City of Casa Grande, Arizona Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2006 City of Casa Grande, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2006 Prepared by the Finance Department Larry D. Rains, Finance Director TABLE OF CONTENTS I. INTRODUCTORY SECTION Page Letter of Transmittal............................................................................................................................... GFOA Certificate of Achievement......................................................................................................... City of Casa Grande Officials ................................................................................................................ Organizational Chart .............................................................................................................................. iv xi xii xiii 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 53 54 54 55 55 57 62 62 64 66 67 68 68 69 SUPPLEMENTARY INFORMATION – COMBINING FUND FINANCIAL STATEMENTS Non-Major Governmental Funds Combining Balance Sheet................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........... 70 72 Fiduciary Funds Combining Statement of Fiduciary Net Assets................................................................... Combining Statement of Changes in Assets and Liabilities – All Agency Funds .............. 74 75 OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules – Other Major Governmental Funds Special Assessment Debt Service Fund....................................................................... Capital Replacement/Development Fund .................................................................... Community Facilities Districts Capital Projects Fund ................................................ 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 88 89 90 TABLE OF CONTENTS (continued) SUPPLEMENTARY INFORMATION (continued) Page Schedule of Operations – Budget and Actual – Proprietary Funds Enterprise Funds: Copper Mountain Ranch ...................................................................................... Wastewater........................................................................................................... Wastewater Development Fees ............................................................................ Sanitation.............................................................................................................. Golf Course .......................................................................................................... 91 92 93 94 95 Capital Assets Used in the operation of Governmental Funds Schedule by Source ............................................................................................................ Schedule by Function and Activity..................................................................................... Schedule of Changes by Function and Activity.................................................................. 96 97 98 Schedule of Expenditures of Federal Awards.............................................................................. 99 III. STATISTICAL SECTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Page 100 101 102 103 104 106 108 109 110 112 113 114 115 116 117 15 16 17 118 119 121 Schedule Index ....................................................................................................................................... Net Assets by Component – Last Four Fiscal Years .............................................................. Changes in Net Assets, Governmental - Last Four Fiscal Years ............................................ Changes in Net Assets, Business-type - Last Four Fiscal Years............................................. Fund Balances, Governmental Funds - Last Ten Fiscal Years ............................................... Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years ............................ Sales Tax Revenue by Industry - Last Three Fiscal Years ..................................................... Direct and Overlapping Sales Tax Rates ................................................................................ Ratios of Outstanding Debt by Type – Last Ten Fiscal Years................................................ Ratio of General Bonded Debt Outstanding – Last Two Fiscal Years ................................... Direct and Overlapping Governmental Activities Debt.......................................................... Legal Debt Margin Information.............................................................................................. Pledged-Revenue Coverage – Last Ten Fiscal Years ............................................................. Demographic and Economic Statistics - Last Ten Fiscal Years ............................................. Principal Employers – Current Year and Six Years Ago........................................................ Authorized City Government Employee Positions by Function-Program – Last Ten Fiscal Years ...................................................................... Operating Indicators by Function/Program – Last Ten Fiscal Years ..................................... Capital Asset Statistics by Function/Program – Last Ten Fiscal Years.................................. 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 ................................................................................. iii 123 125 127 City of Casa Grande September 13, 2006 Honorable Mayor, City Council, City Manager Citizens of Casa Grande, Arizona We are pleased to submit to you the fiscal year ended June 30, 2006 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, 2006, 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, 2006, 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. iv 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, 2006, 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 policies and ordinances of the City Council, as well as overseeing the day-today operations. The City of Casa Grande is now just over 68 squares miles. The City’s updated General Plan includes the 68 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 three downtown redevelopment districts, of which two are funded through Tax Increment Financing. v 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. vi 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 has currently completed 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. At the time this report is being issued, many homebuilders in the state have reported a tremendous slowing in new housing sales. Although the City of Casa Grande has not experienced this trend, we have prepared for any downwards trend in the housing market by allocating construction sales tax to non-operating expenses and establishing a strong reserve. 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 41% 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 20% this next 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. This revenue service is expected to grow by 30% this next year due to a middecade redistribution of revenues based on population. 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 18 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 70% 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. vii MAJOR INITIATIVES AND ACCOMPLISHMENTS During fiscal year 2006, 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 Maintained 5 certifications of Apartment Complexes in the Crime Free Multi-Housing Program. Expanded participants in our volunteer programs to assist with clerical duties, enforce disabled parking violations, monitor traffic speeds in the neighborhoods, assist with the vacation house watch program, and conduct fingerprinting. Held 12th annual “National Night Out” celebration. Participated in on-going education programs at the schools. Sponsored Citizen Police Academies. 39 participants were trained in wide variety of police functions. Fire o o o o o Responded to 4,835 emergencies of which 3,226 (74.8%) involved emergency medical services, averaging a response time for all incidents of 5 minutes 20 seconds. Maintained a department commitment for excellence in public education by initiating in excess of 9,740 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 Maintained roads at North Mountain Park. o Enhanced several retention basins on Arizola Road. o Continued to mow ditches, roads, and retentions. o Installed 2 drywells. o Purchased water pump. o Moved & graded drainage on west side annexations. 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 Held first successful Spanish Language program on financial literacy with 19 attendants. o Coordinated with AARP to provide no cash tax preparation services and low cost 55 Alive drive classes. o Continued Senior Meals Program. o Replaced water slide, repaired cracks in deck, and installed new carpet in the lifeguard room. Community Development o Assisted applicants with 50 Rezoning requests, 37 site plan approvals, 57 Preliminary Plats, and 50 Final Plats. o Issued 35 Major/Minor General Plan Amendments. o Processed 7 PAD Amendments. o Issued 370 Home Occupation Permits, 398 Temporary Use Permits, and 170 Business Licenses. o Initiated 8 annexations. viii 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, 2006, the City had a number of debt issues outstanding. Total bonded debt at June 30, 2006, was $1,815,000. 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, 2006, the City had $22,129,820 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 $36,018,487 for general obligation bonds subject under the 20% limitation and $10,805,546 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 3.8351 percent for the fiscal year. At June 30, 2006, the Pool consisted of $1.4 billion in total local government deposits, which included $66 million the City had invested in the Pool. ix 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 $772,623. The current year’s net change in fair value totaled $57,576. 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, 2005. This was the fifteenth 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, 2005. 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, L.L.P. 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 x xi 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 xii 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 Geographical Information Systems 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 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 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, 2006. 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 iv - x 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 The City’s total net assets, on the government-wide basis, totaled $179 million at June 30, 2006. Of this amount, $26 million is unrestricted. The General Fund reported revenues in excess of expenditures and other financial sources and uses by $7,006,777. At June 30, 2006, unreserved fund balance for the General Fund was $17.8 million, or 70% of General Fund expenditures for fiscal year 2006. At June 30, 2006, unreserved fund balance of the governmental funds was $51.8 million, or 135% of governmental fund expenditures for fiscal year 2006. The governmental activities general revenues of $58.7 million were $20.5 more than the $38.2 million of expenditures before other financial sources and uses. The business-type activities increase in net assets was $16.4 million as of June 30, 2006. 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: 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. 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. 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. 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 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. 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 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 39-69) 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 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, 2006. 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, 2006 compared to the prior year. Condensed Statement of Net Assets (in Millions) Governmental Activities 2006 2005 Current and other assets Capital assets Total assets Other liabilities Long-term liabilities Total liabilities Net assets: Invested Capital assets net of related debt Restricted Unrestricted Total net assets Business-type Activities 2006 2005 Total Primary Government 2006 2005 $ 60.0 87.3 147.3 $38.9 42.2 81.1 $22.4 43.2 65.6 $14.2 35.4 49.6 $ 82.4 130.5 212.9 $ 53.1 77.6 130.7 3.8 12.1 15.9 3.3 13.0 16.3 1.3 16.6 17.9 1.3 17.0 18.3 5.1 28.7 33.8 4.6 30.0 34.6 74.3 39.5 17.6 $131.4 28.1 25.8 10.9 $64.8 27.7 11.5 8.5 $47.7 19.1 7.2 5.0 $31.3 102.0 51.0 26.1 $179.1 47.3 32.9 15.9 $96.1 The net assets of the City increased to $179.1 million (86%) at June 30, 2006. Of this $179.1 million, $131.4 million was in the governmental activities, a 203% increase, and $47.7 million was in the business-type activities, a 52% increase. 6 Net Assets consist of three components. The largest portion of net assets ($102.0 million or 57%) 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 ($51.0 million or 28%) 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 ($26.1 million or 15%), 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, 2006 were $125,989,229. The total cost of all programs and services was $42,973,480. The following table presents a summary of the changes in net assets for the year ended June 30, 2006. 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 2006 2005 Business-type Activities 2006 2005 Total 2006 2005 $21,824 2,615 43,675 $13,435 1,543 6,372 $13,084 7,991 $12,193 1,562 $34,908 2,615 51,666 $25,628 1,543 7,934 2,401 14,974 1,236 12,286 2,532 101,543 2,334 12,094 955 10,194 1,028 47,955 2,677 694 24,446 2,150 231 16,136 2,401 17,651 1,236 12,286 3,226 125,989 2,334 14,244 955 10,194 1,259 64,091 Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Other Water Golf course Sewer Sanitation Total expenses 4,464 13,504 5,486 1,869 4,978 4,468 501 35,270 4,100 11,789 3,438 779 4,147 2,717 478 27,448 98 928 3,138 3,539 7,703 158 845 2,488 3,149 6,640 4,464 13,504 5,486 1,869 4,978 4,468 501 98 928 3,138 3,539 42,973 4,100 11,789 3,438 779 4,147 2,717 478 158 845 2,488 3,149 34,088 Excess before transfer Transfers In (Out) Increase in Net Assets 66,273 349 $66,622 20,507 99 $20,606 16,743 (349) $16,394 9,496 (99) $9,397 83,016 $83,016 30,003 $30,003 7 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 80.6% of the total revenues of the City and 82.0% of the total expenditures in fiscal year 2006. This compares to 74.8% of total revenues and 79.4% of expenses in fiscal year 2005. Governmental Programs Revenues and Expenses 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 de ve lo pm en t n C no m ic ul tu re & Pu bl ic Revenues Ec o Expenditures re cr ea tio w or ks n sa fe ty Pu bl ic Tr an sp or ta tio St re et s/ G en er al G ov er nm en t 0 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 70-73. 8 For fiscal year ended June 30, 2006, the governmental funds reflect a combined fund balance of $57.5 million, an increase of $20.9 million. Of this, $5.7 million, a reduction of $1.7 million, is reserved because it is not appropriate for expenditure or is legally segregated for a specific future use. The remaining $51.8 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 20,000,000 15,000,000 10,000,000 5,000,000 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 $34.5 million, an increase of $8.5 million, in fiscal year 2005-2006. The expenditures, before other financing sources and uses, totaled $25.3 million, an increase of $4.7 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 $5.5 million, an increase of $1.1 million, while expenses totaled $3.3 million, an increase of $1.2 million in fiscal year ended June 30, 2006. 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 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 $47.8 million, an increase of $16.4 million as of June 30, 2006. Operating revenues in fiscal year 2005-2006 were $13.1 million, an increase of $2.1 million, while operating expenses totaled $7.3 million, an increase of $1 million, resulting in $5,837,285 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 $67,955,800 occurred during fiscal year 2006. 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, 2006, the City had $102 million invested in various capital assets, net of accumulated depreciation and related debt, up $54.7 million. Of the $102 million $74.3 million (73%) is invested in governmental activities and $27.7 million (27%) is invested in business-type activities. Major additions to capital assets during the fiscal year include the following: Acquired AS400 computer server and computer aided dispatching for Public Safety in the amount of $220,250. Acquired a voice interaction recognition system for the Building Division in the amount of $20,700. Completed the Peart Road Improvements between Kortsen & Rodeo in the amount of $458,000. Acquired a mobile Self Controlled Breathing Apparatus system in the amount of $80,580. Completed improvements to the shooting range in the amount of $71,505. Completed design for the new Animal Control Facility. Completed feasibility study for new Public Safety Facility. Completed taxiway, lighting and fencing project at Airport in the amount of $284,850. Purchased new garbage truck in the amount of $199,080 for the Sanitation Division. 10 The following table provides a breakdown of the capital asset balances net of accumulated depreciation at June 30, 2006. Additional information on the City’s capital assets may be found in Note 7 on pages 55-57. Capital Assets (In Thousands) Governmental Activities 2006 2005 Land Building and improvements Machines and equipment Construction in progress Total $ 6,559 76,544 4,225 $87,328 Business-type Activities 2006 2005 $ 6,296 29,356 3,627 2,952 $42,231 $ 283 39,285 3,649 $43,217 $ 283 19,645 3,879 11,570 $35,377 Total 2006 2005 $ 6,842 115,829 7,874 $130,545 $ 6,579 49,001 7,506 14,522 $77,608 Long-Term Debt The City’s outstanding long-term debt, including bonds, notes, contracts, and compensated absences, was $29.4 million at June 30, 2006, with $2.3 million due in one year. Of this total, $13.8 million was in governmental activities and $15.6 million was in business-type activities. Of the outstanding debt, $22.1 million is excise tax revenue obligation bond collateralized by the City’s excise tax stream. An additional $480,000 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, 2006. Further details can be found in Notes 10, 11, 12, 13, & 14 on pages 62-68. Outstanding Debt (In Thousands) Governmental Activities 2006 2005 Compensated absences Capital leases Bonds payable Notes payable Total $ 705 4,030 9,033 $13,768 Business-type Activities 2006 2005 $ 633 4,486 9,608 $14,727 11 $ 96 408 14,912 168 $15,584 $ 85 594 15,426 177 $16,282 Total 2006 $ 801 4,438 23,945 168 $29,352 2005 $ 718 5,080 25,034 177 $31,009 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 10% in 2007. The unemployment rate in Casa Grande for June 2006 was 5.1%, which is slightly higher than the state (4.4%) and the national average (4.6%). While the local economy witnessed a solid year, it has been largely driven by construction of residential dwellings. 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, but is expected to slow and follow the trend of other Arizona communities. The City of Casa Grande has been successful at sighting numerous industrial and manufacturing companies within the city limits over the course of the past 3 years. These new employers have brought more than 1,400 new jobs to the community during this period of time. 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 2006 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 BASIC FINANCIAL STATEMENTS City of Casa Grande Statement of Net Assets June 30, 2006 Governmental Activities $ 6,378,560 45,119,103 6,636,586 382,382 60,000 206,918 2,325 ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Prepaids Restricted assets: Restricted investments Deferred bond costs Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other current liabilities Deposits held Accrued wages and benefits Accrued interest payable Unearned revenue Noncurrent liabilities: Due within one year: Current portion of compensated absences Current portion of capital leases and notes Current portion of excise tax revenue obligations Current portion of bonds payable Due in more than one year: Noncurrent portion of capital leases Noncurrent portion of notes payable Noncurrent portion of excise tax revenue obligations Noncurrent portion of bonds payable Bond premium 2003 issue Less: Deferred amount on refunding Closure and postclosure liability Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Highways and streets Grant purposes Community development Debt service Capital projects Unrestricted Total net assets Total 7,498,869 65,338,080 7,398,121 382,382 215,870 2,325 979,584 179,948 1,610 342,739 981,194 522,687 6,559,450 283,000 6,842,450 80,768,504 147,273,360 42,933,701 65,610,823 123,702,205 212,884,183 1,522,509 270,460 135,150 283,178 301,284 14,330 43,236 165,267 - 1,823,793 14,330 313,696 300,417 283,178 704,683 275,792 496,455 110,000 96,347 121,941 523,545 - 801,030 397,733 1,020,000 110,000 3,754,188 6,721,488 1,705,000 (50,088) 15,928,815 295,899 158,520 14,388,332 371,814 (256,522) 1,624,796 17,848,789 74,265,031 27,728,464 101,993,495 7,126,638 1,317,471 22,333,862 2,663,299 6,064,184 17,574,060 $ 131,344,545 11,541,534 8,492,036 47,762,034 7,126,638 1,317,471 22,333,862 2,663,299 17,605,718 26,066,096 $ 179,106,579 The accompanying notes are an integral part of the financial statements 13 Primary Government Business-type Activities $ 1,120,309 $ 20,218,977 761,535 (60,000) 8,952 - $ 4,050,087 158,520 21,109,820 1,705,000 371,814 (306,610) 1,624,796 33,777,604 City of Casa Grande Statement of Activities For the Year Ended June 30, 2006 Functions/Programs Primary government: Governmental activities: General government Public safety Streets/Transportation Public works Culture and recreation Economic development Interest on long-term debt Total governmental activities Business-type activities: Water Golf course Wastewater Sanitation Total business-type activities Total primary government Charges for Services Expenses $ 4,463,957 13,504,033 5,486,251 1,868,890 4,978,247 4,468,076 500,879 35,270,333 $ 98,048 928,321 3,138,128 3,538,650 7,703,147 $ 42,973,480 119,514 984,555 832,940 84,424 340,272 19,462,139 21,823,844 Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 197,834 781,464 7,533,801 4,571,127 13,084,226 $ 34,908,070 327,309 5,264,554 305,736 1,968,902 7,866,501 $ 66,332 43,525,051 75,000 8,800 43,675,183 $ 7,866,501 7,991,457 7,991,457 $ 51,666,640 General revenues: Property taxes Sales taxes Franchise taxes Shared revenues - unrestricted: State sales taxes Urban revenue sharing Auto-in-lieu Investment earnings Gain on sale of assets Miscellaneous Transfers in (out) Total general revenues and transfers Change in net assets Net assets-beginning Net assets-ending The accompanying notes are an integral part of the financial statements 14 Net (Expense) Revenue and Changes in Net Assets Governmental Activities Business-type Activities $ $ (4,344,443) (12,125,837) 44,136,294 (1,784,466) (4,257,239) 16,971,765 (500,879) 38,095,195 - - Total $ (4,344,443) (12,125,837) 44,136,294 (1,784,466) (4,257,239) 16,971,765 (500,879) 38,095,195 99,786 (146,857) 12,387,130 1,032,477 13,372,536 99,786 (146,857) 12,387,130 1,032,477 13,372,536 38,095,195 13,372,536 51,467,731 2,401,386 14,973,622 1,236,366 2,676,631 - 2,401,386 17,650,253 1,236,366 2,721,554 2,728,207 1,585,116 1,508,717 660,798 361,586 349,200 28,526,552 66,621,747 64,722,798 $ 131,344,545 $ 635,533 58,502 (349,200) 3,021,466 16,394,002 31,368,032 47,762,034 2,721,554 2,728,207 1,585,116 2,144,250 660,798 420,088 31,548,018 83,015,749 96,090,830 $ 179,106,579 15 City of Casa Grande Balance Sheet Governmental Funds June 30, 2006 ASSETS Cash Investments Accounts receivable (less allowance for uncollectibles) Due from other governments Due from other funds Inventories Prepaids Restricted assets: Cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Accrued wages and benefits Due to: Other funds Deferred revenue Compensated absences Total liabilities Fund balances: Reserved for: Court and development Special revenue Debt service Capital projects Unreserved, reported in: General fund Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances General $ 4,202,183 11,285,380 Highway Users $ 5,335 6,302,045 System Development $ 18,993,739 Grants & Subsidies $ 61,211 193,775 4,825,042 285,000 7,261 2,325 704,407 - 105,407 - 1,940 43,528 - 603,878 44,430 - $ 20,607,191 $ 7,011,787 $ 19,099,146 $ 300,454 $ 1,014,621 $ $ $ $ $ 796,101 223,707 308,310 6,346 1,334,464 90,268 16,723 236 107,227 1,430,894 45,379 - 18,793 - 45,518 1,510 $ CDBG 366,313 - 417,552 - 18,793 47,028 417,552 - 253,426 - 597,069 - 17,796,454 19,272,727 6,904,560 6,904,560 19,080,353 19,080,353 253,426 597,069 $ 20,607,191 $ 7,011,787 $ 19,099,146 $ 300,454 $ 1,014,621 The accompanying notes are an integral part of the financial statements 16 Self-help Technical Assistance $ 3,804 - $ $ Home/HUD $ 1,865 - Special Assessments $ 10,726 1,219,227 Capital Replacement/ Development $ 703,654 3,543,113 64,226 - 172,115 - 86,431 - 21,721 - 68,030 $ 173,980 $ $ $ 629 2,401 65,000 68,030 $ 13,980 160,000 173,980 1,316,384 150 - - 1,237,548 - - - 1,237,548 $ 173,980 $ 78,686 78,836 - 68,030 $ $ 1,316,384 905,198 5,173,686 7,761 - Community Facilities Districts Capital Projects $ 579,154 - Total Governmental Funds $ 6,369,387 45,119,103 287,642 58,083 45,396 - 6,636,586 382,382 285,000 52,657 2,325 4,408,087 979,584 $ 59,827,024 118 - $ $ 7,761 74,386 653,658 - $ $ - - 653,658 5,165,925 5,165,925 $ Other Governmental Funds $ 435,142 3,581,824 5,173,686 17 653,658 $ 653,658 $ 70,533 2,082 $ 1,461,285 246,423 72,615 225,000 386,996 6,582 2,326,286 26,198 1,482,209 - 1,430,894 876,693 2,719,757 699,037 2,627,843 199,222 4,335,472 17,796,454 28,612,756 5,365,147 57,500,738 4,408,087 $ 59,827,024 City of Casa Grande Reconciliation of the Balance Sheet to the Statement of Net Assets Governmental Funds June 30, 2006 Fund balance - total governmental funds balance sheet $57,500,738 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets Less accumulated depreciation Internal service capital assets Less accumulated depreciation 110,840,100 (23,585,490) 279,180 (205,836) 87,327,954 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Compensated absences Capital leases Bonds payable Bond issuance costs Deferred Loss Bond premium (704,683) (4,029,980) (9,032,943) 179,948 50,088 (7,958) (13,545,528) Deferred revenue is shown on the governmental funds, but is not deferred on the statement of net assets. Special Assessments Property Tax 78,692 33,090 111,782 Interest payable on long-term debt is not reported in the governmental funds. Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds (excluding capital assets) are reported with governmental activities. Net assets of governmental activities - statement of net assets The accompanying notes are an integral part of the financial statements 18 (135,150) 84,749 $131,344,545 City of Casa Grande Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2006 REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Special assessments Investment earnings Contributions and donations Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Highway Users General $ 2,025,381 14,085,605 1,236,366 3,632,214 7,034,877 4,940,267 734,495 417,951 113,990 304,864 34,526,010 $ 5,251,259 211,081 3,016 5,465,356 System Development $ 11,353,338 533,828 11,887,166 Grants & Subsidies $ 1,004,826 10,466 14,339 1,029,631 CDBG $ 391,594 41,315 432,909 4,221,972 12,752,935 1,650,860 3,983,694 1,495,005 623,634 2,168,597 14,625 1,029,724 100,762 204,501 157,123 328,433 273,838 236,214 437,335 - 542,691 25,270,791 59,775 61,802 3,334,523 305,263 995,608 437,335 9,255,219 2,130,833 11,581,903 34,023 (4,426) (505,583) (505,583) 11,076,320 8,004,033 19,080,353 64,560 64,560 98,583 154,843 253,426 (4,426) 601,495 $ 597,069 1,690,500 (3,938,942) (2,248,442) 7,006,777 12,265,950 $ 19,272,727 (515,800) (515,800) 1,615,033 5,289,527 $ 6,904,560 The accompanying notes are an integral part of the financial statements 19 $ $ Self-help Technical Assistance Home/HUD $ $ $ 287,482 3,623 291,105 810,275 810,275 Capital Replacement/ Development Special Assessments $ 354,840 42,916 397,756 $ Community Facilities Districts Capital Projects 139,944 36,650 176,594 $ 14,864 12,206 73,809 100,879 Other Governmental Funds $ 335,369 888,017 428,091 97,325 140,325 920,871 757,639 3,567,637 Total Governmental Funds $ 2,375,614 14,973,622 1,236,366 3,632,214 15,208,404 16,390,930 734,495 354,840 1,508,717 14,339 1,071,511 1,184,266 58,685,318 297,646 - 810,275 - 1,386 - 6,636 835,543 33 2,790,240 1,008,034 47,709 19,453 592,713 429,778 5,230,006 12,957,767 2,168,597 1,650,860 4,446,967 3,914,867 6,149,634 297,646 810,275 105,000 31,590 137,976 842,179 52,780 2,843,053 498,922 338,603 2,935,212 1,206,388 484,775 38,209,861 (665,585) (2,742,174) 632,425 20,475,457 (2,742,174) 3,395,832 653,658 699,974 (414,509) 285,465 917,890 3,417,582 4,335,472 5,808,434 (5,374,834) 433,600 20,909,057 36,591,681 57,500,738 (6,541) - 259,780 (6,541) 6,541 - - 259,780 977,768 1,237,548 $ $ $ 3,353,400 3,353,400 2,687,815 2,478,110 5,165,925 20 $ $ $ City of Casa Grande Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2006 Net change in fund balances - total governmental funds $ 20,909,057 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Expenditures for capital assets Less current year depreciation 6,149,636 (4,210,643) 1,938,993 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net assets. Contributed capital assets Sale of capital assets 43,225,896 (85,086) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the fund statements Deferred property tax The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction has any effect on net assets. Bond payments Lease payments 25,773 575,640 455,954 1,031,594 Certain revenues in the governmental funds that provide current financial resources are not included in the statement of activities because they were recognized in a prior period. However, other revenues that are deferred in the governmental funds because they do not provide current financial resources due to unavailability are recognized in the statement of activities. Special assessments Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences Interest expense on long-term debt Change in net assets of governmental activities (309,020) (72,021) (43,439) $ 66,621,747 The accompanying notes are an integral part of the financial statements 21 City of Casa Grande General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Taxes: Property taxes City sales tax Franchise tax Licenses and permits Intergovernmental revenues Charges for services Fines Investment earnings Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Mayor and Council City manager Attorney Clerk Finance Information technology Personnel Public safety Police Fire Court Animal Control Public works Culture and recreation Planning and economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Original $ $ 1,925,100 12,939,400 722,500 1,742,400 6,593,100 1,908,500 727,700 50,000 66,000 58,000 26,732,700 Final $ 1,925,100 12,939,400 722,500 1,742,400 6,593,100 1,908,500 727,700 50,000 66,000 293,000 26,967,700 Actual Amounts $ 2,025,381 14,085,605 1,236,366 3,632,214 7,034,877 4,940,267 734,495 417,951 113,990 304,864 34,526,010 Variance with Final BudgetPositive (Negative) $ 100,281 1,146,205 513,866 1,889,814 441,777 3,031,767 6,795 367,951 47,990 11,864 7,558,310 1,748,700 359,300 415,900 291,500 762,400 973,400 1,118,800 516,000 359,300 415,900 302,000 781,400 981,400 1,118,800 491,986 314,587 412,746 240,384 779,420 942,012 1,040,837 24,014 44,713 3,154 61,616 1,980 39,388 77,963 8,615,900 3,775,700 378,500 260,100 1,260,200 3,861,600 1,234,000 824,200 8,470,000 3,775,700 378,500 255,700 1,719,400 4,103,100 1,527,700 909,700 8,403,092 3,771,929 347,492 230,422 1,650,860 3,983,694 1,495,005 623,634 66,908 3,771 31,008 25,278 68,540 119,406 32,695 286,066 520,200 26,400,400 554,200 26,168,800 367,897 174,794 25,270,791 186,303 (174,794) 898,009 332,300 798,900 9,255,219 8,456,319 1,690,500 (3,938,942) (2,248,442) 7,006,777 12,265,950 19,272,727 17,058 17,058 8,473,377 10,799,350 19,272,727 1,690,500 (3,489,400) (1,798,900) (1,466,600) 1,466,600 - $ 1,690,500 (3,956,000) (2,265,500) (1,466,600) 1,466,600 - The accompanying notes are an integral part of the financial statements 22 $ $ City of Casa Grande Highway Users Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Variance with Budgeted Amounts Final BudgetPositive REVENUES Original Final Actual Amounts (Negative) Taxes: State-shared gas tax $ 2,412,500 $ 2,412,500 $ 2,670,629 $ 258,129 Local transportation assistance 155,600 155,600 155,548 (52) County sales tax 1,265,000 1,057,000 2,425,082 1,368,082 Investment earnings 15,000 15,000 211,081 196,081 Miscellaneous 2,500 2,500 3,016 516 Total revenues 3,850,600 3,642,600 5,465,356 1,822,756 EXPENDITURES Culture and recreation Contractual services 24,200 24,200 14,625 9,575 24,200 24,200 14,625 9,575 1,142,100 786,200 542,300 4,478,000 17,600 1,038,100 496,300 741,400 4,164,900 127,600 979,604 449,426 739,567 1,029,724 121,577 58,496 46,874 1,833 3,135,176 6,023 Total Streets/Transportation 6,966,200 6,568,300 3,319,898 3,248,402 Total expenditures 6,990,400 6,592,500 3,334,523 3,257,977 Excess (deficiency) of revenues over (under) expenditures (3,139,800) (2,949,900) 2,130,833 5,080,733 OTHER FINANCING SOURCES (USES) Transfers out (325,900) (515,800) (515,800) - (325,900) (515,800) (515,800) - (3,465,700) 3,465,700 $ - (3,465,700) 3,465,700 $ - Total Culture and recreation Streets/Transportation Personal services Contractual services Materials and supplies Capital outlay Debt service Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year The accompanying notes are an integral part of the financial statements 23 $ 1,615,033 5,289,527 6,904,560 $ 5,080,733 1,823,827 6,904,560 City of Casa Grande System Development Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Final 170,000 170,000 Actual Amounts $ 11,353,338 533,828 11,887,166 Variance with Final BudgetPositive (Negative) $ 11,183,338 533,828 11,717,166 45,000 3,193,300 3,238,300 105,000 3,127,300 3,232,300 100,762 204,501 305,263 4,238 2,922,799 2,927,037 (3,068,300) (3,062,300) 11,581,903 14,644,203 (500,000) (500,000) (3,568,300) 3,568,300 $ - (506,000) (506,000) (3,568,300) 3,568,300 $ - Budgeted Amounts REVENUES Charges for services Investment earnings Total revenues EXPENDITURES Culture and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original 170,000 170,000 $ The accompanying notes are an integral part of the financial statements 24 $ (505,583) (505,583) 11,076,320 8,004,033 19,080,353 417 417 14,644,620 4,435,733 $ 19,080,353 City of Casa Grande Grants and Subsidies Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Variance with Budgeted Amounts Final BudgetPositive REVENUES Original Final Actual Amounts (Negative) Intergovernmental revenues $ 2,602,400 $ 2,647,400 $ 1,004,826 $ (1,642,574) Investment earnings 10,466 10,466 Contributions and donations 11,500 11,500 14,339 2,839 Total revenues 2,613,900 2,658,900 1,029,631 (1,629,269) EXPENDITURES Public safety Personal services Contractual services Materials and supplies Capital outlay Total Public Safety Culture and recreation Personal services Contractual services Materials and supplies Total Culture and Recreation Community development Contractual services Total Community Development Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ 314,200 5,000 31,800 1,360,000 1,711,000 360,200 6,000 127,300 864,400 1,357,900 50,926 4,056 102,141 236,214 393,337 309,274 1,944 25,159 628,186 964,563 131,300 7,700 212,900 351,900 131,300 8,800 246,100 386,200 100,556 7,821 220,056 328,433 30,744 979 26,044 57,767 641,000 641,000 2,703,900 959,800 959,800 2,703,900 273,838 273,838 995,608 685,962 685,962 1,708,292 (90,000) (45,000) 34,023 79,023 90,000 90,000 - 45,000 45,000 - 64,560 64,560 98,583 154,843 253,426 19,560 19,560 98,583 154,843 253,426 $ The accompanying notes are an integral part of the financial statements 25 $ $ City of Casa Grande Community Development Block Grant Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Intergovernmental revenues Program income Total revenues Original $ 3,000,000 3,000,000 Final $ 3,000,000 3,000,000 Actual Amounts $ 391,594 41,315 432,909 3,000,000 3,000,000 10,000 729,300 10,700 750,000 8,648 419,844 8,843 437,335 EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year - $ 2,250,000 - $ (2,250,000) - The accompanying notes are an integral part of the financial statements 26 Variance with Final BudgetPositive (Negative) $ (2,608,406) 41,315 (2,567,091) 1,352 309,456 1,857 312,665 (4,426) $ 601,495 597,069 (2,254,426) $ 2,851,495 597,069 City of Casa Grande Self-Help Technical Assistance Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Actual Amounts $ 287,482 3,623 291,105 Variance with Final BudgetPositive (Negative) $ 287,482 3,623 291,105 209,341 83,982 4,323 297,646 10,659 66,018 25,677 102,354 Budgeted Amounts REVENUES Intergovernmental revenues Miscellaneous Total revenues $ EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original - $ Final - - 220,000 150,000 30,000 400,000 - (400,000) - $ 400,000 - The accompanying notes are an integral part of the financial statements 27 (6,541) $ 6,541 - 393,459 $ (393,459) - City of Casa Grande Home/HUD Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues $ EXPENDITURES Community development Personal services Contractual services Materials and supplies Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original - Final $ - - 37,000 1,513,000 1,550,000 - (1,550,000) - $ 1,550,000 - The accompanying notes are an integral part of the financial statements 28 Actual Amounts $ 810,275 810,275 Variance with Final BudgetPositive (Negative) $ 810,275 810,275 36,503 773,772 810,275 497 739,228 739,725 - $ - 1,550,000 $ (1,550,000) - City of Casa Grande Statement of Net Assets Proprietary Funds June 30, 2006 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees ASSETS Current assets: Cash Cash with fiscal agent Investments Receivables, net of uncollectibles Inventories Total current assets Noncurrent assets: Deferred bond costs Capital assets: Land Buildings and improvements Machinery and equipment Less accumulated depreciation Total capital assets, net Total noncurrent assets Total assets $ $ - $ 11,481,255 65,334 11,546,589 - 47,610,937 1,129,683 (9,032,133) 39,708,487 40,051,226 48,033,908 2,724 14,330 2,888 9,549 29,491 $ 472,696 1,610 6,884,701 623,675 7,982,682 342,739 1,036,504 (239,665) 796,839 796,839 1,446,047 LIABILITIES Current liabilities: Accounts payable Deposits held Accrued wages and benefits Accrued interest payable Due to other funds Compensated absences Capital leases Notes payable Excise tax revenue obligations Total current liabilities Noncurrent liabilities: Capital leases Notes payable Excise tax revenue obligations Bond premium 2003 issue Deferred amount on refunding Closure and postclosure liability Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Construction Unrestricted Total net assets 625,812 1,300 22,096 649,208 11,546,589 41,997 7,349 162,298 23,267 523,545 758,456 6,665 6,665 158,520 158,520 188,011 14,388,332 371,814 (256,522) 14,503,624 15,262,080 6,665 628,770 24,796,610 - 629,266 1,258,036 1,610 7,973,608 32,771,828 $ The accompanying notes are an integral part of the financial statements 29 $ 11,539,924 11,539,924 Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation $ Golf Course 10,855 1,851,721 49,215 1,911,791 $ - $ - 167,092 5,091,501 (3,108,672) 2,149,921 2,149,921 4,061,712 $ 10,946 1,215 8,952 21,113 Total 1,120,309 1,610 20,218,977 761,535 8,952 22,111,383 $ 342,739 9,173 154,262 163,435 - 283,000 531,611 660,944 (914,101) 561,454 561,454 582,567 283,000 48,309,640 7,918,632 (13,294,571) 43,216,701 43,559,440 65,670,823 52,354 226,825 (205,836) 73,343 73,343 236,778 227,615 28,604 61,742 112,392 430,353 22,283 7,283 81 60,000 11,338 100,985 301,284 14,330 43,236 165,267 60,000 96,347 112,392 9,549 523,545 1,325,950 61,231 6,663 10,791 78,685 295,899 1,624,796 1,920,695 2,351,048 100,985 295,899 158,520 14,388,332 371,814 (256,522) 1,624,796 16,582,839 17,908,789 78,685 1,741,630 561,454 27,728,464 - (30,966) 1,710,664 (79,872) 481,582 11,541,534 8,492,036 47,762,034 $ $ 30 $ 158,093 158,093 City of Casa Grande Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2006 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Operating revenues: Service fees Connection fees Rental Green fees Miscellaneous Total operating revenue $ 197,834 197,834 Operating expenses: Personal services Contractual services Materials and supplies Depreciation Closure and postclosure costs Total operating expenses Operating income (loss) Nonoperating revenues (expense): Investment earnings Interest expense City sales tax Total nonoperating revenues (expense) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets Total net assets-beginning of year Total net assets-end of year 574,444 456,815 660,351 1,073,068 2,764,678 105,563 4,564 $ 4,784,736 4,784,736 4,784,736 (5,777) (5,777) 233,853 (373,450) 2,660,843 2,521,246 99,786 2,525,810 5,133,421 7,991,457 (153,300) 10,363,967 22,407,861 32,771,828 5,133,421 6,406,503 11,539,924 The accompanying notes are an integral part of the financial statements 31 2,497,619 251,446 20,177 2,769,242 1,600 5,602 29,948 55,121 92,271 (21,900) 77,886 1,180,150 1,258,036 $ $ $ 348,685 348,685 $ Governmental Activities Internal Service Funds Business-type Activities-Enterprise Funds Sanitation $ 4,222,208 348,919 4,845 4,575,972 Golf Course $ $ 6,917,661 5,385,101 197,970 583,494 58,502 13,142,728 $ 995,210 995,210 1,813,989 578,975 573,473 433,529 120,207 3,520,173 509,631 35,465 342,055 41,170 928,321 2,899,664 1,076,857 1,605,827 1,602,888 120,207 7,305,443 353,326 165,836 374,864 16,787 910,810 1,055,799 (113,377) 5,837,285 84,400 15,788 15,788 635,533 (397,704) 2,676,631 2,914,460 - 1,090,317 (97,589) 8,751,745 84,400 (481,600) 608,717 1,101,947 1,710,664 400,600 (93,000) 210,011 271,571 481,582 7,991,457 400,600 (749,800) 16,394,002 31,368,032 47,762,034 (84,400) 158,093 158,093 52,995 (18,477) 34,518 $ 197,970 583,494 33,480 814,944 Total $ $ 32 $ City of Casa Grande Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2006 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Payments to suppliers Payments to employees $ Net cash provided (used) by operating activities 198,558 (36,174) (1,600) $ 2,610,292 (1,148,894) (578,671) $ 4,784,736 (18,448) - 160,784 882,727 (21,900) - 2,660,843 (153,300) - (21,900) 2,507,543 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets Principal paid on capital debt Interest paid on capital debt (9,231) (5,936) (1,147,173) (591,660) (336,463) - Net cash (used) by capital and related financing activities (15,167) (2,075,296) - CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES City sales tax Transfers to other funds Transfers from other funds Net cash provided (used) by noncapital financing activities CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received Net cash provided by investing activities Net increase (decrease) in cash Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Cash Cash with fiscal agent Investments 4,766,288 - 206,446 309,413 - 206,446 309,413 1,521,420 5,837,587 5,075,701 6,405,554 123,717 503,395 $ 627,112 $ 7,359,007 $ 11,481,255 $ 625,812 1,300 627,112 $ 472,696 1,610 6,884,701 7,359,007 $ 11,481,255 11,481,255 $ The accompanying notes are an integral part of the financial statements 33 $ $ Governmental Activities Internal Service Fund Business-type Activities-Enterprise Funds Sanitation $ 4,592,431 (956,814) (1,790,310) Golf Course $ 1,845,307 814,720 (520,758) (507,050) Total $ 13,000,737 (2,681,088) (2,877,631) $ 995,210 (537,553) (346,785) (213,088) 7,442,018 110,872 (481,600) - 15,788 (93,000) 400,600 2,676,631 (749,800) 400,600 (84,400) - (481,600) 323,388 2,327,431 (84,400) (199,079) (108,174) (18,478) (105,095) - (1,451,347) (709,065) (360,877) (33,809) - (325,731) (105,095) (2,521,289) (33,809) 47,430 - 563,289 - 47,430 - 563,289 - 1,085,406 777,170 5,205 5,741 7,811,449 13,529,447 (7,337) 16,510 $ 1,862,576 $ 10,946 $ 21,340,896 $ 9,173 $ 10,855 1,851,721 1,862,576 $ 10,946 10,946 $ 1,120,309 1,610 20,218,977 21,340,896 $ 9,173 9,173 $ $ $ $ (continued) 34 City of Casa Grande Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2006 Business-type Activities-Enterprise Funds Wastewater Water Wastewater Dev Fees Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Closure and postclosure costs Depreciation expense (Increase) decrease in accounts receivable (Increase) decrease in inventory Increase (decrease) in accounts payable Increase (decrease) in deposits held Increase (decrease) in accrued wages Increase (decrease) in due to other funds Increase (decrease) in compensated absences Total adjustments Net cash provided (used) by operating activities $ Noncash investing, capital, and financing activities: Contributions of capital assets 105,563 55,121 (1,091) 160,784 The accompanying notes are an integral part of the financial statements 4,564 $ 1,073,068 (158,950) (31,728) (683) (3,544) 878,163 (624) 1,815 55,221 - 35 $ $ 882,727 $ 7,991,457 4,784,736 - (18,448) (18,448) $ 4,766,288 - Governmental Activities Internal Service Fund Business-type Activities-Enterprise Funds Sanitation $ Golf Course 1,055,799 $ 120,207 433,529 16,459 195,634 9,041 14,638 789,508 $ 1,845,307 - (113,377) Total $ 41,170 (225) (8,952) (4,285) 2,401 (130,000) 180 (99,711) $ (213,088) - 5,837,285 $ 120,207 1,602,888 (143,807) (8,952) 140,549 1,815 10,759 (130,000) 11,274 1,604,733 $ 7,442,018 $ 7,991,457 36 84,400 16,787 1,630 (22,978) 24,492 2,093 4,448 26,472 $ 110,872 City of Casa Grande Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2006 Agency Funds ASSETS Cash Interest receivable Investments, at fair value $ Total assets 15,631 2,958 509,145 Part-Time Firemen's Pension $ 527,734 LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for pension benefits and other purposes 772,623 527,734 - 527,734 - $ The accompanying notes are an integral part of the financial statements 37 5,914 766,709 - $ 772,623 City of Casa Grande Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2006 Part-Time Firemen's Pension ADDITIONS Contributions: Employer Plan members Total contributions $ Investment earnings: Interest Change in the fair value of investments Total investment earnings Less investment expense Net investment earnings 1,584 1,584 3,168 32,496 57,576 90,072 (6,348) 83,724 Total additions 86,892 DEDUCTIONS Pension payments Administrative expenses Total deductions 84,763 1,922 86,685 Change in net assets 207 Net assets-beginning of year Net assets-end of year $ The accompanying notes are an integral part of the financial statements 38 772,416 772,623 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, 2006 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 operates four major enterprise activities: wastewater system, sanitation operations, golf course and water system. Individual Component Unit – Blended The Mission Royale Community Facilities District and the Villago Community Facilities District (the Districts) were formed for the purpose of acquiring or constructing public infrastructure in specified areas of the City. As special purpose districts and separate political subdivisions under the Arizona Constitution, the Districts can levy taxes and issue bonds independently of the City. Property owners in the designated areas are assessed for District taxes, and thus for the costs of operating the Districts. The City Council serves as the Board of Directors; however, the City has no liability for the District’s debt. For reporting purposes, the transactions of the Districts are combined together and included as governmental type funds as if they were part of the City’s operations. No separate financial statements were prepared for the Districts. (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 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, 2006 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 (CDBG), 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 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, 2006 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 Community Facilities Districts (CFD) Capital Projects Fund accounts for capital construction activities within the CFDs. 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 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, 2006 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. 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 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, 2006 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 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, 2006 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 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, 2006 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. 6. Governmental Accounting Standards Board Statement No. 44 The City adopted the provisions of GASB Statement No. 44, Economic Condition Reporting: The Statistical Section. This statement amends National Council on Governmental Accounting Statement 1 and establishes and modifies requirements related to the supplementary information presented in a Statistical section in order to improve the understandability and usefulness of the information. (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. (continued) 45 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, 2006 NOTE 1: Summary of Significant Accounting Policies (continued) (E) Basis of Accounting (continued) 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, 2006, are recorded as receivable, net of allowance for uncollectibles. The balance of the tax levy not collected within 60 days after yearend are reflected as deferred revenue. 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) 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. (continued) 46 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, 2006 NOTE 1: Summary of Significant Accounting Policies (continued) (F) Budgetary Data (continued) (4) (5) (6) (7) (8) (9) (10) 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 2005-2006. 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. 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. (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. (continued) 47 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, 2006 NOTE 1: Summary of Significant Accounting Policies (continued) (H) Investments (continued) The State’s investment pool is managed by the State Treasurer’s office. 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. (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 four 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 $317,937 was capitalized for 2005-2006 for the Wastewater Treatment Plant. (continued) 48 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, 2006 NOTE 1: Summary of Significant Accounting Policies (continued) (J) Capital Assets (continued) 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 (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 with less than ten years of service are granted nonvesting sick leave. Employees with ten or more years of service will be paid the unused accrued sick leave as follows: 10 – 15 years of service will receive 30% up to a maximum of 128 hours 15 – 19 years of service will receive 40% up to a maximum of 218 hours 20 or more years of service will receive 50% up to a maximum of 640 hours. Sick leave compensation is accounted for in the period in which 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. (continued) 49 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, 2006 NOTE 1: Summary of Significant Accounting Policies (continued) (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. NOTE 2: Cash and Investments At year-end, the City had the following cash and investments: Cash Investments Restricted investments Total cash and investments $ 7,520,414 66,613,934 981,194 $75,115,542 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 $7,520,414 and the bank balance was $7,961,820. Federal Depository Insurance covered the City’s deposits at June 30, 2006, to the extent of $200,000. Deposits of $7,520,000 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 $241,820 is uncollateralized at June 30, 2006. (continued) 50 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, 2006 NOTE 2: Cash and Investments (continued) Custodial Credit Risk (continued) Cash and cash equivalents include restricted and unrestricted amounts and are included in the financial statements as follows: Cash Investments Restricted investments Governmental Activities $ 6,378,560 45,119,103 979,584 $52,477,247 Business Activities $ 1,120,309 20,218,977 1,610 $21,340,896 Fiduciary Fund $ 21,545 1,275,854 $1,297,399 Total $ 7,520,414 66,613,934 981,194 $75,115,542 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, 2006 was $1,440,524,210. In 2002 an investment within the portfolio defaulted and a loss of $472,455 was recognized and reported on the financial statements ended June 30, 2003. To date, $183,878 has been recovered on this loss. 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. (continued) 51 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, 2006 NOTE 2: Cash and Investments (continued) 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 $65,845,927 1,609 7,377 757,723 908,106 74,386 $67,595,128 Ratings as of Year-End AAA Unrated $ $65,845,927 $ - 1,609 7,377 757,723 908,106 74,386 $67,595,128 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 $65,845,927 State Investment Pool Money Market Money Market & Mutual Funds Money Market Money Market 1,609 7,377 757,723 908,106 74,386 $67,595,128 (continued) 52 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, 2006 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, 2006 $905,198 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, 2006 $74,386 In January 2003, 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, 2006 $1,610 (continued) 53 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, 2006 NOTE 4: Receivables The following table summarizes the City’s governmental activities receivables as of June 30, 2006: General Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total $3,985,532 784,032 73,890 4,843,454 Special Revenue Debt Service $ 686,712 819,607 54,471 1,560,790 $135,240 79,067 14,608 228,915 (18,412) - Capital 118 $4,807,602 1,682,706 21,721 164,690 21,839 6,654,998 - - $4,825,042 $1,560,790 $ Total $228,915 (18,412) $21,839 $6,636,586 The following table summarizes the City’s business-type activities receivables as of June 30, 2006 Water Receivables: Taxes Accounts Interest Gross Receivables Less: allowance for uncollectible Net total receivables $ 22,096 22,096 $22,096 Wastewater $554,207 520,789 41,344 1,116,340 Wastewater Dev Fees $ 65,334 65,334 (492,665) - $623,675 $65,334 Sanitation $ 689,980 10,457 700,437 (651,222) $49,215 Golf Course Total $ 1,215 1,215 $ 554,207 1,234,080 117,135 1,905,422 - (1,143,887) $1,215 $761,535 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: $ 80,924 109,752 $ 190,676 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, 2006, there were 65 of these loans outstanding, totaling $597,069. (continued) 54 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, 2006 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 2005-2006 maximum primary levy limit was $2,868,990. The primary tax levy was $1,735,100. The City did not have a secondary tax levy. The City’s total tax levy for 2005-2006 was $1,735,100. 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, 2006, are $20,416 and $33,090 respectively. NOTE 7: Capital Assets A summary of business-type activities property, plant and equipment at June 30, 2006 follows: Enterprise Land Building & Improvements Machinery & Equipment Total Capital Assets Less: accumulated depreciation Net Capital Assets Water $ 1,036,504 1,036,504 Wastewater $ 47,610,937 1,129,683 48,740,620 Sanitation $ 167,092 5,091,501 5,258,593 Golf Course $283,000 531,611 660,944 1,475,555 (239,665) (9,032,133) (3,108,672) (914,101) (13,294,571) $ 796,839 $39,708,487 $2,149,921 $561,454 $ 43,216,701 $ Total 283,000 48,309,640 7,918,632 56,511,272 (continued) 55 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, 2006 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, 2005 $ 101,806 7,854,205 3,840,030 $11,796,041 Balance Disposals June 30, 2006 $ $ 104,948 8,919,796 (104,358) 4,269,827 $(104,358) $13,294,571 Additions $ 3,142 1,065,591 534,155 $1,602,888 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, 2005 $ 9,248,217 10,688,588 30,727,831 1,407,992 4,682,137 5,308,834 $62,063,599 Adjustments Adjustments Balance & Additions & Disposals June 30, 2006 $ 152,420 $ (2,841,187) $ 6,559,450 2,996,600 13,685,188 47,525,691 78,253,522 33,809 1,441,801 757,496 5,439,633 709,513 (278,661) 5,739,686 $52,175,529 $ (3,119,848) $111,119,280 Less Accumulated Depreciation for: Buildings Improvements Heavy machinery & equipment Operational equipment Vehicles Total Accumulated Depreciation Total General Capital Assets $ 4,648,375 7,412,507 770,698 3,507,399 3,493,490 19,832,469 $42,231,130 $ 535,015 2,799,440 105,690 301,034 486,253 4,227,432 $47,948,097 $ (268,575) (268,575) $(2,851,273) $ 5,183,390 10,211,947 876,388 3,808,433 3,711,168 23,791,326 $87,327,954 (continued) 56 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, 2006 NOTE 7: Capital Assets (continued) The City had additions to contributed capital assets during the fiscal year 2005-2006. The Governmental Activities Capital Assets include a total of $43,225,896 in contributed capital assets received in fiscal year 2005-2006. 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 $ 52,077 542,500 2,380,889 121,871 531,280 582,026 16,789 $4,227,432 Business-type Activities: Water Wastewater Sanitation Golf Course Total Depreciation Expense Business-type Activities NOTE 8: $ 55,121 1,073,068 433,529 41,170 $1,602,888 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) 57 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, 2006 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, 2006, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 7.4 percent (6.9 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, 2006, 2005 and 2004 were $717,228, $529,908, and $455,951, respectively, which were equal to the required contributions for those years. Prior years rates are 5.7% for 2005 and 5.7% for 2004. (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 14.25 percent for police and 13.05 percent for fire. The City contributed the required amount. (continued) 58 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, 2006 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, 2005, 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 14.25% 7.65% 397,049 397,049 June 30, 2005 Entry Age PSPRS - Fire 13.05% 7.65% 253,646 253,646 June 30, 2005 Entry Age 8.50% 6.0% - 9.0% 5.0% Level Percentage Open Open 20 Years Smoothed Market Based on Income 8.50% 6.0% - 9.0% 5.0% 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 2005 $397,049 100% - 2004 343,162 100% - 2003 220,533 100% - 2005 $253,646 100% - 2004 206,291 100% - 2003 114,978 100% - (continued) 59 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, 2006 NOTE 8: Retirement and Pension Plans (continued) (B) Arizona Public Safety Personnel Retirement System (continued) Required Supplementary Information (unaudited) Schedule of Funding progress - An analysis of funding progress for each of the plans as of the most recent actuarial valuations, June 30, 2005, follows: PSPR - Police Actuarial Valuation Date 6/30/05 6/30/04 6/30/03 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) (a) $13,126,047 12,673,016 12,533,116 (b) $18,198,459 15,091,351 13,648,927 (b-a) $5,072,412 2,418,335 1,115,811 Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (b) Funding Liability (Excess) (b-a) $10,213,654 8,640,456 8,024,641 $2,628,532 1,356,658 657,700 Annual Covered Payroll Unfunded Liability as Percentage of Covered Payroll (c) $3,481,906 3,098,436 2,858,725 ([b-a]/c) 145.7% 78.1% 39.0% Funded Ratio (a/b) Annual Covered Payroll (c) Unfunded Liability as Percentage of Covered Payroll ([b-a]/c) 74.3% 84.3% 91.8% $2,231,531 1,959,300 1,825,058 117.8% 69.2% 36.0% Funded Ratio (a/b) 72.1% 83.9% 91.8% PSPR – Fire Actuarial Valuation Date 6/30/05 6/30/04 6/30/03 $7,585,122 7,283,798 7,366,941 (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 $16,936,884 for the year ended June 30, 2006, $31,680 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 $1,584 (5%), and the City contributed $1,584 (5%), totaling $3,168. The City discontinued using part-time firefighters as of December 31, 2005. (continued) 60 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, 2006 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, 2003 2004 2005 Annual Pension Cost $6,387 7,117 1,584 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. This plan was fully vested as of June 30, 2005. As of June 30, 2006, there were 21 eligible employees participating in the plan. The plan is administered by The Innes Associates. As of June 30, 2006, the plan’s assets consisted of the following: Cash Money Market Funds Mutual Funds State Treasury Pool $ Total Assets 5,914 7,377 757,723 1,609 $772,623 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) 61 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, 2006 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, 2006, 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. $3,337,437 12,700 Lease with option to purchase 2 fuel trucks ($58,576 Airport) and 1 street sweeper ($67,591 Streets). Quarterly installments of $8,189 including interest of 4.461%, due through August 20, 2010. 126,167 Lease with option to purchase Airport T-hangers. Quarterly installments of $22,944 including interest of 5.081%, due through August 20, 2013. 553,676 Total Governmental Activities Capital Lease Obligation $4,029,980 (continued) 62 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, 2006 NOTE 10: Capital Leases (continued) Business-Type Activities: 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 $302,467 105,824 408,291 Total Business-type Activities Capital Lease Obligation Total Long-Term Lease Payable 408,291 $4,438,271 The future minimum lease payments by year are: Fiscal Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2020 Governmental Activities $ 467,771 454,950 454,950 454,950 430,385 1,858,595 1,321,675 Business-type Activities $126,651 126,651 126,651 52,267 6,869 - Total $594,422 581,601 581,601 507,217 437,254 1,858,595 1,321,675 5,443,276 (1,413,296) 439,089 (30,798) 5,882,365 (1,444,094) 4,029,980 (275,792) $3,754,188 408,291 (112,392) $295,899 4,438,271 (388,184) $4,050,087 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments Less: current portion Noncurrent portion (continued) 63 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, 2006 NOTE 10: Capital Leases (continued) Leased Capital Assets The following is an analysis of the leased assets included in capital assets: Accumulated Depreciation Cost Building and Improvements: Governmental Activities Assets Total Building and Improvement Machinery and Equipment Governmental Activities Assets Business-type Activities Assets: Sanitation Total Machinery and Equipment Total Leased Capital Assets Net Balance $3,678,007 3,678,007 $(132,585) (132,585) $3,545,422 3,545,422 369,124 (183,412) 185,712 743,265 1,112,389 $4,790,396 (190,162) (373,574) $(506,159) 553,103 738,815 $4,284,237 A portion of the Public Works Facility lease ($905,198) 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, 2006, follows: Governmental Activities General obligation bonds Special assessment bonds Total Bonds Outstanding Balance July 1, 2005 $1,335,000 585,000 $1,920,000 Issued $ $ - Retired $ (105,000) $(105,000) Balance June 30, 2006 $1,335,000 480,000 $1,815,000 Summarization of the long-term bond debt payable at June 30, 2006, 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, 2006 $1,335,000 01/01/10 480,000 $1,815,000 (continued) 64 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, 2006 NOTE 11: Bond Debt (continued) The following table summarizes the City’s future bond debt service requirements as of June 30, 2006: Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2030 General Obligation Bonds (1) Bonds Interest 35,000 40,000 220,000 285,000 375,000 380,000 $1,335,000 Special Assessment Fund (2) Bonds Interest $73,932 73,932 73,932 73,040 71,128 323,764 257,515 166,567 46,110 $1,159,920 $110,000 115,000 125,000 130,000 $480,000 $25,920 19,980 13,770 7,020 $66,690 Total Bonds Interest $110,000 115,000 125,000 165,000 40,000 220,000 285,000 375,000 380,000 $1,815,000 $99,852 93,912 87,702 80,060 71,128 323,764 257,515 166,567 46,110 $1,226,610 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. Principal payments on the bond begin in July, 2009. 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) 65 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, 2006 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 was used 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 was 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) 66 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, 2006 NOTE 12: Excise Tax Revenue Obligations (continued) The following table summarizes the City’s future revenue obligation debt service requirements as of June 30, 2006: Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022 NOTE 13: Governmental Activities Principal Interest $ 496,455 $ 340,997 522,270 316,311 543,900 292,501 565,530 267,979 596,753 242,676 3,415,956 772,174 946,892 150,792 130,187 6,520 $7,217,943 $2,389,950 Business-type Activities Principal Interest $ 523,545 $ 646,635 532,730 633,546 551,100 618,896 569,470 602,363 583,248 583,856 3,279,046 2,563,946 7,403,138 1,529,488 1,469,600 73,480 $14,911,877 $7,252,210 Total Principal Interest $ 1,020,000 $ 987,632 1,055,000 949,857 1,095,000 911,397 1,135,000 870,342 1,180,001 826,532 6,695,002 3,336,120 8,350,030 1,680,280 1,599,787 80,000 $22,129,820 $9,642,160 Changes in Long-Term Obligations Governmental Activities: Compensated absences Bonds payable Excise tax revenue obligations Capital leases Total Governmental Activities Balance July 1, 2005 $ 632,662 1,920,000 7,688,583 4,485,933 $14,727,178 Business-type Activities: Compensated absences Capital leases Excise tax revenue obligations Notes payable (1) Total Business-type Activities Balance July 1, 2005 $ 85,073 593,795 15,426,237 177,300 $16,282,405 Obligations Incurred $ 877,409 $877,409 Additions $116,571 $116,571 Obligations Paid $ (805,388) (105,000) (470,640) (455,953) $(1,836,981) Reductions $(105,297) (185,504) (514,360) (9,231) $(814,392) Balance June 30, 2006 $ 704,683 1,815,000 7,217,943 4,029,980 $13,767,606 Balance June 30, 2006 $ 96,347 408,291 14,911,877 168,069 $15,584,584 Amounts Due Within One Year $ 704,683 110,000 496,455 275,792 $1,586,930 Amounts Due Within One Year $96,347 112,392 523,545 9,549 $741,833 (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 with an interest rate of 3.437%. Long-term compensated absences of governmental activities are expected to be liquidated by the operating funds (primarily the General Fund) as they become due. (continued) 67 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, 2006 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 $12,356,460: Year Ending June 30, 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 2027-2030 NOTE 15: Governmental Activities Principal Interest $ 882,247 $ 632,827 913,454 588,989 958,827 545,225 1,034,886 498,633 931,417 449,525 5,030,915 1,559,575 2,425,989 535,887 505,188 173,087 380,000 46,110 $13,062,923 $5,029,858 Business-type Activities Principal Interest $ 645,486 $ 666,506 659,383 648,699 682,649 629,147 631,034 608,210 600,971 588,138 3,339,610 2,578,976 7,459,504 1,533,446 1,469,600 73,480 $15,488,237 $7,326,602 Total Principal $ 1,527,733 1,572,837 1,641,476 1,665,920 1,532,388 8,370,525 9,885,493 1,974,788 380,000 $28,551,160 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, 2006 the City has reported a $1,624,796 landfill closure and postclosure care liability that represents the total current cost based on 39.90 percent of estimated capacity of the landfill. The remaining cost of $2,447,806 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 2006 valuation of the total closure and postclosure costs were estimated to be $4,072,602. (continued) 68 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, 2006 NOTE 16: Summary of Interfund Transactions Interfund transactions as of June 30, 2006, were as follows: Interfund Receivable/Payable: Fund General Special Revenue Fund: Self-help technical assist. Home/HUD Enterprise Fund - Golf Course Total Receivable Amount $285,000 $285,000 Payable Amount $ 65,000 160,000 60,000 $285,000 The interfund balances at June 30, 2006 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 $3,938,942 515,800 505,583 414,509 5,374,834 $1,690,500 64,560 3,353,400 699,974 5,808,434 21,900 93,000 153,300 481,600 749,800 400,600 400,600 84,400 $6,209,034 $6,209,034 There were no significant transfers during fiscal year 2006 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. 69 COMBINING STATEMENTS City of Casa Grande Combining Balance Sheet Non-Major Governmental Funds June 30, 2006 ASSETS Cash Investments Receivables (less allowance for uncollectibles) Due from other governments Fuel Inventory Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and other current liabilities Accrued wages and benefits Total liabilities Fund balances: Reserved for: Special revenue Debt service Unreserved, reported in: Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balance Special Revenue Community RedevelopArts ment $ 15,016 $ 2,300 484 1,536,207 Municipal Airport $ 11,613 233,427 Parks Develop. $ 1,788 91,041 112,336 45,396 $ 402,772 550 $ 93,379 $ $ $ $ 36,240 2,082 38,322 - 174 174 3 15,503 - 19,265 54,358 1,525 261,016 $ $ $ 159 159 - 364,450 364,450 93,205 93,205 15,503 15,503 1,547,591 1,547,591 $ 402,772 $ 93,379 15,503 $ 1,547,750 70 Court Enhancement $ 3,321 256,170 9,243 $ 1,547,750 - $ Promotion & Tourism $ 24,701 10,392 - - $ $ - - 54,358 54,358 $ 54,358 - 261,016 261,016 $ 261,016 Special Revenue Housing Public Safety Programs Programs $ 58,070 $ 2,812 232,388 22,942 1,387 $ 291,845 $ $ $ 125 125 291,720 291,720 $ 291,845 $ 849 26,603 405 405 Debt Service Capital Projects Airport Recreation Improvement Improvement $ 1,156 $ 173,413 - Redevelopment $ 107 - Recreation $ 140,845 1,198,773 107 142,484 $ 1,482,102 $ - $ $ $ $ - 1,156 - 26,198 - 107 1,482,102 - 26,198 107 1,482,102 1,156 1,156 107 $ 1,482,102 26,603 $ $ 71 1,156 $ $ 58,083 231,496 33,430 33,430 Total Nonmajor Governmental Funds $ 435,142 3,581,824 $ $ - 231,496 70,533 2,082 72,615 26,198 1,482,209 198,066 198,066 $ 287,642 58,083 45,396 4,408,087 2,627,843 199,222 4,335,472 $ 4,408,087 City of Casa Grande Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds For the Year Ended June 30, 2006 REVENUES Taxes: Property taxes Sales Tax Intergovernmental revenues Charges for services Investment earnings Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Culture and recreation Economic development Capital outlay Debt Service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances - beginning of year Fund balances - end of year Municipal Airport Parks Develop. Special Revenue Community RedevelopArts ment Promotion & Tourism Court Enhancement $ $ $ $ $ 17,303 830,130 692,683 1,540,116 3,068 49,633 52,701 14 14 $ 335,369 60,901 90,741 487,011 111,117 583 111,700 8,003 46,073 8,580 62,656 908,034 - 14,988 - 4,465 - 415,989 - 100,000 - 31,332 - 73,922 33,062 1,015,018 14,988 4,465 415,989 100,000 31,332 525,098 37,713 (4,451) 71,022 11,700 31,324 71,022 1,476,569 $ 1,547,591 11,700 42,658 54,358 31,324 229,692 261,016 (414,509) (414,509) 110,589 253,861 $ 364,450 37,713 55,492 $ 93,205 72 $ 18,965 18,965 14,514 989 15,503 $ $ Special Revenue Housing Programs $ $ 166,753 51,252 6,175 224,180 Debt Service Public Safety Programs $ 914 15,323 16,237 Redevelopment $ - 174,024 - 16,377 - 2,700 - 174,024 16,377 165,000 138,693 306,393 (306,393) 50,156 (140) 50,156 241,564 291,720 (140) 26,338 26,198 $ $ 306,500 306,500 107 107 Recreation $ 776,900 42,787 819,687 Capital Projects Recreation Airport Improvement Improvement $ - - $ $ 253,335 253,335 Total Nonmajor Governmental Funds $ 335,369 888,017 428,091 97,325 140,325 920,871 757,639 3,567,637 - 429,778 1,008,034 47,709 19,453 592,713 429,778 260,000 166,848 426,848 - 429,778 498,922 338,603 2,935,212 392,839 - (176,443) 632,425 1,156 1,156 374,509 374,509 198,066 198,066 699,974 (414,509) 285,465 917,890 3,417,582 4,335,472 392,839 1,089,263 1,482,102 $ 73 $ $ City of Casa Grande Combining Statement of Fiduciary Net Assets All Agency Funds June 30, 2006 Flexible Spending Plan Fund Performance Bond Fund ASSETS Cash Interest receivable Investments, at fair value $ Total assets LIABILITIES Other liabilities Total liabilities NET ASSETS Held in trust for other purposes 2,958 509,145 $ 15,631 - Total $ 15,631 2,958 509,145 512,103 15,631 527,734 512,103 15,631 527,734 512,103 15,631 527,734 $ - 74 $ - $ - City of Casa Grande Combining Statement of Changes in Assets and Liabilities All Agency Funds For the Year Ended June 30, 2006 Balance June 30, 2005 Performance Bond Fund Assets: Cash Investments Interest Receivable Total Assets $ Liabilities: Other Liabilities Accounts Payable Additions 471,459 1,916 473,375 $ 37,686 1,042 38,728 Deductions $ - Balance June 30, 2006 $ 509,145 2,958 512,103 473,273 102 473,375 38,493 235 38,728 - 511,766 337 512,103 13,687 13,687 49,109 49,109 (47,165) (47,165) 15,631 15,631 13,687 13,687 1,944 1,944 - 15,631 15,631 Totals - All Agency Funds Assets: Cash Investments Interest Receivable Total Assets 13,687 471,459 1,916 487,062 49,109 37,686 1,042 87,837 (47,165) (47,165) 15,631 509,145 2,958 527,734 Liabilities: Other Liabilities Accounts Payable Total Liabilities 486,960 102 487,062 40,437 235 40,672 - 527,397 337 527,734 Flexible Spending Plan Fund Assets: Cash Total Assets Liabilities: Other Liabilities $ $ 75 $ $ OTHER SUPPLEMENTARY INFORMATION City of Casa Grande Special Assessments Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Special assessments Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Debt Service Principal retirement Interest 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 Amounts $ 354,840 42,916 397,756 5,200 5,200 1,386 3,814 105,000 32,000 142,200 105,000 32,000 142,200 105,000 31,590 137,976 410 4,224 259,780 259,780 - $ Final 140,200 2,000 142,200 Variance with Final BudgetPositive (Negative) $ 214,640 40,916 255,556 - - $ 76 - $ 977,768 1,237,548 $ 977,768 1,237,548 City of Casa Grande Capital Replacement/Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Actual Amounts $ 139,944 36,650 176,594 Variance with Final BudgetPositive (Negative) $ 139,944 36,650 139,944 Budgeted Amounts REVENUES Investment earnings Sale of City property Total revenues EXPENDITURES Materials and supplies Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers 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 $ Original - Final $ - 8,307,300 8,307,300 6,700 6,246,000 6,252,700 6,636 835,543 842,179 64 5,410,457 5,410,521 (8,307,300) (6,252,700) (665,585) 5,550,465 2,687,300 5,500,000 8,187,300 (120,000) 120,000 $ - 2,687,300 5,500,000 8,187,300 1,934,600 (1,934,600) $ - 77 $ 3,353,400 3,353,400 2,687,815 2,478,110 5,165,925 $ 666,100 (5,500,000) (4,833,900) 753,215 4,412,710 5,165,925 City of Casa Grande Community Facilities Districts - Capital Projects Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Property Tax Developer Contribution Investment Earnings Total revenues EXPENDITURES Contractual services Capital outlay Debt Service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) General obligation bonds Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year Final 12,000 2,663,900 2,675,900 Actual Amounts $ 14,864 73,809 12,206 100,879 12,000 34,000,000 - 12,000 34,000,000 - 33 2,790,240 52,780 34,012,000 34,012,000 2,843,053 11,967 31,209,760 (52,780) 31,168,947 (31,336,100) (31,336,100) (2,742,174) 28,593,926 30,000,000 30,000,000 (1,336,100) 1,336,100 $ - 30,000,000 30,000,000 (1,336,100) 1,336,100 $ - (2,742,174) 3,395,832 653,658 $ Original 12,000 2,663,900 2,675,900 Variance with Final BudgetPositive (Negative) $ 2,864 (2,590,091) 12,206 (2,575,021) 78 $ $ (30,000,000) (30,000,000) (1,406,074) 2,059,732 $ 653,658 City of Casa Grande Municipal Airport Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Final 200 552,000 508,000 1,060,200 Actual Amounts $ 17,303 830,130 692,683 1,540,116 Variance with Final BudgetPositive (Negative) $ 17,103 278,130 184,683 479,916 120,200 19,600 275,000 107,000 521,800 146,200 27,000 755,000 107,000 1,035,200 145,971 26,428 735,635 106,984 1,015,018 229 572 19,365 16 20,182 30,400 25,000 525,098 500,098 Budgeted Amounts REVENUES Investment earnings Rental and sale of city property Miscellaneous Total revenues EXPENDITURES Current: General government: Personal services Contractual services Materials and supplies Debt service Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Proceeds from obligations Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original 200 552,000 552,200 (1,030,400) 1,000,000 (30,400) $ - 79 $ (985,000) 1,000,000 15,000 40,000 (40,000) $ - $ (414,509) (414,509) 110,589 253,861 364,450 $ 570,491 (1,000,000) (429,509) 70,589 293,861 364,450 City of Casa Grande Parks Development Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Investment earnings Miscellaneous Total revenues $ EXPENDITURES Current: Culture and recreation: Contractual services 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 Amounts $ 3,068 49,633 52,701 Variance with Final BudgetPositive (Negative) $ 868 24,633 25,501 27,200 27,200 27,200 27,200 14,988 14,988 12,212 12,212 - - 37,713 37,713 - $ 80 - $ 55,492 93,205 $ 55,492 93,205 City of Casa Grande Community Arts Reserve Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Actual Amounts $ 14 14 Variance with Final BudgetPositive (Negative) $ 14 14 Budgeted Amounts REVENUES Investment earnings Total revenues EXPENDITURES Current: Culture and recreation: Contractual services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original - $ Final - 1,500 20,000 21,500 5,500 15,000 20,500 4,465 4,465 1,035 15,000 16,035 (21,500) (20,500) (4,451) 16,049 5,000 5,000 (16,500) 16,500 $ - 5,000 5,000 (15,500) 15,500 $ - 18,965 18,965 14,514 989 15,503 13,965 13,965 30,014 (14,511) 15,503 81 $ $ City of Casa Grande Redevelopment/Downtown Revitalization Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Local taxes Investment earnings Rental and sale of city property Total revenues $ EXPENDITURES Current: Economic development: Contractual services Materials and supplies Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 310,000 15,000 75,000 400,000 $ Final 310,000 15,000 75,000 400,000 Actual Amounts $ 335,369 60,901 90,741 487,011 Variance with Final BudgetPositive (Negative) $ 25,369 45,901 15,741 87,011 112,000 7,000 1,623,600 1,742,600 527,000 7,000 1,623,600 2,157,600 410,948 5,041 415,989 116,052 1,959 1,623,600 1,741,611 (1,342,600) (1,757,600) 71,022 1,828,622 1,342,600 - 82 $ 1,757,600 - $ 1,476,569 1,547,591 $ (281,031) 1,547,591 City of Casa Grande Promotion and Tourism Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Local taxes Total revenues $ EXPENDITURES Current: General government Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 85,000 85,000 Final $ 100,000 100,000 Actual Amounts $ 111,117 111,700 85,000 85,000 100,000 100,000 100,000 100,000 - 11,700 11,700 - $ Variance with Final BudgetPositive (Negative) $ 11,117 11,700 - - $ 83 - $ 42,658 54,358 $ 42,658 54,358 City of Casa Grande Court Enhancement/Probationary Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment earnings Total revenues $ EXPENDITURES Current: Public safety: Contractual services Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 8,000 45,200 2,200 55,400 $ Final 8,000 45,200 2,200 55,400 Actual Amounts $ 14,383 46,073 2,200 62,656 Variance with Final BudgetPositive (Negative) $ 6,383 873 7,256 85,000 200,500 285,500 100,000 200,500 300,500 31,332 31,332 68,668 200,500 269,168 (230,100) (245,100) 31,324 276,424 230,100 - 84 $ 245,100 - $ 229,692 261,016 $ (15,408) 261,016 City of Casa Grande Housing Application and Development Fees Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Charges for service Intergovernmental Investment earnings Total revenues $ EXPENDITURES Current: Economic development: Personal services Contractual services Materials and supplies Total expenditures Final $ 500,000 500,000 Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 500,000 500,000 - $ - $ 85 Variance with Final BudgetPositive (Negative) $ 51,252 (333,247) 6,175 (275,820) 500,000 500,000 Actual Amounts $ 51,252 166,753 6,175 224,180 43,000 756,000 1,000 800,000 1,164 172,459 401 174,024 41,836 583,541 599 625,976 (300,000) 50,156 350,156 300,000 - $ 241,564 291,720 $ (58,436) 291,720 City of Casa Grande Public Safety Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Investment earnings Contributions Total revenues $ EXPENDITURES Current: Public safety activities Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original 200 9,800 10,000 Final $ 200 16,200 16,400 10,000 10,000 16,400 16,400 - - - $ 86 - Actual Amounts $ 914 15,323 16,237 Variance with Final BudgetPositive (Negative) $ 714 (877) (163) 16,377 16,377 23 23 (140) $ 26,338 26,198 (140) $ 26,338 26,198 City of Casa Grande Redevelopment Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Total revenues EXPENDITURES Current: Contractual services Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balance Fund balance - beginning of year Fund balance - end of year $ Original - $ Final - Actual Amounts $ - Variance with Final BudgetPositive (Negative) $ - 2,700 2,700 2,700 165,000 138,800 306,500 165,000 138,800 306,500 165,000 138,693 306,393 107 107 (306,500) (306,500) (306,393) 107 306,500 306,500 107 107 107 107 306,500 306,500 $ - 87 306,500 306,500 $ - $ - $ City of Casa Grande Recreation Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Local taxes Investment earnings Total revenues $ EXPENDITURES Current: Contractual services Debt Service: Principal retirement Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year Original 433,000 433,000 $ 6,000 6,000 260,000 167,000 433,000 260,000 167,000 433,000 - $ Final 433,000 433,000 Actual Amounts $ 776,900 42,787 819,687 - - - $ 88 - Variance with Final BudgetPositive (Negative) $ 343,900 42,787 386,687 $ 6,000 260,000 166,848 426,848 152 6,152 392,839 392,839 1,089,263 1,482,102 $ 1,089,263 1,482,102 City of Casa Grande Recreation Improvements Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Investment earnings Total revenues $ EXPENDITURES Contractual services Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning of year Fund balance - end of year $ Original - $ Final - Actual Amounts $ - Variance with Final BudgetPositive (Negative) $ - - - - - - - - - - $ 89 - $ 1,156 1,156 $ 1,156 1,156 City of Casa Grande Airport Improvement Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts REVENUES Intergovernmental revenues Total revenues $ EXPENDITURES Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources and uses Net change in fund balances Fund balance - beginning of year Fund balance - end of year $ Original 597,300 597,300 Variance with Final BudgetPositive (Negative) $ (343,965) (343,965) Final 597,300 597,300 Actual Amounts $ 253,335 253,335 1,597,300 1,597,300 1,597,300 1,597,300 429,778 429,778 (1,000,000) (1,000,000) (176,443) 823,557 1,000,000 1,000,000 - 1,000,000 1,000,000 - 374,509 374,509 198,066 (625,491) (625,491) 198,066 - 90 $ $ - $ 198,066 1,167,522 1,167,522 $ 198,066 City of Casa Grande Copper Mountain Ranch Water Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2006 Final Actual Amounts Variance with Final BudgetPositive (Negative) 206,500 206,500 $ $ Budgeted Amounts Original OPERATING REVENUES: Service fees Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 206,500 206,500 $ 197,834 197,834 (8,666) (8,666) 49,800 43,000 54,300 160,000 307,100 49,800 38,900 54,300 160,000 303,000 1,600 5,602 29,948 55,121 92,271 48,200 33,298 24,352 104,879 210,729 (100,600) (96,500) 105,563 202,063 NONOPERATING REVENUE (EXPENSES): Interest expense Total nonoperating revenue (expense) (14,000) (14,000) (14,000) (14,000) (5,777) (5,777) Income (loss) before transfers (114,600) (110,500) 99,786 (21,900) (26,000) (21,900) (136,500) (136,500) 77,886 Operating Income Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ 136,500 - 91 $ 136,500 - $ 1,180,150 1,258,036 8,223 8,223 210,286 4,100 214,386 $ 1,043,650 1,258,036 City of Casa Grande Wastewater Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2006 Budgeted Amounts Original Final OPERATING REVENUES: Service fees Connection fees Miscellaneous Total operating revenues $ 2,302,000 95,000 5,000 2,402,000 $ 2,302,000 95,000 5,000 2,402,000 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses 669,200 545,000 557,300 820,000 2,591,500 669,200 528,800 662,300 1,075,000 2,935,300 Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense City sales tax Total nonoperating revenue (expense) $ 2,497,619 251,446 20,177 2,769,242 $ 195,619 156,446 15,177 367,242 574,444 456,815 660,351 1,073,068 2,764,678 94,756 71,985 1,949 1,932 170,622 4,564 537,864 (189,500) (533,300) 29,000 (1,314,400) 1,276,700 (8,700) 29,000 (576,400) 1,276,700 729,300 233,853 (373,450) 2,660,843 2,521,246 204,853 202,950 1,384,143 1,791,946 (198,200) 196,000 2,525,810 2,329,810 (153,300) (240,500) 7,991,457 (153,300) 7,991,457 87,200 (351,500) (44,500) Income (loss) before contributions and transfers Capital contributions Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year Actual Amounts Variance with Final BudgetPositive (Negative) $ 92 351,500 - $ 44,500 - 10,363,967 10,408,467 22,407,861 $ 32,771,828 22,363,361 $ 32,771,828 City of Casa Grande Wastewater Development Fees Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2006 Actual Amounts Variance with Final BudgetPositive (Negative) $ $ Budgeted Amounts Original OPERATING REVENUES: Connection fees Total operating revenues $ 1,500,000 1,500,000 OPERATING EXPENSES: Depreciation Total operating expenses 1,500,000 1,500,000 Final $ 948,600 948,600 948,600 948,600 4,784,736 4,784,736 - 3,836,136 3,836,136 948,600 948,600 Operating Income - - 4,784,736 4,784,736 NONOPERATING REVENUE : Interest income Total nonoperating revenue - - 348,685 348,685 348,685 348,685 Net change in net assets - - 5,133,421 5,133,421 6,406,503 11,539,924 6,406,503 $ 11,539,924 Net Assets - beginning of year Net Assets - end of year $ - 93 $ - $ City of Casa Grande Sanitation Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2006 Actual Amounts Variance with Final BudgetPositive (Negative) $ $ Budgeted Amounts OPERATING REVENUES: Service fees Recycling revenue Miscellaneous Total operating revenues Original Final $ 3,963,000 200,000 1,000 4,164,000 $ 3,985,000 200,000 1,000 4,186,000 1,855,400 960,600 510,500 200,000 220,000 3,746,500 1,815,400 585,400 581,500 434,000 124,000 3,540,300 1,813,989 578,975 573,473 433,529 120,207 3,520,173 1,411 6,425 8,027 471 3,793 20,127 417,500 645,700 1,055,799 410,099 5,000 (168,900) (163,900) 5,000 (21,600) (16,600) 253,600 629,100 481,600 (856,800) (481,600) 375,200 735,200 (227,700) 608,717 836,417 OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Closure and postclosure costs Total operating expenses Operating Income NONOPERATING REVENUE (EXPENSES): Interest income Interest expense Total nonoperating revenue (expense) Income before transfers Transfers out Net change in net assets Net Assets - beginning of year Net Assets - end of year $ (735,200) - 94 $ 227,700 - 4,222,208 348,919 4,845 4,575,972 52,995 (18,477) 34,518 47,995 3,123 51,118 1,090,317 $ 1,101,947 1,710,664 237,208 148,919 3,845 389,972 461,217 $ 874,247 1,710,664 City of Casa Grande Golf Course Enterprise Fund Schedule of Operations - Budget and Actual For the Year Ended June 30, 2006 Final Actual Amounts Variance with Final BudgetPositive (Negative) 152,400 505,000 657,400 $ $ Budgeted Amounts Original OPERATING REVENUES: Rental Green fees Total operating revenues $ OPERATING EXPENSES: Personal services Contractual Materials and supplies Depreciation Total operating expenses Operating Income NONOPERATING REVENUE: City sales tax Total nonoperating revenue $ Transfers in Transfers out Net change in net assets 45,570 78,494 157,544 525,200 36,900 342,900 41,300 946,300 509,631 35,465 342,055 41,170 928,321 15,569 1,435 845 130 17,979 (316,100) (288,900) (113,377) 175,523 8,500 8,500 15,788 15,788 7,288 7,288 (307,600) (280,400) (97,589) 182,811 400,600 (93,000) 400,600 (120,200) 400,600 (93,000) 27,200 210,011 - $ 197,970 583,494 814,944 573,200 56,100 344,200 973,500 8,500 8,500 Income (loss) before transfers Net assets - beginning of year Net assets - end of year 152,400 505,000 657,400 - - $ 95 - 210,011 $ 271,571 481,582 $ 271,571 481,582 City of Casa Grande Capital Assets Used in the Operation of Governmental Funds Schedule By Source June 30, 2006 Governmental funds capital assets: Land and construction in progress Buildings Improvements other than buildings Heavy machinery and equipment Operational equipment Total governmental funds capital assets Investments in governmental funds capital assets by source: General obligation bonds Grants General Fund revenues Special Revenue Fund revenues Capital Project Funds Gifts and donations Total investments in governmental funds capital assets $ 6,559,450 13,661,329 78,225,023 1,407,992 10,986,306 $ 110,840,100 $ 459,863 1,529,993 11,526,011 27,063,854 12,578,697 57,681,682 $ 110,840,100 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 96 City of Casa Grande Capital Assets Used in the Operation of Governmental Funds Schedule By Function and Activity June 30, 2006 Land and Buildings Function and Activity General government $ 1,650,154 Improvements Other Than Buildings $ 145,632 Machinery and Equipment $ 266,360 Total $ 2,062,146 Public safety 1,913,255 703,921 5,239,668 7,856,844 Streets/Transportation 3,048,499 64,412,075 4,453,201 71,913,775 959,626 402,767 265,923 1,628,316 Culture and recreation 3,470,290 6,314,148 2,311,750 12,096,188 Economic development 8,642,298 6,299,824 340,709 15,282,831 12,877,611 $ 110,840,100 Public works Total $ 19,684,122 $ 78,278,367 $ This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 97 City of Casa Grande Capital Assets Used in the Operation of Governmental Funds Schedule of Changes By Function and Activity For the Year Ended June 30, 2006 Function and Activity General government General Capital Assets June 30, 2005 $ Public safety 2,076,550 Additions $ General Capital Assets June 30, 2006 Deletions - $ (14,404) $ 2,062,146 7,086,654 974,261 (204,071) 7,856,844 27,154,343 44,834,432 (75,000) 71,913,775 1,570,003 58,313 Culture and recreation 11,967,140 189,234 Economic development 11,963,539 3,319,292 Streets/Transportation Public works Total $ 61,818,229 $ 49,375,532 - 1,628,316 (60,186) 12,096,188 $ (353,661) 15,282,831 $ 110,840,100 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 98 City of Casa Grande Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2006 U.S. Department of Housing and Urban Development: Passed through Arizona Department of Commerce: Community Development Block Grant - 2005 Community Development Block Grant - 2005 Community Development Block Grant - 2006 Community Development Block Grant - 2006 HOME - 2004 HOME - 2005 HOME - 2003 Rural Housing and Economic Development Rural Housing and Economic Development Total Department of Housing and Urban Development U.S. Department of Agriculture: Self Help Housing Technical Assistance Grant Rural Development Housing Preservation Grant Passed through Arizona Department of Health Services: State Administrative Matching Grants for Food Stamp Program Total Department of Agriculture U.S. Department of Health & Human Services Passed through Pinal-Gila Council for Senior Citizens: Special Programs for the Aging Special Programs for the Aging Social Services Block Grant Nutritional Services Incentive Program Total Department of Health & Human Services U.S. Department of Justice: JAG Grant Bulletproof Vest Grant Local Law Enforcement Block Grant Total Department of Justice U.S. Department of Transportation: FAA Airport Grant FAA Airport Grant FAA Airport Grant FAA Airport Grant Total Department of Transportation U.S. Department of Homeland Security Federal Emergency Management Agency Federal Emergency Management Agency Passed through Pinal County Department of Public Works: Domestic Preparedness Total Department of Homeland Security Grant Number Federal CFDA Number 128-05 104-05 164-06 142-06 304-04 307-05 302-06 564-04 567-05 14.228 14.228 14.228 14.228 14.239 14.239 14.239 14.250 14.250 10 10-433 10.420 10.433 297,646 41,753 461200 10.561 3,246 342,645 5-237 5-237 5-237 5-237 93.044 93.045 93.667 93.053 15,750 54,755 14,889 20,223 105,617 2005-DJBX0880 2005-BUBX05028897 04-LB-BX-0493 16.592 16.607 16.592 22,697 10,735 8,159 41,591 3-04-0007-06 3-04-0007-08 3-04-0007-09-2005 3-04-0007-10-2006 20.106 20.106 20.106 20.106 39,993 18,132 170,111 6,315 234,551 EMW-2003-FP-00726 EMW-2004-FG-03343 97.044 97.044 199 73,702 97.004 45,511 119,412 2005-GE-T5-0030 Total Federal Financial Assistance and Expenditures of Federal Awards *Denotes major program 99 Expenditures $ $ 146,612 205,859 101,758 53,907 1,765 236,449 100,787 261,127 * 210,147 * 1,318,411 2,162,227 * * * * STATISTICAL SECTION Statistical Section This part of the City of Casa Grande's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 101 Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City's ability to generate its sales and property taxes. 108 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 110 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 116 Operating Information These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 118 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year. 100 Schedule 1 City of Casa Grande Net Assets by Component Last Four Fiscal Years (accrual basis of accounting) June 30 2003 2004 2005 2006 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ 21,646,269 7,492,999 3,935,234 $ 33,074,502 $ 24,413,490 13,846,429 5,857,139 $ 44,117,058 $ 28,136,615 25,705,254 10,880,929 $ 64,722,798 $ 74,265,031 39,505,454 17,574,060 $ 131,344,545 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets $ 15,329,786 1,983,310 97,231 $ 17,410,327 $ 9,650,425 11,289,359 1,030,876 $ 21,970,660 $ 19,179,454 7,202,857 4,985,723 $ 31,368,034 $ 27,728,464 11,541,534 8,492,036 $ 47,762,034 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 36,976,055 9,476,309 4,032,465 $ 50,484,829 $ 34,063,915 25,135,788 6,888,015 $ 66,087,718 $ 47,316,069 32,908,111 15,866,652 $ 96,090,832 $ 101,993,495 51,046,988 26,066,096 $ 179,106,579 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 101 Schedule 2 City of Casa Grande Changes in Net Assets Last Four Fiscal Years (accrual basis of accounting) June 30 2003 Governmental Activities: Expenses General government Public safety Streets/Transportation Public works Culture and recreation Economic development Interest on long-term debt Total expenses Program Revenues Charges for services: General government Public safety Streets/Transportation Public works Culture and recreation Development fees Building permits Development and engineering Other economic development Operating grants and contributions Capital grants and contributions Total program revenues Total Governmental Activities Net Program Expense General Revenues and Other Changes in Net Assets Property taxes Sales taxes Franchise taxes Shared revenues: State sales taxes Urban revenue sharing Auto-in-lieu Investment earnings Gain on sales of assets Miscellaneous Transfers Total general revenues and other changes in net assets Total Governmental Activities Change in Net Assets $ 3,627,359 9,888,543 2,702,484 697,449 3,778,926 2,289,429 540,921 23,525,111 102,276 823,583 142,848 28,440 303,358 1,511,684 959,975 583,532 213,613 4,584,394 4,312,801 13,566,504 $ (9,958,607) 2004 $ 2005 2006 4,117,835 10,732,674 2,942,777 765,497 4,078,279 2,422,140 499,031 25,558,233 $ 4,100,221 11,789,718 3,437,830 778,974 4,147,490 2,716,784 477,956 27,448,973 $ 4,463,957 13,504,033 5,486,251 1,868,890 4,978,247 4,468,076 500,879 35,270,333 113,317 810,216 424,308 11,632 288,714 2,139,152 1,263,355 430,876 572,326 4,993,835 4,199,412 15,247,143 109,340 904,202 505,948 2,273,085 285,592 4,667,542 2,017,707 1,876,291 795,721 5,834,031 6,372,598 25,642,057 119,514 984,555 832,940 84,424 340,272 11,353,338 3,468,682 3,357,825 1,282,294 7,866,501 43,675,183 73,365,528 $ (10,311,090) $ (1,806,916) $ 38,095,195 1,536,606 9,477,906 850,839 1,799,803 10,573,489 899,604 2,333,638 12,094,301 954,853 2,401,386 14,973,622 1,236,366 1,972,714 2,650,450 999,433 (163,059) 221,721 200,444 (26,617) 17,720,437 2,122,100 2,278,117 1,189,494 124,545 (77,414) 277,201 1,341,083 20,528,022 2,336,759 2,345,507 1,221,188 466,925 414,900 145,585 99,000 22,412,656 2,721,554 2,728,207 1,585,116 1,508,717 660,798 361,586 349,200 28,526,552 $ 20,605,740 $ 66,621,747 $ 7,761,830 $ 10,216,932 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. 102 Schedule 3 City of Casa Grande Changes in Net Assets Last Four Fiscal Years (accrual basis of accounting) June 30 2003 Business-type Activities: Expenses Water Golf course Wastewater Sanitation Total expenses Revenues Charges for services: Water Golf course Wastewater Sanitation Sales taxes Investment earnings Miscellaneous Capital grants and contributions Total revenues Total Business-type Activities Net Program Expense Other Changes in Net Assets Transfers $ 197,109 698,909 2,465,665 2,638,820 6,000,503 194,782 420,799 2,767,417 2,687,498 1,681,957 (77,534) 7,157 1,099,166 8,781,242 $ 2,780,739 26,617 2004 $ 142,327 716,703 2,981,091 2,797,052 6,637,173 2005 $ 158,397 844,434 2,487,685 3,148,693 6,639,209 2006 $ 98,048 928,321 3,138,128 3,538,650 7,703,147 193,006 433,686 3,703,613 3,056,414 1,885,485 88,214 1,895,607 1,136,713 12,392,738 186,225 584,429 7,618,055 3,804,163 2,150,452 183,584 47,086 1,561,589 16,135,583 197,834 781,464 7,533,801 4,571,127 2,676,631 635,533 58,502 7,991,457 24,446,349 $ 5,755,565 $ 9,496,374 $ 16,743,202 (1,341,083) (99,000) (349,200) Total Business-type Activities Change in Net Assets $ 2,807,356 $ 4,414,482 $ 9,397,374 $ 16,394,002 Total Primary Government Change in Net Assets $ 10,569,186 $ 14,631,414 $ 30,003,114 $ 83,015,749 103 Schedule 4 City of Casa Grande Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 1997 General Fund Reserved Unreserved Total general fund All Other Governmental Funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Total all other governmental funds 1998 1999 2000 $ 112,837 2,798,300 $ 2,911,137 $ 74,769 2,451,559 $ 2,526,328 $ 110,897 3,964,937 $ 4,075,834 139,262 4,915,566 $ 5,054,828 $ 1,528,318 $ 1,560,637 $ 6,795,532 $ 4,096,314 1,985,141 1,486,226 $ 4,999,685 4,817,397 218,851 $ 6,596,885 2,624,407 44,043 $ 9,463,982 3,181,985 539,713 $ 7,818,012 104 $ 2001 2002 2003 Fiscal Year 2004 2005 2006 $ 143,871 4,422,980 $ 4,566,851 $ 176,526 3,338,675 $ 3,515,201 $ 486,826 3,823,320 $ 4,310,146 $ 801,965 6,343,317 $ 7,145,282 $ 1,115,310 11,150,642 $ 12,265,952 $ 1,476,273 17,796,454 $ 19,272,727 $ 2,186,274 $ 2,311,916 $ 2,341,307 $ 2,368,606 $ 6,252,078 $ 4,250,108 2,761,029 1,406,775 $ 6,354,078 3,758,330 1,214,043 $ 7,284,289 4,328,235 372,078 $ 7,041,620 9,013,364 1,066,167 $ 12,448,137 15,594,386 2,479,265 $ 24,325,729 28,612,756 5,365,147 $ 38,228,011 105 Schedule 5 City of Casa Grande Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Revenues Taxes Licenses and permits Intergovernmental revenues Charges for services Fines Special assessments Investment earnings Rental and sale of city property Other revenues Total revenues 1997 1998 Fiscal Year 1999 2000 2001 $ 8,009,255 432,342 7,201,890 528,774 524,263 523,626 338,560 110,529 289,966 17,959,205 $ 7,368,958 389,569 7,719,748 432,094 667,303 433,972 405,490 155,228 242,448 17,814,810 $ 8,207,129 698,453 8,947,070 877,478 827,765 242,998 376,637 104,288 384,429 20,666,247 $ 9,647,104 644,487 9,361,703 760,096 772,079 588,862 649,120 288,542 216,622 22,928,615 $ 10,500,552 895,927 11,303,184 974,559 628,857 309,163 565,660 418,879 352,902 25,949,683 Expenditures General government Public safety Streets/Transportation Public works Culture and recreation Planning and economic development Capital outlay Debt service Principal Interest Total expenditures 2,510,411 6,160,033 1,270,656 354,158 2,085,005 1,147,130 3,055,380 2,615,082 6,451,991 1,478,014 472,821 2,220,546 1,477,070 3,900,673 2,750,694 6,831,027 1,221,041 460,161 2,279,233 1,788,326 4,929,355 2,753,142 7,502,776 1,446,023 797,824 2,669,541 1,352,047 7,716,638 3,348,830 8,237,440 1,956,566 766,460 3,076,334 2,859,626 6,307,819 1,364,549 357,260 18,304,582 1,350,340 271,536 20,238,073 1,058,750 396,383 21,714,970 1,003,291 571,129 25,812,411 979,300 465,622 27,997,997 Other Financing Sources (Uses) Transfers in Transfers out Capital leases Bond issuance Bond issuance costs Total other financing sources (uses) 2,179,119 (2,150,894) 28,225 2,691,306 (2,647,806) 3,592,154 3,635,654 1,874,832 (1,659,139) 2,001,127 2,216,820 2,391,189 (2,649,899) 369,137 110,427 844,605 (701,105) 321,826 5,000,000 5,465,326 Net change in fund balances $ (317,152) $ 1,212,391 $ 4,416,603 $ (666,976) $ (1,937,887) Debt service as a percentage of noncapital expenditures Not Available* Not Available* Not Available* Not Available* Not Available* *Prior to implementation of GASB 34 in 2003, the Capital outlay number from the CAFR may not include all capital asset purchases. 106 2002 2003 Fiscal Year 2004 2005 2006 $ 10,565,836 801,910 10,763,681 1,578,990 801,690 244,872 233,207 405,717 231,348 25,627,251 $ 11,851,114 1,074,991 10,358,329 2,528,275 690,177 211,787 (163,059) 536,538 274,985 27,363,137 $ 13,294,993 1,385,080 10,902,234 3,221,772 677,048 137,644 124,545 738,198 473,864 30,955,378 $ 15,388,557 2,156,170 11,911,931 9,853,065 739,283 217,895 466,925 701,633 720,093 42,155,552 $ 18,585,602 3,632,214 15,208,404 16,390,930 734,495 354,840 1,508,717 1,071,511 1,198,605 58,685,318 $ 3,689,262 9,639,754 1,798,580 777,291 3,349,200 2,238,132 2,593,601 3,641,912 9,499,759 1,987,200 657,785 3,352,211 1,871,266 4,472,441 4,451,216 10,309,036 1,672,165 730,486 3,450,403 1,952,308 1,939,318 4,300,175 11,344,629 1,908,050 734,391 3,654,964 2,242,438 4,526,914 5,230,006 12,957,767 2,168,597 1,650,860 4,446,967 3,914,867 6,149,634 956,448 620,054 25,662,322 932,344 559,527 26,974,445 960,801 471,539 25,937,272 799,546 477,428 29,988,535 1,206,388 484,775 38,209,861 1,010,817 (1,097,185) (86,368) 1,618,327 (1,644,944) 150,000 123,383 2,919,819 (1,578,736) 1,056,839 2,397,922 2,686,632 (2,530,831) 3,500,000 1,335,000 (159,557) 4,831,244 5,808,434 (5,374,834) 433,600 (121,439) Not Available* $ 512,075 6.63% $ 7,416,028 5.97% $ 16,998,260 5.02% 107 $ 20,909,057 5.27% Schedule 6 City of Casa Grande Sales Tax Revenue by Industry, Fiscal Years 2006, 2005 and 2004 Fiscal Year 2004 Percentage Tax Paid of Total Fiscal Year 2005 Percentage Tax Paid of Total Fiscal Year 2006 Percentage Tax Paid of Total Construction Manufacture Transportation/Communication/ Utilities Wholesale Trade Retail Trade Restaurants/Bars Insurance/Real Estate Hotels/Lodging Services All Other $ 2,267,707 355,169 18.20% 2.85% $ 2,187,722 497,382 15.36% 3.49% $ 3,164,234 599,880 878,190 194,389 6,190,793 703,915 830,953 266,437 464,107 307,314 7.05% 1.56% 49.69% 5.65% 6.67% 2.14% 3.73% 2.47% 1,220,019 195,610 7,027,208 923,817 1,485,089 275,550 373,228 59,128 8.56% 1.37% 49.33% 6.49% 10.43% 1.93% 2.62% 0.42% 1,470,192 211,865 8,377,108 1,021,869 1,732,572 316,538 427,755 328,240 17.93% 3.40% 0.00% 8.33% 1.20% 47.46% 5.79% 9.82% 1.79% 2.42% 1.86% Total $ 12,458,974 100.00% $ 14,244,753 100.00% $ 17,650,253 100.00% Source: Arizona State Department of Revenue Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue. Information prior to 2004 is not available. 108 Schedule 7 City of Casa Grande Direct and Overlapping Sales Tax Rates June 30, 2006 City Rates State and Pinal County (3) Combined Privilege tax, except retail, utilities and telecommunication 1.80% 6.60% 8.40% Retail 2.00% 6.60% 8.60% Retail - privilege tax for single item over $5000 1.50% 6.60% 8.10% Hotel/Motel 3.80% 6.60% 10.40% Restaurant/Bar 1.80% 6.60% 8.40% Utilities/Telecommunications 2.00% 6.60% 8.60% Construction * 4.00% 6.60% 10.60% Type of Tax Sources: City of Casa Grande Finance Department and Arizona Department of Revenue *Changed from 1.8% effective 6/15/2006 109 Schedule 8 City of Casa Grande Ratios of Outstanding Debt by Type, Last Ten Fiscal Years Fiscal Year General Obligation Bonds Street & Hwy User Revenue Bonds 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $ 260,000 1,335,000 1,335,000 $ 1,150,000 785,000 410,000 - Governmental Activities Excise Tax Special Revenue Assessment Obligations Bonds $ 1,975,000 5,480,000 10,280,000 9,870,000 9,435,000 8,980,000 8,495,000 8,138,000 7,688,583 7,217,943 $ 880,000 595,000 280,000 1,170,000 955,000 870,000 780,000 685,000 585,000 480,000 Capital Leases $ 653,573 391,382 463,944 1,042,071 1,130,019 761,093 566,744 1,236,062 4,485,933 4,029,980 Notes: Details regarding the City's outstanding debt can be found in the financial statements. (a) See Schedule 13 for personal income and population data Personal income is based on Pinal County information. 110 Mortgages $ 265,000 119,472 - Business-type Activities Excise Tax Revenue Capital Notes Obligations Leases Payable $ 10,325,000 9,835,000 9,320,000 8,785,000 8,220,000 7,625,000 7,005,000 15,926,820 15,426,237 14,911,877 $ 635,351 672,214 605,180 638,216 1,162,818 787,125 459,286 404,534 593,795 408,291 $ 203,193 178,170 178,170 177,300 168,069 Total Primary Government Percentage of Personal Income (a) Per Capita (a) $ 15,878,924 17,758,596 21,359,124 21,770,287 21,022,309 19,226,411 17,484,200 26,568,586 30,291,848 28,551,160 4.60% 4.94% 5.56% 4.84% 4.33% 3.94% 3.21% 4.32% 4.22% 3.59% 723.58 794.92 921.65 821.83 755.79 704.52 588.40 848.43 884.18 783.30 111 Schedule 9 City of Casa Grande Ratio of General Bonded Debt Outstanding Last Two Fiscal Years Fiscal Year General Obligation Bonds 2005 $ 1,335,000 2006 1,335,000 Assessed Valuation (a) $ Percentage of Assessed Valuation 582,812 229.06% 1,063,834 125.49% (a) Source: Pinal County Assessor's records Note: The only current general obligation bond was issued by the Mission Royale Community Facilities District in fiscal year 2005. These bonds will be repaid by the property owners within Mission Royale CFD and are obligations of the district only. No population data are available. 112 Schedule 10 City of Casa Grande Direct and Overlapping Governmental Activities Debt As of June 30, 2006 Debt Outstanding Estimated Percentage Applicable Estimated Share of Overlapping Debt $ 165,865,000 14.75% $ 24,465,088 School District #4 22,760,000 62.82% 14,297,832 School District #82 10,523,061 48.72% 5,126,835 Central Arizona Community College 20,055,000 14.10% 2,827,755 1,335,000 100.00% 1,335,000 Governmental Unit Pinal County Mission Royale CFD Subtotal, overlapping debt 48,052,510 City direct debt 11,727,923 Total direct and overlapping debt $ 59,780,433 Sources: Assessed value data used to estimate applicable percentages provided by Pinal County Assessor's Office. Debt outstanding data provided by each governmental unit. Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Casa Grande. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of Pinal County's taxable assessed value that is within the government's boundaries and dividing it by the County's total taxable assessed value. 113 Schedule 11 City of Casa Grande Legal Debt Margin Information June 30, 2006 General Obligation 6% Assessed value $ 180,092,436 $ 10,805,546 General obligation debt Legal debt margin Utility Purpose and Open Space 20% $ $ 10,805,546 36,018,487 - $ 36,018,487 Note: No retroactive reporting of the legal debt margin is provided because the City has had no general obligation debt since 1997. 114 Schedule 12 City of Casa Grande Pledged-Revenue Coverage Last Ten Fiscal Years Special Assessment Bonds Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Special Assessment Collections $ 410,579 465,175 447,993 204,394 308,629 290,054 174,365 137,642 217,895 354,840 Debt Service Principal Interest $ 332,741 372,500 232,500 142,500 215,000 85,000 90,000 95,000 100,000 105,000 $ 88,852 65,725 37,553 25,320 37,785 51,570 56,147 42,120 36,990 31,590 Excise Tax Revenue Obligations Coverage Pledged Revenue Collected (a) 0.97 1.06 1.66 1.22 1.22 2.12 1.19 1.00 1.59 2.60 $ 16,215,809 15,496,416 18,037,441 19,967,133 23,176,964 22,402,363 23,444,022 25,645,893 29,267,707 37,727,237 Debt Service Principal Interest Not Available Not Available 715,000 945,000 1,000,000 1,050,000 1,105,000 1,165,000 950,001 985,000 Coverage Not Available Not Available 865,073 1,058,859 1,010,013 957,807 901,980 594,321 1,054,202 1,022,252 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (a) 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. 115 11.42 9.96 11.53 11.16 11.68 14.58 14.60 18.80 Schedule 13 City of Casa Grande Demographic and Economic Statistics, Last Ten Fiscal Years Fiscal Year Population County Per Capita Personal Income 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 21,945 22,340 23,175 26,490 27,815 27,290 29,715 31,315 34,260 36,450 $ 15,725 16,099 16,563 16,994 17,436 17,889 18,354 19,646 20,959 21,800 Total Personal Income School Enrollment Unemployment Rate $ 345,085,125 359,651,660 383,847,525 450,171,060 484,982,340 488,190,810 545,389,110 615,214,490 718,055,340 794,610,000 6,952 7,079 7,241 7,442 7,680 7,784 7,895 8,120 8,930 9,049 4.40% 3.80% 4.00% 3.90% 4.20% 6.80% 6.20% 5.00% 5.20% 5.10% Sources: Population, County Per Capita Income and City Unemployment Rate - Arizona Department of Commerce and Arizona Department of Economic Security. School Enrollment - Casa Grande Elementary and Casa Grande Union High School Districts. 116 Schedule 14 City of Casa Grande Principal Employers, Current Year and Six Years Ago Employer Casa Grande Regional Medical Center Casa Grande Elementary School District Wal-Mart Distribution Center Wal-Mart Supermarket Frito-Lay Inc. Abbott Laboratories/Ross Products Hexcel Corporation City of Casa Grande Mobile-Mini Palm Harbor Homes 2006 (a) Percentage of Total City Employees Employment 2000 (b) Percentage of Total City Employees Employment 920 761 569 520 450 425 365 340 300 200 5.52% 4.56% 3.41% 3.12% 2.70% 2.55% 2.19% 2.04% 1.80% 1.20% 788 625 302 397 562 251 200 5.70% 4.52% 0.00% 0.00% 2.19% 2.87% 4.07% 1.82% 0.00% 1.45% 4,850 29.09% 3,125 22.62% Sources: (a) Casa Grande Valley Economic Development Foundation; various employers; AZ Dept of Economic Security (b) Casa Grande Valley Economic Development Foundation, July 2000; AZ Dept of Economic Security Note: July, 2000 is the earliest year for which both employer and labor force information are available. 117 Schedule 15 City of Casa Grande Authorized City Government Employee Positions by Function/Program Last Ten Fiscal Years Function/Program Fiscal Year General Government Police, City Attorney and Court 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 17.5 17.5 17.5 22 24.5 26 22.75 23 24 26 77.5 85.5 86.5 88.5 91.5 93.5 98.5 97.5 103.5 107.5 Fire Culture and Recreation Planning and Development Public Works Total 24 24 25 27 27 30 33 37 38 41 35.5 37 37 39 43 43 44 44 44 44 13.95 14.75 15.75 15.75 16 17 17 17 19 22 60.17 60.5 62 61 66 76 80 80 79 84.25 228.62 239.25 243.75 253.25 268.00 285.50 295.25 298.50 307.50 324.75 Source: City Budget Note: Information is based on authorized positions. 118 Schedule 16 City of Casa Grande Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program General government Registered voters Votes cast last primary election Fire Medical support calls Total alarms Inspections/investigations Public education contacts Police Calls for service Officer initiated Patrolled miles Traffic accidents Traffic citations Arrests (adult and juvenile) Culture and recreation - library (a) Items in collections Reference questions Total items circulated Total circulation transactions Economic development Building permits - commercial Building permits - residential Self-help homes completed Self-help homes started Housing rehabilitations Code enforcement cases Planning cases 1997 1998 Fiscal Year 1999 2000 2001 9,973 1,741 9,973 1,741 9,987 1,307 11,441 2,367 11,441 2,367 1,816 2,545 245 10,133 1,798 2,540 479 10,643 1,873 2,790 340 6,661 2,087 3,128 276 7,501 2,426 3,281 415 8,582 30,529 101,751 605,229 1,094 6,035 4,030 28,596 104,357 676,328 1,107 8,840 3,736 26,788 98,206 657,807 791 9,216 4,228 26,019 59,332 649,745 817 9,163 4,785 27,602 63,362 654,370 853 10,561 4,338 100,897 37,644 388,371 710,634 100,000 37,482 192,101 228,876 95,610 18,229 380,942 799,622 94,523 17,199 332,691 391,308 99,414 18,912 422,063 733,582 255 489 20 11 34 361 74 289 569 22 18 46 407 72 274 892 20 8 12 303 98 271 1,003 8 16 13 670 155 279 1,446 16 24 17 617 78 Sources: Various City departments Note: (a) In 2004 the library implemented a new system that tracks information more accurately. 119 2002 2003 11,441 2,367 13,685 1,242 2,578 3,447 222 10,018 Fiscal Year 2004 2005 2006 13,685 1,242 15,919 1,428 13,239 1,428 2,774 3,697 305 11,386 3,085 4,136 524 7,344 3,427 4,557 487 11,764 3,766 5,137 390 8,884 29,705 71,814 700,884 796 9,495 4,673 33,076 68,677 671,030 886 8,408 4,773 37,674 69,588 716,138 928 8,607 4,387 38,869 69,412 702,062 1,046 7,068 4,614 39,365 69,936 706,375 1,213 6,127 4,055 100,619 22,647 374,840 734,852 100,655 18,940 149,210 825,000 90,826 5,776 52,240 172,391 86,364 6,415 51,915 170,875 73,984 14,959 49,718 187,063 256 1,333 24 23 13 675 61 262 1,639 23 15 16 724 114 262 1,983 22 13 12 660 161 273 2,565 6 26 9 1,059 154 339 3,501 20 27 12 1,704 334 120 Schedule 17 City of Casa Grande Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program Fire stations Parks and recreation Park areas Parkland acreage Community centers Golf courses Playgrounds Other maintenance areas Airport T-hangers T-shades Public works Total number of streetlights Miles of streets Miles of sewer Number of lift stations Number of signalized intersections Fiscal Year 1998 1999 1997 2000 2 2 2 2 23 2,143 2 1 19 38 25 2,152 2 1 19 38 25 2,152 2 1 19 38 25 2,152 2 1 19 38 22 18 22 18 22 18 22 18 1,257 226 152 7 18 1,283 228 153 7 18 1,315 237 104 7 18 1,336 243 105 10 25 Sources: Various City departments 121 2001 Fiscal Year 2003 2004 2002 2005 2006 3 3 3 3 3 3 25 2,152 3 1 19 71 24 1,787 4 1 19 85 23 1,783 4 1 20 85 24 1,790 4 1 22 85 24 1,370 4 1 22 85 24 1,370 4 1 24 87 22 18 22 18 52 18 52 18 52 18 52 18 1,525 243 108 10 26 1,638 307 121 10 26 1,638 307 121 10 27 1,893 321 145 10 27 2,011 354 160 10 27 2,217 375 300 9 31 122 SINGLE AUDIT REPORTS 123 The Honorable Mayor and Council City of Casa Grande, Arizona A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the city council, management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. September 15, 2006 125 The Honorable Mayor and Council City of Casa Grande, Arizona Internal Control Over Compliance The management of the City of Casa Grande, Arizona is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the city council, management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. September 15, 2006 127