. Long-Term Debt............................................................................................................ 15. Landfill Closure and Postclosure Care Costs ................................................................ 16. Summary of Interfund Transactions .............................................................................. Page 39 50 52 53 53 54 54 56 61 61 63 65 66 67 67 68 SUPPLEMENTARY INFORMATION Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........... 69 71 Budgetary Comparison Schedules – Other Major Governmental Funds Special Assessment Debt Service Fund....................................................................... Capital Replacement/Development Fund .................................................................... CFD Mission Royale Capital Projects Fund................................................................ 73 74 75 Budgetary Comparison Schedules – Non-Major Governmental Funds Municipal Airport Special Revenue Fund ................................................................... Parks Development Special Revenue Fund................................................................. Community Arts Reserve Special Revenue Fund........................................................ Redevelopment /Downtown Revitalization Special Revenue Fund ............................ Promotion & Tourism Special Revenue Fund............................................................. Court Enhancement/Probationary Special Revenue Fund........................................... Housing Application, Development Fees, Rehabilitation and Preservation Grant Special Revenue Fund ................................................................................. Public Safety Special Revenue Fund........................................................................... Redevelopment Debt Service Fund ............................................................................. Recreation Debt Service Fund..................................................................................... Recreation Improvements Capital Projects Fund ........................................................ Airport Improvement Capital Projects Fund ............................................................... ii 76 77 78 79 80 81 82 83 84 85 86 87 TABLE OF CONTENTS (continued) SUPPLEMENTARY INFORMATION (continued) Page Internal Service Fund Statement of Net Assets...................................................................................................... Statement of Revenues, Expenses, and Changes in Fund Net Assets................................. Statement of Cash Flows .................................................................................................... 88 89 90 Fiduciary Funds Statement of Changes in Assets and Liabilities........................................................................... 91 Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch ...................................................................................... Wastewater........................................................................................................... Wastewater Development Fees ............................................................................ Sanitation.............................................................................................................. Golf Course .......................................................................................................... 92 93 94 95 96 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule by Function and Activity..................................................................................... Schedule of Changes by Function and Activity.................................................................. 97 98 99 Schedule of Expenditures of Federal Awards.............................................................................. 100 III. STATISTICAL SECTION General Governmental Expenditures by Function - Last Ten Fiscal Years............................ General Governmental Revenues by Sources - Last Ten Fiscal Years................................... Property Tax Levies and Collections - Last Ten Fiscal Years................................................ Property Tax Rates - Direct and Overlapping Governments - Per $100 Assessed Valuation - Last Ten Fiscal Years ..................................................................................... Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years ............. Special Assessment Billings and Collections - Last Ten Years.............................................. Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years .................................................................................... Computation of Direct and Overlapping Debt........................................................................ Legal Debt Margin.................................................................................................................. Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures - Last Ten Fiscal Years......................................................... Schedule of Revenue Bond Coverage - Highway User Revenue Bonds Last Ten Fiscal Years ........................................................................................................ System Development Fees Allocation .................................................................................... Demographics Statistics Last Ten Fiscal Years...................................................................... Property Value, Construction and Bank Deposits - Last Ten Fiscal Years ............................ Principal Taxpayers ............................................................................................................... Miscellaneous Statistical Data ............................................................................................... iii Table 1 2 3 Page 102 104 106 4 5 6 108 110 111 7 8 9 112 114 114 10 115 11 12 13 14 15 16 116 118 120 121 122 123 TABLE OF CONTENTS (continued) SINGLE AUDIT SECTION SINGLE AUDIT REPORTS Report on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.......................... Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133........................ Schedule of Findings and Questioned Costs ................................................................................. iv 124 126 128 Table of Contents City of Casa Grande September 13, 2005 Honorable Mayor, City Council, City Manager Citizens of Casa Grande, Arizona We are pleased to submit to you the fiscal year ended June 30, 2005 Comprehensive Annual Financial Report (CAFR) of the City of Casa Grande, Arizona (the City). The report was prepared by the City’s Finance Department. This report represents management’s report to its governing body, constituents, legislative and oversight bodies, investors, and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Nationally Recognized Municipal Securities Information Repositories, and other agencies, which have expressed an interest in the City’s financial matters. Copies of this financial report will be placed in the City library for use by the general public, and posted on the City’s web page. Responsibility for the accuracy of the presented data and the completeness and fairness of the presentations, including all disclosures, rests with the management of the City. The City has established and maintains a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of financial statements. We believe the data, as presented in this report, is accurate in all material respects and is presented in a manner which fairly sets forth the financial position and results of operations of the City on both a city-wide and fund basis. Furthermore, we believe that all disclosures necessary to enable the reader to gain an understanding of the City’s financial activity and financial stability have been included. These financial statements have been prepared in accordance with accounting principles generally accepted in the United State of America (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA). The City of Casa Grande, Arizona’s financial statements have been audited by Henry & Horne, P.L.C, whose report is included herein. The examination satisfies Article VI, Section 6, of the City Charter, which requires an annual audit of all accounts of the City by an independent certified public accountant. As stated in the independent auditors’ report, the goal of the independent audit is to provide reasonable assurance that the financial statements of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2005, are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the financial statements of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2005, are fairly presented, in all material respects, in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. v Additionally, the City is required to have an independent audit (“Single Audit”) of federal financial assistance received by the City directly from federal agencies, or passed through to the City by the State of Arizona or other governmental entities during the fiscal year. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the government’s internal controls and compliance with legal requirements having a direct and material impact on major programs, with special emphasis on internal controls and compliance requirements involving the administration of major federal awards. The results of the City’s Single Audit for the fiscal year ended June 30, 2005, found no instances of material weakness in the internal control structure or significant violations of applicable laws and regulations with respect to major programs. The reports from Henry & Horne P.L.C. are available in the City of Casa Grande, Arizona’s separately issued Single Audit Report. Presentation These financial statements are prepared and presented in conformity with GASB Statement #34 – Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments (the new reporting model). The City first implemented this new reporting model with the financial statements for the fiscal year ended June 30, 2003. More information about this change can be found in Management’s Discussion and Analysis (MD&A) beginning on page 3 and also discussed in the notes to the financial statements (See Note 1D on page 43). This transmittal letter is designed to complement the MD&A and should be read in conjunction with it. The comprehensive annual financial report is presented in three sections: The Introductory Section includes this letter of transmittal, GFOA Certificate of Achievement, the City’s organization chart, and the list of principal City officials. The Financial Section includes the independent auditors’ report, Management’s Discussion and Analysis, the basic financial statements (government-wide statements and fund statements), notes to the financial statements, other required supplementary information, combining financial statements and other financial schedules. The Statistical Section includes selected financial and demographic information, presented on a ten-year basis. PROFILE OF THE CITY The City of Casa Grande was founded in 1879 and is named for the famous Hohokam Indian Ruins. Since its incorporation in 1915, Casa Grande has grown to be the largest community in western Pinal County. Casa Grande is located in central Arizona approximately halfway between the State’s two largest metropolitan areas of Phoenix and Tucson, and is surrounded by three Indian Reservations. In addition, the City is located at the intersection of two major interstate highways, which service the Los Angeles, and San Diego markets. The City is a dynamic, involved city with a rural heritage and old-fashioned values. The economic base is a mix of retail trade, manufacturing and agriculture. The City of Casa Grande, chartered in December 1974, has a Council-Manager form of government consisting of the Mayor and six Council members. The Mayor is elected at-large for a two-year term and cannot serve for more than four consecutive terms. Council members are elected to four-year terms. The City Council is vested with policy and legislative authority and is responsible for appointing the positions of City Manager, City Attorney and Judge. The City Manager is responsible for carrying out the polices and ordinances of the City Council, as well as overseeing the day-today operations. The City of Casa Grande is now just over 60 squares miles. The City’s updated General Plan includes the 60 square miles, as well as a large area surrounding the City limits in order to best plan for the growth of the City. This planning area includes 50,269 acres and has a projected build-out population of 226,659 residents. In accordance with State Law, the General Plan went to a public vote in early 2002 after the completion of many public workshops, meetings and hearings. The voters overwhelmingly approved the General Plan. The City provides a full range of municipal services, including police and fire protection, construction and maintenance of streets, recreational and cultural events, library services, planning and zoning services, sewer services, sanitation services, and general administration services. The City invests in its historic downtown with the administration of two downtown redevelopment districts. vi In 2002, the City completed the process of updating its Strategic Agenda. In its most fundamental form, this process provides a structure for management staff to think about the current condition of the City of Casa Grande, the issues and challenges expected to confront the City in the next five years and beyond, the appropriate role for the City Government in responding to those issues and challenges, and the resources needed by the City government to fulfill this role. FINANCIAL CONTROLS Internal Controls As previously noted, the management of the City of Casa Grande is responsible for establishing and maintaining a system of internal control. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) safeguarding of assets against loss from unauthorized use or disposition, and 2) reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City’s financial statements. All internal control evaluations occur within the above framework. The City’s internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary Controls The City of Casa Grande, like all cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the City’s legal budget capacity. The City currently operates under the Alternative Expenditure Limitation – Home Rule Option. This option allows the City Council to establish the budgetary limits locally. The voters must authorize this option every four years. It was last authorized by the citizens of Casa Grande in March 2005. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated operating budget approved by the Mayor and Council. Activities of the general fund, special revenue funds, debt service funds, capital projects funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total operating budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. ECONOMIC CONDITIONS AND OUTLOOK The information presented in the financial statement is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. The economy of Casa Grande is a diverse combination of agriculture, manufacturing, commercial and service activities, as well as a haven for retired individuals who winter in Arizona. The community also serves as the provider of many goods and services to the rural areas surrounding the City, as well as several growing communities located in the area. This combination of diverse economic activities keeps the community from becoming overly dependent on any single segment of the economy. In March 2004, the Community adopted a Strategic Plan for Community and Economic Development with the purpose of developing a process to successfully implement diverse type of businesses, attracting new revenue, and expanding/maintaining the community revenues essential to sustaining Casa Grande and improving the quality-of-life. vii Local indicators point to continued stability and strength. Casa Grande continues to witness a sustained number of issued building permits. The City has witnessed steady growth in both residential and non-residential building permits. Several of Arizona’s largest homebuilders have entered the Casa Grande housing market to compete with the local established homebuilders. The City is currently considering several annexations. The expansion of the boundaries comes with new development activities. Many of these areas have had development proposals submitted in conjunction with the annexation petitions. This combination of existing subdivided lots, coupled with the newly proposed, should allow Casa Grande to witness a continued positive trend in new housing starts in the near term. Retail Sales. The City of Casa Grande, like all Arizona cities, places a heavy reliance on City sales tax. Overall, local sales tax revenues comprise approximately 44% of General Fund revenues. The City’s sales tax is currently at 1.8%, with an additional .2%, which has been pledged as collateral for the retirement of debt obtained to complete park and recreation construction projects. This particular component of the tax rate is scheduled to “sunset” when the debt is retired. Management is projecting the city’s sales tax to grow by 10% per year due to the growth in population and new commercial retail. State Shared Revenues. The City of Casa Grande receives revenue allocation from the State. These “State Shared Revenues” include allocations of the state-collected income tax, sales tax, gas tax, and motor vehicle in-lieu taxes based on population formulas that are created on official census data. The majority of these revenues are placed in the General Fund, where it supports daily operations. The State has indicated positive growth patterns in the majority of these revenue sources. One disadvantage to placing a heavy reliance on state-shared revenues is the state legislature controls the distribution to municipalities each year. Property Tax. The City’s primary property tax rate stands at $0.9999 per $100 of assessed valuation. The City has maintained this rate for more than 17 years. The primary levy can be used for any general government purpose, but is limited in size by State statute. The City currently does not levy a secondary tax levy. Total assessed property value within the City has increased by approximately 52% since fiscal year 2000. The fiscal year 2005 projections, based on data provided by the Pinal County Assessor’s Office, indicate a 3% reduction in assessed value over fiscal year 2004 levels. This reduction was attributed to a Regional Power Generation plant that was taken off the rolls because it was acquired by a governmental entity. viii MAJOR INITIATIVES AND ACCOMPLISHMENTS During fiscal year 2005, the City invested in a number of programs and services that make Casa Grande a better community. The following are some of the efforts and accomplishments of the City during the year: Police o o o o o o Maintained 9 certifications of Apartment Complexes in the Crime Free Multi-Housing Program. Expanded membership in Citizens on Patrol Program to include volunteers to enforce disabled parking violations, monitor traffic speeds in the neighborhoods, and assist with the vacation house watch program. Trained additional volunteers to take fingerprints to assist in child fingerprint requests. Held 11th annual “National Night Out” celebration. Participated in on-going education programs at the schools. Sponsored Citizen Police Academies. 45 participants were trained in wide variety of police functions. Fire o o o o o Responded to 4,312 emergencies of which 3,226 (74.8%) involved emergency medical services, averaging a response time for all incidents of 5 minutes 7 seconds. Maintained a department commitment for excellence in public education by initiating in excess of 9,539 public contacts. Continued the K-6 fire safety education program within the Elementary School District. Continued the wellness/fitness program for the department. Continued mentoring of the Casa Grande Fire Explorers Program. Public Works o Continued annual maintenance of roadways and alleys. o Improved roadway at North Mountain Park. o Enhanced several retention basins on Arizola Road. o Cleared out debris from Santa Cruz Wash. o Began a $15 million expansion to the Water Reclamation facility. The expansion will add 2 mgd to the existing facility. o Added the third Front Load truck to the Sanitation division. o Increased business participation in the recycling program. Community Services o Hosted 12 Sunday Socials and 24 Tag Along field trips for senior adult population. o Continued and expanded the Halloween Carnival, Desert Grande Duathlon/Triathlon, Christmas Tree Lighting Ceremony, Electric Light Parade, and Downtown Party. o Successfully completed the seventh year of the Mayor’s Reading Club. o Coordinated with AARP to provide no cash tax preparation services and low cost 55 Alive drive classes. o Continued Senior Meals Program. o Continued beautification program for the downtown area in cooperation with Main Street Program. o Installed new water slide at aquatics center and installed shade structures over playground equipment. Community Development o Assisted applicants with 15 Rezoning requests, 27 site plan approvals, 28 Preliminary Plats, 42 Final Plats. o Issued 16 Minor/Major General Plan Amendments. o Processed 7 PAD Amendments and 2 Protected Development Rights Plans. o Investigated 755 Code enforcement complaints. o Processed 2,565 residential building permits. o Addressed 23 new subdivisions o Conducted 21,000 various building inspections. ix OTHER MATTERS The information presented in the financial statement is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. Debt Administration. On June 30, 2005, the City had a number of debt issues outstanding. Total bonded debt at June 30, 2005, was $1,920,000. This included two issues of special assessment debt with government commitment. In fiscal year 2003 the City issued new Excise Tax Revenue Obligations, as well as refunded the Series 1994 and 1995 Obligations within this issuance. The City’s general credit was rated A+ by Fitch Ratings and received an A- rating from Moody’s. The City is diligent in its efforts to maintain and improve these ratings. The ratings for the existing issues are as follows: ID #38 Special Assessment Excise Tax Revenue Obligation Series 1997 Series 1999 Series 2003 Moody’s Investor Service Baa3 Standard and Poor’s Corporation - Fitch IBCA - Aaa Aaa Aaa - AAA AAA In October 1997, the City issued $3,590,000 of Excise Tax Revenue Obligations to refurbish and restore a 1921 vintage school building for use as a new City Hall. In April 1999, the City issued $5,000,000 of Excise Tax Revenue Obligations to finance the acquisition, construction and equipping of two public recreational complexes and improvements to existing recreational facilities. In 2003, the City issued $18,120,000 of Excise Tax Revenue Obligations for the purpose of expanding the wastewater treatment plant and refunding the 1994 and 1995 Obligations. All Excise Tax Revenue Obligations are secured by a pledge of and first lien on all excise, transaction, franchise, privilege and business taxes, state shared sales and income taxes, fees for licenses and permits and state revenue sharing, which the City presently or in the future validly imposes or receives from other entities. As of June 30, 2005, the City had $23,114,820 of Excise Tax Revenue Obligations outstanding. Under State statutes the City can issue general obligation bonds for purposes of water, sewer, artificial lighting, open space, playground and recreation facilities up to an amount not exceeding 20% of the secondary assessed valuation. Cities can also issue general obligation bonds for all other purposes up to an amount not exceeding 6% of the secondary assessed valuation. As of the June 30, 2005, the City has debt capacity of $33,188,584 for general obligation bonds subject under the 20% limitation and $9,956,575 for general obligation bonds subject under the 6% limitation. The City has no general obligation debt outstanding. Cash Management. Idle cash is pooled into a single investment account except for the Casa Grande Part-time Firemen’s Pension Plan. The City of Casa Grande is a participant in the Local Government Investment Pool operated by the State Treasurer for the benefit of counties, cities, towns and other political subdivisions of the State. The deposits are pooled together and invested in U.S. Government securities, certificates of deposit, repurchase agreements and high-grade corporate issues. Earnings are apportioned monthly based on total “dollar days” of the participant’s account balance for each day of the month. At the first of each month the earnings are automatically reinvested and a statement is sent to each participant. The investment policy of the City is to keep risk as low as possible and then consider the yield. The majority of the City’s funds are idle for less than 90 days at a time; therefore, liquidity also plays a major role. For these reasons and the fact that the pool has a diverse portfolio, the City invested all of its idle funds with the Pool during the 2004/2005 fiscal year. The yield for the investment account averaged 1.9776 percent for the fiscal year. At June 30, 2005, the Pool consisted of $1.4 billion in total local government deposits, which included $39 million the City had invested in the Pool. x With the issuance of GASB Statement No. 31, all investments are stated at fair value in the balance sheet. The State Treasurer’s Local Governmental Investment Pool includes liquid investments which cost approximates market. The Firemen’s Pension Fund is stated at fair value, which totals $772,415. The current year’s net change in fair value totaled $36,647. Risk Management. The City is exposed to various risks of loss, related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City’s liability risks are covered by commercial insurance purchased from independent third parties. The City is fully insured with per occurrence limit at $2 million general liability coverage with a $10,000 deductible and a $10 million umbrella liability policy. The City continues to carry commercial insurance for all other risks of loss, including workers’ compensation, employee health and accident, airport activities and fuel use bond. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past five fiscal years. The City of Casa Grande has an aggressive safety program that promotes employee safety on the job and focuses on risk control techniques designed to minimize accident-related losses. OTHER INFORMATION 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 Casa Grande, Arizona, for its comprehensive annual financial report for the fiscal year ended June 30, 2004. This was the fourteenth consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principals and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The Government Finance Officers Association of the United States and Canada presented a Distinguished Budget Presentation Award to the City of Casa Grande, Arizona for its annual budget for the fiscal year beginning July 1, 2004. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a plan, and as a communication device. A Distinguished Budget Presentation Award is valid for a period of one year only. This is the eighth Distinguished Budget Presentation Award the City of Casa Grande has received. We expect to continue to participate and meet the program requirements, and we will be submitting it to GFOA next budget year. ACCOMPLISHMENT. The preparation of the City's Comprehensive Annual Financial Report was only made possible by the dedication and hard work of Janice Rutherford, Supervising Accountant, the Finance Department, and the firm of Henry and Horne, P.L.C. We give them our sincere thanks for their effort in the creation of this report. We wish to express our appreciation to the City Manager, the Mayor and City Council for their support and leadership. Sincerely, Larry D. Rains Finance Director xi Table of Contents xii Table of Contents CITY COUNCIL CHARLES WALTON, SR., MAYOR ALBERT GUGENBERGER KARL PETERSON DICK POWELL STEPHEN Q. MILLER RALPH VARELA JIM NORRIS CITY MANAGER JAMES THOMPSON FINANCE DEPARTMENT STAFF LARRY D. RAINS JANICE RUTHERFORD FINANCE DIRECTOR SUPERVISING ACCOUNTANT xiii Table of Contents City of Casa Grande Organizational Chart People of Casa Grande Mayor & Council Members City Attorney Police Department Animal Control Fire Department Public Works City Manager Administrative Services City Clerk City Court Finance Department Planning & Development Community Services Engineering Personnel Financial Services Planning & Development Library Wastewater Risk Management Information Systems Housing Improvement Senior Adult Services Building Inspection Parks Maintnenance Sanitation Equipment Maintenance Recreation Programs Streets Len Colla Center Water Aquatics Airport General Recreation Facilities Maintenance Woman's Club Golf Course FINANCIAL SECTION Table of Contents Table of Contents Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Casa Grande, Arizona (the City), we offer this narrative overview and analysis of the financial activities of the City of Casa Grande, Arizona for the fiscal year ended June 30, 2005. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the approved annual budget, and (5) identify individual fund issues or concerns. Please read it in conjunction with the transmittal letter presented on pages v - xi of this report as well as the City’s financial statements beginning on page 13 and the accompanying notes to the financial statements. Financial Highlights ƒ The City’s total net assets, on the government-wide basis, totaled $96 million at June 30, 2005. Of this amount, $15.9 million is unrestricted. ƒ The General Fund reported revenues in excess of expenditures and other financial sources and uses by $5,120,668. ƒ At June 30, 2005, unreserved fund balance for the General Fund was $11.2 million, or 54% of General Fund expenditures for fiscal year 2005. ƒ At June 30, 2005, unreserved fund balance of the governmental funds was $29.2 million, or 97% of governmental fund expenditures for fiscal year 2005. ƒ The governmental activities general revenues of $42.2 million were $12,167,016 more than the $30.0 million of expenditures before other financial sources and uses. ƒ The business-type activities increase in net assets was $9.4 million as of June 30, 2005. OVERVIEW OF THE FINANCIAL STATEMENTS The City implemented the Governmental Accounting Standards Board (GASB) Statement 34 – Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments (the new model) with the financial statements for the year ended June 30, 2003. The new model contains a number of changes to the requirements for governmental reporting. The major changes are as follows: ƒ Government-wide reporting – while governments have traditionally focused reporting on groupings of funds (i.e. General Fund, Special Revenue Funds, Capital Project Fund, etc.), the new model also contains financial statements on a government-wide basis. ƒ Fund financial statements – the new model maintains governmental, proprietary and fiduciary fund financial statements, but the focus is on major funds within each fund type. ƒ New focus for governmental activities – in the government-wide financial statements all activities, including the governmental activities, are reported using the economic resource measurement focus and accrual basis of accounting. The traditional current financial resources focus and modified accrual basis of accounting are maintained for the governmental fund financial statements in the new model. ƒ Infrastructure reporting – the new model requires governments to report the value of infrastructure assets of governmental activities (roads, bridges, storm drainage systems, parks, etc.) These assets are reported in the governmental activities on the government-wide financial statements. 3 Table of Contents ƒ Changes in budgetary reporting – the new model requires the display of both the original adopted budget and the amended budget in the budgetary comparison schedules. These schedules are only required for the general fund and major special revenue funds, although they may be presented for other funds as additional information. ƒ Required narrative analysis – the new model requires that the financial statements be accompanied by narrative introduction and analytical overview of the government’s financial activities in the form of “management’s discussion and analysis” (MD&A). Required Components of the Annual Financial Report Management’s Discussion and Analysis Basic Financial Statements GovernmentWide Financial Statements Required Supplementary Information Fund Financial Statements Other Supplementary Information Notes to the Financial Statements Summary Detail As pictured above, the financial section of the Comprehensive Annual Financial Report (CAFR) for the City of Casa Grande, Arizona consists of this discussion and analysis, the basic financial statements, required supplementary information and other supplementary information. The basic financial statements include the government-wide financial statements, fund financial statements, and notes to the financial statements. Government-wide Financial Statements The government-wide financial statements (see pages 13-15) are designed to provide a broad overview of the City’s finances in a manner similar to those used by private businesses. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. The activities of the City are broken into two columns on these statements – governmental activities and businesstype activities. A total column is also provided. Governmental activities include the basic services of the City including general government (administration), parks and recreation, police, fire, planning and development and streets. Taxes and general revenues generally support these activities. Business-type activities include the private sector type activities such as golf course, sanitation, and wastewater. These activities are primarily supported through user charges and fees. 4 Table of Contents The statement of net assets presents information on all of the City’s assets and liabilities, both current and long-term, with the difference between assets and liabilities reported as net assets. The focus on net assets is designed to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. To assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of infrastructure, should be considered. The statement of activities presents information showing how the City’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time that the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also focuses on both the gross and net costs of the various functions of the City, based only on direct functional revenues and expenses. This is designed to show the extent to which the various functions depend on general taxes and revenue for support. Fund Financial Statements Also presented are the traditional fund financial statements for governmental funds, proprietary funds and fiduciary funds. The fund financial statements now focus on major funds of the City, rather than fund type used prior to GASB-34. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or conditions. Funds are used to ensure and demonstrate compliance with financerelated legal requirements as well as for managerial control to demonstrate fiduciary responsibility over the assets of the City. The City has three kinds of funds: Governmental funds – Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets can readily be converted to cash flow in and out and (2) the balances left at the year end that are available for spending. Consequently, the governmental funds statements provided a detailed short-term view that helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on page 18 and 21, respectively. Proprietary funds – Proprietary funds are used to account for business-type activities of the City. Proprietary funds, like the government-wide statements, provide both long and short-term financial information. Enterprise funds are used for activities that primarily serve customers outside the governmental unit for which fees are charged. The City has three enterprise funds: The golf course, sanitation and wastewater funds. The internal service fund is used for activities in which the City is the customer. The equipment mechanics fund is the City’s only internal service fund. Its purpose is to provide vehicle maintenance services to City departments. Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of others. Fiduciary funds are not included in the government-wide financial statements because the resources of those funds are not available to support projects of the City. Notes to the financial statements – The notes to the financial statements (pages 39-68) provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements and should be read with the financial statements. 5 Table of Contents Required supplementary information other than MD&A – Governments have an option of including the budgetary comparison statements for the general fund and major special revenue funds as either part of the fund financial statements within the basic financial statements, or as required supplementary information after the notes. The City has chosen to present these budgetary statements as part of the basic financial statements. Additionally, governments are required to disclose certain information about employee pension funds. The City has disclosed this information in Note 8 to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position for the City as a whole as of and for the year ended June 30, 2005. Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets for the City for June 30, 2005 compared to the prior year. Condensed Statement of Net Assets (in Millions) Governmental Activities 2005 2004 Business-type Activities 2005 2004 Current and other assets Capital assets Total assets $38.9 42.2 81.1 $22.0 34.4 56.4 $14.2 35.4 49.6 $14.9 26.2 41.1 $ 53.1 77.6 130.7 $36.9 60.6 97.5 Other liabilities Long-term liabilities Total liabilities 3.3 13.0 16.3 3.0 9.3 12.3 1.3 17.0 18.3 2.0 17.2 19.2 4.6 30.0 34.6 5.0 26.5 31.5 28.1 25.8 10.9 $64.8 24.4 13.9 5.8 $44.1 19.1 7.2 5.0 $31.3 9.6 11.3 1.0 $21.9 47.3 32.9 15.9 $96.1 34.0 25.2 6.8 $66.0 Net assets: Invested Capital assets net of related debt Restricted Unrestricted Total net assets Total Primary Government 2005 2004 The net assets of the City increased to $96.1 million (46%) at June 30, 2005. Of this $96.1 million, $64.8 million was in the governmental activities, a 47% increase, and $31.3 million was in the business-type activities, a 43% increase. 6 Table of Contents Net Assets consist of three components. The largest portion of net assets ($47.3 million or 49%) reflects the City’s investment in capital assets net of accumulated depreciation and any related outstanding debt used to acquire or construct those assets. The City uses these capital assets to provide services to its citizens; consequently, it is not the City’s intention to sell these assets and they are therefore not available for future spending. The second portion of the City’s net assets ($32.9 million or 34%) represents resources that are subject to external restrictions on how they may be used. This component is primarily made up of accumulated development impact fee collected by the City and funds are specifically reserved for capital improvements pertaining to growth as it relates to maintaining a consistent level of service to all citizens. The third portion consists of unrestricted net assets ($15.9 million or 17%), which may be used to meet the City’s ongoing obligation to citizens and creditors. Changes in Net Assets. The City’s total revenues for the year ended June 30, 2005 were $64,091,296. The total cost of all programs and services was $34,088,182. The following table presents a summary of the changes in net assets for the year ended June 30, 2005. The primary increase in net assets is the result of sustained economic growth including developer investment in city infrastructure. Changes in Net Assets (In Thousands) Revenues Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Property taxes Sales taxes Franchise taxes Shared revenues Other Total revenues Governmental Activities 2005 2004 Business-type Activities 2005 2004 Total 2005 2004 $13,435 1,543 6,372 $6,054 1,216 4,199 $12,193 1,562 $7,387 1,137 $25,628 1,543 7,934 $13,441 1,216 5,336 2,334 12,094 955 10,194 1,028 47,955 1,800 10,573 900 9,367 324 34,433 2,150 231 16,136 1,885 1,984 12,393 2,334 14,244 955 10,194 1,259 64,091 1,800 12,458 900 9,367 2,308 46,826 Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Other Water Golf course Sewer Sanitation Total expenses 4,100 11,789 3,438 779 4,147 2,717 478 27,448 4,118 10,732 2,943 765 4,078 2,422 499 25,557 158 845 2,488 3,149 6,640 142 717 2,981 2,797 6,637 4,100 11,789 3,438 779 4,147 2,717 478 158 845 2,488 3,149 34,088 4,118 10,732 2,943 765 4,078 2,422 499 142 717 2,981 2,797 32,194 Excess before transfer Transfers In (Out) Increase in Net Assets 20,507 99 $20,606 8,876 1,341 $10,217 9,496 (99) $9,397 5,756 (1,341) $4,415 30,003 $30,003 14,632 $14,632 7 Table of Contents The graph below shows the functional revenues and expenses of governmental activities to demonstrate the extent to which the governmental functions produce direct revenues to offset the program costs. It should be noted that this is not intended to represent full cost allocation to these functions. Expenses not covered by direct program revenues are covered by general revenues of the City, primarily taxes and state shared revenues. Governmental activities account for 74.8% of the total revenues of the City and 80.5% of the total expenditures in fiscal year 2005. This compares to 73.5% of total revenues and 79.4% of expenses in fiscal year 2004. Governmental Programs Revenues and Expenses 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Expenditures en t de ve lo pm ea tio n re cr Ec on om ic & C ul tu re Pu bl ic w or k s an sp or ta tio n St re et s/ Tr fe ty sa Pu bl ic G en er al G ov er nm en t 0 Revenues FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental Funds The focus of governmental fund financial statements (pages 16-28) is to provide information on near-term inflows, outflows and balances of spendable resources. All major governmental funds are discreetly presented on these financial statements, while the non-major funds are combined into a single column. Combining statements for the non-major funds may be found on pages 69-72. 8 Table of Contents For fiscal year ended June 30, 2005, the governmental funds reflect a combined fund balance of $36.6 million, an increase of $17 million. Of this, $7.4 million, an increase of $4.2 million, is reserved because it is not appropriate for expenditure or is legally segregated for a specific future use. The remaining $29.2 million is classified as “Unreserved”. This balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. Governmental Fund Balances 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 General Highway User System Development Grants CDB Grant Special Assessments Capital Replacement Other Governmental The General Fund is the chief operating fund of the City and accounts for many of the major functions of the government, including public safety, parks and recreation, community development and general administrative services. The General Fund revenues total $26.0 million, an increase of $4.6 million, in fiscal year 2004-2005. The expenditures, before other financing sources and uses, totaled $20.6 million, an increase of $1.1 million. The Highway User Revenue Fund is required by state statute to track the state allocation of gasoline taxes and other state revenues shared with local governments and required to be used for transportation purposes. The City also accounts for a half-cent sales tax that is collected and distributed by Pinal County for the purposes of construction and improvements of major roadways within the City. Revenue in this fund totaled $4.4 million, an increase of $.5 million, while expenses totaled $2.1 million, a decrease of $.5 million in fiscal year ended June 30, 2005. Other major governmental funds of the City include the System Development Fee Fund which collects governmental impact fees for public safety, parks and recreational facilities, library facilities, and general government; the Grants Fund is utilized to account for the various state and federal grants that are awarded to the City for the purposes of providing specific programming and services in public safety, parks and recreation, and library; the CDBG, Self Help, and Home Funds provides a variety of housing and neighborhood improvements services ranging from housing rehab to infrastructure improvements; the Special Assessment Fund collects special assessments levied through improvement districts and services the debt on the improvement district bond; the Capital Replacement Fund accounts for accumulated proceeds and capital expenditure of those proceeds for the construction of capital projects; the Mission Royale CFD Capital Projects Fund accounts for capital construction within the CFD; all non-major governmental funds of the City are combined into the “Other Governmental Funds” column on the governmental fund statements. 9 Table of Contents Proprietary Funds The proprietary funds financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each major enterprise fund is shown individually on the fund statement. Net assets of the enterprise funds were $31.4 million, an increase of $9.4 million as of June 30, 2005. Operating revenues in fiscal year 2004-2005 were $11 million, an increase of $4 million, while operating expenses totaled $6.3 million, an increase of $0.5 million, resulting in $4,641,808 of operating income. BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. A statement showing the budget amounts for the general fund is provided as required supplementary information on page 22. This statement compares the original adopted budget, the budget as amended throughout the fiscal year, and the actual expenditures prepared on a budgetary basis. Amendments to the adopted budget may occur throughout the year in a legally permissible manner (see Note 1 (F) on page 46 for more information on budget policies). No amendments increasing the City’s total adopted budget of $60,362,000 occurred during fiscal year 2005. Budget amendments between funds or departments or from budgeted contingencies into operational expense/expenditure accounts did occur. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2005, the City had $47.3 million invested in various capital assets, net of accumulated depreciation and related debt, up $13.2 million. Of the $47.3 million $28.1 million (59%) is invested in governmental activities and $19.2 million (41%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following: ¾ The City completed major construction of the $15 million expansion to the wastewater treatment facility. The expansion will create an additional 2 million gallons per day of capacity at the existing plant. ¾ Acquired an existing facility that will be used for the Public Works and Maintenance Operations in the amount of $2,737,692. ¾ Acquired microwave communication equipment and repeater sites for the public safety divisions in the amount of $ 268,062. ¾ Purchased and installed a new water slide for the aquatic center in the amount of $162,736. ¾ Initiated the development of a Comprehensive Parks Master Plan process in the amount of $108,675. ¾ Acquired a new water truck and front-end loader for the streets department in the amount of $231,884. ¾ Installed fire sprinkler systems and backup generators at the 3 fire stations in the amount of $139,009. 10 Table of Contents The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2005. Additional information on the City’s capital assets may be found in Note 7 on pages 54-56. Capital Assets (In Thousands) Governmental Activities 2005 2004 Land Building and improvements Machines and equipment Construction in progress Total $ 6,296 29,356 3,627 2,952 $42,231 Business-type Activities 2005 2004 $ 6,344 25,012 3,088 28 $34,472 $ 283 19,645 3,879 11,570 $35,377 $ 283 18,795 3,743 3,339 $26,160 Total 2005 2004 $ 6,579 49,001 7,506 14,522 $77,608 $ 6,627 43,807 6,831 3,367 $60,632 Long-Term Debt The City’s outstanding long-term debt, including bonds, notes, contracts, and compensated absences, was $30.9 million at June 30, 2005, with $2.3 million due in one year. Of this total, $14.7 million was in governmental activities and $16.2 million was in business-type activities. Of the outstanding debt, $23.1 million is excise tax revenue obligation bond collateralized by the City’s excise tax stream. An additional $585,000 is special assessment bonds where the City is contingently liable in the event that the assessment revenue is insufficient to pay the debt payments. All other outstanding debt is secured by pledges of specific revenue sources of the City. The following schedule shows the outstanding debt of the City (both current and long term) as of June 30, 2005. Further details can be found in Notes 10, 11, 12, 13, & 14 on pages 61-67. Outstanding Debt (In Thousands) Governmental Activities 2005 2004 Compensated absences Capital leases Bonds payable Notes payable Total $ 633 4,486 9,608 $14,727 Business-type Activities 2005 2004 $ 635 1,236 8,823 $10,694 11 $ 85 594 15,426 177 $16,282 $ 77 405 15,927 177 $16,586 Total 2005 $ 718 5,080 25,034 177 $31,009 2004 $ 712 1,641 24,750 177 $27,280 Table of Contents ECONOMIC FACTORS Casa Grande’s population has grown steadily since 2000. The growth rate over the course of the past 5 years has been just under 30% and is expected to be 5% in 2006. The unemployment rate in Casa Grande for June 2005 was 5.2%, which is slightly higher than the state (4.4%) and the national average (5%). While the local economy witnessed a solid year, it has been largely driven by construction of residential dwellings. The state and regional economies continues to recover from the recent recession. Local economists predict continued recovery and moderate growth. The recent disasters in the nation, coupled with the potential of greater inflation will undoubtedly have some impact on the state and city. Because of the continued growth of the community, Casa Grande’s revenues have continued to increase. The new housing market in the region continues to exceed projected expectations. A number of new retail businesses and restaurants are adding to the local tax base. Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. Total assessed value in Casa Grande has increased progressively, showing a 71% overall increase from 1995 to 2005. This is largely due to the new housing development. Residential value in 2005 represented about 40% of the total. FINANCIAL CONTACT This financial report is designed to provide a general overview of the City of Casa Grande, Arizona’s finances and to demonstrate accountability for the use of public funds. Questions about any of the information provided in this report, or requests for additional information should be addressed to the City’s Finance Director at the following address: Finance Director, City of Casa Grande, 510 E. Florence Blvd. Casa Grande, AZ 85222. 12 Table of Contents City of Ca sa Gra nde Statem ent of Net Assets June 30, 2005 Prim ary Governm ent Governm ental Business-type Activities Activities Total $ 4,539,485 $ 1,274,313 $ 5,813,798 26,222,091 11,458,780 37,680,871 5,221,166 545,484 5,766,650 218,187 218,187 190,000 (190,000) 175,017 175,017 18,093 18,093 ASSETS Cas h Inves tm ents Receivables (net of allowance for uncollectibles ) Due from other governm ents Internal balances Inventories Prepaids Res tricted as s ets : Res tricted inves tm ents Deferred bond cos ts Capital as s ets : Land and cons truction in progres s Other capital as s ets (net of accum ulated depreciation) Total assets LIABILITIES Accounts payable and other current liabilities Depos its held Accrued wages and benefits Accrued interes t payable Unearned revenue Noncurrent liabilities : Due within one year: Current portion of com pens ated abs ences Current portion of capital leas es and notes Current portion of excis e tax revenue obligations Current portion of bonds payable Due in m ore than one year: Noncurrent portion of capital leas es Noncurrent portion of notes payable Noncurrent portion of excis e tax revenue obligations Noncurrent portion of bonds payable Bond prem ium 2003 is s ue Les s : Deferred am ount on refunding Clos ure and pos tclos ure liability Total liabilities NET ASSETS Inves ted in capital as s ets , net of related debt Res tricted for: Highways and s treets Grant purpos es Com m unity developm ent Debt s ervice Capital projects Unres tricted Total net assets 2,052,533 189,605 796,354 370,380 2,848,887 559,985 9,248,217 11,852,524 21,100,741 32,982,913 81,057,307 23,524,262 49,632,097 56,507,175 130,689,404 1,337,891 100 210,104 106,806 8,411 160,818 12,515 32,477 164,901 - 1,498,709 12,615 242,581 271,707 8,411 632,662 424,114 470,640 105,000 85,073 194,735 514,360 - 717,735 618,849 985,000 105,000 4,061,819 7,217,943 1,815,000 (55,981) 16,334,509 408,291 168,069 14,911,877 393,060 (286,702) 1,504,589 18,264,063 4,470,110 168,069 22,129,820 1,815,000 393,060 (342,683) 1,504,589 34,598,572 28,136,615 19,179,454 47,316,069 5,526,701 1,159,724 10,740,801 2,347,931 5,930,097 10,880,929 $ 64,722,798 7,202,857 4,985,723 $ 31,368,034 5,526,701 1,159,724 10,740,801 2,347,931 13,132,954 15,866,652 $ 96,090,832 The accom panying notes are an integral part of the financial s tatem ents 13 Table of Contents City of Ca sa Gra nde Statem ent of Activities For the Year Ended June 30, 2005 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Expenses Functions/Program s Prim ary governm ent: Governm ental activities : General governm ent Public s afety Streets /Trans portation Public works Culture and recreation Econom ic developm ent Interes t on long-term debt Total governm ental activities $ 4,100,221 11,789,718 3,437,830 778,974 4,147,490 2,716,784 477,956 27,448,973 Bus ines s -type activities : Com m unity facilities Golf cours e Was tewater Sanitation Total business-type activities 158,397 844,434 2,487,685 3,148,693 6,639,209 Total prim ary governm ent $ 34,088,182 $ 109,340 904,202 505,948 2,273,085 285,592 9,357,261 13,435,428 186,225 584,429 7,618,055 3,804,163 12,192,872 $ 25,628,300 $ 237 356,863 254,693 931,354 1,543,147 $ 1,543,147 $ 125,108 6,138,686 29,604 79,200 6,372,598 1,561,589 1,561,589 $ 7,934,187 General revenues : Property taxes Sales taxes Franchis e taxes Shared revenues : State s ales taxes Urban revenue s haring Auto-in-lieu Half-cent s ales tax Other Inves tm ent earnings Gain on s ale of as s ets Mis cellaneous Trans fers in (out) Total general revenues and trans fers Change in net as s ets Net as s ets -beginning Net assets-ending The accom panying notes are an integral part of the financial s tatem ents 14 Table of Contents Net (Expense) Revenue and Changes in Net Assets Governm ental Activities Business-type Activities $ (3,990,644) (10,403,545) 3,206,804 1,494,111 (3,577,601) 7,651,031 (477,956) (6,097,800) $ - - Total $ (3,990,644) (10,403,545) 3,206,804 1,494,111 (3,577,601) 7,651,031 (477,956) (6,097,800) 27,828 (260,005) 6,691,959 655,470 7,115,252 27,828 (260,005) 6,691,959 655,470 7,115,252 (6,097,800) 7,115,252 1,017,452 2,333,638 12,094,301 954,853 2,150,452 - 2,333,638 14,244,753 954,853 2,336,759 2,345,507 1,221,188 1,708,436 2,582,448 466,925 414,900 145,585 99,000 26,703,540 20,605,740 44,117,058 $ 64,722,798 183,584 47,086 (99,000) 2,282,122 9,397,374 21,970,660 $ 31,368,034 2,336,759 2,345,507 1,221,188 1,708,436 2,582,448 650,509 414,900 192,671 28,985,662 30,003,114 66,087,718 $ 96,090,832 15 Table of Contents City of Ca sa Gra nde Balance Sheet Governm ental Funds June 30, 2005 ASSETS Cas h Inves tm ents Accounts receivable (les s allowance for uncollectibles ) Due from other governm ents Due from other funds Inventories Prepaids Res tricted as s ets : Cas h and cas h equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Depos its held Accrued wages and benefits Due to: Other funds Deferred revenue Com pens ated abs ences Total liabilities Fund balances: Res erved for: Court and developm ent Special revenue Debt s ervice Capital projects Unres erved, reported in: General fund Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances General $ 1,181,783 8,121,416 Highw ay Users $ 53,069 4,695,396 3,388,553 290,000 11,215 16,464 590,611 - $ 13,009,431 $ 553,920 100 172,114 7,318 10,027 743,479 1,115,310 - Grants & Subsidies $ 58,522 39,676 CDBG $ 88,455 - 32,130 - 567 70,999 - 591,953 - $ 5,339,076 $ 8,010,700 $ 169,764 $ 680,408 $ $ 6,667 - $ 13,855 1,067 $ 78,913 - 368 49,549 6,667 14,922 78,913 - - 154,842 - 601,495 - 36,509 12,672 System Developm ent $ 7,978,570 11,150,642 12,265,952 5,289,527 5,289,527 8,004,033 8,004,033 154,842 601,495 $ 13,009,431 $ 5,339,076 $ 8,010,700 $ 169,764 $ 680,408 The accom panying notes are an integral part of the financial s tatem ents 16 Table of Contents Self-help Technical Assistance $ 24,834 - Hom e/HUD $ 29,719 - Special Assessm ents $ 19,054 954,644 87,706 - $ 24,834 $ 117,425 $ 16,826 1,466 $ 17,425 - 18,292 100,000 117,425 $ $ Capital Replacem ent/ Developm ent $ 360,900 1,689,937 391,775 - 7,139 - 1,365,473 874,013 $ 2,931,989 $ $ $ 387,706 387,706 453,880 - - 977,767 - 6,542 - 977,767 2,478,109 2,478,109 1,365,473 $ 2,931,989 $ 117,425 $ $ Total Governm ental Funds $ 4,522,975 26,222,091 212,157 59,482 32,519 - 5,221,166 218,187 290,000 43,734 16,464 558 3,542,218 2,052,533 $ 38,587,150 123,160 1,476 1,301,155 100 188,795 124,636 100,000 395,024 10,395 1,995,469 3,395,832 26,338 1,089,262 - 1,115,310 789,217 2,067,029 3,395,832 3,395,832 2,300,826 1,156 3,417,582 11,150,642 15,594,386 2,479,265 36,591,681 3,542,218 $ 38,587,150 1,177,962 3,395,832 - $ $ - - 17 Other Governm ental Funds $ 495,050 2,742,452 6,281 - 453,880 6,542 - $ 24,834 CFD Mission Royale Capital Projects $ 2,211,589 - 3,395,832 $ Table of Contents City of Ca sa Gra nde Reconciliation of the Balance Sheet to the Statem ent of Net Assets Governm ental Funds June 30, 2005 Fund balance - total governm ental funds balance s heet $36,591,681 Am ounts reported for governm ental activities in the s tatem ent of net as s ets are different becaus e: Capital as s ets us ed in governm ental activities are not financial res ources and therefore are not reported in the governm ental funds . Governm ental capital as s ets Les s accum ulated depreciation Internal s ervice capital as s ets Les s accum ulated depreciation 61,818,229 (19,643,420) 245,370 (189,049) 42,231,130 Long-term liabilities , including bonds payable, are not due and payable in the current period and therefore are not reported in the funds . Com pens ated abs ences Capital leas es Bonds payable Bond is s uance cos ts Deferred Los s Bond prem ium (632,662) (4,485,933) (9,608,583) 189,605 55,981 (8,411) (14,490,003) Deferred revenue is s hown on the governm ental funds , but is not deferred on the s tatem ent of net as s ets . Special As s es s m ents Property Tax 387,706 7,318 395,024 Interes t payable on long-term debt is not reported in the governm ental funds . Internal s ervice funds are us ed by m anagem ent to charge the cos ts of certain activities to individual funds . The as s ets and liabilities of the internal s ervice funds are reported with governm ental activities . Net as s ets of governm ental activities - s tatem ent of net as s ets The accom panying notes are an integral part of the financial s tatem ents 18 (106,806) 101,772 $64,722,798 Table of Contents City of Ca sa Gra nde Statem ent of Revenues, Expenditures, and Changes in Fund Balances Governm ental Funds For the Year Ended June 30, 2005 REVENUES Taxes : Property taxes City s ales tax Franchis e tax Licens es and perm its Intergovernm ental revenues Charges for s ervices Fines Special as s es s m ents Inves tm ent earnings Contributions and donations Rental and s ale of city property Mis cellaneous Total revenues EXPENDITURES Current: General governm ent Public s afety Streets /Trans portation Public works Culture and recreation Planning and econom ic developm ent Capital outlay Debt Service: Principal Interes t and fis cal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers in Trans fers out Capital Leas es Bond Is s uance Bond Is s uance cos ts Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year General $ 1,808,102 11,304,048 954,853 2,156,170 5,903,454 2,750,983 739,283 156,623 237 106,290 88,537 25,968,580 $ Highw ay Users System Developm ent Grants & Subsidies 4,290,884 79,915 7,724 4,378,523 $ $ 4,667,542 128,410 4,795,952 700,291 1,519 92,459 794,269 CDBG $ 261,525 40,599 302,124 3,732,653 11,212,097 734,369 3,318,166 1,072,432 383,863 1,908,050 6,195 50,154 1,519 398,181 113,381 281,498 79,200 344,765 294,531 - 166,253 13,821 20,633,654 57,939 63,312 2,085,650 399,700 818,844 294,531 5,334,926 2,292,873 4,396,252 1,132,100 (1,346,358) (214,258) 5,120,668 7,145,284 $ 12,265,952 (218,118) (218,118) 2,074,755 3,214,772 $ 5,289,527 The accom panying notes are an integral part of the financial s tatem ents 19 (942,000) (942,000) 3,454,252 4,549,781 $ 8,004,033 (24,575) 122,254 122,254 97,679 57,163 $ 154,842 7,593 7,593 593,902 $ 601,495 Table of Contents Self-help Technical Assistance $ $ 280,351 2,532 282,883 Hom e/HUD Special Assessm ents Capital Replacem ent/ Developm ent $ $ $ 369,233 369,233 217,895 18,562 236,457 30,662 30,662 276,341 - 369,233 - 3,240 - 1,477 3,231,167 276,341 369,233 100,000 36,990 140,230 3,232,644 6,542 - 96,227 6,542 6,542 - 96,227 881,540 977,767 $ $ CFD Mission Royale Capital Projects Other Governm ental Funds Total Governm ental Funds $ $ $ - 20 $ 531,301 790,253 106,193 183,986 46,434 595,343 488,004 2,741,514 2,339,403 12,094,301 954,853 2,156,170 11,911,931 9,853,065 739,283 217,895 466,925 92,696 701,633 627,396 42,155,552 34,943 567,522 19,151 47,586 145,984 83,841 4,300,175 11,344,629 1,908,050 734,391 3,654,964 2,242,438 4,526,914 34,965 475,354 363,305 1,702,743 799,546 477,428 29,988,535 2,220,389 1,038,771 12,167,016 1,335,000 (159,557) 1,175,443 3,395,832 3,395,832 315,760 (24,355) 291,405 1,330,176 2,087,406 3,417,582 2,686,632 (2,530,831) 3,500,000 1,335,000 (159,557) 4,831,244 16,998,260 19,593,421 $ 36,591,681 22 (3,201,982) 1,116,518 3,500,000 4,616,518 1,414,536 1,063,573 $ 2,478,109 2,250,554 4,800 2,255,354 $ Table of Contents City of Ca sa Gra nde Reconciliation of the Statem ent of Revenues, Expenditures, and Changes in Fund Balances of Governm ental Funds To the Statem ent of Activities For the Year Ended June 30, 2005 Net change in fund balances - total governm ental funds $ 16,998,260 Am ounts reported for governm ental activities in the s tatem ent of activities are different becaus e: Governm ental funds report capital outlays as expenditures . However, in the s tatem ent of activities the cos t of thos e as s ets is allocated over their es tim ated us eful lives and reported as depreciation expens e. This is the am ount by which capital outlays exceeded depreciation in the current period. Expenditures for capital as s ets 4,526,914 Les s current year depreciation (2,574,262) 1,952,652 The net effect of various m is cellaneous trans actions involving capital as s ets (i.e., s ales , trade-ins , and donations ) is to increas e net as s ets . Contributed capital as s ets Sale of capital as s ets Revenues received in the current year that were accrued in the Statem ent of Activities in prior years Deferred property tax 5,853,927 (48,000) (5,794) The is s uance of long-term debt (e.g., bonds , leas es ) provides current financial res ources to governm ental funds , while the repaym ent of the principal of long-term debt cons um es the current financial res ources of governm ental funds . Neither trans action has any effect on net as s ets . Is s uance of leas e debt (3,500,000) Is s uance of bond debt (1,335,000) Bond paym ents 549,417 Leas e paym ents 250,129 (4,035,454) Som e expens es reported in the s tatem ent of activities do not require the us e of current financial res ources and, therefore, are not reported as expenditures in governm ental funds . Com pens ated abs ences Interes t expens e on long-term debt Change in net as s ets of governm ental activities (109,777) (74) $ 20,605,740 The accom panying notes are an integral part of the financial s tatem ents 21 Table of Contents City of Casa Grande Ge ne ral Fund State m e nt of Re ve nue s , Expe nditure s , and Change s in Fund Balance - Budge t and Actual For the Ye ar Ende d June 30, 2005 Actual Am ounts Variance w ith Final Budge tPos itive (Ne gative ) $ $ Budge te d Am ounts REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Investment earnings Contributions and donations Rental and sale of city property Miscellaneous Total re ve nue s EXPENDITURES Current: General government Mayor and Council City manager Attorney Clerk Finance Inf ormation technology Personnel Public safety Police Fire Court Animal Control Public w orks Culture and recreation Planning and economic development Capital outlay Debt Service: Principal Interest and f iscal charges Total e xpe nditure s Exce s s (de ficie ncy) of re ve nue s ove r (unde r) e xpe nditure s OTHER FINANCING SOURCES (USES) Transfers in Transfers out Proceeds from obligations Total othe r financing s ource s and us e s Ne t change in fund balance Fund balance - be ginning of ye ar Fund balance - e nd of ye ar Original Final $ 1,578,100 9,485,400 1,084,600 1,373,000 5,642,200 1,027,000 719,100 7,700 71,500 96,300 21,084,900 $ 1,578,100 9,485,400 1,084,600 1,373,000 5,642,200 1,027,000 719,100 7,700 71,500 96,300 21,084,900 1,303,600 255,000 422,700 275,900 712,500 653,700 1,335,100 1,287,100 247,200 439,200 275,900 753,900 653,700 1,267,100 383,542 240,996 437,902 250,945 744,493 643,698 1,031,077 903,558 6,204 1,298 24,955 9,407 10,002 236,023 7,753,600 3,367,900 328,200 250,100 904,200 3,517,900 1,029,000 534,900 7,663,600 3,407,800 336,000 250,100 901,600 3,473,300 1,103,800 515,900 7,367,530 3,265,396 332,467 246,704 734,369 3,318,166 1,072,432 383,863 296,070 142,404 3,533 3,396 167,231 155,134 31,368 132,037 180,100 22,824,400 180,200 22,756,400 166,253 13,821 20,633,654 13,947 (13,821) 2,122,746 (1,739,500) (1,671,500) 5,334,926 7,006,426 1,075,300 (1,279,100) 108,000 (95,800) (1,835,300) 1,835,300 $ - 1,075,300 (1,347,100) 108,000 (163,800) (1,835,300) 1,835,300 $ - 1,132,100 (1,346,358) (214,258) 5,120,668 7,145,284 12,265,952 56,800 742 (108,000) (50,458) 6,955,968 5,309,984 12,265,952 The accompanying notes are an integral part of the f inancial statements 22 $ 1,808,102 11,304,048 954,853 2,156,170 5,903,454 2,750,983 739,283 156,623 237 106,290 88,537 25,968,580 $ 230,002 1,818,648 (129,747) 783,170 261,254 1,723,983 20,183 148,923 237 34,790 (7,763) 4,883,680 Table of Contents City of Ca sa Gra nde Highw ay Users Special Revenue Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Variance w ith Final BudgetBudgeted Am ounts Positive REVENUES Original Final Actual Am ounts (Negative) Taxes : State-s hared gas tax $ 2,223,700 $ 2,223,700 $ 2,429,640 $ 205,940 Local trans portation as s is tance 152,900 152,900 152,808 (92) County s ales tax 1,174,700 1,174,700 1,708,436 533,736 Inves tm ent earnings 7,000 7,000 79,915 72,915 Mis cellaneous 362,500 362,500 7,724 (354,776) Total revenues 3,920,800 3,920,800 4,378,523 457,723 EXPENDITURES Culture and recreation Contractual s ervices 24,200 24,200 6,195 18,005 24,200 24,200 6,195 18,005 1,036,600 781,300 519,300 3,428,000 17,500 1,036,600 717,000 614,000 2,476,700 121,300 901,552 392,617 613,881 50,154 121,251 135,048 324,383 119 2,426,546 49 Total Streets /Trans portation 5,782,700 4,965,600 2,079,455 2,886,145 Total expenditures 5,806,900 4,989,800 2,085,650 2,904,150 (1,886,100) (1,069,000) 2,292,873 3,361,873 (175,000) (218,700) (218,118) 582 (175,000) (218,700) (218,118) 582 (2,061,100) 2,061,100 $ - (1,287,700) 1,287,700 $ - Total Culture and recreation Streets /Trans portation Pers onal s ervices Contractual s ervices Materials and s upplies Capital outlay Debt s ervice Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year The accom panying notes are an integral part of the financial s tatem ents 23 $ 2,074,755 3,214,772 5,289,527 3,362,455 1,927,072 $ 5,289,527 Table of Contents City of Ca sa Gra nde System Developm ent Special Revenue Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Charges for s ervices Inves tm ent earnings Total revenues EXPENDITURES Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Variance w ith Final BudgetPositive (Negative) $ 3,316,742 128,410 3,445,152 Original $ 735,000 735,000 Final $ 1,350,800 1,350,800 Actual Am ounts $ 4,667,542 128,410 4,795,952 329,000 329,000 1,600 403,200 404,800 1,519 398,181 399,700 81 5,019 5,100 406,000 946,000 4,396,252 3,450,252 OTHER FINANCING SOURCES (USES) Trans fers out (406,000) Total other financing sources and uses (406,000) Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ - (946,000) (946,000) $ - The accom panying notes are an integral part of the financial s tatem ents 24 $ (942,000) (942,000) 3,454,252 4,549,781 8,004,033 4,000 4,000 3,454,252 4,549,781 $ 8,004,033 Table of Contents City of Ca sa Gra nde Grants and Subsidies Special Revenue Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Variance w ith Final BudgetBudgeted Am ounts Positive REVENUES Original Final Actual Am ounts (Negative) Intergovernm ental revenues $ 1,666,300 $ 1,666,300 $ 700,291 $ (966,009) Inves tm ent earnings 1,519 1,519 Contributions and donations 11,500 11,500 92,459 80,959 Total revenues 1,677,800 1,677,800 794,269 (883,531) EXPENDITURES Public s afety Pers onal s ervices Contractual s ervices Materials and s upplies Capital outlay Total Public Safety Culture and recreation Pers onal s ervices Contractual s ervices Materials and s upplies Total Culture and Recreation Com m unity developm ent Contractual s ervices Total Com m unity Developm ent Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ 315,500 5,000 32,800 415,000 768,300 171,400 6,600 84,700 505,600 768,300 43,676 9,465 60,240 344,765 458,146 127,724 (2,865) 24,460 160,835 310,154 121,500 7,600 143,600 272,700 99,100 10,400 194,000 303,500 88,383 9,377 183,738 281,498 10,717 1,023 10,262 22,002 686,800 686,800 1,727,800 656,000 656,000 1,727,800 79,200 79,200 818,844 576,800 576,800 908,956 (50,000) (50,000) 50,000 50,000 - 50,000 50,000 - $ The accom panying notes are an integral part of the financial s tatem ents 25 (24,575) $ 122,254 122,254 97,679 57,163 154,842 25,425 $ 72,254 72,254 97,679 57,163 154,842 Table of Contents City of Ca sa Gra nde Com m unity Developm ent Block Grant Special Revenue Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Intergovernm ental revenues Program incom e Total revenues Original $ 1,428,000 1,428,000 Final $ 1,428,000 1,428,000 Actual Am ounts $ 261,525 40,599 302,124 1,428,000 1,428,000 24,300 1,395,900 7,800 1,428,000 24,230 262,638 7,663 294,531 70 1,133,262 137 1,133,469 7,593 7,593 EXPENDITURES Com m unity developm ent Pers onal s ervices Contractual s ervices Materials and s upplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Variance w ith Final BudgetPositive (Negative) $ (1,166,475) 40,599 (1,125,876) - $ - - $ - The accom panying notes are an integral part of the financial s tatem ents 26 $ 593,902 601,495 $ 593,902 601,495 Table of Contents City of Ca sa Gra nde Self-Help Technical Assistance Special Revenue Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Intergovernm ental revenues Mis cellaneous Total revenues Original $ 205,700 205,700 Final $ 205,700 72,000 277,700 Actual Am ounts $ 280,351 2,532 282,883 136,300 66,300 3,100 205,700 196,600 66,300 14,800 277,700 196,598 64,960 14,783 276,341 2 1,340 17 1,359 6,542 6,542 EXPENDITURES Com m unity developm ent Pers onal s ervices Contractual s ervices Materials and s upplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Variance w ith Final BudgetPositive (Negative) $ 74,651 (69,468) 5,183 - $ - - $ - $ The accom panying notes are an integral part of the financial s tatem ents 27 6,542 $ 6,542 Table of Contents City of Ca sa Gra nde Hom e/HUD Special Revenue Fund Statem ent of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Intergovernm ental revenues Total revenues $ EXPENDITURES Com m unity developm ent Pers onal s ervices Contractual s ervices Materials and s upplies Total expenditures $ 700,000 700,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 700,000 700,000 Actual Am ounts $ 369,233 369,233 30,300 597,100 200 627,600 - $ Final 627,600 627,600 30,117 338,970 146 369,233 - - $ - The accom panying notes are an integral part of the financial s tatem ents 28 Variance w ith Final BudgetPositive (Negative) $ (258,367) (258,367) 183 258,130 54 258,367 - $ - - $ - Table of Contents City of Casa Grande Statement of Net Assets Proprietary Funds June 30, 2005 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees ASSETS Current as s ets : Cas h Cas h with fis cal agent Inves tm ents Receivables , net of uncollectibles Inventories Total current as s ets Noncurrent as s ets : $ Deferred bond cos ts Capital as s ets : Land Buildings and im provem ents Machinery and equipm ent Cons truction in progres s Les s accum ulated depreciation Total capital as s ets , net Total noncurrent as s ets Total assets 502,102 1,293 21,005 524,400 - NET ASSETS Inves ted in capital as s ets , net of related debt Res tricted for: Cons truction Unres tricted Total net assets $ 690,478 796,354 4,350,755 437,317 6,274,904 $ 370,380 1,036,504 (184,544) 851,960 851,960 1,376,360 LIABILITIES Current liabilities : Accounts payable Depos its held Accrued wages and benefits Accrued interes t payable Due to other funds Deferred revenue Com pens ated abs ences Capital leas es Notes payable Excis e tax revenue obligations Total current liabilities Noncurrent liabilities : Capital leas es Notes payable Excis e tax revenue obligations Bond prem ium 2003 is s ue Deferred am ount on refunding Clos ure and pos tclos ure liability Total noncurrent liabilities Total liabilities $ - 26,902,784 1,129,683 11,569,524 (7,959,064) 31,642,927 32,013,307 38,288,211 3,348 12,515 3,047 9,231 28,141 25,113 6,380,441 26,062 6,431,616 6,431,616 73,725 8,032 161,854 26,811 77,331 514,360 862,113 25,113 25,113 168,069 168,069 196,210 14,911,877 393,060 (286,702) 15,018,235 15,880,348 25,113 674,660 16,139,359 - 505,490 1,180,150 796,354 5,472,150 22,407,863 $ The accom panying notes are an integral part of the financial s tatem ents 29 $ 6,406,503 6,406,503 Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 50,879 726,291 60,109 837,279 Golf Course $ - $ - 167,092 4,996,780 (2,779,502) 2,384,370 2,384,370 3,221,649 $ 5,741 991 6,732 Total 1,274,313 796,354 11,458,780 545,484 14,074,931 Governmental Activities Internal Service Funds $ 370,380 16,510 1,629 131,283 149,422 - 283,000 531,611 555,849 (872,931) 497,529 497,529 504,261 283,000 27,601,487 7,718,816 11,569,524 (11,796,041) 35,376,786 35,747,166 49,822,097 52,354 193,016 (189,049) 56,321 56,321 205,743 31,981 19,563 47,104 108,173 206,821 26,651 4,882 190,000 11,158 232,691 160,818 12,515 32,477 164,901 190,000 85,073 185,504 9,231 514,360 1,354,879 36,736 4,570 6,344 47,650 408,291 1,504,589 1,912,880 2,119,701 232,691 408,291 168,069 14,911,877 393,060 (286,702) 1,504,589 17,099,184 18,454,063 47,650 1,867,906 497,529 19,179,454 - (765,958) 1,101,948 (225,959) 271,570 7,202,857 4,985,723 31,368,034 $ $ 30 $ 158,093 158,093 Table of Contents City of Ca sa Gra nde Statem ent of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2005 Business-type Activities-Enterprise Funds W astew ater W ater W astew ater Dev Fees Operating revenues: Service fees Connection fees Rental Green fees Mis cellaneous Total operating revenue $ 186,225 186,225 Operating expenses: Pers onal s ervices Contractual s ervices Materials and s upplies Depreciation Clos ure and pos tclos ure cos ts Total operating expenses Operating incom e (loss) Nonoperating revenues (expense): Sale of s ewer capacity Inves tm ent earnings Interes t expens e City s ales tax Total nonoperating revenues (expense) Incom e (loss) before contributions and transfers Capital contributions Trans fers in Trans fers out Change in net assets Total net assets-beginning of year Total net assets-end of year 531,967 394,990 482,446 774,738 2,184,141 33,922 204,904 $ 3,987,516 3,987,516 3,987,516 (6,094) (6,094) 1,288,580 58,373 (303,545) 2,140,482 3,183,890 27,828 3,388,794 4,095,297 1,561,589 1,674,242 (103,700) 6,520,925 15,886,938 22,407,863 (1,674,242) 2,421,055 3,985,448 6,406,503 $ The accom panying notes are an integral part of the financial s tatem ents 31 2,133,452 208,494 47,099 2,389,045 56,334 7,792 33,056 55,121 152,303 (10,900) 16,928 1,163,222 1,180,150 $ $ 107,781 107,781 $ Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 3,540,921 263,242 3,804,163 Golf Course $ 1,673,400 527,003 418,339 416,526 93,424 3,128,692 675,471 17,430 (20,001) (2,571) $ 150,709 433,720 584,429 Total $ 5,860,598 4,459,252 150,709 433,720 47,099 10,951,378 Governm ental Activities Internal Service Funds $ 800,593 800,593 458,363 58,308 291,329 36,434 844,434 2,720,064 988,093 1,225,170 1,282,819 93,424 6,309,570 313,498 91,465 323,451 15,379 743,793 (260,005) 4,641,808 56,800 1,288,580 183,584 (329,640) 2,150,453 3,292,977 - 9,971 9,971 672,900 (250,034) 7,934,785 56,800 (292,700) 380,200 721,748 1,101,948 376,100 (67,800) 58,266 213,304 271,570 1,561,589 2,050,342 (2,149,342) 9,397,374 21,970,660 31,368,034 (56,800) 158,093 158,093 $ $ 32 $ Table of Contents City of Ca sa Gra nde Statem ent of Cash Flow s Proprietary Funds For the Year Ended June 30, 2005 Business-type Activities-Enterprise Funds W astew ater W ater W astew ater Dev Fees CASH FLOW S FROM OPERATING ACTIVITIES Receipts from cus tom ers and us ers Paym ents to s uppliers Paym ents to em ployees $ Net cash provided (used) by operating activities CASH FLOW S FROM NONCAPITAL FINANCING ACTIVITIES Sale of s ewer capacity City s ales tax Trans fers to other funds Trans fers from other funds Net cash provided (used) by noncapital financing activities CASH FLOW S FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from bond s ales / leas e purchas e Purchas es of capital as s ets Proceeds from s ale of capital as s ets Paym ent on refunded bonds Principal paid on capital debt Interes t paid on capital debt Net cash (used) by capital and related financing activities 186,523 (41,601) (56,334) $ 2,335,708 (1,532,760) (544,372) $ 3,987,516 22,911 - 88,588 258,576 4,010,427 (10,900) - 1,288,580 2,140,482 (103,700) 1,674,242 (1,674,242) - (10,900) 4,999,604 (1,674,242) (870) (9,447) (8,445,770) (574,090) (269,819) - (10,317) (9,289,679) - CASH FLOW S FROM INVESTING ACTIVITIES Interes t and dividends received - 47,661 89,337 Net cash provided by investing activities - 47,661 89,337 Net increas e (decreas e) in cas h Cash and cash equivalents at beginning of year 67,371 436,024 Cash and cash equivalents at end of year Cas h Cas h with fis cal agent Inves tm ents 2,425,522 3,980,032 $ 503,395 $ 5,837,587 $ 6,405,554 $ 502,102 1,293 503,395 $ 690,478 796,354 4,350,755 5,837,587 $ 25,113 6,380,441 6,405,554 $ The accom panying notes are an integral part of the financial s tatem ents 33 (3,983,838) 9,821,425 $ $ Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 3,814,679 (944,805) (1,717,943) Golf Course $ 1,151,931 583,438 (426,361) (469,850) Total $ 10,907,864 (2,922,616) (2,788,499) (312,773) 5,196,749 (292,700) - 9,971 (67,800) 376,100 1,288,580 2,150,453 (2,149,342) 2,050,342 (292,700) 318,271 3,340,033 451,000 (492,298) (188,232) (21,017) - 451,000 (8,938,068) (763,192) (300,283) (250,547) - (9,550,543) 12,927 - 149,925 12,927 - 149,925 621,611 155,559 5,498 243 (863,836) 14,393,283 $ 777,170 $ 5,741 $ 13,529,447 $ 50,879 726,291 777,170 $ 5,741 5,741 $ $ $ 1,274,313 796,354 11,458,780 $ 13,529,447 (continued) 34 Table of Contents City of Casa Grande Statem ent of Cash Flow s Proprietary Funds For the Year Ended June 30, 2005 Business-type Activities-Enterprise Funds W astew ater W ater W astew ater Dev Fees Reconciliation of operating incom e (loss) to net cash provided (used) by operating activities: Operating incom e (los s ) $ Adjus tm ents to reconcile operating incom e (los s ) to net cas h provided (us ed) by operating activities : Clos ure and pos tclos ure cos ts Depreciation expens e (Increas e) decreas e in accounts receivable Increas e (decreas e) in accounts payable Increas e (decreas e) in depos its held Increas e (decreas e) in accrued wages Increas e (decreas e) in due to other funds Increas e (decreas e) in com pens ated abs ences Total adjus tm ents 55,121 (1,013) (753) 1,311 54,666 Net cash provided (used) by operating activities 88,588 $ Noncash investing, capital, and financing activities: Contributions of capital as s ets 33,922 - $ 774,738 (53,337) (655,324) (14,135) 1,730 53,672 $ 258,576 $ 1,561,589 The accom panying notes are an integral part of the financial s tatem ents 35 204,904 $ 3,987,516 22,911 22,911 $ 4,010,427 - Table of Contents Business-type Activities-Enterprise Funds Sanitation $ 675,471 Golf Course $ 93,424 416,526 10,516 537 (46,821) 2,278 476,460 $ 1,151,931 - (260,005) Total $ 36,434 (991) 13,276 (8,969) (90,000) (2,518) (52,768) $ (312,773) - 4,641,808 93,424 1,282,819 (44,825) (619,353) 1,311 (69,925) (90,000) 1,490 554,941 $ 5,196,749 $ 1,561,589 36 Table of Contents City of Casa Grande Statem ent of Fiduciary Net Assets Fiduciary Funds June 30, 2005 Agency Funds ASSETS Cas h Interes t receivable Inves tm ents , at fair value $ Total assets $ 487,062 LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for pension benefits and other purposes 13,687 1,916 471,459 Part-Tim e Firem en's Pension $ 772,415 487,062 - 487,062 - - The accom panying notes are an integral part of the financial s tatem ents 37 4,831 767,584 $ 772,415 Table of Contents City of Casa Grande Statem ent of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2005 Part-Tim e Firem en's Pension ADDITIONS Contributions : Em ployer Plan m em bers Total contributions $ Inves tm ent earnings : Interes t Change in the fair value of inves tm ents Total inves tm ent earnings Les s inves tm ent expens e Net inves tm ent earnings 7,129 7,129 14,258 20,967 48,066 69,033 (6,286) 62,747 Total additions 77,005 DEDUCTIONS Pens ion paym ents Adm inis trative expens es Total deductions 38,585 1,773 40,358 Change in net as s ets 36,647 Net assets-beginning of year Net assets-end of year $ The accom panying notes are an integral part of the financial s tatem ents 38 735,768 772,415 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies The accounting policies and financial reporting practices of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the City’s significant accounting policies: (A) Reporting Entity The reporting entity of the City includes the following services as authorized by its charter: general government, public safety (police, court and fire), streets/transportation, public works, culture and recreation and economic development. In addition, the City owns and operated four major enterprise activities: wastewater system, sanitation operations, golf course and water system. Individual Component Unit – Blended The Mission Royale Community Facilities District (the District) was formed by petition to the City Council in November 2003. The District’s purpose is to acquire or construct public infrastructure in a specified area of the City. As a special purpose district and separate political subdivision under the Arizona Constitution, the District can levy taxes and issue bonds independently of the City. Property owned in the designated area is assessed for the District’s property taxes, and thus for the costs of operating the District. The City Council serves as the Board of Directors of the District. The City has no liability for the District’s debt. For reporting purposes, the transactions of the District are included as governmental type funds as if they were part of the City’s operations. No separate financial statements were prepared for the District. (B) Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from Business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses for a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. (continued) 39 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (B) Government-wide and Fund Financial Statements (continued) Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between governmental activities and business-type activities are shown in the government-wide financial statements. The “doubling up” effect of internal service fund activity has been removed from the government-wide statements with the expenses shown in the various functions and segments on the Statement of Activities. (C) Basis of Presentation – Fund Accounting The accounts of the City are organized on the basis of funds each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of selfbalancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures (expenses). The various funds are summarized by type in the combined financial statements. The City uses the following fund types: GOVERNMENTAL FUNDS General Fund - The General Fund is the general operation fund of the City. It is used to account for all financial resources except for those required to be accounted for in another fund. Special Revenue Funds - The Special Revenue Funds are used to account for revenues derived from specific taxes, grants or other restricted revenue sources. City Ordinances or Federal and State Statutes specify the uses and limitations of each special revenue fund. The Special Revenue Funds presented as major funds in the basic financial statement are as follows: Highway Users Fund, used to account for the city’s share of tax revenues that are legally restricted to the maintenance of highways within the city’s boundaries; Systems Development Fund, used for fees collected to help defray the costs of development of general government; Grants and Subsidies Fund, used to account for various small grants; Community Development Block Grant Fund, used to account for intergovernmental grants, which are used to improve and develop neighborhoods by developing housing; Self-help Technical Assistance Fund, used to account for the activity related to the Rural Development Self-Help Technical Assistance Grant; Home/HUD Fund, used to account for intergovernmental grants used to rehabilitate owner occupied homes and to provide counseling services. (continued) 40 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (C) Basis of Presentation – Fund Accounting (continued) GOVERNMENTAL FUNDS (continued) Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for and the payment of general obligation long-term debt principal, interest and related costs. The Special Assessment Debt Service Fund is a major fund presented in the basic financial statements. This fund accounts for the receipts of revenues from special assessment districts and the payment of special assessment bonds. Capital Project Funds - Capital Project Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). The Capital Replacement Fund is a major fund presented in the basic financial statements. This fund is used to account for the replacement of various capital items or development of infrastructure. The Mission Royale CFD Capital Projects Fund accounts for capital construction activities within the CFD. PROPRIETARY FUNDS Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The enterprise funds presented as major funds in the basic financial statement are as follows: Water Fund - Used to account for water related activities. Wastewater Fund – This fund is used to account for the activities of the sewer (wastewater) operations and maintenance. Wastewater Development Fees Fund – Fees collected to help defray the costs of development of the wastewater system. Sanitation Fund – This fund is used to account for the operations of the City’s trash and landfill services. Golf Course Fund – This fund is used to account for the operations of the City’s public golf course. On the proprietary fund financial statements, operating revenues are those that flow directly from the operations of that activity, i.e. charges to customers or users who purchase or use the goods or services of that activity. Operating expenses are those that are incurred to provide those goods or services. Non-operating revenues and expenses are items like investment income and interest expense that are not a result of the direct operations of the activity. (continued) 41 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (C) Basis of Presentation – Fund Accounting (continued) PROPRIETARY FUNDS (continued) Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, generally on a cost-reimbursement basis. The City has one internal services fund, Equipment Mechanics. This fund is used to account for the maintenance and operations of City owned vehicles. FIDUCIARY FUNDS Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others and therefore are not available to support City programs. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary Funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. GASB Statement #34 redefined fiduciary funds as follows: Pension Trust Funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post employment benefit plans, or other employee benefit plans. The City has one Pension Trust Fund to account for the activities of the part-time firemen’s pension plan. Agency Funds account for assets the City holds as an agent for individuals, private organizations, other governments or other funds in a temporary custodial capacity. The City currently maintains two agency funds, one to account for deposits received from various businesses in order to conduct business within the City, and the other to account for employee deposits into a flexible spending plan. The two agency funds are aggregated in the statements. NON-CURRENT GOVERNMENTAL ASSETS AND LIABILITIES Non-Current Governmental Assets and Liabilities - GASB Statement #34 eliminates the presentation of account groups in the financial statements (formerly the general fixed asset account group and the general long-term debt account group). The governmental long-term assets and liabilities continue to be maintained in a separate fund for tracking purposes, but are presented with the governmental activities in the government-wide Statement of Net Assets. (continued) 42 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (D) Implementation of GASB Statement No.34 1. Governmental Accounting Standards Board Statement No. 34 In fiscal year 2002/2003 the City adopted the provisions of GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This statement affects the manner in which the City records transactions and presents financial information. State and local governments have traditionally used a financial reporting model substantially different from the one used to prepare private sector financial reports. GASB Statement No. 34 establishes new requirements and a new reporting model for the annual financial reports of state and local governments. The statement was developed to make annual reports of state and local governments easier to understand and more useful to the people who use governmental financial information to make decisions and include the following sections, which were not previously included in the Comprehensive Annual Financial Statements. The governmental fund financial statements continue to be presented as a building block for the new GASB Statement No. 34 statements. a. Management’s Discussion and Analysis – GASB Statement No. 34 requires that financial statements be accompanied by a narrative introduction and analytical overview of the City’s financial activities in the form of “management’s discussion and analysis” (MD&A). This analysis is similar to the analysis provided in the annual reports of private-sector organizations. b Government-Wide Financial Statements – The reporting model includes financial statements prepared using full accrual accounting for all of the City’s activities. This approach includes not just current assets and liabilities but also capital and other long-term assets as well as long-term liabilities. Accrual accounting also reports all of the revenues and costs of providing services each year, not just those received or paid in the current year or soon thereafter. Statement of Net Assets – The statement of net assets is designed to display the financial position of the primary government (government and businesstype activities). The City now reports all capital assets in the governmentwide statement of net assets and reports depreciation expense – the cost of “using up” capital assets – in the statement of activities. The net assets of the City are broken down into three components: 1) invested in capital assets, net of related debt, 2) restricted and 3) unrestricted. (continued) 43 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (D) Implementation of GASB Statement No.34 (continued) 1. Governmental Accounting Standards Board Statement No. 34 (continued) b. Statement of Net Assets (continued) Restricted net assets are those with constraints placed on their use by either: 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation. All net assets not otherwise classified as restricted, are shown as unrestricted. Generally, the City would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Statement of Activities – The government-wide statement of activities reports expenses and revenues in a format that focuses on the cost of each of the City’s functions. The expense of individual functions is compared to the revenue generated directly by the function. Accordingly, the City has recorded capital and certain other long-term assets and liabilities in the statement of net assets, and has reported all revenues and the cost of providing services under the accrual basis of accounting in the statement of activities. 2. Governmental Accounting Standards Board Statement No. 36 The City adopted the provisions of GASB Statement No. 36, Receipt Reporting for Certain Shared Nonexchange Revenues. This statement amends GASB Statement No. 33 with respect to the manner in which shared nonexchange revenues are accounted for by recipient governments. 3. Governmental Accounting Standards Board Statement No. 37 The City adopted the provisions of GASB Statement No. 37, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments: Omnibus. This statement amends GASB Statement No. 34 to either 1) clarify certain provisions or 2) modify other provisions that GASB believes may have unintended consequences in some circumstances. Accordingly, the City considered the effects of this statement when adopting the provisions of GASB Statement No. 34 as previously described. 4. Governmental Accounting Standards Board Statement No. 38 The City adopted the provisions of GASB Statement No. 38, Certain Financial Statement Note Disclosures. This statement modifies, establishes, and rescinds certain financial statement disclosure requirements. Accordingly, certain footnote disclosures have been revised to conform to the provisions of GASB Statement No. 38. (continued) 44 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (D) Implementation of GASB Statement No.34 (continued) 5. Governmental Accounting Standards Board Statement No. 40 The City adopted the provisions of GASB Statement No. 40, Deposit and Investment Risk Disclosures. This statement amends GASB Statement No. 3 and establishes more comprehensive disclosure requirements addressing common risks of the deposits and investments of state and local governments. (E) Basis of Accounting Different measurement focuses are applied to governmental, proprietary and fiduciary funds. The governmental fund measurement focus is on determination of financial position and changes in financial position. Governmental funds focus on the flow of resources. The proprietary and pension fund measurement focus is on determination of net income, financial position, and changes in financial position. Agency funds are custodial in nature and do not measure results of operation or have a measurement focus. The modified accrual basis of accounting is followed by the governmental funds. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. 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 related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. In applying the susceptible to accrual concept to intergovernmental revenues (grants, subsidies and shared revenues), the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. In one, monies must be expended on specific purpose of the project before any amounts will be paid to the City; therefore, revenues are recognized based upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of expenditures and nearly irrevocable, i.e., revocable only for failure to comply with prescribed compliance requirements, e.g., equal employment opportunity. These resources are reflected as revenues at the time of receipt or earlier if they meet the criterion of availability. Licenses and permits, charges for services, fines, forfeitures and miscellaneous revenues are recorded as revenues when received. Investment interest is recorded as earned since they are measurable and available. City sales tax, collected by the State of Arizona, and property taxes are accrued in the accounting period they become both measurable and available. The portion of property tax levies available on June 30, 2005, are recorded as receivable, net of allowance for uncollectibles. The balance of the tax levy not collected within 60 days after year-end are reflected as deferred revenue. (continued) 45 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (E) Basis of Accounting (continued) Special assessments and notes receivables are recorded as revenue as installments are received. The balances of these receivables are reflected as deferred revenue. Direct loans made through Community Development Block Grants are reflected as a reserve in fund balance. All proprietary and pension funds are accounted for using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the accounting period in which they are earned and become measurable. Expenses are recorded in the accounting period incurred. Pursuant to GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting, the City follows GASB guidance as applicable to its proprietary funds, and Financial Accounting Standards Boards Statements and Interpretations, Accounting Principals Board Opinions, and Accounting Research Bulletins issued on or before November 30, 1989 that do not conflict with or contradict GASB Pronouncements. The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (F) Budgetary Data (1) (2) (3) (4) (5) (6) In the spring of each year, the City Manager submits to City Council an estimate of the expenditures necessary to conduct the affairs of the City for the fiscal year commencing July 1st. The Council holds open work sessions relating to budget preparation. After required public hearings are held, budget for all governmental and proprietary funds (excluding internal service and pension funds) are legally enacted prior to the third Monday of July as required by Arizona Revised Statutes. The budget specifies expenditure amounts by activity. Transfers of budgeted amounts within a department can be authorized by the Director of Finance upon the City Manager’s approval unless the transfer involves a transfer from personal services. This type of budgetary transfer requires Council approval. Council approval is required for transfers of budgeted amounts from one department or fund to another. The original budget has been amended for the year ending 2004-2005. All funds except internal service funds are subject to the comprehensive appropriated budget except as provided under state law. Encumbrances are not used by the City. All appropriations lapse at fiscal year-end. Invoices for goods and services received on or before June 30, must be paid within 60 days of the fiscal year-end. (continued) 46 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (F) Budgetary Data (continued) (7) (8) (9) (10) The budget for the City is adopted on a basis consistent with generally accepted accounting principles. Under State statutes, there are certain annual expenditure limitations to which the City adheres. Several supplemental appropriations were necessary during the year. Expenditures may not legally exceed budgeted appropriations at the department level. GASB #34 requires that budgetary comparison statements for the general fund and major special revenue funds be presented in the annual financial statements. These statements must display original budget, final budget and actual results. The City has also shown this information as supplementary schedules for other governmental funds as well as enterprise funds. The Community Facilities District Mission Royale did not have an adopted budget for the fiscal year. (G) Cash and Cash Equivalents Cash represents amounts in demand deposits and amounts held in trust by financial institutions. The funds held in trust are available to the City upon demand. Cash equivalents are defined as short-term (original maturities of three months or less), highly liquid investments that are 1) readily convertible to known amounts of cash and 2) so near maturity that they present insignificant risk of changes in value because of changes in interest rates (H) Investments The City adheres to the Arizona Revised Statutes (A.R.S. §35-323) that governs the investment of City funds. Eligible investments include certificate of deposits in eligible depositories, interest bearing accounts in qualified banks, repurchase agreements, pooled investments by the State Treasurer, bonds of the U.S. Government that are guaranteed as to principal and interest, and bonds of the state, county, city, town or school district. All investments except for the Part-time Firemen’s Pension funds are invested in the State’s Local Government Investment Pool. The State’s investment pool is managed by the State Treasurer’s office with no regulatory oversight. The pool is not required to register with the Securities and Exchange Commission under the 1940 Investments Advisors Act. The activity and performance of the pool is reviewed monthly by the State Board of Investment in accordance with A.R.S. §35-311. The Arizona State Treasurer issues a publicly available financial report that includes financial statements and required supplementary information. Copies may be obtained by contacting the Arizona State Treasurer, 1700 West Washington, Phoenix, Arizona 85007. In accordance with GASB Statement No. 31 “Accounting and Financial Reporting for Certain Investments and External Investment Pools,” the City records all its investments at fair value as defined in the statement. The Part-time Firemen’s Pension investments are valued from quoted market prices at year-end. (continued) 47 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (I) Inventories Inventories for Governmental and Proprietary Funds consist primarily of expendable supplies. Governmental funds maintain inventories using the consumption method of accounting. All inventories are valued at cost, which approximates market, using the first-in/first-out method. Physical inventories are conducted at year-end for financial statements purposes. (J) Capital Assets Capital Assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Assets contributed (donated) to those funds are recorded by reference to historical costs of the donor if recently purchased or constructed, or if such records are not available, at estimated fair market value on the date of receipt. General government infrastructure capital assets include only those assets acquired or constructed in the past three years. No infrastructure acquired prior to 2003 has been included. Infrastructure from 1980 to 2003 will be included in fiscal year 2007. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Interest of $357,671 was capitalized for 2004-2005 for the Wastewater Treatment Plant. Depreciation of all assets is recorded and calculated using the straight-line method over the following estimated useful lives: Buildings ............................................................................ 40 years Sewer system............................................................. 20 to 50 years Street system ............................................................. 20 to 30 years Building and facility improvements .................................... 20 years Streetlights and traffic control devices ................................ 20 years Other Improvements and landscaping ................................. 15 years Vehicles....................................................................... 3 to 15 years Equipment ................................................................... 5 to 10 years Furniture and fixtures .................................................. 5 to 10 years Computers/software............................................................... 3 years (continued) 48 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 1: Summary of Significant Accounting Policies (continued) (K) Compensated Absences City employees are granted one day of vacation leave per month. Employees are entitled to accumulate vacation to a maximum allowable limit depending on the number of years of service. In the event of termination, an employee is reimbursed for the accumulated vacation leave. Different measurement focuses for governmental and proprietary funds were considered when determining the compensated absences liability. Because the measurement focus for proprietary funds is the determination of net income, current and long-term liabilities are recorded in the accounting records. The measurement focus for governmental funds is the flow of financial resources; expenditures for vacation time are accrued as current liabilities only if they have matured (i.e., unused reimbursable leave still outstanding following an employee’s resignation or retirement). City employees are granted nonvesting sick leave. Upon termination an employee is not entitled to reimbursement of the accumulated sick leave. Therefore, future sick leave compensation is contingent upon a specific event that is outside the control of the employee or the City. This sick leave compensation is accounted for in the period that the event takes place. (L) Long-term Obligations A distinction is made between proprietary fund long-term liabilities and governmental long-term debt. Governmental funds’ long-term obligations are recognized as a liability in the governmental funds when due and expected to be financed from expendable available financial resources. Longterm obligations expected to be financed from proprietary fund operations are accounted for in those funds. (M) Interfund Transactions Interfund transactions are categorized as loans, reimbursements, interfund services provided and used or transfers. Loans between funds are reported in the balance sheet of the borrowing and lending funds as a liability and receivable, respectively. Reimbursements are expenditures or expenses of one fund but are attributable to another fund. An example of this type of transaction is when one fund purchases a supply in which another fund uses, thus reimbursing the original funds expenditure/ expense. An interfund services provided and used transaction is a revenue or expenditure/expense if the transaction involved an outside party. Utility receipts and payments are examples of transactions where the fund receiving the service records an expenditure/expense and the fund supplying the service records a revenue. Other interfund transactions are classified as transfers. Transfers usually reflect ongoing operating subsidies between funds. (N) Fund Equity Reserves represent those portions of fund equity not appropriable for expenditures or legally segregated for a specific future use. (continued) 49 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 2: Cash and Investments At year-end, the City had the following cash and investments: Cash Investments Restricted investments Total cash and investments $ 5,832,316 38,919,914 2,848,887 $47,601,117 Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, an entity will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The carrying amount of the City’s cash in bank totaled $5,832,316 and the bank balance was $6,059,170. Federal Depository Insurance covered the City’s deposits at June 30, 2005, to the extent of $200,000. Deposits of $3,949,700 were collateralized with securities held by the pledging financial institution or by its trust department or agent but not in the City’s name. The balance of $1,909,470 is uncollateralized at June 30, 2005. Cash and cash equivalents include restricted and unrestricted amounts and are included in the financial statements as follows: Cash Investments Restricted investments Governmental Activities $ 4,539,485 26,222,091 2,052,533 $32,814,109 Business Activities $ 1,274,313 11,458,780 796,354 $13,529,447 Fiduciary Fund $ 18,518 1,239,043 $1,257,561 Total $ 5,832,316 38,919,914 2,848,887 $47,601,117 Investments The City’s policy is to invest unrestricted cash in the Local Government Investment Pool (LGIP), an investment pool managed by the State Treasurer’s Office that allows governments within the State to pool their funds for investment purposes. The LGIP is not registered with the Securities Exchange Commission under the 1940 Investment Advisors Act. The State Board of Investment has oversight responsibilities of the investment pool in accordance with ARS 35-311. The pool’s policy is to invest in fixed-rate securities with a final maturity less than 24 months from the settlement date of the purchase and variable-rate securities with final maturity less than 5 years. The dollar weighted average portfolio maturity is less than 180 days. Only securities backed by the full faith and credit of the U.S. Government may be purchased for this pool. The fair value balance of the pool at June 30, 2005 was $1,367,992,334. (continued) 50 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 2: Cash and Investments (continued) Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. All investments have a remaining maturity of 12 months or less. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of year-end for each investment type. Investment Type LGIP Fire Fighter Pension: LGIP American Funds Linsco JP Morgan Wells Fargo Amount $38,151,037 1,539 11,612 754,433 1,672,218 1,177,962 $41,768,801 $ $ Ratings as of Year-End AAA Unrated $38,151,037 796,354 796,354 1,539 11,612 754,433 875,864 1,177,962 $40,972,447 Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer. Investments in any one issuer are as follows: Issuer LGIP Fire Fighter Pension Plan: LGIP American Funds Linsco/Private Ledger JP Morgan Wells Fargo Investment Type State Investment Pool Reported Amount $38,151,037 State Investment Pool Money Market Money Market & Mutual Funds Money Market Money Market 1,539 11,612 754,433 1,672,218 1,177,962 $41,768,801 (continued) 51 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 3: Cash with Fiscal Agent In May 2005, the City purchased a Public Works Facility with issuance of lease purchase debt. A portion of the debt to be used for building improvements was placed in an interest bearing escrow account. Fund Type Capital - Development Description of Designated Capital Public Works Facility Balance at June 30, 2005 $874,013 In April 2005, the Mission Royale Community Facilities District issued long-term revenue obligations in which the funds received were placed with a third party trustee in an interest bearing escrow account. The purpose of the funds is to finance the construction of sewer line. Fund Type Capital - CFD Description of Designated Capital Sewer Line Balance at June 30, 2005 $1,177,962 In January 2005, the City issued long-term revenue obligations in which the funds received were placed with a third party trustee in an interest bearing escrow account. The funds are being used to finance the Wastewater Treatment Plant. Fund Type Enterprise - Wastewater Description of Designated Capital Wastewater Treatment Plant Balance at June 30, 2005 $796,354 During fiscal year 1998-99, the City issued long-term revenue obligations in which the funds received were placed with a third party trustee in an interest bearing escrow account. The purpose of the funds is to finance the acquisition, construction and equipping of recreational facilities. Fund Type Capital - Recreation Description of Designated Capital Recreation Facilities Balance at June 30, 2005 $558 (continued) 52 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 4: Receivables The following table summarizes the City’s governmental activities receivables as of June 30, 2005 General Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables $2,827,252 535,100 40,509 3,402,861 (14,308) $3,388,553 Special Revenue Debt Service Capital Internal Service $ 583,445 657,237 65,250 1,305,932 $118,407 387,748 7,106 513,261 $ 4,000 9,420 13,420 $ - $3,529,104 1,584,085 122,285 5,235,474 - - - - (14,308) $1,305,932 $513,261 $ - $5,221,166 $13,420 Total The following table summarizes the City’s business-type activities receivables as of June 30, 2005 Water Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables Wastewater Wastewater Dev Fees $ 21,812 21,812 $381,826 519,118 13,936 914,880 $ 26,062 26,062 (807) (477,563) - $21,005 $437,317 $26,062 Sanitation $ 676,763 4,892 681,655 (621,546) $60,109 Golf Course Total $ 991 991 $ 381,826 1,218,684 44,890 1,645,400 - (1,099,916) $991 $545,484 Revenues of wastewater and sanitation are reported net of uncollectible amounts. Total uncollectible amounts related to revenues of the current period are as follows: Uncollectibles related to wastewater Uncollectibles related to sanitation Total uncollectibles of the current fiscal year NOTE 5: $19,342 47,272 $66,614 Direct Loans The City issues loans to provide housing for low-income families, which are funded by Community Development Block Grants from the U.S. Department of Housing and Urban Development through the Arizona Department of Commerce. These loans are paid back on a monthly basis and have varying terms and maturity dates. At June 30, 2005, there were 71 of these loans outstanding, totaling $774,943. (continued) 53 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 6: Property Taxes Arizona Revised Statues require that property taxes be levied on or before the third Monday in August. Taxes are levied and collected by the Pinal County Treasurer on real and personal property. Real property taxes, payable in two installments, are due November 1 and May 1. Personal property taxes are billed throughout the year. Interest and penalties are assessed if a taxpayer fails to pay the tax within a period of time specified by law. Taxes are considered a lien against real property at the date of levy. The property tax levy as described in the Arizona Revised Statutes is divided into two levies, a limited levy known as the primary levy and an unlimited levy known as the secondary levy. The secondary taxes are levied strictly for the retirement and redemption of bond indebtedness, while the primary taxes are imposed for all purposes. The primary tax levy is limited to a 2% increase over the previous year’s maximum allowable primary levy plus an increased dollar amount due to a net gain in property not taxed the previous year. The primary levy is further limited in that the primary tax from all jurisdictions may not exceed 1% of the homeowner’s market value of the home. Secondary taxes are levied to retire voter approved general obligation bonds. The City’s 2004-2005 maximum primary levy limit was $2,599,279. The primary tax levy was $1,581,847. The City did not have a secondary tax levy. The City’s total tax levy for 2004-2005 was $1,581,847. Using the modified accrual basis of accounting, property tax revenue is recognized when it becomes both measurable and available to finance expenditures as of June 30, and expected to be collected within 60 days after year-end. Available means taxes due or past due at the end of the fiscal year. Deferred revenue includes the balance of the property tax levy that does not meet the accrual criteria. Property tax receivable and deferred revenue at June 30, 2005, are $30,879 and $7,318 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2005 follows: Enterprise Land Building & Improvements Machinery & Equipment Construction in Progress Total Capital Assets Less: accumulated depreciation Net Capital Assets Water $ 1,036,504 1,036,504 Wastewater $ 26,902,784 1,129,683 11,569,524 39,601,991 Sanitation $ 167,092 4,996,780 5,163,872 Golf Course $283,000 531,611 555,849 1,370,460 (184,544) (7,959,064) (2,779,502) (872,931) (11,796,041) $ 851,960 $31,642,927 $2,384,370 $497,529 $ 35,376,786 $ Total 283,000 27,601,487 7,718,816 11,569,524 47,172,827 (continued) 54 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 6: Property Taxes Arizona Revised Statues require that property taxes be levied on or before the third Monday in August. Taxes are levied and collected by the Pinal County Treasurer on real and personal property. Real property taxes, payable in two installments, are due November 1 and May 1. Personal property taxes are billed throughout the year. Interest and penalties are assessed if a taxpayer fails to pay the tax within a period of time specified by law. Taxes are considered a lien against real property at the date of levy. The property tax levy as described in the Arizona Revised Statutes is divided into two levies, a limited levy known as the primary levy and an unlimited levy known as the secondary levy. The secondary taxes are levied strictly for the retirement and redemption of bond indebtedness, while the primary taxes are imposed for all purposes. The primary tax levy is limited to a 2% increase over the previous year’s maximum allowable primary levy plus an increased dollar amount due to a net gain in property not taxed the previous year. The primary levy is further limited in that the primary tax from all jurisdictions may not exceed 1% of the homeowner’s market value of the home. Secondary taxes are levied to retire voter approved general obligation bonds. The City’s 2004-2005 maximum primary levy limit was $2,599,279. The primary tax levy was $1,581,847. The City did not have a secondary tax levy. The City’s total tax levy for 2004-2005 was $1,581,847. Using the modified accrual basis of accounting, property tax revenue is recognized when it becomes both measurable and available to finance expenditures as of June 30, and expected to be collected within 60 days after year-end. Available means taxes due or past due at the end of the fiscal year. Deferred revenue includes the balance of the property tax levy that does not meet the accrual criteria. Property tax receivable and deferred revenue at June 30, 2005, are $30,879 and $7,318 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2005 follows: Enterprise Land Building & Improvements Machinery & Equipment Construction in Progress Total Capital Assets Less: accumulated depreciation Net Capital Assets Water $ 1,036,504 1,036,504 Wastewater $ 26,902,784 1,129,683 11,569,524 39,601,991 Sanitation $ 167,092 4,996,780 5,163,872 Golf Course $283,000 531,611 555,849 1,370,460 (184,544) (7,959,064) (2,779,502) (872,931) (11,796,041) $ 851,960 $31,642,927 $2,384,370 $497,529 $ 35,376,786 $ Total 283,000 27,601,487 7,718,816 11,569,524 47,172,827 (continued) 54 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 7: Capital Assets (continued) Business-type capital assets changes in Accumulated Depreciation by class: Buildings Improvements Machinery & equipment Total Accumulated Depreciation Balance June 30, 2004 $ 98,564 7,090,065 3,324,593 $10,513,222 Additions $ 3,242 764,140 515,437 $1,282,819 Disposals $ $ - Balance June 30, 2005 $ 101,806 7,854,205 3,840,030 $11,796,041 A summary of changes in governmental activities capital assets follows: Land & construction in progress Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total General Capital Assets Balance June 30, 2004 $ 6,372,291 10,676,987 24,562,848 1,176,108 4,172,692 4,797,784 $51,758,710 Additions $ 2,923,926 11,601 6,164,983 231,884 537,397 511,050 $10,380,841 Retirement/ Balance Disposals June 30, 2005 $(48,000) $ 9,248,217 10,688,588 30,727,831 1,407,992 (27,952) 4,682,137 5,308,834 $(75,952) $62,063,599 Less Accumulated Depreciation for: Land & Construction in progress Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total Accumulated Depreciation Total General Capital Assets $ 4,210,787 6,016,896 674,267 3,316,240 3,067,969 17,286,159 $34,472,551 $ 437,588 1,395,611 96,431 191,159 453,473 2,574,262 $7,806,579 $ (27,952) (27,952) $(48,000) $ 4,648,375 7,412,507 770,698 3,507,399 3,493,490 19,832,469 $42,231,130 (continued) 55 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 7: Capital Assets (continued) The City had additions to contributed capital assets during the fiscal year 2004-2005. The Governmental Activities Capital Assets include a total of $5,853,927 in contributed capital assets. Depreciation Expense was charged to the functions/programs of the government as follows: Governmental Activities: General Government Public Safety Streets/Transportation Public Works Culture and Recreation Economic Development Internal Service Total Depreciation Expense Governmental Activities $ 59,717 447,831 1,035,471 43,638 494,045 478,181 15,379 $2,574,262 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 55,121 774,738 416,526 36,434 $1,282,819 Retirement and Pension Plans All full-time City employees are covered by one of two contributory retirement and pension plans, which are administered by the State of Arizona under State Statute. Part-time firefighters participate in the Casa Grande Part-time Firemen’s Pension Plan. The following summarizes each plan. (A) Arizona State Retirement Plan Plan Description. 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, Article 2. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. ASRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at ASRS, 3300 N. Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling 602-240-2200 or 1-800621-3778. (continued) 56 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 7: Capital Assets (continued) The City had additions to contributed capital assets during the fiscal year 2004-2005. The Governmental Activities Capital Assets include a total of $5,853,927 in contributed capital assets. Depreciation Expense was charged to the functions/programs of the government as follows: Governmental Activities: General Government Public Safety Streets/Transportation Public Works Culture and Recreation Economic Development Internal Service Total Depreciation Expense Governmental Activities $ 59,717 447,831 1,035,471 43,638 494,045 478,181 15,379 $2,574,262 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 55,121 774,738 416,526 36,434 $1,282,819 Retirement and Pension Plans All full-time City employees are covered by one of two contributory retirement and pension plans, which are administered by the State of Arizona under State Statute. Part-time firefighters participate in the Casa Grande Part-time Firemen’s Pension Plan. The following summarizes each plan. (A) Arizona State Retirement Plan Plan Description. 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, Article 2. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. ASRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at ASRS, 3300 N. Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling 602-240-2200 or 1-800621-3778. (continued) 56 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 8: Retirement and Pension Plans (continued) (A) Arizona State Retirement Plan (continued) Funding Policy. The Arizona State Legislature has the authority to establish and amend benefits provisions and contributions for active plan members. For the year ended June 30, 2005, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 5.7 percent (5.2 percent retirement and 0.5 percent long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2005, 2004 and 2003 were $529,908, $455,951 and $193,971, respectively, which were equal to the required contributions for those years. (B) Arizona Public Safety Personnel Retirement System Plan Description. The Public Safety Personnel Retirement System (PSPRS) is an agent multipleemployer 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 fivemember board, known as The Fund Manager, and 167 local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The City contributes to one PSPRS plan for police and one for fire fighters. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. PSPRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at PSPRS, 1020 E. Missouri Avenue, Phoenix, Arizona 85014. Funding Policy - The Arizona State Legislature has the authority to establish and amend benefits provisions and contributions for active plan members. For the year ended June 30, 2005 active PSPRS members were required by statute to contribute 7.65 percent of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 11.98 percent for police and 11.14 percent for fire. The City contributed the required amount. (continued) 57 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 8: Retirement and Pension Plans (continued) (B) Arizona Public Safety Personnel Retirement System (continued) Annual Pension Cost - The City’s pension cost for the year ended June 30, 2004, the date of the most recent actuarial valuation, and related information follow. Contribution rates: City 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 cost-of-living adjustments Amortization method Remaining amortization period from 7/1/00 Asset valuation method Post retirement benefit increases PSPRS - Police 11.98% 7.65% 343,162 343,162 June 30, 2004 Entry Age PSPRS - Fire 11.14% 7.65% 206,291 206,291 June 30, 2004 Entry Age 8.75% 6.5% - 9.5% 5.5% Level Percentage Open Open 20 Years Smoothed Market Based on Income 8.75% 6.5% - 9.5% 5.5% Level Percentage Open Open 20 Years Smoothed Market Based on Income Trend Information - Information of the PSPRS plan as of the most recent actuarial valuation follows: Plan PSPRS Police PSPRS - Fire Year Ended June 30 Annual Pension Cost (APC) Percentage of APC Contribution Net Pension Obligation 2004 $343,162 100% - 2003 220,533 100% - 2002 293,159 100% - 2004 $206,291 100% - 2003 114,978 100% - 2002 98,315 100% - (continued) 58 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 8: Retirement and Pension Plans (continued) (B) Arizona Public Safety Personnel Retirement System (continued) Funding progress - An analysis of funding progress for each of the plans as of the most recent actuarial valuations, June 30, 2004, follows: PSPR - Police Actuarial Valuation Date 6/30/04 6/30/03 6/30/02 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) (a) $12,673,016 12,533,116 12,256,912 (b) $15,091,351 13,648,927 12,301,470 (b-a) $2,418,335 1,115,811 44,558 Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (b) Funding Liability (Excess) (b-a) $8,640,456 8,024,641 7,266,996 $1,356,658 657,700 (105,482) Annual Covered Payroll Unfunded Liability as Percentage of Covered Payroll (c) $3,098,436 2,858,725 2,978,744 ([b-a]/c) 78.1% 39.0% 1.5% Funded Ratio (a/b) Annual Covered Payroll (c) Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) 84.3% 91.8% 101.5% $1,959,300 1,825,058 1,566,269 69.2% 36.0% - Funded Ratio (a/b) 83.9% 91.8% 99.6% PSPR – Fire Actuarial Valuation Date 6/30/04 6/30/03 6/30/02 $7,283,798 7,366,941 7,372,478 (C) Casa Grande Part-time Firemen’s Pension Plan The Casa Grande Part-time Firemen’s Pension Plan is a single-employer defined contribution plan, which was approved by the City Council on August 21, 1989, under Arizona Revised Statutes Section 9-981. The authority to establish and amend benefit provisions rests with the City Council. In December 1999, the council revised the pension and benefit program for the part-time firefighters. Of the City’s total payroll of $15,996,696 for the year ended June 30, 2005, $142,566 was covered by this plan. City Council establishes the required contribution for part-time firefighters along with the City’s match. Firefighters are required to contribute at least 5% of gross compensation with the City matching 5%. During the fiscal year, the employees contributed $7,129 (5%), and the City contributed $7,129 (5%), totaling $14,258. (continued) 59 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 8: Retirement and Pension Plans (continued) (C) Casa Grande Part-time Firemen’s Pension Plan (continued) Previous trend information is shown below: Part-time Firemen Fiscal Year June 30, 2002 2003 2004 Annual Pension Cost $10,386 6,387 7,117 Percent Contributed 100.0% 100.0% 100.0% The assets of the plan are valued annually and the earnings or loss is distributed among the participant’s accounts in the plan. The only expenditures being made from this fund are administration fees, retirement payments, and refunds to those firefighters who leave the service of the Fire Department before becoming eligible for pension benefits. The cost of administering the plan is financed from investment earnings. Retirement with full benefits can be at age fifty-five (55) or twenty years of credited service. Participants under the age of 55 are 30% vested with three years of credited service, with an increase of 10% per year thereafter until fully vested at 10 years of credited service. Participants with less than three years of credited service are not vested. As of June 30, 2005, there were 37 eligible employees participating in the plan. Of the 37 participants covered by the plan, there were 8 active members, 19 terminated members and 10 retirees. The vesting status for these members was 12 fully vested, 5 partially vested and 20 are nonvested. The plan is administered by The Innes Associates. As of June 30, 2005, the plan’s assets consisted of the following: Cash Money Market Funds Mutual Funds State Treasury Pool $ 4,831 11,612 754,433 1,539 Total Assets $772,415 During fiscal year 2000, the plan was revised to include a different vesting schedule. The old plan started vesting at five years of service and continuing until 100% vested after twenty years. The new plan starts vesting after three years of service and continuing until 100% vested after ten years of service. The plan has never had an actuarial valuation; however, benefits cannot exceed plan assets. The market values of mutual funds are determined from readily available market quotations. The fund uses the accrual basis of accounting. Contributions are recognized when earned; benefits and refunds are expensed when incurred. (continued) 60 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 9: Risk Management The City is exposed to various risks of loss, related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City’s liability risks are covered through membership in the Arizona Municipal Risk Retention Pool. The City is responsible for the first $10,000 of all insured claims inclusive of all loss adjustment expenses. Settled claims from these risks have not exceeded insurance coverage for the past five years. The City has $2 million general liability coverage with $10,000 deductible and a $10 million umbrella liability policy. The City continues to carry commercial insurance for all other risks of loss, including workers’ compensation, employee health and accident, airport activities and fuel use bond. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past four fiscal years. NOTE 10: Capital Leases Leases at June 30, 2005, included the following: Governmental activities – Lease with option to purchase Public Works Facility. Quarterly installments of $82,605 including interest of 4.887%, due through May 9, 2020. Lease with option to purchase 6 police vehicles. Quarterly installments of $12,821 including interest of 3.789%, due through August 20, 2006 $3,500,000 95,060 Lease with option to purchase 2 fuel trucks ($82,545 Airport) and 1 street sweeper ($95,245 Streets). Quarterly installments of $8,189 including interest of 4.461%, due through August 20, 2010. 153,455 Lease with option to purchase Airport T-hangers. Quarterly installments of $22,944 including interest of 5.081%, due through August 20, 2013. 581,707 Lease with option to purchase fire truck and police dept. parking lot. Quarterly installments of $32,198, including interest at 4.48%, due through July 5, 2006. 155,711 Total Governmental Activities Capital Lease Obligation 4,485,933 Business-Type Activities: Wastewater: Lease with option to purchase sewer line. Monthly installments of $6,621 including interest at 5.02% due through June 12, 2006. Total Wastewater 77,331 77,331 (continued) 61 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 9: Risk Management The City is exposed to various risks of loss, related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City’s liability risks are covered through membership in the Arizona Municipal Risk Retention Pool. The City is responsible for the first $10,000 of all insured claims inclusive of all loss adjustment expenses. Settled claims from these risks have not exceeded insurance coverage for the past five years. The City has $2 million general liability coverage with $10,000 deductible and a $10 million umbrella liability policy. The City continues to carry commercial insurance for all other risks of loss, including workers’ compensation, employee health and accident, airport activities and fuel use bond. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past four fiscal years. NOTE 10: Capital Leases Leases at June 30, 2005, included the following: Governmental activities – Lease with option to purchase Public Works Facility. Quarterly installments of $82,605 including interest of 4.887%, due through May 9, 2020. Lease with option to purchase 6 police vehicles. Quarterly installments of $12,821 including interest of 3.789%, due through August 20, 2006 $3,500,000 95,060 Lease with option to purchase 2 fuel trucks ($82,545 Airport) and 1 street sweeper ($95,245 Streets). Quarterly installments of $8,189 including interest of 4.461%, due through August 20, 2010. 153,455 Lease with option to purchase Airport T-hangers. Quarterly installments of $22,944 including interest of 5.081%, due through August 20, 2013. 581,707 Lease with option to purchase fire truck and police dept. parking lot. Quarterly installments of $32,198, including interest at 4.48%, due through July 5, 2006. 155,711 Total Governmental Activities Capital Lease Obligation 4,485,933 Business-Type Activities: Wastewater: Lease with option to purchase sewer line. Monthly installments of $6,621 including interest at 5.02% due through June 12, 2006. Total Wastewater 77,331 77,331 (continued) 61 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 10: Capital Leases (continued) Sanitation: Lease with option to purchase Tractor and Compactor. Quarterly installments of $24,795, including interest at 3.685%, due through September 3, 2009. Lease with option to purchase a garbage truck. Monthly installments of $6,868, including interest at 4.461%, due through August 20, 2010. Total Sanitation $388,508 127,956 516,464 Total Business-type Activities Capital Lease Obligation Total Long-Term Lease Payable 593,795 $5,079,728 The future minimum lease payments by year are: Fiscal Year Ending June 30, 2006 2007 2008 2009 2010 2011-2015 2016-2020 Governmental Activities $ 635,024 499,968 454,950 454,950 454,950 1,958,561 1,652,097 Business-type Activities $206,103 126,651 126,651 126,651 52,267 6,868 - Total $ 841,127 626,619 581,601 581,601 507,217 1,965,429 1,652,097 6,110,500 (1,624,567) 645,191 (51,396) 6,755,691 (1,675,963) 4,485,933 (424,114) $4,061,819 593,795 (185,504) $408,291 5,079,728 (609,618) $4,470,110 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion (continued) 62 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 10: Capital Leases (continued) Leased Capital Assets The following is an analysis of the leased assets included in capital assets: Cost Building and Improvements: Governmental Activities Assets Business-type Activities Assets: Wastewater Total Building and Improvement Machinery and Equipment Governmental Activities Assets Business-type Activities Assets: Sanitation Total Machinery and Equipment Total Leased Capital Assets Accumulated Depreciation Net Balance $3,444,539 $(41,835) $3,402,704 350,000 3,794,539 (70,000) (111,835) 280,000 3,682,704 738,261 (228,140) 510,121 743,265 1,481,526 $5,276,065 (115,835) (343,975) $(455,810) 627,430 1,137,551 $4,820,255 A portion of the Public Works Facility lease ($874,013) has not been spent and will be used for building improvements. NOTE 11: Bond Debt A summary of long-term bond debt transactions for the year ended June 30, 2005, follows: Governmental Activities General obligation bonds Special assessment bonds Total Bonds Outstanding Balance July 1, 2004 $ 685,000 $685,000 Issued $1,335,000 $1,335,000 Retired $ (100,000) $(100,000) Balance June 30, 2005 $1,335,000 585,000 $1,920,000 Summarization of the long-term bond debt payable at June 30, 2005, follows: Original Issue Amount $1,335,000 Bond Description General obligation Special Assessment: ID #38 1,030,000 Total Bonds Outstanding Amount of Interest Installment Rate $35,000 – 105,000 5.10% - 5.80% 75,000 - 130,000 5.40% Date of Final Payment 07/15/29 Balance June 30, 2005 $1,335,000 01/01/10 585,000 $1,920,000 (continued) 63 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 10: Capital Leases (continued) Leased Capital Assets The following is an analysis of the leased assets included in capital assets: Cost Building and Improvements: Governmental Activities Assets Business-type Activities Assets: Wastewater Total Building and Improvement Machinery and Equipment Governmental Activities Assets Business-type Activities Assets: Sanitation Total Machinery and Equipment Total Leased Capital Assets Accumulated Depreciation Net Balance $3,444,539 $(41,835) $3,402,704 350,000 3,794,539 (70,000) (111,835) 280,000 3,682,704 738,261 (228,140) 510,121 743,265 1,481,526 $5,276,065 (115,835) (343,975) $(455,810) 627,430 1,137,551 $4,820,255 A portion of the Public Works Facility lease ($874,013) has not been spent and will be used for building improvements. NOTE 11: Bond Debt A summary of long-term bond debt transactions for the year ended June 30, 2005, follows: Governmental Activities General obligation bonds Special assessment bonds Total Bonds Outstanding Balance July 1, 2004 $ 685,000 $685,000 Issued $1,335,000 $1,335,000 Retired $ (100,000) $(100,000) Balance June 30, 2005 $1,335,000 585,000 $1,920,000 Summarization of the long-term bond debt payable at June 30, 2005, follows: Original Issue Amount $1,335,000 Bond Description General obligation Special Assessment: ID #38 1,030,000 Total Bonds Outstanding Amount of Interest Installment Rate $35,000 – 105,000 5.10% - 5.80% 75,000 - 130,000 5.40% Date of Final Payment 07/15/29 Balance June 30, 2005 $1,335,000 01/01/10 585,000 $1,920,000 (continued) 63 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 11: Bond Debt (continued) The following table summarizes the City’s future bond debt service requirements as of June 30, 2005: Year Ending June 30, 2006 2007 2008 2009 2010 2011-2015 2016-2020 2021-2025 2026-2029 General Obligation Bonds (1) Bonds Interest $ 35,000 210,000 270,000 355,000 465,000 $1,335,000 Special Assessment Fund (2) Bonds Interest $52,780 73,932 73,932 73,932 73,040 334,729 272,551 187,189 70,615 $1,212,700 $ 105,000 110,000 115,000 125,000 130,000 $585,000 $31,590 25,920 19,980 13,770 7,020 $98,280 Total Bonds Interest $105,000 110,000 115,000 125,000 165,000 210,000 270,000 355,000 465,000 $1,920,000 $ 84,370 99,852 93,912 87,702 80,060 334,729 272,551 187,189 70,615 $1,310,980 1) Community Facilities Districts (CFDs), special purpose districts created specifically to acquire or construct public infrastructure within specified areas of the City, are authorized under state law to issue General Obligation (GO) bonds to be repaid by property taxes levied on property within the district. CFDs are created by petition to the City Council by property owners within the area to be covered by the district and debt may be issued only after approval of the voters within the district. In April 2005 the Mission Royale Community Facilities District issued $1,335,000 of General Obligation bonds to finance the construction of a sewer line. These bonds will be repaid by the property owners within Mission Royale CFD. The bonds are obligations of the district only. The City has no obligation for the debt other than the administration of the collection of the property taxes and payment of the debt service on behalf of Mission Royale. 2) The Special Assessment Bonds are secured and payable from special assessments levied against the real property benefited by said improvements. If the assessments are not paid, the properties subject to such assessments are sold at auction. If there is no purchaser for any property offered for sale, the City will get ownership of the property subject to any tax liens and will be liable for the remaining debt. The City Council is required to appropriate from the General Fund of the City the amount of the total unpaid assessments or the amount of each semiannual assessment until the total debt is paid. (continued) 64 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 12: Excise Tax Revenue Obligations In October 1997, the City issued $3,590,000 of Excise Tax Revenue Obligations Series 1997 to finance the restoration of a 1921 vintage school building for use as a new City Hall. The 20-year revenue obligations have interest rates that range from 4.80 to 6.00 percent. Principal payments ranging from $110,000 to $290,000 are paid annually with interest paid semiannually on April 1, and October 1. In April 1999, the City issued $5,000,000 of Excise Tax Revenue Obligations Series 1999 to finance the acquisition, construction and equipping of two public recreational complexes and improvements to existing recreational facilities. The 15-year revenue obligations have interest rates that range from 4.40 to 4.80 percent. Principal payments ranging from $200,000 to $410,000 are paid annually with interest paid semiannually on April 1, and October 1. On December 1, 2003, the City issued $18,120,000 of Excise Tax Revenue Obligations Series 2003. The 20-year revenue obligations have interest rates that range from 2.00 to 5.00 percent. Principal payments ranging from $780,000 to $1,600,000 are paid annually on April 1. $9,300,000 will continue to finance the construction of a wastewater treatment plant. $8,820,000 was used to advance refund $4,560,000 of Series 1994 and $3,830,000 of Series 1995 Excise Tax Revenue Obligations with interest rates ranging from 4.35 to 6.00 and 5.00 to 6.20 percent, respectively. The net proceeds of $8,806,159 (after payment of $447,866 in underwriting fees, insurance and other issuance costs and receipt of $434,025 in premium) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service on the 1994 and 1995 obligations. As a result, the 1994 and 1995 obligations referred to above are considered to be defeased and the liability for those bonds has been removed from the government-wide statement of net assets. There is no outstanding balance on these bonds as of June 30, 2005. The advance refunding resulted in a difference of $423,720 between the reacquisition price and the net carrying amount of the old debt. This difference is being charged to operations through the year 2015 using the straight-line amortization method. The 1997, 1999, and 2003 revenue obligations are secured by a pledge of and first lien on all excise, transaction, franchise, privilege and business taxes, state shared sales and income taxes, fees for licenses and permits and state revenue sharing which the City presently or in the future validly imposes or receives from other entities. (continued) 65 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 12: Excise Tax Revenue Obligations (continued) The following table summarizes the City’s future revenue obligation debt service requirements as of June 30, 2005: Year Ending June 30, 2006 2007 2008 2009 2010 2011-2015 2016-2020 2021-2022 NOTE 13: Governmental Activities Principal Interest $ 470,640 $ 364,044 496,455 340,997 522,270 316,311 543,900 292,501 565,530 267,979 3,264,954 925,328 1,545,094 226,318 279,740 20,518 $7,688,583 $2,753,996 Business-type Activities Principal Interest $ 514,360 $ 658,208 523,545 646,635 532,730 633,546 551,100 618,896 569,470 602,363 3,155,049 2,687,174 6,424,909 1,832,363 3,155,074 231,233 $15,426,237 $7,910,418 Total Principal Interest $ 985,000 $ 1,022,252 1,020,000 987,632 1,055,000 949,857 1,095,000 911,397 1,135,000 870,342 6,420,003 3,612,502 7,970,003 2,058,681 3,434,814 251,751 $23,114,820 $10,664,414 Changes in Long-Term Obligations Governmental Activities: Compensated absences Bonds payable Excise tax revenue obligations Capital leases Total Governmental Activities Balance July 1, 2004 $ 635,402 685,000 8,138,000 1,236,062 $10,694,464 Business-type Activities: Capital leases Excise tax revenue obligations Notes payable (1) Total Business-type Activities Balance July 1, 2004 $ 404,534 15,926,820 178,170 $16,509,524 Obligations Incurred $ 746,938 1,335,000 3,500,000 $5,581,938 Additions $451,000 $451,000 Obligations Paid $ (749,678) (100,000) (449,417) (250,129) $(1,549,224) Reductions $(261,739) (500,583) (870) $(763,192) Balance June 30, 2005 $ 632,662 1,920,000 7,688,583 4,485,933 $14,727,178 Balance June 30, 2005 $ 593,795 15,426,237 177,300 $16,197,332 Amounts Due Within One Year $ 632,662 105,000 470,640 424,114 $1,632,416 Amounts Due Within One Year $185,504 514,360 9,231 $709,095 (1) In January, 2002 the Water Fund received financing from the Water Infrastructure Finance Authority of Arizona. The note is paid semi-annually until July 2019. (continued) 66 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 12: Excise Tax Revenue Obligations (continued) The following table summarizes the City’s future revenue obligation debt service requirements as of June 30, 2005: Year Ending June 30, 2006 2007 2008 2009 2010 2011-2015 2016-2020 2021-2022 NOTE 13: Governmental Activities Principal Interest $ 470,640 $ 364,044 496,455 340,997 522,270 316,311 543,900 292,501 565,530 267,979 3,264,954 925,328 1,545,094 226,318 279,740 20,518 $7,688,583 $2,753,996 Business-type Activities Principal Interest $ 514,360 $ 658,208 523,545 646,635 532,730 633,546 551,100 618,896 569,470 602,363 3,155,049 2,687,174 6,424,909 1,832,363 3,155,074 231,233 $15,426,237 $7,910,418 Total Principal Interest $ 985,000 $ 1,022,252 1,020,000 987,632 1,055,000 949,857 1,095,000 911,397 1,135,000 870,342 6,420,003 3,612,502 7,970,003 2,058,681 3,434,814 251,751 $23,114,820 $10,664,414 Changes in Long-Term Obligations Governmental Activities: Compensated absences Bonds payable Excise tax revenue obligations Capital leases Total Governmental Activities Balance July 1, 2004 $ 635,402 685,000 8,138,000 1,236,062 $10,694,464 Business-type Activities: Capital leases Excise tax revenue obligations Notes payable (1) Total Business-type Activities Balance July 1, 2004 $ 404,534 15,926,820 178,170 $16,509,524 Obligations Incurred $ 746,938 1,335,000 3,500,000 $5,581,938 Additions $451,000 $451,000 Obligations Paid $ (749,678) (100,000) (449,417) (250,129) $(1,549,224) Reductions $(261,739) (500,583) (870) $(763,192) Balance June 30, 2005 $ 632,662 1,920,000 7,688,583 4,485,933 $14,727,178 Balance June 30, 2005 $ 593,795 15,426,237 177,300 $16,197,332 Amounts Due Within One Year $ 632,662 105,000 470,640 424,114 $1,632,416 Amounts Due Within One Year $185,504 514,360 9,231 $709,095 (1) In January, 2002 the Water Fund received financing from the Water Infrastructure Finance Authority of Arizona. The note is paid semi-annually until July 2019. (continued) 66 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 14: Long-Term Debt The following summarizes the annual debt service requirements to maturity for all long-term debt excluding compensated absences, including interest of $13,700,889: Year Ending June 30, 2006 2007 2008 2009 2010 2011-2015 2016-2020 2021-2025 2026-2029 NOTE 15: Governmental Activities Principal Interest $ 999,754 $ 659,024 914,088 633,184 913,454 588,989 958,827 545,225 1,034,886 498,633 4,900,532 1,793,040 3,273,235 693,126 634,740 207,707 465,000 70,615 $14,094,516 $5,689,543 Business-type Activities Principal Interest $ 709,096 $ 684,741 645,486 666,506 659,383 648,699 682,649 629,147 631,034 608,210 3,220,383 2,704,326 6,494,227 1,838,484 3,155,074 231,233 $16,197,332 $8,011,346 Total Principal $ 1,708,850 1,559,574 1,572,837 1,641,476 1,665,920 8,120,915 9,767,462 3,789,814 465,000 $30,291,848 Landfill Closure and Postclosure Care Costs The U.S. Environmental Protection Agency and the Arizona Department of Environmental Quality require municipal solid waste landfill (MSWLF) owners and operators to provide for landfill closure and postclosure care costs. The City of Casa Grande owns and operates one landfill. Closure and postclosure care costs include cost of equipment expected to be installed and facilities expected to be constructed, cost of final cover and cost of monitoring and maintaining the expected useable MSWLF area. These costs are expected to be paid near or after the date that the MSWLF stops accepting solid waste and during the postclosure period. The Environmental Protection Agency has established the postclosure period to be 30 years. Closure and postclosure care costs are recognized in the current period based on landfill capacity used to date. On June 30, 2005 the City has reported a $1,504,589 landfill closure and postclosure care liability that represents the total current cost based on 37.98 percent of estimated capacity of the landfill. The remaining cost of $2,457,086 will be recognized in the future periods as the remaining capacity is filled. The City expects the remaining capacity to extend for 25 years, which will be through the year 2030. Total closure and postclosure costs are based on current costs, and are reevaluated annually for changes in inflation or deflation, technology, and applicable laws or regulations. The 2005 valuation of the total closure and postclosure costs were estimated to be $3,961,675. (continued) 67 Table of Contents C I T Y O F C A S A G R A N D E, A R I Z O N A NOTES TO FINANCIAL STATEMENTS June 30, 2005 NOTE 16: Summary of Interfund Transactions Interfund transactions as of June 30, 2005, were as follows: Interfund Receivable/Payable: Receivable Amount $290,000 Fund General Special Revenue Fund: Home/HUD Enterprise Fund - Golf Course Total $290,000 Payable Amount $ 100,000 190,000 $290,000 The interfund balances at June 30, 2005 are short-term loans to cover temporary cash deficits in various funds. Transfers: Fund Governmental Funds: General Highway Users Grants System Development Capital Replacement Other Non-major Governmental Total Governmental Funds Enterprise Funds: Water Golf Course Wastewater Sanitation Total Enterprise Funds Internal Service Fund Grand Totals Transfers Out Transfers In $1,346,358 218,118 942,000 24,356 2,530,832 $1,132,100 122,254 1,116,518 315,760 2,686,632 10,900 67,800 103,700 292,700 475,100 376,100 376,100 56,800 $3,062,732 $3,062,732 There were no significant transfers during fiscal year 2005 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. 68 Table of Contents City of Casa Grande Com bining Balance She e t Non-M ajor Gove r nm e ntal Funds June 30, 2005 Spe cial Re ve nue ASSETS Cash Investments Receivables (less allow ance f or uncollectibles) Due f rom other governments Fuel Inventory Restricted cash Total as s e ts LIABILITIES AND FUND BALANCES Liabilitie s : A ccounts payable and other current liabilities A ccrued w ages and benef its Total liabilitie s Fund balance s : Reserved f or: Special revenue Debt service Unreserved, reported in: Special revenue f unds Capital projects f unds Total fund balance s Total liabilitie s and fund balance M unicipal Air port $ 15,585 188,197 Par k s De ve lop. $ 18,997 36,312 66,037 32,519 $ 302,338 210 $ 55,519 $ $ 47,001 1,476 48,477 $ $ 28 Com m unity Ar ts $ 517 467 Re de ve lopm e nt $ 9,090 1,456,728 Pr om otion & Touris m $ 32,647 - Cour t Enhance m e nt $ 13,978 214,808 6 990 10,933 $ 1,476,751 $ 12,095 44,742 906 229,692 - $ $ 28 - - 253,861 253,861 55,491 55,491 $ 302,338 $ 55,519 69 - $ 182 182 - 990 990 1,476,569 1,476,569 990 $ 1,476,751 2,083 2,083 $ $ - - 42,659 42,659 $ 44,742 - 229,692 229,692 $ 229,692 Table of Contents Total Spe cial Re ve nue De bt Se r vice Hous ing Progr am s $ 149,013 92,211 Public Safe ty Pr ogram s $ 1,970 24,576 389 $ 241,613 $ 97 26,643 $ $ 49 49 241,564 241,564 $ 241,613 $ 305 305 Re cr e ation $ 238,625 729,153 Re cr e ation Im pr ove m e nt $ 598 - Air por t Im pr ove m e nt $ 14,030 - - 121,484 $ 1,089,262 $ 558 1,156 59,482 73,512 - $ $ Re de ve lopm e nt $ - $ $ Nonm ajor Capital Proje cts - - $ $ 73,512 73,512 Gove r nm e ntal Funds $ 495,050 2,742,452 $ $ 212,157 59,482 32,519 558 3,542,218 123,160 1,476 124,636 26,338 - - 1,089,262 - - 26,338 1,089,262 26,338 - 1,089,262 1,156 1,156 - 2,300,826 1,156 3,417,582 - $ 1,089,262 26,643 $ 70 $ 1,156 $ 73,512 $ 3,542,218 Table of Contents City of Casa Grande Com bining State m e nt of Re ve nue s , Expe nditur e s , and Change s in Fund Balance s Non-M ajor Gove r nm e ntal Funds For the Ye ar Ende d June 30, 2005 Spe cial Re ve nue REV ENUES Taxes: Property taxes Sales Tax Intergovernmental revenues Charges f or services Investment earnings Rental and sale of city property Miscellaneous Total re ve nue s EXPENDITURES Current: General government Public saf ety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and f iscal charges Total e xpe nditur e s Exce s s (de ficie ncy) of re ve nue s ove r (unde r) e xpe nditur e s OTHER FINANCING SOURCES (USES) Transf ers in Transf ers out Total othe r financing s our ce s and us e s Ne t change in fund balance s Fund balance s - be ginning of ye ar Fund balance s - e nd of ye ar M unicipal Air port Par k s De ve lop. $ $ 231 500,348 434,910 935,489 29,604 805 39,705 70,114 Com m unity Arts $ - Re de ve lopm e nt $ 29 531,301 24,489 94,995 650,785 29 - Pr om otion & Touris m $ 97,512 97,512 Cour t Enhance m e nt $ 9,725 45,771 3,976 59,472 487,522 - 42,017 - 5,569 - 86,916 10,330 80,000 - 6,375 - 70,354 36,630 594,506 42,017 5,569 97,246 80,000 6,375 340,983 28,097 (5,540) 553,539 17,512 53,097 28,097 27,394 $ 55,491 5,000 5,000 (540) 1,530 990 553,539 923,030 $ 1,476,569 17,512 25,147 42,659 53,097 176,595 229,692 (24,355) (24,355) 316,628 (62,767) $ 253,861 71 $ $ $ Table of Contents Spe cial Re ve nue De bt Se rvice Hous ing Pr ogram s Public Safe ty Pr ogram s Re de ve lopm e nt Re cr e ation $ $ $ $ 138,215 1,835 140,050 463 13,389 13,852 - 692,741 14,552 707,293 56,368 - 12,776 - 2,700 - 56,368 12,776 155,000 148,050 305,750 250,000 178,625 428,625 83,682 1,076 (305,750) 278,668 83,682 157,882 $ 241,564 1,076 25,262 26,338 305,605 305,605 (145) 145 - 278,668 810,594 1,089,262 $ $ Re cr e ation Im pr ove m e nt $ 72 - Airpor t Im pr ove m e nt Gove r nm e ntal Funds $ $ 54 54 - $ Total Nonm ajor Capital Pr oje cts 531,301 790,253 106,193 183,986 46,434 595,343 488,004 2,741,514 - 73,511 567,522 19,151 47,586 145,984 83,841 - 73,511 475,354 363,305 1,702,743 54 (6,647) 1,038,771 54 1,102 1,156 5,155 5,155 (1,492) 1,492 - 315,760 (24,355) 291,405 1,330,176 2,087,406 3,417,582 - $ 66,864 66,864 $ $ Table of Contents City of Ca sa Gra nde Special Assessm ents Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Special as s es s m ents Inves tm ent earnings Total revenues $ EXPENDITURES Current: Contractual s ervices Debt Service Principal retirem ent Interes t Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 140,200 2,000 142,200 $ Actual Am ounts $ 217,895 18,562 236,457 5,200 5,400 3,240 100,000 37,000 142,200 100,000 37,000 142,400 100,000 36,990 140,230 10 2,170 96,227 96,227 - $ Final 140,200 2,200 142,400 Variance w ith Final BudgetPositive (Negative) $ 77,695 16,362 94,057 - - $ 73 - $ 881,540 977,767 2,160 - $ 881,540 977,767 Table of Contents City of Ca sa Gra nde Capital Replacem ent/Developm ent Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Inves tm ent earnings Total revenues EXPENDITURES Materials and s upplies Capital outlay Total expenditures $ Original - $ Final - Actual Am ounts $ 30,662 30,662 Variance w ith Final BudgetPositive (Negative) $ 30,662 30,662 6,470,000 6,470,000 1,500 5,751,300 5,752,800 1,477 3,231,167 3,232,644 23 2,520,133 2,520,156 Excess (deficiency) of revenues over (under) expenditures (6,470,000) (5,752,800) (3,201,982) 2,550,818 OTHER FINANCING SOURCES (USES) Trans fers in Proceeds from obligations Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year 542,400 5,500,000 6,042,400 (427,600) 427,600 $ - 319,100 5,500,000 5,819,100 66,300 (66,300) $ - 1,116,518 3,500,000 4,616,518 1,414,536 1,063,573 2,478,109 74 $ 797,418 (2,000,000) (1,202,582) 1,348,236 1,129,873 $ 2,478,109 Table of Contents City of Ca sa Gra nde Com m unity Facilities District - Mission Royale - Capital Projects Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Sewer Capacity Fees Inves tm ent Earnings Total revenues Original $ - EXPENDITURES Contractual s ervices Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Bond Is s uance Bond Is s uance Cos ts Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ $ Final - Actual Amounts $ 2,250,554 4,800 2,255,354 Variance w ith Final BudgetPositive (Negative) $ 2,250,554 4,800 2,255,354 - - 22 34,943 - - 34,965 - - 2,220,389 2,220,389 - - 1,335,000 (159,557) 1,175,443 3,395,832 3,395,832 1,335,000 (159,557) 1,175,443 3,395,832 3,395,832 - 75 $ - $ (22) (34,943) (34,965) $ Table of Contents City of Ca sa Gra nde Municipal Airport Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Inves tm ent earnings Rental and s ale of city property Mis cellaneous Total revenues EXPENDITURES Current: General governm ent: Pers onal s ervices Contractual s ervices Materials and s upplies Debt s ervice Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ 1,500 455,000 1,000 457,500 Variance w ith Final BudgetPositive (Negative) $ (1,269) 45,348 433,910 477,989 Final 1,500 455,000 1,000 457,500 Actual Am ounts $ 231 500,348 434,910 935,489 121,600 36,800 331,800 107,000 597,200 121,571 34,649 331,302 106,984 594,506 29 2,151 498 16 2,694 (3,100) (139,700) 340,983 480,683 (19,200) (19,200) (22,300) 22,300 $ - (24,400) (24,400) (164,100) 164,100 $ - (24,355) (24,355) 316,628 (62,767) 253,861 45 45 480,728 (226,867) 253,861 114,000 20,400 219,200 107,000 460,600 76 $ $ $ Table of Contents City of Ca sa Gra nde Parks Developm ent Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Inves tm ent earnings Mis cellaneous Intergovernm ental Total revenues $ EXPENDITURES Current: Culture and recreation: Contractual s ervices Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 2,200 25,000 27,200 $ Final 2,200 25,000 27,200 Actual Am ounts $ 805 39,705 29,604 70,114 Variance w ith Final BudgetPositive (Negative) $ (1,395) 14,705 29,604 42,914 27,200 27,200 43,000 43,000 42,017 42,017 983 983 - (15,800) 28,097 43,897 - $ 77 15,800 - $ 27,394 55,491 $ 11,594 55,491 Table of Contents City of Ca sa Gra nde Com m unity Arts Reserve Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Actual Am ounts $ 29 29 Variance w ith Final BudgetPositive (Negative) $ 29 29 Budgeted Am ounts REVENUES Inves tm ent earnings Total revenues EXPENDITURES Current: Culture and recreation: Contractual s ervices Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ - $ Final - 2,100 25,500 27,600 2,300 25,300 27,600 5,569 5,569 (3,269) 25,300 22,031 (27,600) (27,600) (5,540) 22,060 5,000 5,000 (22,600) 22,600 $ - (5,000) (5,000) (32,600) 32,600 $ - 5,000 5,000 (540) 1,530 990 10,000 10,000 32,060 (31,070) 990 78 $ $ Table of Contents City of Ca sa Gra nde Redevelopm ent/Dow ntow n Revitalization Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Local taxes Inves tm ent earnings Rental and s ale of city property Total revenues $ EXPENDITURES Current: Econom ic developm ent: Contractual s ervices Materials and s upplies Capital outlay Debt s ervice Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 135,000 75,000 210,000 $ Final 135,000 75,000 210,000 117,000 7,000 510,000 40,000 674,000 141,300 22,700 470,000 40,000 674,000 (464,000) (464,000) 464,000 - 79 $ 464,000 - Actual Am ounts $ 531,301 24,489 94,995 650,785 $ Variance w ith Final BudgetPositive (Negative) $ 396,301 24,489 19,995 440,785 64,229 22,687 10,330 97,246 77,071 13 459,670 40,000 576,754 553,539 1,017,539 923,030 1,476,569 $ 459,030 1,476,569 Table of Contents City of Ca sa Gra nde Promotion and Tourism Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Local taxes Total revenues Original $ 85,000 85,000 Final $ 85,000 85,000 Actual Am ounts $ 97,512 97,512 85,000 85,000 85,000 85,000 80,000 80,000 5,000 5,000 - - 17,512 17,512 EXPENDITURES Current: General governm ent Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Variance w ith Final BudgetPositive (Negative) $ 12,512 12,512 $ - $ 80 - $ 25,147 42,659 $ 25,147 42,659 Table of Contents City of Ca sa Gra nde Court Enhancement/Probationary Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Intergovernm ental Charges for s ervices Inves tm ent earnings Total revenues $ EXPENDITURES Current: Public s afety: Contractual s ervices Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 6,000 55,000 1,500 62,500 $ Final 6,000 55,000 1,500 62,500 60,000 160,000 220,000 66,400 153,600 220,000 (157,500) (157,500) 157,500 - 81 $ 157,500 - Actual Am ounts $ 9,725 45,771 3,976 59,472 $ Variance w ith Final BudgetPositive (Negative) $ 3,725 (9,229) 2,476 (3,028) 6,375 6,375 60,025 153,600 213,625 53,097 210,597 176,595 229,692 $ 19,095 229,692 Table of Contents City of Ca sa Gra nde Housing Application and Developm ent Fees Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Charges for s ervice Inves tm ent earnings Total revenues Original $ 84,300 84,300 Final $ 84,300 84,300 Actual Am ounts $ 138,215 1,835 140,050 5,000 77,000 2,300 84,300 5,000 77,000 2,300 84,300 1,851 52,612 1,905 56,368 3,149 24,388 395 27,932 - - 83,682 83,682 EXPENDITURES Current: Econom ic developm ent: Pers onal s ervices Contractual s ervices Materials and s upplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Variance w ith Final BudgetPositive (Negative) $ 53,915 1,835 55,750 $ - $ 82 - $ 157,882 241,564 $ 157,882 241,564 Table of Contents City of Ca sa Gra nde Public Safety Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Inves tm ent earnings Contributions Total revenues $ EXPENDITURES Current: Public s afety activities Total expenditures Final $ 10,000 10,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 200 9,800 10,000 - 83 Actual Am ounts $ 463 13,389 13,852 12,900 12,900 - $ 200 12,700 12,900 - $ - $ Variance w ith Final BudgetPositive (Negative) $ 263 689 952 12,776 12,776 124 124 1,076 1,076 25,262 26,338 $ 25,262 26,338 Table of Contents City of Ca sa Gra nde Redevelopm ent Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Total revenues EXPENDITURES Current: Contractual s ervices Debt s ervice: Principal Interes t and fis cal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Original $ - $ Final - Actual Am ounts $ - Variance w ith Final BudgetPositive (Negative) $ - 2,500 2,700 2,700 - 155,000 148,100 305,600 155,000 148,100 305,800 155,000 148,050 305,750 - (305,600) (305,800) (305,750) 50 305,605 305,605 (145) 145 - (195) (195) (145) 145 - OTHER FINANCING SOURCES (USES) Trans fers in 305,600 Total other financing sources and uses 305,600 Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ - 84 305,800 305,800 $ - $ 50 50 $ Table of Contents City of Ca sa Gra nde Recreation Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Local taxes Inves tm ent earnings Total revenues Original $ 434,600 434,600 Final $ 434,600 434,600 6,000 5,900 250,000 178,600 434,600 250,000 178,700 434,600 EXPENDITURES Current: Contractual s ervices Debt Service: Principal retirem ent Interes t Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year - $ Actual Am ounts $ 692,741 14,552 707,293 - - - $ 85 - $ Variance w ith Final BudgetPositive (Negative) $ 258,141 14,552 272,693 5,900 250,000 178,625 428,625 75 5,975 278,668 278,668 810,594 1,089,262 810,594 $ 1,089,262 Table of Contents City of Ca sa Gra nde Recreation Improvem ents Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts REVENUES Inves tm ent earnings Total revenues Original $ - EXPENDITURES Contractual s ervices Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ $ Final - - - - - - $ 86 - Actual Am ounts $ 54 54 Variance w ith Final BudgetPositive (Negative) $ 54 54 - - 54 $ 1,102 1,156 54 $ 1,102 1,156 Table of Contents City of Ca sa Gra nde Airport Improvem ent Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2005 Budgeted Amounts REVENUES Intergovernm ental revenues Total revenues Original $ - EXPENDITURES Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Trans fers in Total other financing sources and uses Net change in fund balances Fund balance - beginning of year Fund balance - end of year $ $ Final - Actual Am ounts $ 66,864 66,864 Variance w ith Final BudgetPositive (Negative) $ 66,864 66,864 - 73,600 73,600 - (73,600) (6,647) 66,953 - 73,600 73,600 - 5,155 5,155 (1,492) (68,445) (68,445) (1,492) - 87 $ - 73,511 73,511 $ 1,492 - 89 89 $ 1,492 - Table of Contents City of Ca sa Gra nde Statem ent of Net Assets Internal Service Fund June 30, 2005 ASSETS Equipm ent Mechanics Current as s ets : Cas h Prepaid expens e Inventories Total current as s ets Capital as s ets : Buildings and im provem ents Machinery and equipm ent Les s accum ulated depreciation Total capital as s ets , net Total assets $ $ LIABILITIES Current liabilities : Accounts payable Accrued wages and benefits Com pens ated abs ences Total current liabilities Total liabilities $ NET ASSETS Unres tricted Total net assets $ 88 16,510 1,629 131,283 149,422 52,354 193,016 (189,049) 56,321 205,743 36,736 4,570 6,344 47,650 47,650 158,093 158,093 Table of Contents City of Ca sa Gra nde Statem ent of Revenues, Expenses, and Changes in Fund Net Assets Internal Service Fund For the Year Ended June 30, 2005 Equipm ent Mechanics Operating revenues: Charges for s ervices Total operating revenue $ Operating expenses: Pers onal s ervices Contractual s ervices Materials and s upplies Depreciation Total operating expenses 800,593 800,593 313,498 91,465 323,451 15,379 743,793 56,800 Operating incom e Trans fers out (56,800) Change in net assets Total net assets-beginning of year Total net assets-end of year $ 89 158,093 158,093 Table of Contents City of Ca sa Gra nde Statem ent of Cash Flow s Internal Service Fund For the Year Ended June 30, 2005 Equipm ent Mechanics CASH FLOW S FROM OPERATING ACTIVITIES Receipts from cus tom ers and us ers Paym ents to s uppliers Paym ents to em ployees $ Net cash provided by operating activities 810,537 (431,954) (324,159) 54,424 CASH FLOW S FROM CAPITAL AND RELATED FINANCING ACTIVITIES Trans fers to other funds (56,800) Net cash used by capital and related financing activities (56,800) Net decreas e in cas h and cas h equivalents Cash at beginning of year (2,376) 18,886 Cash at end of year Reconciliation of operating incom e to net cash provided by operating activities: Operating incom e Adjus tm ents to reconcile operating incom e to net cas h provided (us ed) by operating activities : Depreciation expens e (Increas e) decreas e in accounts receivable (Increas e) decreas e in inventory Increas e (decreas e) in accounts payable Increas e (decreas e) in accrued wages Increas e (decreas e) in com pens ated abs ences Total adjus tm ents Net cash provided by operating activities $ 16,510 $ 56,800 15,379 9,944 (23,385) 6,347 (9,439) (1,222) (2,376) $ 90 54,424 Table of Contents City of Casa Grande Statem ent of Changes in Fiduciary Assets and Liabilities Agency Funds For the Year Ended June 30, 2005 Balance June 30, 2004 As s ets : Cas h Inves tm ents Interes t Receivable Total Assets Liabilities : Accounts Payable $ $ Additions 10,531 196,542 396 207,469 $ 655 $ 42,812 283,797 1,519 328,128 - 91 Deductions Balance June 30, 2005 $ (39,656) (8,879) (48,535) $ $ $ 553 13,687 471,459 1,916 487,062 102 Table of Contents City of Ca sa Gra nde Copper Mountain Ranch W ater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2005 Actual Am ounts Variance w ith Final BudgetPositive (Negative) $ $ Budgeted Am ounts Original Final OPERATING REVENUES: Service fees Total operating revenues $ 210,900 210,900 $ 210,900 210,900 OPERATING EXPENSES: Pers onal s ervices Contractual Materials and s upplies Depreciation Total operating expenses 59,900 42,900 45,100 320,000 467,900 59,900 7,879 45,100 355,021 467,900 Operating Incom e (257,000) (257,000) (14,000) (14,000) (14,000) (14,000) (271,000) (271,000) (10,900) (10,900) (281,900) (281,900) NONOPERATING REVENUE (EXPENSES): Interes t expens e Total nonoperating revenue (expense) Incom e (loss) before transfers Trans fers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 281,900 - 92 $ 281,900 - 186,225 186,225 56,334 7,792 33,056 55,121 152,303 3,566 87 12,044 299,900 315,597 33,922 290,922 (6,094) (6,094) 27,828 (10,900) $ (24,675) (24,675) 7,906 7,906 298,828 - 16,928 298,828 1,163,222 1,180,150 881,322 $ 1,180,150 Table of Contents City of Ca sa Gra nde W astew ater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2005 Actual Am ounts V ar iance w ith Final Budge tPos itive (Ne gative ) $ $ Budge te d Am ounts Or iginal Final OPERATING REV ENUES: Service f ees Connection f ees Miscellaneous Total ope rating re ve nue s $ 1,755,700 73,400 5,000 1,834,100 $ 1,776,900 73,400 5,000 1,855,300 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total ope rating e xpe ns e s 563,600 426,500 514,000 8,042,000 9,546,100 532,600 1,228,200 483,000 6,232,100 8,475,900 Ope rating Incom e (7,712,000) NONOPERATING REV ENUE (EXPENSES): Interest income Interest expense City sales tax Sale of sew er capacity Total nonope rating re ve nue (e xpe ns e ) Incom e (los s ) be for e contr ibutions and tr ans fe r s Ne t As s e ts - be ginning of ye ar Ne t As s e ts - e nd of ye ar 633 833,210 554 5,457,362 6,291,759 (6,620,600) 204,904 6,825,504 22,700 (1,361,000) 1,400,000 61,700 22,700 (1,680,300) 627,900 (1,029,700) 58,373 (303,545) 2,140,482 1,288,580 3,183,890 35,673 1,376,756 1,512,582 1,288,580 4,213,590 (7,650,300) (7,650,300) 3,388,794 11,039,094 (103,700) (103,700) 1,561,589 1,674,242 (103,700) 1,561,589 1,674,242 - (7,754,000) (7,754,000) 6,520,925 14,274,925 15,886,938 22,407,863 8,132,938 $ 22,407,863 $ 93 356,552 135,094 42,099 533,745 531,967 394,990 482,446 774,738 2,184,141 Capital contributions Transf ers in Transf ers out Ne t change in ne t as s e ts 2,133,452 208,494 47,099 2,389,045 7,754,000 - $ 7,754,000 - $ Table of Contents City of Ca sa Gra nde W astew ater Developm ent Fees Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2005 Budgeted Am ounts Original Final OPERATING REVENUES: Connection fees Total operating revenues $ 1,340,000 1,340,000 $ 1,514,300 1,514,300 OPERATING EXPENSES: Depreciation Total operating expenses 1,500,000 1,500,000 Operating Incom e $ - (160,000) NONOPERATING REVENUE (EXPENSES): Interes t incom e Total nonoperating revenue (expense) Actual Am ounts 15,000 15,000 - - Net Assets - beginning of year Net Assets - end of year $ 145,000 - 2,473,216 15,000 15,000 107,781 107,781 92,781 92,781 4,095,297 2,565,997 94 (1,674,242) (145,000) $ - 3,987,516 (1,674,300) (145,000) Net change in net assets $ 2,473,216 2,473,216 1,514,300 Incom e (loss) before transfers Trans fers out 3,987,516 3,987,516 Variance w ith Final BudgetPositive (Negative) 145,000 - $ 58 2,421,055 2,566,055 3,985,448 6,406,503 3,840,448 $ 6,406,503 Table of Contents City of Ca sa Gra nde Sanitation Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2005 Actual Am ounts Variance w ith Final BudgetPositive (Negative) $ $ Budgeted Am ounts Original Final $ 3,689,500 150,000 1,000 3,840,500 $ 3,689,500 150,000 1,000 3,840,500 1,733,600 866,600 471,500 205,000 220,000 3,496,700 1,744,500 900,600 432,600 417,000 94,000 3,588,700 1,673,400 527,003 418,339 416,526 93,424 3,128,692 71,100 373,597 14,261 474 576 460,008 343,800 251,800 675,471 423,671 NONOPERATING REVENUE (EXPENSES): Interes t incom e Interes t expens e Total nonoperating revenue (expense) 2,400 (218,100) (215,700) 2,400 (125,800) (123,400) 17,430 (20,001) (2,571) 15,030 105,799 120,829 Incom e (loss) before transfers 128,100 128,400 672,900 544,500 (292,700) (292,700) (292,700) (164,600) (164,300) 380,200 544,500 721,748 1,101,948 557,448 $ 1,101,948 OPERATING REVENUES: Service fees Recycling revenue Mis cellaneous Total operating revenues OPERATING EXPENSES: Pers onal s ervices Contractual Materials and s upplies Depreciation Clos ure and pos tclos ure cos ts Total operating expenses Operating Incom e Trans fers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 164,600 - 95 $ 164,300 - $ 3,540,921 263,242 3,804,163 (148,579) 113,242 (1,000) (36,337) - Table of Contents City of Ca sa Gra nde Golf Course Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2005 Actual Am ounts Variance w ith Final BudgetPositive (Negative) $ $ Budgeted Am ounts Original Final OPERATING REVENUES: Rental Green fees Total operating revenues $ 127,400 301,000 428,400 $ 127,400 429,500 556,900 OPERATING EXPENSES: Pers onal s ervices Contractual Materials and s upplies Depreciation Total operating expenses 401,600 81,800 259,900 743,300 458,400 85,566 291,400 36,434 871,800 458,363 58,308 291,329 36,434 844,434 37 27,258 71 27,366 Operating Incom e (314,900) (314,900) (260,005) 54,895 NONOPERATING REVENUE: City s ales tax Total nonoperating revenue 6,600 6,600 Incom e (loss) before transfers Trans fers in Trans fers out Net change in net assets Net assets - beginning of year Net assets - end of year 6,600 6,600 9,971 9,971 23,309 4,220 27,529 3,371 3,371 (308,300) (308,300) (250,034) 58,266 376,100 (67,800) 376,100 (67,800) 376,100 (67,800) 58,266 - $ 150,709 433,720 584,429 58,266 - - $ 96 - $ 213,304 271,570 $ 213,304 271,570 Table of Contents City of Ca sa Gra nde Capital Assets Used in the Operation of Governm ental Funds Schedule By Source June 30, 2005 Governm ental funds capital as s ets : Land and cons truction in progres s Buildings Im provem ents other than buildings Heavy m achinery and equipm ent Operational equipm ent Total governm ental funds capital as s ets Inves tm ents in governm ental funds capital as s ets by s ource: General obligation bonds Grants General Fund revenues Special Revenue Fund revenues Capital Project Funds Gifts and donations Total inves tm ents in governm ental funds capital as s ets $ 9,248,217 10,636,234 30,727,831 1,407,992 9,797,955 $ 61,818,229 $ 459,863 1,529,993 11,181,037 22,849,346 11,313,377 14,484,613 $ 61,818,229 This s chedule pres ents only the capital as s et balances related to governm ental funds . Accordingly, the capital as s ets reported in internal s ervice funds are excluded from the above am ounts . Generally, the capital as s ets of internal s ervice funds are included as governm ental activities in the s tatem ent of net as s ets . 97 Table of Contents City of Ca sa Gra nde Capital Assets Used in the Operation of Governm ental Funds Schedule By Function and Activity June 30, 2005 Land and Buildings Function and Activity General governm ent $ 1,650,154 Im provem ents Other Than Buildings $ 145,632 Machinery and Equipm ent $ 280,764 Total $ 2,076,550 Public s afety 1,887,815 152,940 5,045,899 7,086,654 Streets /Trans portation 3,048,499 20,785,232 3,320,612 27,154,343 959,626 389,567 220,810 1,570,003 Culture and recreation 3,470,290 6,180,772 2,316,078 11,967,140 Econom ic developm ent 8,642,298 3,299,458 21,783 11,963,539 30,953,601 $ 11,205,946 $ 61,818,229 Public works Total $ 19,658,682 $ This s chedule pres ents only the capital as s et balances related to governm ental funds . Accordingly, the capital as s ets reported in internal s ervice funds are excluded from the above am ounts . Generally, the capital as s ets of internal s ervice funds are included as governm ental activities in the s tatem ent of net as s ets . 98 Table of Contents City of Ca sa Gra nde Capital Assets Used in the Operation of Governm ental Funds Schedule of Changes By Function and Activity For the Year Ended June 30, 2005 Function and Activity General governm ent General Capital As s ets June 30, 2004 $ Public s afety Streets /Trans portation Public works Culture and recreation Econom ic developm ent Total $ 2,049,097 Additions $ 27,453 General Capital As s ets June 30, 2005 Deletions $ - $ 2,076,550 6,198,337 901,297 (12,980) 7,086,654 20,954,748 6,247,595 (48,000) 27,154,343 1,443,297 126,706 11,687,287 294,825 9,180,574 2,782,965 51,513,340 $ 10,380,841 (14,972) $ (75,952) 1,570,003 11,967,140 11,963,539 $ 61,818,229 This s chedule pres ents only the capital as s et balances related to governm ental funds . Accordingly, the capital as s ets reported in internal s ervice funds are excluded from the above am ounts . Generally, the capital as s ets of internal s ervice funds are included as governm ental activities in the s tatem ent of net as s ets . 99 Table of Contents City of Ca sa Gra nde Schedule of Expenditures of Federal Aw ards For the Year Ended June 30, 2005 Grant Num ber Federal CFDA Num ber 100-04 128-05 104-05 207-03 304-04 307-05 564-04 14.228 14.228 14.228 14.239 14.239 14.239 14.250 - 10.420 276,341 461200 10.561 11,100 287,441 5-237 5-237 5-237 5-237 93.044 93.045 93.667 93.053 15,480 56,723 10,849 18,818 101,870 04-LB-BX-0493 16.592 5,075 5,075 3-04-0007-06 3-04-0007-07 3-04-0007-08 20.106 20.106 20.106 16,442 38,234 2,042 56,718 EMW-2002-FG-09109 EMW-2003-FP-00726 97.044 97.044 1,263 139,009 - 97.004 177,260 * 317,532 U.S. Department of Housing and Urban Development: Passed through A rizona Department of Commerce: Community Development Block Grant - 2004 Community Development Block Grant - 2005 Community Development Block Grant - 2005 HOME - 2003 HOME - 2004 HOME - 2005 Rural Housing and Economic Development Total Department of Housing and Urban Development U.S. Department of A griculture: Self Help Housing Technical A ssistance Grant #8 Passed through A rizona Department of Health Services: State A dministrative Matching Grants f or Food Stamp Program Total Department of A griculture U.S. Department of Health & Human Services Passed through Pinal-Gila Council f or Senior Citizens: Special Programs f or the A ging Special Programs f or the A ging Social Services Block Grant Nutritional Services Incentive Program Total Department of Health & Human Services U.S. Department of Justice: Local Law Enf orcement Block Grant Total Department of Justice U.S. Department of Transportation: FA A A irport Grant FA A A irport Grant FA A A irport Grant Total Department of Transportation U.S. Department of Homeland Security Federal Emergency Management A gency Federal Emergency Management A gency Passed through Pinal County Department of Public Works: Domestic Preparedness Total Department of Homeland Security Total Federal Financial A ssistance and Expenditures of Federal A w ards *Denotes major program 100 Expenditures $ $ 111,315 * 139,076 * 94,141 * 26,105 170,140 93,551 79,437 713,765 1,482,401 Table of Contents City of Casa Grande Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2005 NOTE 1 BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Casa Grande and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with requirements of OMB Circular A-133, Audits of States, Local Governments, and NonProfit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the financial statements. 101 Table of Contents CITY OF CASA GRANDE, ARIZONA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) LAST TEN FISCAL YEARS (Unaudited) Fiscal Year General Government Planning and Economic Development Public Safety Public W orks 1995-96 $2,102,383 $1,101,425 $5,604,507 $1,578,222 1996-97 2,510,411 1,147,130 6,160,033 1,624,814 1997-98 2,625,022 1,467,130 6,451,991 1,950,835 1998-99 2,751,788 1,787,232 6,831,027 1,681,202 1999-00 2,756,390 1,348,799 7,502,776 2,243,847 2000-01 3,363,534 2,844,922 8,237,440 2,723,026 2001-02 3,710,837 2,239,814 9,621,871 2,575,872 2002-03 3,641,912 1,871,266 9,499,759 2,644,985 2003-04 4,451,216 1,952,308 10,309,036 2,402,651 2004-05 4,300,175 2,242,438 11,344,629 2,642,441 (1) Source: Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds. This schedule includes General Fund, Special Revenue, Debt Service and Capital Projects Funds. 102 Table of Contents Table 1 Culture and Recreation Debt Service Capital Outlay Total $2,005,874 $1,776,845 $3,099,547 $17,268,803 2,085,005 1,721,809 3,055,380 18,304,582 2,220,546 1,621,876 3,900,673 20,238,073 2,279,233 1,455,133 4,929,355 21,714,970 2,669,541 1,574,420 7,716,638 25,812,411 3,076,334 1,444,922 6,307,819 27,997,997 3,349,199 1,587,000 2,593,602 25,678,195 3,352,211 1,491,871 4,472,441 26,974,445 3,450,403 1,432,340 1,939,318 25,937,272 3,654,964 1,276,974 4,526,914 29,988,535 103 Table of Contents CITY OF CASA GRANDE, ARIZONA GENERAL GOVERNMENTAL REVENUES BY SOURCES (1) LAST TEN FISCAL YEARS (Unaudited) Fiscal Year Local Taxes Intergovernmental Revenue Licenses and Permits Charges for Services Fines and Forfeitures 1995-96 $7,505,903 $6,924,283 $345,094 $254,335 $478,128 1996-97 8,009,225 7,201,890 432,342 528,774 524,263 1997-98 7,368,958 7,719,748 389,569 432,094 667,303 1998-99 8,207,129 8,947,070 698,453 877,478 827,765 1999-00 9,647,104 9,361,703 644,487 760,096 772,079 2000-01 10,500,552 11,303,184 895,927 974,559 628,857 2001-02 10,565,836 10,780,672 801,910 1,578,990 801,690 2002-03 11,851,114 10,358,329 1,074,991 2,528,275 690,177 2003-04 13,294,993 10,902,234 1,385,080 3,187,172 677,048 2004-05 15,388,557 11,911,931 2,156,170 9,853,065 739,283 (1) Source: Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds. This schedule includes General Fund, Special Revenue, Debt Service and Capital Projects Funds. 104 Table of Contents Table 2 Special Assessments Investment Revenues Rental and Sale of Property Miscellaneous Total $484,334 $428,303 $46,630 $171,084 $16,638,094 523,626 396,571 110,529 231,955 17,959,175 433,972 455,682 131,835 192,256 17,791,417 242,998 405,377 104,288 366,596 20,677,154 588,862 667,324 202,916 198,418 22,842,989 309,163 565,660 238,340 352,902 25,769,144 250,612 210,477 405,717 231,348 25,627,252 211,787 (163,059) 536,538 274,985 27,363,137 137,644 124,545 772,798 473,864 30,955,378 217,895 466,925 701,633 720,093 42,155,552 105 Table of Contents CITY OF CASA GRANDE, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS (1) LAST TEN FISCAL YEARS (Unaudited) Fiscal Year Total Tax Levy Current Tax Collections Percent of Levy Collected Delinquent Tax Collections 1995-96 $918,608 $841,312 91.59% $88,202 1996-97 914,441 827,476 90.49% 72,990 1997-98 919,249 850,591 92.53% 42,867 1998-99 906,008 872,002 96.25% 48,381 1999-00 1,020,568 867,065 84.96% 92,285 2000-01 1,040,676 930,005 89.37% 100,999 2001-02 1,040,676 930,005 89.37% 100,999 2002-03 1,289,900 1,244,479 96.48% 49,965 2003-04 1,638,900 1,569,938 95.79% 30,507 2004-05 1,581,847 1,576,578 99.67% 32,461 (1) Source: Pinal County Treasurer's records. 106 Table of Contents Table 3 Total Tax Collections Total Collections As Percent Of Current Levy Outstanding Delinquent Taxes Outstanding Delinquent Taxes As Percent of Current Levy $929,514 101.19% $43,540 4.74% 900,466 98.47% 53,313 5.83% 893,458 97.19% 61,763 6.72% 920,383 101.59% 48,965 5.40% 959,350 94.00% 81,251 7.96% 1,031,004 99.07% 78,782 7.57% 1,031,004 99.07% 78,782 7.57% 1,294,444 100.35% 66,263 5.14% 1,600,445 97.65% 46,759 2.85% 1,609,039 101.72% 38,197 2.41% 107 Table of Contents CITY OF CASA GRANDE, ARIZONA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (1) PER $100 ASSESSED VALUATION LAST TEN FISCAL YEARS (Unaudited) Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 School District #4 School District #82 Community College District PRIMARY 2.6064 2.6360 1.6418 SECONDARY 1.2705 2.0038 0.0427 PRIMARY 2.6064 2.6140 1.6512 SECONDARY 1.1765 1.8992 0.0453 PRIMARY 2.5045 2.8338 1.7295 SECONDARY 1.2015 1.5629 0.0458 PRIMARY 2.8719 2.8784 1.9167 SECONDARY 1.3491 1.3565 0.0454 PRIMARY 2.2137 2.8894 2.0409 SECONDARY 2.0532 1.2127 0.0427 PRIMARY 2.2601 2.4300 2.1052 SECONDARY 2.7087 1.5765 0.0414 PRIMARY 1.6269 2.2792 2.1352 SECONDARY 1.9896 1.4714 0.0385 PRIMARY 1.7708 1.8963 2.1737 SECONDARY 2.4081 1.2359 0.0000 PRIMARY 2.0154 1.8474 2.1737 SECONDARY 2.0491 1.1833 0.0000 PRIMARY 2.0154 1.8317 2.1500 SECONDARY 1.9558 1.1644 0.0000 (1) Source: Pinal County A ssessor's records. 108 Table of Contents Table 4 City Pinal County State Total 0.6853 4.1637 0.4700 12.2032 0.3144 0.6615 3.6314 4.1637 0.5300 0.3281 0.7019 3.4491 4.4532 0.5300 0.2845 0.9999 4.1416 0.5300 4.4532 0.5217 4.4532 0.5123 4.4532 0.4974 4.4532 0.4889 11.7828 3.6440 4.4532 0.4717 0.0000 0.9999 11.9918 3.4995 0.0000 0.9999 12.7607 4.3266 0.0000 0.9999 13.1188 3.3086 0.0000 0.9999 13.3385 2.7510 0.0000 0.9999 12.7529 3.0947 0.0000 0.9999 12.2268 11.9613 3.2324 4.4532 0.4560 0.0000 11.9062 3.1202 109 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 5 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY (1) LAST TEN FISCAL YEARS (Unaudited) Total Assessed Value Estimated Actual Value Ratio of Total Assessed To Total Estimated Actual Value PRIMARY $91,555,210 $635,463,578 0.144 SECONDARY 92,614,611 646,925,666 0.143 PRIMARY 92,265,609 652,340,795 0.141 SECONDARY 92,670,374 657,974,513 0.141 PRIMARY 92,810,915 680,037,578 0.136 SECONDARY 94,121,767 688,802,207 0.137 PRIMARY 90,609,873 705,667,632 0.128 SECONDARY 91,179,081 711,104,483 0.128 PRIMARY 100,486,468 798,345,167 0.126 SECONDARY 101,327,294 805,004,238 0.126 PRIMARY 104,078,009 808,673,138 0.129 SECONDARY 105,713,610 819,628,644 0.129 PRIMARY 118,434,916 891,214,049 0.133 SECONDARY 119,878,152 901,835,657 0.133 PRIMARY 128,998,923 964,546,772 0.134 SECONDARY 130,950,513 1,006,097,987 0.130 PRIMARY 163,891,283 1,206,617,178 0.136 SECONDARY 173,136,653 1,263,323,842 0.137 PRIMARY 158,200,496 1,338,475,502 0.118 SECONDARY 165,942,921 1,383,801,142 0.120 Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 (1) Source: Pinal County A ssessor's records. 110 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 6 SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS LAST TEN FISCAL YEARS (Unaudited) Fiscal Year Current Assessments Due Current Assessments Collected Ratio of Collection to Amount Due Outstanding Delinquent Assessments 1995-96 $444,920 $567,272 127% $21,791 1996-97 325,663 410,579 126% 25,704 1997-98 286,597 465,175 162% 29,896 1998-99 320,625 447,993 140% 29,896 1999-00 130,426 204,394 157% - 2000-01 219,413 308,629 141% 2,763 2001-02 129,629 290,054 224% 4,728 2002-03 124,215 174,365 140% 3,530 2003-04 107,044 137,642 129% 707 2004-05 10,268 21,411 209% 41 111 Table of Contents CITY OF CASA GRANDE, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (Unaudited) Population Assessed Value Gross Bonded Debt Less Funds for Debt Retirement 1995-96 $21,300 $92,614,611 $605,000 $52,177 1996-97 21,945 92,670,374 260,000 53,197 1997-98 22,340 94,121,767 - - 1998-99 23,175 91,179,081 - - 1999-00 26,490 102,979,790 - - 2000-01 27,815 (2) 105,713,610 - - 2001-02 27,290 (2) 119,878,152 - - 2002-03 29,715 (2) 130,950,513 - - 2003-04 31,315 (2) 173,136,653 - - 2004-05 34,260 (2) 165,942,921 - - Fiscal Year (1) Net Bonded Debt includes only general obligation debt intended to be repaid w ith property tax proceeds. (2) Estimated 112 Table of Contents Table 7 Less Payable from Enterprise Funds Net Bonded Debt (1) Ratio of Net Bonded Debt to Assessed Value Net Bonded Debt Per Capita $67,063 $485,760 0.0052 22.81 - 206,803 0.0022 9.42 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 113 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 8 COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2005 (Unaudited) Net Debt Outs tanding Percentage Applicable to City of Cas a Grande City of Cas a Grande's Share of Debt - 100.00% - School Dis trict #4 13,460,000 63.45% 8,540,370 School Dis trict #82 8,630,094 49.22% 4,247,732 Com m unity College - 14.70% - Pinal County - 15.64% - $22,090,094 0.40% $12,788,102 Nam e of Governm ental Unit City of Cas a Grande State of Arizona Total LEGAL DEBT MARGIN June 30, 2005 (Unaudited) Table 9 Bonds Excluded General Utility Purpose and Total f rom Limitation Obligation 6% Open Space 20% Bonded Debt - $9,956,575 $33,188,584 - 585,000 - - 585,000 585,000 - - 585,000 - - Total - - Legal Debt Margin $9,956,575 $33,188,584 Legal Debt Limitation 2005 A ssessed V aluation $165,942,921 Outstanding Bonded Debt By Purpose Special A ssessment Total Less: Balance Held in Reserve 114 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 10 RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT (1) TO TOTAL GENERAL EXPENDITURES LAST TEN FISCAL YEARS (Unaudited) Total General Governmental Expenditures (2) Ratio of Debt Service to General Governmental Expenditures Fiscal Year Principal Interest Total Debt Service 1995-96 $249,703 $43,640 $293,343 $17,268,803 1.70% 1996-97 277,937 26,140 304,077 18,304,582 1.66% 1997-98 260,000 8,450 268,450 20,238,073 1.33% 1998-99 - - - 21,714,970 - 1999-00 - - - 25,812,411 - 2000-01 - - - 27,997,997 - 2001-02 - - - 25,678,195 - 2002-03 - - - 26,974,445 - 2003-04 - - - 25,937,272 - 2004-05 - - - 29,988,535 - (1) General Bonded Debt includes debt intended to be repaid w ith property tax proceeds, and excludes debt, w hich w ill be repaid w ith special assessments. (2) Includes all Governmental Fund Types. 115 Table of Contents CITY OF CASA GRANDE, ARIZONA SCHEDULE OF REVENUE BOND COVERAGE HIGHW AY USER REVENUE BONDS LAST TEN FISCAL YEARS (Unaudited) Year Revenue (1) Expenditures (1) Net Revenue Available For Debt Service 1995-96 $2,888,925 $1,549,709 $1,339,216 1996-97 2,859,419 1,632,191 1,227,228 1997-98 2,886,940 1,828,783 1,058,157 1998-99 3,192,227 2,578,710 613,517 1999-00 3,531,290 2,201,807 1,329,483 2000-01 3,863,454 4,399,943 - 2001-02 3,366,705 3,299,441 67,264 2002-03 3,344,522 4,072,344 - 2003-04 3,859,533 2,494,959 1,364,574 2004-05 4,378,523 2,085,650 2,292,873 (1) Excludes lease purchase proceeds and capital expenditures made w ith lease purchase proceeds. 116 Table of Contents Table 11 Principal Debt Service Requirements Interest Total Coverage $335,000 $87,898 $422,898 3.17% 350,000 70,940 420,940 2.92% 365,000 52,700 417,700 2.53% 375,000 33,085 408,085 1.50% 410,000 11,480 421,480 3.15% - - - - - - - - - - - - - - - - - - - - 117 Table of Contents CITY OF CASA GRANDE, ARIZONA SYSTEM DEVELOPMENT FEES ALLOCATION June 30, 2005 (Unaudited) General Government Street Maint. Maint. A nimal Shop Shop Shelter Y ear Library Building Transp. Signals Transp. Equip. & Improv. 1996 - - - - - 1997 - - - - 1998 - - - 1999 - - 2000 - 2001 Community Services Facilities, Community Regional V ehicles, Park Park Library Coll. Parks Maint. Land, City Hall V ehicles - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 42,156 7,529 12,132 8,350 8,350 1,669 5,219 - 96,090 8,679 - 2002 95,982 37,414 60,877 25,541 25,541 4,815 15,732 - 219,191 19,431 - 2003 138,531 80,736 131,315 55,733 56,633 10,689 34,736 - 315,624 28,398 - 2004 316,016 71,983 116,657 62,413 62,227 11,556 39,369 - 625,234 47,219 - 2005 386,751 130,631 461,947 179,926 86,389 51,576 50,057 319,994 709,910 651,573 316,181 118 Table of Contents Table 12 Police Fire Wastew ater Building Communication Equipment Cars Building A pparatus Treatment Collection Equipment Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 32,384 4,774 10,793 24,542 42,542 134,518 150,384 9,848 599,959 106,720 15,322 235,236 67,919 118,868 317,529 350,162 22,708 1,738,988 197,563 30,657 64,986 132,659 233,424 502,900 484,167 33,320 2,532,071 225,152 33,863 74,978 165,373 287,112 1,233,769 690,417 46,747 4,110,085 362,072 69,464 131,924 273,418 480,481 2,676,127 1,228,556 82,243 8,649,220 119 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 13 DEMOGRAPHICS STATISTICS LAST TEN FISCAL YEARS (Unaudited) Year Population County Per Capita Incom e City Unem ploym ent Rate Area In Square Miles Dens ity School Enrollm ent 1996 21,300 $15,359 5.20% 30.2 705.3 6,956 1997 21,945 15,725 4.40% 30.2 726.7 6,952 1998 22,340 16,099 3.80% 31.3 713.7 7,079 1999 23,175 16,563 4.00% 47.1 492.0 7,241 2000 26,490 (1) 16,994 (1) 3.90% 47.1 562.4 7,442 2001 27,815 (1) 17,436 (1) 4.20% 53.5 519.9 7,680 2002 27,290 (1) 17,889 (1) 6.80% 54.3 502.6 7,784 2003 29,715 (1) 18,354 (1) 6.20% 60.1 494.4 7,895 2004 31,315 (1) 19,646 (1) 5.00% 60.1 521.0 8,120 2005 34,260 (1) 20,959 (1) 5.20% 68.0 503.8 8,930 (1) Estimated Sources: Population, County Per Capita Income, and City Unemployment Rate - A rizona Department of Commerce and Department of Economic Security. A rea in Square Miles and Density - City of Casa Grande's Planning Department. School Enrollment - Casa Grande Elementary and Casa Grande Union High School Districts. 120 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 14 PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS (Unaudited) Year Building Perm its (1) Com m ercial Res idential Num ber Value Num ber Value Qtr. County Bank Depos it (in Thous ands ) (2) Property Value Es tim ated Actual Value (3) 1995-96 235 $18,585,343 507 $11,525,162 $549,496 $646,925,666 1996-97 255 25,102,946 489 12,056,031 463,035 657,974,513 1997-98 289 14,036,961 569 20,526,927 522,172 688,802,207 1998-99 274 19,687,641 892 50,316,073 657,588 711,104,483 1999-00 271 28,024,696 1003 37,801,670 613,035 830,171,033 2000-01 279 19,637,382 1446 85,435,382 675,065 819,628,644 2001-02 256 15,160,476 1333 70,046,921 675,891 901,835,657 2002-03 262 44,593,179 1639 119,087,422 715,865 1,006,097,987 2003-04 262 23,843,415 1983 144,717,568 785,034 1,263,323,842 2004-05 273 10,542,978 2565 225,736,975 822,504 1,383,801,142 Sources: (1) Based on building permits issued by the City. (2) A rizona Bankers A ssociation. (3) Pinal County Treasurer's records. 121 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 15 PRINCIPAL TAXPAYERS (1) YEAR ENDED JUNE 30, 2005 (Unaudited) Type of Bus ines s 2005 As s es s ed Valuation % of As s es s ed Valuation Arizona Public Service Com pany Electric Utility $7,286,080 21.19% WalMart Stores Eas t LP Retail 6,633,479 19.29% Abbott Manufacturing Inc. Manufacturing 4,708,641 13.69% QWes t Corporation Telecom m unications 4,703,839 13.68% WalMart Stores Eas t Retail 2,647,338 7.70% Arizona Water Com pany Water Utility 2,183,050 6.35% Hom e Depot USA Inc. Retail 1,743,852 5.07% Southwes t Gas Corp. Gas Utility 1,590,590 4.63% Vanderbilt Farm s LLC Agriculture 1,570,006 4.56% Hexcel Corporation Manufacturing 1,323,862 3.84% $34,390,737 100.00% Taxpayers Total (1) Source: Pinal County Treasurer's records. 122 Table of Contents CITY OF CASA GRANDE, ARIZONA Table 16 MISCELLANEOUS STATISTICAL DATA (1) YEAR ENDED JUNE 30, 2005 (Unaudited) Date of incorporation Form of government A rea Elevation (2) Climatological summary 12/01 (2) Hottest month, July Coldest month, January City employees (f ull-time equivalents) Fir e Pr ote ction: Number of stations Number of employees (excluding part-time) Number of f ire and rescue units Medical support calls Total alarms Inspections and investigations Public education contacts Police Prote ction: Number of employees Calls f or service Of f icer initiated Patrolled miles (CGPD vehicles) Traf f ic accidents Traf f ic citations A rrests (adult and juvenile) Com m unity Se r vice s : Park areas Parkland acreage: Developed Undeveloped Total Community centers Golf courses Library: Number of libraries Items in collections Ref erence questions Total items circulated Total circulation transactions Playgrounds Sw imming pools Other maintenance areas February 3, 1915 Council-Manager 68 square miles 1,398 f t. 106.5 35.2 *320 3 *39 17 3,427 4,557 487 11,764 *87 38,689 69,412 702,062 1,046 7,068 4,614 Aviation: Number of airports Based aircraf t T-hangers T-shades Ele ction: Registered voters 3/05 V otes cast in last primary election Percent of voters Planning and Hous ing: Self -help homes: Completed Started Number of housing rehabilitations Code enf orcement cases Zoning cases Public Work s : Total number of streetlights Miles of streets: Local streets State roads Dirt roads Miles of sew er Number of lif t stations Number of signalized intersections 1 97 52 18 15,919 1,428 8.97% 6 26 9 1,059 154 2,011 298 26 30 160 10 27 24 550 820 1,370 4 1 1 86,364 6,415 51,915 170,875 22 1 85 123 Education: Elementary Schools Middle Schools High Schools Community Colleges 8 2 1 1 (1) Unless otherw ise noted, inf ormation obtained f rom City records. (2) A rizona Department of Commerce. *Does not include approved paid-on-call. Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents