Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2002 City of Yuma, Arizona City of Yuma Arizona Comprehensive Annual Financial Report CITY COUNCIL Lawrence K. Nelson, Mayor Bobby L. Brooks Edwin L. Hansberger Karen J. Hill Paul B. Johnson Norma A. Nelson Ema Lea Shoop City Administration Joyce Wilson City Administrator Martha Dempsey Assistant City Administrator City Departments For the Fiscal Year Ended June 30, 2002 Prepared by: Administrative Services Department Robert L. Stull, CPA Director Donald “Pat” Wicks, CPA Assistant Director for Financial Services Administrative Services Robert L. Stull City Attorney Steven W. Moore City Clerk Brigitta K. Stanz Community Development Michael A. Steele Fire Department Gary L. Fisher, Chief Information Technology Laura S. Neinast Municipal Court Douglas S. Stanley, Judge Parks and Recreation Stephen D. Bills Police Department William D. “Robby” Robinson, Chief About the Cover: The new City Hall was completed in June 2002 and opened for business on July 1. The new municipal center consolidates a number of city departments from previously dispersed locations. The historic Yuma City Hall will be turned over to the newly appointed Yuma Crossing National Heritage Area Board of Directors during fiscal year 2003. Public Works Robert L. Wagner Citizens of Yuma Assistant City Administrator/ Quality Initiatives Program Mayor and Council Communications/ Public Affairs Municipal Court Judge City Administrator City Clerk Municipal Court FIRE DEPARTMENT __________________ COMMUNITY DEVELOPMENT _____________________ Emergency Management Business Development Prevention Engineering Streets Training Planning and Neighborhood Services Utility Systems Special Operations Treatment Emergency Medical Services PUBLIC WORKS _______________ POLICE DEPARTMENT ___________________ Assistant Directors Field Services Vehicle Maintenance Support Services ADMINISTRATIVE SERVICES _______________ Assistant Director Parks/Mall Maintenance Support Services Solid Waste PARKS AND RECREATION _______________ Recreation Civic and Convention Center/Baseball Complex Arts and Culture Golf Courses INFORMATION TECHNOLOGY _______________ CITY ATTORNEY _______________ Business Applications and Support Assistant City Attorneys Financial Services Human Resources Materials Management Risk Management Telecommunications and Support City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2002 TABLE OF CONTENTS INTRODUCTORY SECTION Table of Contents Letter of Transmittal from the Director of Administrative Services Certificate of Achievement for Excellence in Financial Reporting Page i v x FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis (Required Supplementary Information) BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Assets Statement of Activities FUND FINANCIAL STATEMENTS Governmental Funds: Balance Sheet Reconciliation of the Balance Sheet-Governmental Funds 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 BalancesGovernmental Funds to the Statement of Activities Proprietary Funds: Statement of Net Assets Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows NOTES TO THE FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress - Public Safety Personnel Retirement System Budgetary Comparison Schedules-General Fund and Major Special Revenue Funds: General Fund Highway User Revenue Fund Road Tax Fund Grants Fund Community Redevelopment Fund OTHER SUPPLEMENTARY INFORMATION Combining Balance Sheet-Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances-Nonmajor Governmental Funds Budgetary Comparison Schedules: Major Governmental Funds Not Included In Required Supplementary Information Municipal Property Corporation Bonds Debt Service Fund Capital Projects Fund Nonmajor Governmental Funds Local Transportation Assistance Special Revenue Fund Public Safety Tax Special Revenue Fund Solid Waste Special Revenue Fund Recreation Complex Special Revenue Fund 2 Percent Tax Special Revenue Fund 3 5 20 21 24 26 28 30 31 32 33 35 58 59 62 63 64 65 70 72 74 75 76 77 78 79 80 City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2002 TABLE OF CONTENTS (Concluded) FINANCIAL SECTION (Continued) Page Nonmajor Governmental Funds (continued) Yuma Mall Maintenance Special Revenue Fund Revenue Bond Debt Service Fund Nonmajor Proprietary Funds: Enterprise Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Combining Statement of Cash Flows Budgetary Comparison Schedules: Water Enterprise Fund Wastewater Enterprise Fund Desert Hills Golf Course Enterprise Fund Arroyo Dunes Golf Course Enterprise Fund Internal Service Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Combining Statement of Cash Flows Budgetary Comparison Schedule - Equipment Replacement Internal Service Fund Capital Assets Used in the Operation of Governmental Funds: Schedule of Capital Assets by Source Schedule By Function and Activity Schedule of Changes by Function and Activity 81 82 84 85 86 87 88 89 90 92 93 94 95 98 99 100 STATISTICAL SECTION Government-wide Expenses by Function Government-wide Revenues General Governmental Expenditures by Function - Last Ten Fiscal Years General Revenues by Source - Last Ten Fiscal Years Tax Revenues by Source - Last Ten Fiscal Years Intergovernmental Shared Revenues - Last Ten Fiscal Years Intergovernmental Revenues - Grants and Others Property Tax Levies and Collections - Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years Property Tax Rate per $100 of Assessed Valuation - Direct and Overlapping Governments - Last Ten Fiscal Years Computation of Direct and Overlapping Debt Ratio of General Bonded Debt to Assessed Value and General Bonded Debt per Capita - Last Ten Fiscal Years Special Assessments Collections - Last Ten Fiscal Years Computation of Legal Debt Limitation Ratio of Debt Service of General Bonded Debt to Total General Governmental Expenditures - Last Ten Fiscal Years Schedule of Water and Wastewater Revenue Bond Coverage - Last Ten Fiscal Years Pledged Tax Collections Schedule of Municipal Property Corporation Debt Service Requirements and Coverage Building Permits, Bank Deposits and Retail Sales - Last Ten Fiscal Years Assessed Valuation of Ten Major Property Taxpayers Miscellaneous Statistical Data Table I II III IV V VI VII VIII IX 103 104 105 106 107 108 109 110 111 X XI 112 113 XII XIII XIV 114 115 116 XV XVI XVII XVIII XIX XX XXI 117 118 119 120 121 122 123 INTRODUCTORY SECTION iii iv DEPARTMENT OF ADMINISTRATIVE SERVICES One City Plaza P.O. Box 13012 Yuma, Arizona 85366-3012 (928) 373-5067 Fax: (928) 373-5068 City of YUMA September 19, 2002 To the Citizens, Honorable Mayor and City Council, and City Administrator The Department of Administrative Services is pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Yuma, Arizona for the fiscal year ended June 30, 2002. The report includes the independent auditors’ report as required by City Charter Article XIII, Section 12, and by Arizona Revised Statutes, Section 9-481. The report is prepared in conformity with generally accepted accounting principles and standards set forth by the Governmental Accounting Standards Board (GASB). Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including disclosures, rests with the City. Management of the city is responsible for establishing and maintaining internal controls to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles as they apply to governmental units. Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived; and, 2) the calculation of costs and benefits requires estimates and judgments by management. To the best of our knowledge and belief, the enclosed data is accurate, in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. Heinfeld, Meech & Co., P.C., a public accounting firm fully licensed and qualified to perform audits of local governments within the State of Arizona, have audited the City’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Yuma, Arizona for the fiscal year ended June 30, 2002, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that the City of Yuma’s financial statements for the fiscal year ended June 30, 2002, are fairly presented in conformity with accounting principles generally accepted in the United States. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of Federal awards. These reports are available in the City’s separately issued Single Audit Reporting Package. This is the first year the report has been prepared using the new financial reporting requirements as outlined in GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This new standard requires that management provide a narrative introduction, v overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditors’ report. The report is presented in three sections: The Introductory Section. The Introductory Section includes this letter of transmittal with its discussion on the City’s economy, financial planning and cash management and information on the City’s organizational structure. The Financial Section. The Financial Section begins with the Independent Auditors’ Report and MD&A. It then contains the basic financial statements, notes to the financial statements, required supplementary information, and other supplementary information. The basic financial statements include the new government-wide financial statements as well as fund financial statements for the City’s major governmental funds and major enterprise funds. The notes to the financial statements follow after which can be found required supplementary information, including pension information and budgetary schedules of the General Fund and each major special revenue fund. The last portion of the financial section contains other supplementary information listing fund financial statements for the City’s nonmajor governmental and enterprise funds, internal service funds, governmental capital assets and budgetary schedules for each of its funds with legally adopted budgets that were not presented with the required supplementary information. The Statistical Section. The Statistical Section includes a number of tables containing ten-year revenue and expenditure information as well as other financial and economic data. PROFILE OF THE CITY OF YUMA The City of Yuma was incorporated in 1914 and adopted its first charter in June of that year. Yuma is the economic hub and county seat of Yuma County and is of one of the fastest growing areas in the United States. The City is located along the Colorado River in southwestern Arizona and is equidistant from the major population centers of Phoenix, Arizona and San Diego, California. The City operates under a council-manager form of government. The City Council consists of six members elected at large for staggered four-year terms. The elected Mayor is the seventh voting member of council, who, along with the remaining council members is elected on a non-partisan basis. The City Council is responsible for passing ordinances, adopting the budget, appointing members of commissions and hiring the City Administrator. The City Administrator carries out the policies and ordinances of the City Council, oversees the day-to-day operations of the City and appoints the various department heads. The City provides a full range of municipal services. These include public safety (police, fire and municipal court), street construction and maintenance, water and wastewater utility services, sanitation and residential refuse collection, parks, recreation and culture, planning and zoning, and general administrative and support services. This CAFR includes the financial activity of the primary government, which includes several enterprise activities, as well as its blended component units. Component units are legally separate units for which the primary government is financially accountable. Blended component units, while legally separate, are parts of the City’s operations and are combined within the report. The Yuma Municipal Property Corporation and the City of Yuma Employee Benefits Trust have been included in the reporting entity. Conversely, the report does not include the City of Yuma Housing Authority as the City is not financially accountable for the authority, nor does the city directly or indirectly rely upon or benefit from the financial activity of the authority. ECONOMIC CONDITION AND OUTLOOK Industrial Expansion. Yuma’s economy is based primarily in agriculture, tourism and government, although further diversification continues. Agriculture remains the Yuma area’s dominant industry, producing almost $800 million in revenues annually1. Several major agricultural companies, most notably Dole Food Company, maintain operations here. Their chief consumer products are packaged produce and salad mixes, popular products for today’s convenience-minded customers. The Yuma area’s stable allocation of Colorado River water will assure that agriculture remains the foundation of Yuma’s economy. 1 Source: Yuma County Chamber of Commerce vi The United States Marine Corps Air Station and United States Army Yuma Proving Ground help provide economic stability. These two installations are cornerstones in the military’s flight training and equipment testing programs and should survive any continued base closure efforts by the federal government. In fact, both installations are enjoying new construction and expansion to meet their needs into the 21st century. With the tragic events of September 11, the importance of these two bases to the military establishment has heightened considerably. Although manufacturing currently accounts for less than 10% of countywide employment, the City’s partnership with the Greater Yuma Economic Development Council continues to attract attention to the area. Several companies have located or expanded operations in Yuma in recent years. As part of Yuma’s economic development plan, a 47-acre business park now houses an addition to Arizona Western College and a new call center. G e n e ra l S a le s T a x 14 13 12 11 10 9 2002 2001 2000 1999 1998 1997 1996 1995 With more than 2 million people living 7 within a 60-mile radius, Yuma will 6 continue to be an important retail center. Recognizing this, major national retailers continue to expand or construct facilities in Yuma, the most recent notable additions being Home Depot and Lowe’s Home Center. 1994 8 1993 Millions Economic Growth. Yuma’s most reliable indicator of the condition of its economy is sales tax. The graph at right reflects the last ten years of data. Until this year, collections averaged a better than 7% increase annually. While Yuma’s collections dipped slightly to a 2% growth during fiscal year 2002, Yuma escaped the dramatic downturns affecting the larger population centers. Planning for fiscal year 2003 includes growth of sales tax collections in the 4% range. F is c a l Y e a r E n d e d J u n e 3 0 , Tourism. Yuma has enjoyed an influx of seasonal residents for decades. Visitors from throughout the United States and Canada continue to call Yuma their winter home. Yuma is so popular a destination that, while other areas in Arizona have seen reductions in their winter residents, the Yuma area adds new winter-resident households each year. This held true last year when visitors returned in record numbers despite the fears associated with September 11. While attendant sales tax collections grew less than recent years, review of collections showed hesitation to purchase big-ticket items having a noticeable, but short-term effect. LONG-TERM FINANCIAL PLANNING Yuma Crossing Heritage Area. Plans to restore, preserve and interpret the Yuma Crossing Heritage area began more than thirty years ago. A study at the time aimed at gaining full economic and recreational benefit from the Colorado River for the Yuma area. The river, once the primary reason for Yuma’s existence, had been ignored for years as community growth and new development moved away from the riverfront. Awareness of the river’s importance has re-emerged, culminating in the establishment of the Yuma Crossing Heritage Area in 2000, the first such National Heritage Area west of the Mississippi River. During fiscal year 2002, the Heritage area plan was completed and submitted for review through the National Parks Service for eventual approval by the Secretary of the Interior. Also during this period, the City Council appointed the first members of the Yuma Crossing National Heritage Area Board as the management entity for the area. This plan means up to $10 million in federal funding over the next 10 years in developing the Heritage Area. vii More than that, it means continued development of historic and cultural activities so important in meeting the Council’s goals in enriching the area’s cultural attributes. Progress in providing opportunities for local residents and for attracting employers to the area to continue to diversify the economy is dependent on continuing these plans. Downtown redevelopment. Revitalization of the downtown area is a vital component of management of the Heritage Area. The City purchased the historic Yuma Theater during fiscal 2002 with the plans of restoring the theater and building it into a performing arts center. During fiscal 2003, Municipal Property Corporation (MPC) bonds will be issued to finance the construction and renovation related to the center. Along with recent private developments in the area, the downtown area will continue to grow into a cultural and recreational portion of the Heritage Area. East Mesa development. Construction of various components of the new East Mesa Wastewater Treatment plant is underway. The anticipated $40 million plant and infrastructure will enable continued growth of the eastern edge of the City on the Yuma Mesa. In addition, the new $60 million water treatment facility/expansion will allow continued growth of both residential and commercial developments already under construction or in the planning stages. The Water Infrastructure Financing Authority (WIFA) of the State of Arizona has been invaluable in attaining lower-cost financing for these important projects. During the fiscal year, the City successfully passed an election allowing use of this financial method. Rate structures for both the Water Fund and the Wastewater Fund have already been passed and put in place by the City Council to assure adequate funding for the project’s debt service. FINANCIAL INFORMATION Budgetary Controls. The annual budget serves as the foundation for City financial planning and control. The City maintains budgetary controls with the objectives to ensure compliance with legal provisions embodied in the annual appropriated budget, approved by the City Council. Activities of the General Fund, Special Revenue Funds, Debt Service Funds, Capital Projects Fund, Enterprise Funds, and one of the City’s Internal Service Funds are included in the annual appropriated budget. As with the governmental funds, the City’s proprietary funds are presented on a current financial resources basis to account for capital and debt-related expenditures. The City maintains an encumbrance accounting system as one technique of accomplishing budgetary controls. Encumbered amounts lapse at year-end. However, encumbrances generally are re-appropriated as part of the following year’s budget. As demonstrated by the budgetary schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. In addition to budgetary schedules, Note I-D in the Notes to the Financial Statements on page 37 describes in detail the budget process used by the City. Cash Management. The policy of the City of Yuma is to invest funds in a manner which will provide the maximum security of principal invested, provide the highest yield while conforming to applicable State statutes and City ordinances, and meet the daily cash flow needs of the City. Investments authorized by the City’s Investment Policy include: 1) Obligations of the U.S. Government; 2) Fully insured or collateralized certificates of deposits; 3) Bankers acceptances issued by the ten largest domestic banks and the twenty largest international banks; 4) Commercial paper rated A-1/P-1; 5) Repurchase agreements whose underlying collateral consists of the foregoing, provided a signed PSA Master Repurchase Agreement is on file with the counterpart bank or broker/dealer; 6) Money Market Funds whose portfolio consists of the foregoing; and, 7) the State of Arizona Local Government Investment Pool. Total investments decreased, dropping to $73,930,832 at June 30, 2002 from $96,834,541 last year. The reduction reflects the expenditure of the proceeds of the 2001 MPC Bond with which the new Municipal Complex was constructed. Following market conditions, average yield on investments declined at June 30, 2002, to 3.28%. A review of Note III A in the Notes to the Financial Statements, page 41, will provide a more complete review of investment policy and balances. Risk Management. The City is self insured for certain risks up to a maximum of $250,000 per occurrence. Primary insurance is then available for the next $1,000,000 per occurrence with a $5,000,000 annual aggregate loss. An excess policy follows to cover losses in excess of $1,000,000 per occurrence up to an additional $4,000,000 per occurrence with a $4,000,000 aggregate. The City self funds for workman’s compensation up to $100,000 per occurrence per year with a $250,000 lifetime maximum loss per occurrence. The City also self- viii funds its dental coverage while securing commercially provided health insurance for its employees. Coverage in excess of self-funded stop loss amounts is also provided through the purchase of commercial insurance. The City pursues an aggressive safety program providing a wide range of training opportunities for employees in promoting safety, managing materials, defensive driving and many other issues. This program helps to mitigate claims costs and reduce exposure. AWARDS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended June 30, 2001. This is the twentieth consecutive year the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report. The report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another award. I wish to express my sincere thanks to the employees of the Accounting Division for their dedicated service in preparing this report. Their work, along with those services provided by other members of the Department of Administrative Services, have made this report possible. The cooperation and assistance of the accounting firm of Heinfeld, Meech & Co., P.C., also contributed significantly to its production. Finally, I wish to thank the Mayor and Council, City Administrator, and the City Staff for their continued support. Respectfully submitted, Robert L. Stull Director of Administrative Services ix x FINANCIAL SECTION 1 2 HEINFELD, MEECH & CO., P .C. CERTIFIED PUBLIC ACCOUNTANTS Gary Heinfeld, CPA, CGFM Nancy A. Meech, CPA, CGFM Jennifer L. Shields, CPA C. Christopher Arvizu, CPA 3003 N. Central Avenue, Suite 1175 Phoenix, Arizona 85012 (602) 277-9449 Fax (602) 277-9297 www .heinfeldmeech.com INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of the City Council City of Yuma, Arizona We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund (General Fund, Highway Users Revenue Fund, City Road Tax Fund, Grants Fund, Community Redevelopment Fund, Municipal Property Corporation Debt Service Fund, Capital Projects Fund, Water Fund, and Wastewater Fund), and the aggregate remaining fund information of the City of Yuma, Arizona (City), as of and for the year ended June 30, 2002, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund as listed above, and the aggregate remaining fund information of the City of Yuma, Arizona as of June 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As described in Note I, the City has implemented a new financial reporting model, as required by the provisions of the Governmental Accounting Standards Board Statement No.34, Basic Financial Statements -and Management's Discussion and Analysis -for State and Local Governments, as of June 30, 2002. In addition, as described in Note III, the City changed its capitalization threshold for equipment. 3 The management's discussion and analysis on pages 5 through 15, the Public Safety Personnel Retirement System on page 59, and budgetary comparison information on pages 61 through 67 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. In accordance with Government Auditing Standards, we have also issued our report dated September 19, 2002 on our consideration of City of Yuma's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. HEINFELD, MEECH & CO., P.C. Certified Public Accountants September 19, 2002 4 MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information) As management of the City of Yuma, we offer readers of the City of Yuma's financial statements this narrative overview and analysis of the financial activities of the City of Yuma for the fiscal year ended June 30, 2002. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal in the introductory section of this report. FINANCIAL HIGHLIGHTS • On a government-wide basis, the City’s net assets grew by just under $16.3 million for the fiscal year, $12.2 million of which was generated by governmental activities while $4.1 million was due to business-type activities of the City. • The City’s combined net assets total $218.5 million at June 30, 2002. Of this amount, $67.5 million is available (unrestricted) to finance ongoing programs, $44.2 million in governmental programs and $23.3 million in business activities. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City of Yuma's basic financial statements. The City of Yuma's basic financial statements comprise three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Yuma's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. 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. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (uncollected taxes and earned but unused vacation leave are two examples). Both of the government-wide financial statements distinguish functions of the City of Yuma that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, streets, environmental health and welfare, community design and development and parks, recreation and culture. The business-type activities of the City include water, wastewater and golf course operations. The government-wide financial statements can be found on pages 20-21 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Yuma, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. 5 MANAGEMENT’S DISCUSSION AND ANALYSIS Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Moreover, these latter statements provide a ready comparison to similar financial statements produced prior to the City’s implementation of GASB Statement No. 34. The City maintains thirteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the seven funds considered to be major funds. Data from the other six governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements beginning on page 70. Major Governmental Funds: Nonmajor Governmental Funds: General Highway User Revenue City Road Tax Grants Community Redevelopment Municipal Property Corporation Debt Service Capital Projects Local Transportation Assistance Public Safety Tax Solid Waste Recreation Complex 2 Percent Tax Yuma Mall Maintenance The City adopts annual appropriated budgets for all of its governmental funds. Budgetary comparison statements have been provided to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found starting on page 24 of this report. Proprietary funds. The City of Yuma maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Yuma uses enterprise funds to account for its Water and Sewer Authority and for its golf courses. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City of Yuma uses internal service funds to account for its equipment replacement program and for its workers compensation and employee health insurance. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Major Enterprise Funds: Nonmajor Enterprise Funds: Water Fund Wastewater Fund Desert Hills Golf Course Arroyo Dunes Golf Course Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements group major and nonmajor proprietary funds in a manner similar to governmental fund statements. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements, beginning on page 92. The City adopts annual appropriated budgets for all of its proprietary funds with the exception of two internal service funds: Employee Benefits Trust and Workers’ Compensation. Budgetary comparison statements for the remaining proprietary funds are included within the report to demonstrate compliance with these budgets. 6 MANAGEMENT’S DISCUSSION AND ANALYSIS The basic proprietary fund financial statements can be found on pages 31-33 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found beginning on page 35 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Yuma's progress in funding its obligation to provide pension benefits to its employees. A budgetary comparison schedule has been provided for the General Fund and major special revenue funds as required supplementary information. Required supplementary information can be found starting on page 58 of this report. The combining statements referred to earlier in connection with nonmajor governmental, proprietary and internal service funds are presented immediately following the required supplementary information on pensions and budgets. Combining and individual fund statements and schedules can be found starting on page 70. GOVERNMENT-WIDE FINANCIAL ANALYSIS As this is the first year of presentation under the new GASB Statement No. 34, no prior year comparisons are presented. Beginning next year, the City will present comparative amounts between fiscal years. Statement of Net Assets. As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Yuma, assets exceeded liabilities by $218.5 million at the close of the fiscal year. Summary Statement of Net Assets June 30, 2002 (in millions) Governmental Activities Current and other assets Restricted assets Capital assets $ Total assets Long-term liabilities outstanding Other liabilities Total liabilities Net assets: Invest in capital assets, net of related debt Restricted Unrestricted $ Total net assets 58.9 134.0 Business-type Activities $ 14.7 11.9 92.0 Total $ 73.5 11.9 226.0 192.9 118.5 311.4 64.7 13.2 11.2 3.9 75.9 17.0 77.9 15.1 92.9 69.3 1.5 44.2 80.2 23.3 149.5 1.5 67.5 115.0 $ 103.5 $ 218.5 The largest portion of the City of Yuma's net assets reflects its investment in capital assets (e.g., land, buildings, machinery), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to pay these liabilities. An additional portion of the City's net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets may be used to meet the government’s ongoing obligations to citizens and creditors. 7 MANAGEMENT’S DISCUSSION AND ANALYSIS At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. Net assets rose to $218.5 million, up $16.3 million from the year. Governmental activities accounted for $12.2 million while business-type activities amounted to $4.1 million. Most of the increase would be attributable to capital asset acquisitions as governmental capital assets increased almost $32 million (net of depreciation), funded in part by the excess of revenues over operating expenses as reported in the Statement of Activities on page 21. These acquisitions are reflected in the portion of net assets shown above as ‘Net assets invested in capital assets, net of related debt.’ Unrestricted net assets are those assets available to finance programs in the upcoming fiscal year and would increase when the portion of taxes and other revenues exceed operating expenses but are not invested in capital assets. Statement of Activities. Already noted was the statement of activities purpose in presenting information in how the government's net assets changed during the most recent fiscal year. A chart of changes in net assets follows. For the fiscal year, net assets increased $16.3 million, with $12.2 of the increase coming from governmental activities. The increase in assets in governmental activities is related in great part to construction of assets, rather than accumulation of cash or other liquid assets. The reader should remember that the basis of accounting used in the government-wide statement of activities excludes capital expenditures while its revenues include general taxes whose primary purpose is for the construction of those very assets or their related debt service (i.e., public safety or road sales taxes). Changes in Net Assets For the Fiscal Year Ending June 30, 2002 (in millions) Governmental acitivites Business-type activities Total Revenues Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Sales taxes Franchise taxes Shared revenues Unrestricted investment earnings $ Total revenues 6.1 2.8 1.7 $ 17.2 6.3 $ 23.3 2.8 7.9 5.3 25.0 1.8 23.3 2.2 1.0 5.3 25.0 1.8 23.3 3.2 68.2 24.5 92.7 3.5 23.6 9.1 8.5 3.3 5.2 3.2 - 9.8 6.5 2.5 3.5 23.6 9.1 8.5 3.3 5.2 3.2 9.8 6.5 2.5 56.4 18.8 75.2 (1.2) (.4) (1.2) - Expenses: General government Public safety Streets Parks, recreation and culture Environmental health and protection Community design and development Interest on long-term debt Water Wastewater Golf courses Total expenses Changes in net assets before transfers and special item Special item-litigation Transfers .4 $ Change in net assets 8 12.2 $ 4.1 $ 16.3 MANAGEMENT’S DISCUSSION AND ANALYSIS Governmental Activities Revenues Governmental activities revenues totaled $68.2 million for fiscal year 2002. Local sales taxes are the largest revenue source for the City and are comprised of the 1% general sales tax along with a .5% road tax and a .2% public safety tax. State-shared revenues are the City’s second largest revenue. State-shared revenues include state sales tax, urban revenue sharing, auto in-lieu tax and highway user funds (gas tax). Sales taxes and state shared revenues account for 71% of governmental revenues for the year. Charges for services, the third segment of governmental activities revenues, count building permits and inspections, fines, recreation fees, solid waste environmental fees, police services and civic center rental fees among its largest sources. The charges for services category amounts to 9% of governmental revenues. Property taxes represent 8% of governmental revenues. The large majority of property taxes are levied for general purposes with a small levy for downtown mall maintenance. No property taxes are levied for debt service. Various grants and contributions and franchise taxes account for most of the remaining governmental revenues. RevenuesGovernmental Activities Franchise taxes 3% Shared revenues 34% Sales taxes 37% Unrestricted investment earnings 3% Property taxes 8% Capital grants and contributions 2% Operating grants and contributions 4% Charges for services 9% Expenses Governmental expenses totaled $56.4 million for the fiscal year. Of the expenditures, 42% or $23.6 million, is related to public safety for police, fire and municipal court services. Parks and recreation expenses amounted to $8.5 million, or 15%, while streets and community design and development expenses amounted to 16.1% and 9.2% respectively. Interest on long-term debt accounted for 5.6% of overall governmental expenses. The following chart compares governmental activities with their respective program revenues, if any. Because the ultimate beneficiary of services of these types is often difficult to ascertain or the services apply to a broad spectrum of users (such as in fire protection), user fees are not created and general revenues provide the funding support for most of these services. Moreover, where ultimate users of the services are determinable, program revenues may generate only a portion of the funding, such as in recreation programs. 9 MANAGEMENT’S DISCUSSION AND ANALYSIS Expenses and Program Revenues-Governmental Activities 25.0 20.0 Millions Expenses Program Revenues 15.0 10.0 5.0 General government Public safety Streets Parks, recreation and culture Environmental health and protection Community design and development Interest on long-term debt Business-type activities Revenues General revenues do not support the City’s business-type activities; thus, the largest source of revenues comes from charges for services. Of the $17.2 million in charges, 87% come from the City’s two utility operations, water and wastewater. The remaining charges are from the City’s two golf courses, Desert Hills and Arroyo Dunes. The $6.3 million in contributions are payments for capacity charges and development fees as well as constructed additions to the City’s water and wastewater infrastructure by subdivision and other developers. Finally, investment earnings make up the final 4% of revenues for the City’s business activities. Revenues-Business-like Activities Capital grants and contributions 26% Charges for services 70% Investment earnings 4% Expenses Water and wastewater services account for 87% of the City’s business-type activities with golf course making up the remaining 13%. Water expenses amounted to $9.8 million while wastewater expenses totaled $6.5 million. 10 MANAGEMENT’S DISCUSSION AND ANALYSIS Desert Hills Golf Course and Arroyo Dunes Golf Course recorded expenses of $2.3 million and $.2 million, respectively, for a total of $2.5 million. Expenses and Program Revenues-Business-type Activities 14.0 12.0 Program Revenues Expenses 10.0 8.0 6.0 4.0 2.0 Water Wastewater Golf Because the City’s business-type activities are supported by user charges, the chart above shows more reliance on program revenues. Moreover, for both water and wastewater, program revenues include capacity charges for new service and developer additions to the utility infrastructure. The upper portion above the dotted line of the program revenues in the graph relates to contributions. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental funds. The combined fund balances of governmental funds for the fiscal year ended June 30, 2002, is $27.9 million. This represents a $22.9 million decrease in fund balances, most of which is due to the significant amount of capital expenditures made during the year, particularly the bond proceeds used to construct the new Municipal Complex. A review of some of the more significant funds follows. General Fund The fund balance of the General Fund grew by $1.9 million for the fiscal year. Revenues increased by $1.2 million, led by state-shared revenues at $1 million. Expenditures for the fund came in more than $4 million under budget with General Government producing $2.3 million of the savings and Public Safety adding almost $1 million. Even with the savings in expenditures, the City still implemented an update in its salary structure to keep its compensation plan competitive and its employee base stable. Highway User Revenue Fund Another major operating fund to contribute to the increase in the overall governmental fund balance was the Highway User Revenue Fund (HURF), which accounts for the expenditure of state-shared gasoline taxes. The City’s portion of those taxes grew by 4.2% for the fiscal year, and coupled with a budget savings of $.5 million, produced a moderate increase in the fund’s balance of $212,506. This fund also transferred $1.3 million into the Capital Projects Fund to continue the City’s streets program. Road Tax Fund This fund accounts for the one-half cent sales tax for use on the City’s roadways in conjunction with HURF. Ongoing projects from the previous fiscal year caused transfers to the Capital Projects Fund to exceed tax collections for the year and reduced the fund balance by $851,764. A fund balance of $3.3 million remains to help with the City’s roads program in subsequent years. 11 MANAGEMENT’S DISCUSSION AND ANALYSIS Municipal Property Corporation Debt Service The Municipal Property Corporation (MPC) Debt Service Fund decreased its fund balance by some $1.6 million. Because fund balance began the year with unexpended bond proceeds used to pay the interest payments on the 2001 MPC issue, this reduction in fund balance is planned. Transfers from the other operating funds match the remaining principal and interest expenditures. Capital Projects Fund As noted earlier, the Capital Projects Fund’s expenditures exceeded its revenues and transfers in by $22 million for the fiscal year. This is a result of expenditures related to the completion of the City’s new Municipal Complex, first occupied in June 2002. In fiscal year 2001, bonds were sold to fund the completion of the building that produced an unusually high fund balance for the previous fiscal year. Expenditures of those proceeds this fiscal year reduced the fund balance to its historical levels. Remaining in the fund is $3.3 million designated for uncompleted projects for fiscal 2003. Proprietary funds. The City’s enterprise funds posted an overall increase in net assets of $4.0 million for the fiscal year ended June 30, 2002. The City’s utility funds, water and wastewater both recorded increases in net assets for the year while the golf courses combined for a $273,196 decrease in net assets. Even with the increase in net assets for the utilities, both funds would have shown decreases in net assets were it not for capital contributions during the year. This is reflected in a loss before contributions and transfers in the water and wastewater funds of $(62,231) and $(363,303), respectively. Water Enterprise Fund Operating revenues for the Water Fund increased by 7.5 percent for the year ending June 30, 2002. This is due in part to the average 2½% increase in rates implemented in January 2002 and to a 3.4% growth in the customer base to 22,021. Operating expenses rose to a lesser degree to provide operating income of $187,488. A reduction in interest income and a write-off of depreciable assets of $146,657 to adopt GASB 34 capitalization levels resulted in a loss before contributions and transfers of $62,231. In addition, the water fund had a special item charge of $1,220,085 related to litigation. For a description of this special item, please see the Note III N on page 54. Wastewater Enterprise Fund With the end of fiscal 2002, the Wastewater Fund completed its second year in its five-year series of rate adjustments to finance the construction of its $40 million East Mesa wastewater treatment plant. Combined with similar growth noted in the Water Fund, operating revenues increased 14% over fiscal 2001. Operating expenditures increased by 16.8%, largely because depreciation expenses jumped with the significant additions to the plant in 2001. This left a loss before contributions and transfers of $363,303. Again like the Water Fund, contributions, which finance many of the additions to the plant that are now affecting depreciation expenses, more than covered this loss for the year ended June 30, 2002. Golf Courses Both of the City’s nonmajor enterprise funds, the Desert Hills Golf Course and the Arroyo Dunes Golf Course, suffered operating losses for the year ended June 30, 2002. Green fees for Desert Hills, voted “Best Municipal Golf Course in Arizona” by Golf Digest, reported a 4.5% increase; however, sales in both the golf shop and the restaurant dropped to pull the operations into a loss. The City is considering privatizing the restaurant operations to improve performance of the fund. GENERAL FUND BUDGETARY HIGHLIGHTS A detailed budgetary comparison schedule for the fiscal year ended June 30, 2002, can be found starting on page 59. A summary of that schedule follows: 12 MANAGEMENT’S DISCUSSION AND ANALYSIS Budget Revenues and Transfers In Taxes Intergovernmental Other Transfers In Final Actual $ 20,574,910 16,605,402 3,617,150 1,584,500 $ 20,574,910 16,605,402 3,617,150 1,584,500 $ 20,387,835 16,425,712 4,099,497 - 42,381,962 42,381,962 40,913,044 (1,468,918) 38,261,818 4,999,321 38,261,818 4,999,321 34,175,250 4,749,734 4,086,568 249,587 43,261,139 43,261,139 38,924,984 4,336,155 1,988,060 $ 2,867,237 Total Expenditures and Transfers Out Expenditures Transfers Out Total Change in Fund Balance Variance with Final Original (879,177) $ $ (879,177) $ $ (187,075) (179,690) 482,347 (1,584,500) Both City and state-shared sales taxes ended the year below their expected amounts causing the negative variance in taxes. Both ended the year, however, posting gains in actual collections over fiscal 2001 at 2.2% and 3.5%, respectively. While this percentage increase is less than its ten-year average, the local economy’s performance remains relatively strong, in spite of the downturn of the national economy. The chart shows no change in budgetary amounts; however, with the City Administrator’s ability to transfer appropriations within a fund, some changes in budget between departments occurred during the year. In each case, the transfers of budgetary authority were minor. Overall, expenditures remained below budgeted amounts, with no department exceeding its annual appropriation. CAPITAL ASSETS At June 30, 2002, the City of Yuma’s investment in capital assets in both governmental and business-type activities amounted to $226 million, net of depreciation. This includes land, buildings, equipment, and for the first time with the implementation of GASB Statement No. 34, infrastructure (roadways and bridges). Capital assets for governmental activities increased by 31.1% (after restating amounts for July 1, 2001) while business-type capital assets increased 7.1%. These changes included the following: • • • • Construction was completed on the City’s new Municipal Complex in excess of $20 million. Land and right-of-way purchase for governmental activities exceed $2 million. Construction in progress of $16 million included $12 million in street projects. Water system improvements include $2.2 million in a major water line replacement. Construction on the new East Mesa wastewater plant began, accounting for over $2.3 million. Change in Capital Assets (In Millions) Governmental Activities Business-type Activities Land Buildings Improvements Infrastructure Equipment Construction in Progress Accumulated Depreciation Total Restated Net Balance July 1, 2001 Additions/ Deletions June 30, 2002 July 1, 2001 $ 5.8 $ 35.6 10.6 104.7 25.3 7.0 (86.9) 2.5 $ 19.1 3.4 (.3) 3.8 8.9 (5.6) 8.3 $ 54.8 13.9 104.4 29.2 16.0 (92.5) $ 102.2 31.8 134.0 $ $ 13 $ Balance Additions/ Deletions June 30, 2002 1.2 $ 8.0 115.5 3.7 2.7 (45.1) 85.9 Total Net $ $ 3.9 (.8) 6.3 (3.4) 6.1 $ 1.2 $ 8.0 119.5 2.9 9.0 (48.5) 92.0 $ 9.5 62.7 133.4 104.4 32.1 24.9 (141.0) 226.0 MANAGEMENT’S DISCUSSION AND ANALYSIS Additional information on capital assets can be found in Note III-E starting on page 45. DEBT ADMINISTRATION For the year ended June 30, 2002, the City’s long-term debt decreased by a net of $3.9 million, due to scheduled repayments. The only increase in debt for the fiscal year, aside from minimal operational increases in compensated absences, was related to acquisition of capital assets through the issuance of long-term contracts payable, as follow: • • The City purchased the historic Yuma Theater for $103,499. Right-of-way was purchased for $805,337, including buildings that will be leased until the project start. In each case, payments were made on the contracts during the fiscal year. The state limits the amount a municipality may issue in general obligation debt to 20% of the City’s secondary assessed valuation for combined water, wastewater, artificial light, parks, open space preserves, playgrounds and recreational facilities. Debt related to other projects is limited to 6% of the valuation. The current debt limitation for the former type is $51.3 million, well above the outstanding general obligation debt. No debt is outstanding for the other type of issuance. Because all the general obligation debt is related to the water system, and because water revenues are used to pay the debt service requirements of the issues, no secondary property taxes are assessed by the City for debt service. All of the bond issues have been upgraded to a “A+” rating by Fitch Investment Services. The General Obligation Bonds and the MPC Bonds are rated “A” by Moody’s Investor Services. Standard and Poors also rate the GO bonds “A”. All City bond issues ultimately enjoy a “AAA” rating as a result of insurance coverage. A summary of the City’s long-term debt follows. Additional information on the City’s long-term debt can be found in Note III-H on pages 48-51. General Obligation Bonds Yuma Municipal Property Corporation Bonds Revenue Bonds Contracts Payable Governmental activities 2001 2002 Business-type activities 2001 2002 $ $ $ 65.9 .2 1.7 Compensated Absences Total Long-Term Debt - $ 67.8 62.3 .6 1.8 $ 64.7 $ 13.0 $ .1 13.1 12.2 Total 2001 $ .1 $ 12.3 13.0 2002 $ 65.9 .2 .1 1.7 $ 80.9 12.2 62.3 .6 1.8 $ 77.0 ECONOMIC FACTORS Yuma County is one of the fastest growing areas in the nation and the City of Yuma represents just under 50% of the county’s population. Since 1990, the City has grown by 40% to an estimated 79,530. Ranked by ForbesMilken in its top 20 ‘Best Small Places’, the City’s economy is based on a triad of agriculture, tourism and military/government spending. Agriculture continues to lead the economy, contributing $800 million annually. The area’s 85,000-plus winter visitors add $450 million to the mix, while military/government spending infuses some $300 million to the economy. Property taxes are limited constitutionally in Arizona, so other local revenues make up the most significant reflectors of the condition of the economy. Sales tax, the City’s primary source of general revenues, continued this year with a moderate 3% growth, down slightly from its historical growth rate of 7%. Compared to a slight downturn in the large metropolitan areas of the state, Yuma’s steady growth is positive. For fiscal year 2003, revenues were projected using similar trends. 14 MANAGEMENT’S DISCUSSION AND ANALYSIS Not all economic statistics reflect positive results; however, in that the City continues to suffer higher unemployment figures than most of the state. Hovering under 10% during the winter crop growing season, the rate surges into the 20% range for the summer, primarily because of lower agriculture employment. To combat this problem, the City helps to support the Greater Yuma Economic Development Corporation in its activities to encourage new employers to the area. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to familiarize our citizens, taxpayers and customers with the City’s finances and to demonstrate the City’s fiscal accountability for its operations. Questions concerning this report, or requests for additional financial information, should be directed to Mr. Robert L. Stull, Director of Administrative Services, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012, telephone (928) 373-5067. The reader may wish also to visit the City’s website at www.ci.yuma.az.us, which will soon contain an electronic version of this report. 15 16 BASIC FINANCIAL STATEMENTS 17 18 GOVERNMENT-WIDE FINANCIAL STATEMENTS 19 City of Yuma, Arizona Statement of Net Assets June 30, 2002 Governmental Activities Assets Cash and Investments Receivables, Net of Allowances for Uncollectibles: Internal Balances Inventory, at cost Prepaid Items Restricted Assets: Cash and Investments Accrued Interest Long Term Contracts Receivable Deferred Charges Fixed Assets, Net of Accumulated Depreciation Total Assets and Other Debits $ Business-type Activities 50,835,379 $ 7,497,613 (96,955) 521,327 99,934 Total 11,424,806 2,703,447 96,955 211,485 13,801 $ 62,260,185 10,201,060 732,812 113,735 134,019,022 192,876,320 11,748,077 131,868 4,609 214,550 91,991,200 118,540,798 11,748,077 131,868 4,609 214,550 226,010,222 311,417,118 3,932,795 2,180,946 1,547,821 5,503,117 - 2,183,787 495,412 78,882 9,434 1,092,056 6,116,582 2,676,358 1,626,703 5,512,551 1,092,056 4,080,799 60,638,102 77,883,580 259,234 10,947,017 15,065,822 4,340,033 71,585,119 92,949,402 69,300,121 80,223,792 149,523,913 1,484,212 44,208,407 $ 114,992,740 23,251,184 $ 103,474,976 1,484,212 67,459,591 $ 218,467,716 Liabilities Accounts Payable Accrued Liabilities Accrued Interest Payable Deferred Revenue Liabilities Payable from Restricted Assets Long-Term Debt: Due within one year Due in more than one year Total Liabilities Net Assets Invested in Capital Assets, Net of Related Debt Restricted for: Debt Service Unrestricted Total Net Assets The accompanying notes are an integral part of these financial statements 20 City of Yuma, Arizona Statement of Activities For the Fiscal Ended June 30, 2002 Functions/Programs Government Activities: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Interest on Long-Term Debt Total Governmental Activities Business-type Activities: Water Wastewater Golf Courses Total Business-type Activities Total Expenses Net (Expense) Revenue and Program Revenues Changes in Net Assets Charges Operating Capital for Grants and Grants and Governmental Business-type Services Contributions Contributions Activities Activities Total 3,477,585 23,566,887 9,098,421 867,250 1,505,393 - - 8,526,230 799,842 - 3,250,679 1,124,993 - 5,246,150 1,797,353 3,227,438 - 56,393,390 6,094,831 9,835,626 6,484,166 2,490,371 9,320,957 5,639,590 2,247,550 18,810,163 $ 75,203,553 17,208,097 $ 23,302,928 - - (2,610,335) (22,061,494) (9,098,421) (6,076,370) - (6,076,370) - (2,125,686) - (2,125,686) - (654,296) - (654,296) - (3,227,438) - (3,227,438) (45,854,040) - (45,854,040) 1,650,018 2,794,501 2,794,501 1,650,018 $ 2,794,501 (2,610,335) (22,061,494) (9,098,421) 2,426,902 3,833,335 6,260,237 $ 7,910,255 General Revenues: Property taxes Sales taxes Franchise taxes Shared revenues Unrestricted investment earnings Total general revenues Special Item - Litigation Transfers Total general revenues, special item and transfers Change in net assets Net assets-beginning (45,854,040) 5,337,637 25,038,760 1,835,810 23,257,853 2,227,028 57,697,088 381,684 58,078,772 12,224,732 102,768,008 $114,992,740 Net assets-ending The accompanying notes are an integral part of these financial statements 21 1,912,233 2,988,759 (242,821) 4,658,171 4,658,171 1,912,233 2,988,759 (242,821) 4,658,171 (41,195,869) 5,337,637 25,038,760 1,835,810 23,257,853 998,944 3,225,972 998,944 58,696,032 (1,220,085) (1,220,085) (381,684) (602,825) 57,475,947 4,055,346 16,280,078 99,419,630 202,187,638 $ 103,474,976 $ 218,467,716 22 FUND FINANCIAL STATEMENTS 23 City of Yuma, Arizona Balance Sheet Governmental Funds June 30, 2002 Special Revenue Funds General Assets Cash and Investments Cash with Fiscal Agents Receivables, Net of Allowances for Uncollectibles: Accounts Receivable Intergovernmental Special Assessments Delinquent Property Taxes Accrued Interest Due from Other Funds Inventory, at cost Prepaid Items Total Assets and Other Debits Highway Users Revenue $ $ 12,880,884 $ - 4,353,721 - 262,560 1,891,328 23,379 181,788 32,061 479,242 514,191 24,357 16,289,790 $ 2,089 593,592 49,104 4,998,506 City Road Tax Grants $ 2,747,296 $ 503,612 67,230 3,318,138 109,988 $ 89,597 1,096,070 134,250 1,429,905 8,229 6,990 15,219 - - $ $ 495,487 1,376,765 8,055 1,880,307 Liabilities and Fund Balances Accounts Payable Accrued Payroll, Taxes and Benefits Payable Bonds Payable - Current Portion Due to Other Funds Accrued Interest Payable Deposits Deferred Revenue Total Liabilities Fund Balance: Reserved for: Inventory Prepaid Items Debt Service Unreserved: Designated for Uncompleted Projects Designated for Subsequent Years' Expenditures Designated for Future Community Improvements Undesignated Total Fund Balances Total Liabilities and Fund Balances $ 650,170 1,683,027 132,886 78,479 194,204 2,738,766 $ 514,191 24,357 - $ 1,408,207 845,524 10,758,745 13,551,024 16,289,790 $ The accompanying notes are an integral part of these financial statements 24 80,412 3,488,189 3,568,601 4,998,506 $ 3,302,919 3,302,919 3,318,138 $ 73,628 6,677 18,400 1,772,934 1,871,639 - $ 8,668 8,668 1,880,307 Community Redevelopment Municipal Property Corporation Debt Service $ $ $ $ - 1,466,259 484,516 1,950,775 174,048 9,664 $ $ 458,094 1,308,969 1,950,775 - $ 1,950,775 $ 5,297 6,819,265 1,592 6,826,154 7,139 3,800,000 1,534,803 5,341,942 Capital Projects $ $ $ 6,645,626 - Other Governmental Funds $ 2,591,255 - 23,700 1,445,376 8,114,702 $ 154,639 214,544 36,941 18,400 7,136 75,577 3,098,492 2,470,519 13,019 9,175 2,266,970 4,759,683 $ 1,484,212 - 1,484,212 6,826,154 3,355,019 3,355,019 8,114,702 $ $ 25 153,029 75,688 222,568 20,204 471,489 Total $ $ $ 29,719,566 6,819,265 1,909,247 5,064,357 23,379 181,788 194,983 1,943,018 521,327 99,934 46,476,864 3,646,750 1,871,643 3,800,000 1,928,018 1,547,822 87,654 5,697,531 18,579,418 7,136 75,577 - 521,327 99,934 1,484,212 40,477 2,503,813 2,627,003 3,098,492 3,355,019 1,529,096 845,524 20,062,334 27,897,446 46,476,864 $ City of Yuma, Arizona Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Assets June 30, 2002 Amounts reported for governmental activities in the statement of net assets are different because: Total Fund Balances per the Balance Sheet-Governmental Funds: $ 27,897,446 Property taxes receivable that are not financial resources are not reported in the funds. 46,329 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 124,563,152 Property tax revenue deferred to later years recognized in year levied in governmental activities. 194,417 Long-term liabilities, include bonds payable, are not due and payable in the current period and therefore are not reported in the funds. (60,918,901) Net assets of internal service funds that are used by management to charge the cost of equipment replacement and employee-related insurance to individual funds are included in governmental activities in the statement of net assets. 23,210,297 $ 114,992,740 Net assets of governmental activities The accompanying notes are an integral part of these financial statements The accompanying notes are an integral part of these financial statements 26 27 City of Yuma, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2002 Major Special Revenue Funds Highway City User Road Revenue Tax Grants General Revenues: Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Use of Money and Property Contributions and Donations Miscellaneous Total Revenues $ Expenditures: Current: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Debt Service Principal Interest and Fiscal Agent Fees Total Expenditures $ Other Financing Sources/(Uses): Increase In Long-Term Contracts Sale of Real Property Transfers In Transfers Out Total Other Financing Sources/(Uses) Net Change in Fund Balances Fund Balances - Beginning $ 6,414,401 153,748 41,146 6,609,295 $ 6,448,954 175,521 6,624,475 $ 481,485 - 2,974,338 76,379 1,440 3,052,157 4,001,300 20,811,411 5,049,653 702,674 3,911,718 - 565,090 19,142 - 192,224 - - 183 36,516 3,383,771 404,025 Revenues Over/(Under) Expenditures Fund Balances - Ending 20,387,835 1,438,768 16,425,712 1,216,819 670,837 672,876 100,197 40,913,044 1,145,816 7,400 63,499 34,278,749 4,633,534 481,485 1,382,139 6,634,295 1,975,761 6,142,990 1,670,018 103,499 (4,749,734) (4,646,235) 19,142 (1,782,397) (1,763,255) (6,994,754) (6,994,754) (1,670,018) (1,670,018) 1,988,060 212,506 11,562,964 3,356,095 13,551,024 $ The accompanying notes are an integral part of these financial statements 28 3,568,601 (851,764) - 4,154,683 $ 3,302,919 8,668 $ 8,668 Community Redevelopment $ - Municipal Property Corporation Debt Service $ 1,444,341 16,393 31,046 1,491,780 $ 544,960 722,333 57,032 1,324,325 $ 5,295,028 440,004 1,114,179 626,336 24,400 29,087 7,529,034 Total Governmental Funds $ 32,131,817 1,438,768 27,698,796 2,875,958 670,837 2,493,973 25,840 258,508 67,594,497 - - - 2,370,897 4,001,300 22,659,901 4,393,203 7,427,950 - - - 2,398,266 3,174,722 36,682,805 374,207 34,084 5,330,885 37,311,007 3,800,000 3,205,788 7,005,788 272,003 13,019 36,967,827 210,000 8,631 5,396,085 4,345,502 3,227,438 91,871,908 (234,521) (6,955,401) (35,643,502) 2,132,949 (24,277,411) 454,747 (220,226) 234,521 5,352,205 5,352,205 805,337 12,868,781 (125,832) 13,548,286 3,182,506 (5,958,451) (2,775,945) 908,836 454,747 21,422,634 (21,501,412) 1,284,805 - (1,603,196) (22,095,216) (642,996) (22,992,606) - 3,087,408 25,450,235 1,572,724 153,577 - 1,726,301 $ 50,387 50,387 Other Governmental Funds Capital Projects - $ 1,484,212 $ 3,355,019 29 3,269,999 $ 2,627,003 50,890,052 $ 27,897,446 City of Yuma, Arizona Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances-Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2002 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-governmental funds $ (22,992,606) A portion of property tax revenues recorded on the statement of activities does not provide current financial resources are not recorded as revenues in the funds. Governmental funds report capital outlays as expenditures. In the statement of activities, however, the cost of those assets is allocated over their useful lives as depreciation. Depreciation recorded in statement of activities Capital outlay expenditures reported as additions to assets: Capital outlay expenditures-governmental funds Infrastructure maintenance expenditures recorded as capital outlay but not capitalized as asset additions Governmental funds report debt principal service payments as expenditures. The reduction in liability is recorded on the statement of net assets in the government-wide statements. 80,390 (5,195,001) 37,311,007 (1,329,169) 4,345,501 Increase in compensated absences expense not recorded in governmental funds. (147,451) Other financing sources in governmental funds to reflect acquisitions of financed capital assets are recorded on the statement of net assets (908,836) Sales of governmental capital assets are not revenues on the statement of activities. (454,747) Investment earnings of the internal service funds are general revenues on the statement of activities. 561,551 Revenues of internal service funds in excess of expenses reduce governmental activities expenses on the statement of activities 493,631 Transfers between governmental Public Safety Tax Fund and Internal Service Equipment Replacement Fund 460,462 $ 12,224,732 Change in net assets of governmental activities The accompanying notes are an integral part of these financial statements 30 City of Yuma, Arizona Statement of Net Assets Proprietary Funds June 30, 2002 Business-Type Activities-Enterprise Funds Assets Current Assets: Cash and Investments Receivables, Net of Allowance for Uncollectibles: Accounts Receivable Intergovernmental Contracts Receivable Accrued Interest Inventory, at cost Prepaid Expenses Total Current Assets Restricted Assets: Cash and Investments: Current Debt Service Advancement for Future Expansion Customer Deposits Receivables: Accrued Interest Long-Term Contracts Receivable Total Restricted Assets Fixed Assets: Land Buildings Improvements Other than Buildings Equipment Gross Fixed Assets Less Accumulated Depreciation Fixed Assets Net of Depreciation Construction In Progress Total Fixed Assets Other Assets: Deferred Charges Total Assets Water Fund Wastewater Fund $ 10,340,060 $ 903,964 Other Funds $ Totals 180,782 $ 11,424,806 Governmental Activities Internal Service Funds $ 14,296,548 1,581,398 538 45,975 59,935 9,822 12,037,728 754,459 261,576 52,984 550 1,973,533 4,493 379 1,645 151,550 3,429 342,278 2,340,350 262,493 52,984 47,620 211,485 13,801 14,353,539 1,140,528 204,322 10,403,227 - - 1,140,528 10,403,227 204,322 - 11,933 1,356,783 119,935 4,609 10,527,771 - 131,868 4,609 11,884,554 - 1,043,951 2,911,198 71,865,523 1,597,556 77,418,228 29,242,119 48,176,109 4,656,195 52,832,304 127,079 1,931,134 44,615,224 1,092,400 47,765,837 17,236,435 30,529,402 4,287,219 34,816,621 3,102,865 3,002,762 237,926 6,343,553 2,009,640 4,333,913 8,362 4,342,275 1,171,030 7,945,197 119,483,509 2,927,882 131,527,618 48,488,194 83,039,424 8,951,776 91,991,200 19,751,441 19,751,441 10,295,571 9,455,870 9,455,870 214,550 66,441,365 47,317,925 4,684,553 214,550 118,443,843 23,829,948 439,033 179,559 618,592 61,273 95,812 52,984 9,434 219,503 2,183,787 495,412 52,984 206,250 78,882 9,434 3,026,749 198,393 309,303 15,000 522,696 32,338 32,338 - 204,322 32,338 618,750 236,646 1,092,056 - 650,930 4,609 4,609 224,112 4,609 10,942,408 10,947,017 15,065,822 522,696 34,816,621 11,850,374 4,342,275 118,166 80,223,792 23,154,229 9,455,870 13,851,382 $ 46,666,995 $ 4,460,441 $ 103,378,021 Liabilities Current Liabilities Payable from Current Assets: Accounts Payable 1,683,481 Accrued Payroll and Related Taxes 220,041 Current Portion-Long-Term Contracts Current Portion-Bonds Payable 206,250 Estimated Claims and Judgements Due to Other Funds Accrued Interest Payable 78,882 Deferred Revenue 2,188,654 Total Current Liabilities Payable from Current Assets Current Liabilities Payable from Restricted Assets: Deposits 204,322 Deferred Revenue Current Portion-Bonds Payable 618,750 236,646 Accrued Bond Interest Payable 1,059,718 Total Current Liabilities Payable from Restricted Assets Long-Term Liabilities: Long-Term Contracts Payable 10,942,408 Bonds Payable 10,942,408 Total Long-Term Liabilities 14,190,780 Total Liabilities Net Assets Invested in capital assets, net of related debt 41,064,896 11,185,689 Unrestricted $ 52,250,585 Total Net Assets The accompanying notes are an integral part of these financial statements 31 8,283 69,247 14,374,078 $ 23,307,252 City of Yuma, Arizona Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2002 Business-Type Activities-Enterprise Funds Water Fund Operating Revenues: Metered Water Sales Commercial Raw Water Wastewater Charges Meters, Connections and Services Green Fees and Concessions Equipment Rental Miscellaneous Charges Total Operating Revenues $ Operating Expenses: Operations and Maintenance Depreciation and Amortization Total Operating Expenses Wastewater Fund 8,821,057 237,948 - $ $ 5,582,691 Other Funds - Totals $ 8,821,057 237,948 5,582,691 Governmental Activities Internal Service Funds $ - 214,781 8,388 9,282,174 44,430 5,627,121 2,122,940 119,487 2,242,427 259,211 2,122,940 119,487 8,388 17,151,722 2,584,544 4,282,665 6,867,209 5,862,075 3,232,611 9,094,686 4,276,985 2,110,559 6,387,544 2,261,291 236,580 2,497,871 12,400,351 5,579,750 17,980,101 4,261,277 2,134,418 6,395,695 187,488 (760,423) (255,444) (828,379) 471,514 491,919 (146,657) (633,764) 38,783 500,119 (115,468) 12,469 6,906 (28,665) (2,463) 5,123 998,944 (290,790) (636,227) 56,375 561,551 119,072 - (249,719) 397,120 (19,099) 128,302 680,623 (62,231) (363,303) (274,543) (700,077) 1,152,137 2,426,902 (1,220,085) 20,000 (67,382) 3,833,335 (335,649) 246,727 (245,380) 6,260,237 (1,220,085) 266,727 (648,411) 460,463 - Change in Net Assets 1,097,204 3,134,383 (273,196) 3,958,391 1,612,600 Net Assets - Beginning 51,153,381 43,532,612 4,733,637 99,419,630 21,694,652 4,460,441 $ 103,378,021 Operating Income/(Loss) Non-Operating Revenues/(Expenses): Interest Gain/(Loss) on Disposal of Assets Interest and Fiscal Agent Fees Miscellaneous Revenues/(Expenses) Total Non-Operating Revenues/(Expenses) Income/(Loss) before Contributions and Transfers Capital Contributions Special Item-litigation Transfers In Transfers Out Net Assets - Ending $ 52,250,585 $ 46,666,995 $ The accompanying notes are an integral part of these financial statements 32 $ 23,307,252 City of Yuma, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2002 Business-Type Activities-Enterprise Funds Water Wastewater Other Fund Fund Funds Totals Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Other Operating Activity Revenue/(Expense) Net Cash Provided by Operating Activities $ 9,133,865 $ 5,578,152 $ 2,248,847 $ 16,960,864 (2,122,462) (1,598,569) (953,430) (4,674,461) (2,676,083) (2,721,254) (1,339,697) (6,737,034) 11,458 5,122 55,363 38,783 4,374,103 Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Provided by/(Used for) Noncapital Financing Activities Cash Flow from Capital and Related Financing Acitivities: Contributions of Capital Acquisition and Construction of Assets Proceeds from Sale of Capital Assets Principal Payments on Bonds Special Item - Litigation Interest and Fiscal Agent Fee Payments Net Cash Used for Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities 1,269,787 $ 5,604,732 6,819,000 (107,554) (4,182,745) 2,528,701 20,000 (67,382) 48,923 (335,649) 246,727 (296,766) 315,650 (699,797) 460,463 - (47,382) (286,726) (50,039) (384,147) 460,463 1,468,918 (5,530,038) (785,000) (1,220,085) (655,067) 2,051,231 (3,296,078) 1,011 - (49,080) - 3,520,149 (8,875,196) 1,011 (785,000) (1,220,085) (655,067) (2,203,369) 124,718 - (6,721,272) (1,243,836) (49,080) (8,014,188) (2,078,651) 7,087 7,087 1,031,115 1,031,115 508,985 508,985 515,043 515,043 Net Increase in Cash and Cash Equivalents (1,885,566) Cash and Cash Equivalents, July 1 13,570,476 11,052,923 Cash and Cash Equivalents, June 30 $ 11,684,910 $ 11,307,191 Reconciliation of Operating Income/(Loss) to Net Cash Provided by Operating Activities: Operating Income/(Loss) $ $ Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense (Increase)/Decrease in Accounts Receivables (Increase)/Decrease in Inventories Increase/(Decrease) in Accounts Payable (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accrued Wages and Taxes Payable (Decrease) in Claims Incurred but Not Reported Increase/(Decrease) in Customer Deposits Other Operating Activity Revenue/(Expense) Total Adjustments $ Net Cash Provided by Operating Activities (39,158) Governmental Activities Internal Service Funds 187,488 254,268 3,232,611 (168,490) (9,087) 1,076,516 (9,072) 9,523 15,831 38,783 4,186,615 4,374,103 Noncash Transactions Affecting Financial Position Purchase of Assets with Vendor Provided Financing $ 421,953 957,984 Contributions of Fixed Assets Total Noncash Transactions Affecting $ 1,379,937 Financial Position $ (760,423) $ 2,110,559 (48,968) (59,937) (160) - 576,180 576,180 (131,190) (1,762,488) 1,486,693 311,972 24,935,371 12,809,855 180,782 $ 23,172,883 $ 14,296,548 (255,444) $ 236,580 (2,014) 9,852 (32,604) 782 (828,379) $ 5,579,750 (219,472) 765 983,975 (8,450) 2,134,418 (5,820) (2,058) - 9,333 7,925 11,458 2,030,210 $ 1,269,787 $ $ 316,511 1,782,103 $ - $ 738,464 2,740,087 $ 96,780 - $ 2,098,614 $ - $ 3,478,551 $ 96,780 The accompanying notes are an integral part of these financial statements 33 (9,866) 8,990 8,434 32,190 5,122 55,363 216,286 6,433,111 (39,158) $ 5,604,732 471,514 $ (69,353) 2,057,187 2,528,701 34 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Yuma (City) was incorporated April 14, 1914 under Arizona Revised Statute Chapter 9, Section 101, and adopted its first charter on June 11, 1914. The City presently operates under a charter that was last amended on January 2, 2002. The Charter provides for a Council-Manager form of government and provides such services as are authorized by the Charter. Among these services are general government services, public safety (police and fire), parks, recreation, culture, streets, environmental health and protection, and community design and development. The accounting policies of the City conform to generally accepted accounting principles (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. With respect to proprietary activities, the City has adopted GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting. The City has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions, issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. One of the most significant pronouncements was GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This statement establishes a new model for government reporting for which the City was required to implement for the fiscal year ending June 30, 2003. The City elected, however, to implement the statement for the year ended June 30, 2002. While retaining the familiar fund financial statements of the older model, the new statement establishes a level of governmentwide reporting similar to private sector reporting to give the financial statement user a better understanding of the performance of the City. The following is a summary of the more significant policies. A. Reporting Entity The City is a municipal entity governed by an elected mayor and council. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations and so data from these units are combined with data of the City, the primary government. The component units presented have a June 30 year-end. Blended Component Units Yuma Municipal Property Corporation. The Yuma Municipal Property Corporation's board members are appointed by the City Council. The Corporation was formed to finance the acquisition of certain improvements such as the Yuma Civic and Convention Center, Baseball Complex and Desert Hills Golf Course. The Corporation was also used to finance the acquisition of three public safety buildings, (the police headquarters, a fire station and the Municipal Court facility) and Public Works facilities, along with a clubhouse for the municipal golf course. Currently, the Corporation is financing the acquisition of the new Municipal Complex. The Corporation conducts no business other than with the City and that business is solely the retirement of debt related to the aforementioned acquisitions. Complete financial statements may be obtained at the City of Yuma, City Clerk’s Office, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012. City of Yuma Employee Benefits Trust. The City of Yuma Employee Benefits Trust is responsible for providing health insurance for the City employees. The City Council appoints the Trust’s Board of Directors. The Trust provides services entirely to the City and therefore has been included as an Internal Service Fund as of June 30, 1997 in accordance with the criteria established in GASB Statement No. 14, The Financial Reporting Entity. Complete financial statements may be obtained at the City of Yuma Employee Benefit Trust’s administrative offices, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012. 35 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 B. Government-wide and fund financial statements The government-wide financial statements report financial information on all the activities of the City of Yuma and its component units. These financial statements include the Statement of Net Assets and the Statement of Activities or statement of changes in net assets. Most interfund activities have been removed from these statements to avoid duplicating the information with some exceptions such as proprietary fund sales to governmental funds (i.e., water bills paid by a governmental fund). Eliminating these transactions would distort both the measurement of income generated in serving proprietary customers as well as the direct cost of governmental functions serving the citizenry. In these government-wide statements, governmental activities, normally supported by taxes and intergovernmental revenues, are separated from business-type activities that rely on fees and charges for services. The statement of activities presents direct expenses of a given function or segment and the degree to which these expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who use or directly benefit from the services of the function; and 2) grants and contributions that are restricted to the operational or capital needs of a particular function. Taxes and other revenues that are identifiable with a particular function or segment are reported as general revenues. In addition to government-wide presentations, fund financial statements are provided for all governmental and proprietary funds. The financial statements are segregated by their respective significance to City operations with individual major governmental and proprietary funds separated from nonmajor funds (aggregate nonmajor financial activity is reported as a column on the major funds presentation for both governmental and proprietary funds). The City uses GASB Statement No. 34 to determine which funds are to be presented as major funds. In addition to those minimum requirements, the City will, from time to time, include within its major funds presentations other funds, that because of their significance, preclude aggregate reporting outside the basic financial statements. The City of Yuma reports the following funds: GOVERNMENTAL FUNDS General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those for which another fund is required or used. Highway User Revenue Fund – This fund accounts for the receipt and expenditure of the state-shared Highway User Revenue Fund (primarily gas tax) for maintenance and construction of roadways. City Road Tax Fund – This fund accounts for the collection and expenditure of a local one-half percent transaction privilege tax approved by voters in 1994 for maintenance and construction of roadways. While some operating expenditures related to retention basins are recorded within the fund, most revenues are eventually transferred to the Capital Projects Fund where construction expenditures for roadways are recorded. Grant Fund - The Grant Fund accounts for all of the federal and state grants provided to the City with the exception of the Community Development Block Grant. Community Redevelopment Fund – This fund accounts for the financial activities of Community Development Block Grant funds. Municipal Property Corporation Debt Service – This fund accounts for expenditures to service the debt of the City of Yuma Municipal Property Corporation, a blended component unit. Pledged excise tax and other revenues are transferred to this fund for payments of long-term bonded debt of the corporation. Capital Projects Fund – The Capital Projects Fund accounts for the expenditure of monies for purchase or construction of long-lived capital assets including land and buildings and streets infrastructure. 36 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 Other Governmental Funds – Other nonmajor governmental funds of the City of Yuma are aggregated and are presented in a combining statement in the Other Supplementary Information section. These include the Local Transportation Assistance; Public Safety Tax; Solid Waste; Recreation Complex; Two Percent Tax; and Yuma Mall Maintenance Special Revenue Funds and the Revenue Bond Debt Service Fund. PROPRIETARY FUNDS Water Fund – The operations of the City’s drinking water treatment and distribution system are accounted for in this enterprise fund. Wastewater Fund – This enterprise fund accounts for the City’s wastewater collection and treatment system. Other Enterprise Funds – Other nonmajor enterprise funds of the City of Yuma are aggregated along with the major enterprise funds and are also presented in a combining statement in the Other Supplementary Information section . These funds include the Desert Hills Golf Course and Arroyo Dunes Golf Course Funds. Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost-reimbursement basis. They are also presented in the aggregate with major enterprise funds and are included in a combining internal service fund presentation in the Other Supplementary Information section. Because they service primarily governmental funds, they are not included with in the business-like activities of the Statement of Net Assets. Rather, they are combined with the governmental activities on that statement. Moreover, because of their essentially duplicative nature in accounting for their operations (revenues of the internal service funds are expenses of the operating funds), the operations of the internal service funds have been eliminated from the operations of the Statement of Activities. Internal service funds include the Equipment Replacement, Workers Compensation Trust and Employee Benefits Trust Funds. C. Measurement focus and basis of accounting The government-wide financial statements, as well as the proprietary fund financial statements, use the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred. Property taxes are recognized as revenue in the year levied. Grants are recognized as revenue when all eligibility requirements are met and the underlying expenses have been recorded. Governmental fund financial statements are presented using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period (within 60 days). Expenditures are recorded when the liability is incurred. Exceptions include debt service expenditures (recorded when the payment is due) and compensated absences (recorded when earned exclusive of long-term portions not expected to be paid within one year). Property taxes, along with franchise taxes, licenses and sales taxes are susceptible to accrual and have been recognized as revenues of the current period. Delinquent property taxes and property taxes for which there is an enforceable legal claim as of the fiscal year, but which were levied to finance operations of the subsequent fiscal year, have been recorded as deferred revenue. Grants and similar awards received before the eligibility requirements are met are also recorded as deferred revenue. Receivables that will not be collected within the available period have also been reported as deferred revenue on the governmental fund financial statements. All other revenue items are considered measurable and available only when cash is received. D. Budgets and Budgetary Accounting 1) The City follows these procedures in establishing the budgetary data reflected in the financial statements: 37 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 i. On or before the first Monday in June, the City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. ii. Two public hearings are held prior to the budget's final adoption in order to obtain taxpayer comments. iii. On or before the third Monday in August, the budget is legally enacted through passage of an ordinance. iv. At any time during the fiscal year, the City Administrator may transfer part or all of any unencumbered appropriation balance among programs within a fund. Upon written request by the City Administrator, the Council may, by ordinance, transfer part or all of any unencumbered appropriation balance from one fund to another. v. Formal budgetary integration is employed as a management control device during the fiscal year for all funds with legally adopted budgets (only the Workers Compensation Trust and Employee Benefits Trust Internal Services Funds are not budgeted). The budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP) with the exception of the Enterprise Funds and the Internal Service Fund-Equipment Replacement Fund. For these proprietary funds, the expenditures related to debt service and capital acquisition are budgeted in the same manner as governmental funds. Appropriations not expended at fiscal year end lapse. vi. Budgetary amounts include those as originally adopted, and as amended by Council or City Administrator through the end of the fiscal year. Arizona State Statute does not allow supplemental budgets. vii. Expenditures incurred during the fiscal year may not legally exceed the publicly published budget. The maximum legal expenditure permitted for the fiscal year is the total adopted budget. 2) Encumbrances: Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed during the fiscal year. Encumbrances outstanding at year-end are closed and related purchase orders are re-issued for the new fiscal year. Accordingly, there is no reservation of fund balances for encumbrances in the governmental fund types. 3) Budgetary Reporting and Budgetary Basis of Accounting: The City has opted to display budgetary information schedules in a manner similar to its adopted budget; therefore, the information is displayed outside its basic financial statements. Budgetary comparisons are presented for the General Fund and the major Special Revenue Funds in the Required Supplementary Information section. Budgetary comparisons for the Municipal Property Corporation Debt Service Fund, the Capital Projects Fund, the nonmajor governmental funds and the proprietary funds are presented in the Other Supplementary Information sections. For proprietary funds, the budgetary comparison includes a reconciliation to the accrual-based operating statements. Total expenditures on the budgetary schedules of the General and Capital Projects Funds exclude capital outlay expenditures for assets acquired by long-term contracts. E. Assets, Liabilities and Fund Equity Disclosures 1) Transactions between Funds: Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as a reimbursement reducing expenditures in the fund performing the services. Exceptions to this include: (1) sales of water and wastewater treatment are treated as revenue by the Enterprise Fund, and in-lieu property taxes are recorded as revenues in the General Fund and expenses in the Enterprise Funds; (2) operating transfers are made in certain other funds to shift resources from a fund legally required to receive revenue to a fund authorized to expend the revenue; and 38 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 (3) charges for services of the Internal Service Funds are recorded as expenditures in the funds receiving the service. For purposes of government-wide presentation, these latter transactions are eliminated. 2) Cash and Investments: Cash balances of the City’s funds are pooled and invested by the City. The policy of the City is to invest public funds in a manner which will provide the maximum security of principal invested and conform to all applicable State statutes and City ordinances while providing the highest yield and meeting the City’s daily cash flows. Income earned or loss arising from the investment of the pooled cash is allocated on a weekly basis to the individual funds based upon average daily balance. In accordance with GASB Statement 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, the City reports its investments at fair value based on quoted market information obtained from fiscal agents or other sources. 3) Inventories: Inventories of the General Fund, Special Revenue Funds and Enterprise Funds consist primarily of expendable supplies held for consumption. These inventories are maintained on a perpetual inventory basis verified through annual physical counts. Items are valued using the weighted average method. Expenditures are recorded at the time inventories are used in the governmental funds; therefore, the reserve for inventory is equal to the inventory level needed to maintain adequate operating supplies and indicates that a portion of fund balance is not available for future expenditures. 4) Grants Revenue: The City follows the policy that, grants and similar items are recognized as revenue or contributed revenue as soon as all eligibility requirements imposed by the provider have been met. 5) Unbilled Accounts Receivable: The City records as receivables and as revenues the amount of water sales, sewer service charges and commercial refuse collection charges accrued but unbilled at fiscal year end. At June 30, 2002, the estimated amounts of unbilled revenues for the Water and Wastewater Enterprise Funds and the Solid Waste Special Revenue Fund are $938,537, $406,308, and $82,451, respectively. 6) Capital Assets: Capital assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets include property, plant, equipment and infrastructure (e.g., roads, bridges and similar items) and are defined as assets with an individual cost of more than $5,000 and a useful life exceeding one year. These assets are valued at cost or estimated historical cost if original cost is not available. Gifts or contributions are stated at fair market value at the date received. Depreciation and amortization have been provided over the estimated useful lives using the group life method on a straightline basis and the following useful lives: Buildings Improvements Infrastructure Equipment 33 to 100 years 20 to 50 years 35 years 2 to 50 years For proprietary fund assets constructed with bond proceeds, interest costs have been capitalized, net of interest revenue. Gains or losses are recognized when assets are retired from service or are otherwise disposed. 39 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 7) Contributions: Contributions, as shown in the Enterprise Funds, represent Federal and State grants received, sub-dividers' costs of installing water and sewer mains, water service connections installed at the customers' expense, transfers of equipment from other City funds, and contributions from customers to defray future expansion costs. 8) Long-term obligations: In the government-wide financial statements, and proprietary fund types in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or bond discount. Bond issuance costs are reported as deferred charges and amortized over the life of the debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 9) Reserves and Designated Fund Balances: In the governmental fund financial statements, reserves are recorded to signify that a portion of the fund equity is segregated for future use and is not available for appropriation or expenditure. Designated fund balances are recorded to represent resources available to finance intended future expenditures based upon managerial plans. F. Revenues, Expenditures, Expenses and Other Disclosures 1) Property Tax Revenue Recognition: Yuma County is responsible for billing and collecting property taxes. Collections by the County in one month are remitted to the City in the next month. For government-wide presentation, revenues equal the taxes levied for the fiscal year. No allowance for uncollectible taxes has been recorded as the City’s experience shows that after five years the amount uncollected represents less than one-half percent of the original levy. For governmental fund statement purposes, at fiscal year end, delinquent property taxes expected to be collected within 60 days are recognized as revenue and recorded as receivable. The balance of delinquent taxes is recorded in the property tax receivable account with a corresponding entry to the deferred revenue account. 2) Compensated Absences: The City's administrative regulations provide permanent City employees with general and major illness leave in varying amounts based on years of service. In addition, employees may accrue hours worked on holidays for absences or payment in the future. General leave vests with the employee as it is earned. At fiscal year end, the Governmental Funds include an accrual of general and holiday leave pay and related benefits that would normally be liquidated with expendable available financial resources. General and holiday leave with related benefits in excess of this accumulation, $1,333,974, are recorded in the governmental activities column of the government-wide financial statements. The amounts of general and holiday leave pay and related benefits attributable to the Water, Wastewater, Desert Hills, and Arroyo Dunes Enterprise Funds are $147,787, $127,767, $60,112 and $4,402 respectively, and are recorded in those funds and in the business-type activities of the government-wide statements and accrued as earned. Major illness leave benefits provided for ordinary sick pay are not vested with the employee. Unused benefits are payable only upon the death or retirement of the employee. At June 30, 2002, the amount accumulated 40 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 sick pay and related benefits is $5,404,573, including $707,034 attributable to the Enterprise Funds. Under GASB Statement No. 16, Accounting for Compensated Absences, the City uses the “termination payment” method to determine its provision for major illness leave liability. The portion of the major illness leave liability related to governmental fund types, $496,589, is reported within the governmental activities column of the government-wide financial statements, as current amounts of that liability have been determined to be immaterial and are not recorded within the respective governmental funds. The provision for probable future major illness leave and related benefits attributable to the Water, Wastewater, and Desert Hills and Arroyo Dunes Golf Course Enterprise Funds of $35,875, $26,435, $14,022 and $1,084 respectively, are recorded in those funds and are accrued as earned. G. Investment Income Investment income is composed of interest and net changes in the fair value of applicable investments. H. Use of Estimates The preparation of general purpose financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Excess of Expenditures Over Appropriations The City’s expenditures exceeded appropriations in one Debt Service Fund. Within the Municipal Property Corporation (MPC) Bonds Fund, the City had not budgeted for its annual interest payment on the 2001 MPC Issue. As a result, the City exceeded its appropriations by $1,649,993. III. DETAIL NOTES ON ALL FUNDS A. Cash and Investments The City maintains a cash and investments pool that is available to all funds. Each fund type’s portion of the cash and investment pool is shown in the accompanying balance sheet as “Cash and Investments”, including the portion listed under “Restricted Assets”. The City also records cash and investments, held by fiscal agents, that are restricted by bond indenture requirements for the payment of principal and interest at the end of the fiscal year. The policy of the City of Yuma is to invest public funds in a manner which will provide the maximum security of principal invested while providing the highest yield which will also meet the daily cash flow needs of the City while conforming to all applicable State statutes and City ordinances governing the investment of public funds. The primary objectives, in priority order, of the City of Yuma’s investment activities are: 1. SAFETY OF PRINCIPAL: Safety of principal is the foremost objective of the City of Yuma. Investments of the City shall be undertaken in a manner that seeks to insure the preservation of capital in the overall portfolio. To obtain this goal, diversification is required in the portfolio’s composition consistent with the other provisions of the policy. 2. LIQUIDITY: The City of Yuma’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. 41 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 3. YIELD: The City of Yuma’s investment portfolio shall be designed with the objective of attaining the highest yield of return throughout budgetary and economic cycles, taking into account the City’s risk constraints and the cash flow of the portfolio. Investments authorized by the City’s Investment Policy include: 1. Obligations of the United States Government, its agencies and instrumentalities, and government sponsored enterprises; derivative securities of any type are not eligible investments under the policy; 2. Fully insured or collateralized certificates of deposit and other evidence of deposit at banks and savings and loan associations; 3. Bankers acceptances issued by the ten largest domestic banks and the twenty largest international banks; 4. Commercial paper rated A-1/P-1; 5. Repurchase agreements whose underlying collateral consists of the foregoing, provided a signed PSA Master Repurchase Agreement is on file with the counter party bank or broker/dealer; 6. Money Market Funds whose portfolio consists of the foregoing; 7. The State of Arizona Local Government Investment Pool. If additional types of securities are approved for investment of public funds by State Statutes, they will not be eligible for investment by the City of Yuma until the policy is amended and the amendment passed by the City Council. It is the policy of the City to diversify its investment portfolio. Invested funds are diversified to minimize the risk of loss resulting from over concentration of assets in a specific maturity, specific issuer, or specific class of security. Diversification strategies are established and periodically reviewed by the investment committee. Diversification standards by security type and issuer do not exceed the following: U. S. Treasuries and securities having principal and interest guaranteed by the U.S. Government ............................................................................................... 100% U. S. Government agencies, instrumentalities and government sponsored enterprise..............................................................................No more than 50% Fully insured or collateralized CD’s ........................................................No more than 30% Banker’s Acceptances ............................................................................No more than 25% A-1/P-1 Commercial Paper.....................................................................No more than 25% Maximum per issuer...........................................................................20% of total C. P. Repurchase Agreements.............................................................................................. 100% Money Market Funds.................................................................................................... 100% Local Government Investment Pool ............................................................................. 100% The Investment Officer is required to diversify maturities. The Investment Officer, to the extent possible, attempts to match investments with anticipated cash flow requirements. Matching maturities with cash flow dates reduces the need to sell securities prior to maturity, thus reducing market risk. Unless matched to a specific requirement, the Investment Officer may not invest more than 25% of the portfolio for a period greater than three years. Unless matched to a specific requirement, the Investment Officer may not invest any portion of the portfolio for a period greater than five years. All security transactions, including collateral for repurchase agreements, entered into by the City are conducted on a delivery versus payment basis. A third party custodian designated by the Investment Officer holds all securities. The third party custodian is required to issue a safekeeping receipt to the City listing the specific 42 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 instrument, rate, maturity and other pertinent information. In order to anticipate market changes and provide a level of additional security for all funds, the collateralization level will be 102% of market value of principal and accrued interest on Certificates of Deposit and Repurchase Agreements. Deposits. At June 30, 2002, the carrying amount of the City’s deposits was $56,795 and the bank balance was $263,391. The difference of $206,596 relates to outstanding checks and unrecorded deposits in transit. The City’s deposits of $253,391 are categorized to indicate the level of custodial risk assumed by the City. Category 1 includes deposits that are insured or collateralized with securities held by the City or by its agent in the City’s name. Category 2 includes deposits collateralized with securities held by the bank’s trust department or its agent in the City’s name. Category 3 includes deposits that are not collateralized or that are collateralized with securities held by the bank’s trust department or its agent but not in the City’s name. The bank balance includes $109,709 covered by federal depository insurance, which is Category 1, and $153,682 covered by collateral held by the bank’s agent in the City’s name, which is Category 2. Deposits in both categories are covered by collateral arrangements with the bank in which the bank pledges collateral in the form of government securities. The amount of collateral pledged is monitored both by the City and by the bank to insure that the collateral exceeds actual and anticipated deposits. Investments. The City’s investments are also categorized according to the level of risk assumed by the City at year-end. Category 1 includes investments that are insured or registered or for which the City or its agent in the City’s name holds the securities. Category 2 includes uninsured and unregistered investment for which the counter party’s trust department or agent in the City’s name holds the securities. Category 3 includes uninsured and unregistered investments for which the securities are held by the counter party, or by its trust department or agent, but not in the City's name. The City’s investments in the State Treasurer’s investment pool represents shares of the pool’s portfolio. Those shares are not identified with specific investments and are not subject to custodial risk. The fair value of the position in the pool is the same as the value of the pool shares. The pool is overseen by the State Board of Investment in accordance with Arizona Revised Statutes. Category 1 U.S. Treasuries Federal Agencies $ $ 24,868,857 34,748,132 59,616,989 Amount $ Money Market Investments in State Investment Pool $ 24,868,857 34,748,132 59,616,989 9,695,549 4,618,294 73,930,832 Fair Value $ $ 24,868,857 34,748,132 59,616,989 9,695,549 4,618,294 73,930,832 Cash and Investments are presented on the Statement of Net Assets as follows: Cash and Investments Restricted Cash and Investments $ 62,260,185 11,748,077 - Total $ 74,008,262 $ 20,635 56,795 73,930,832 Total $ 74,008,262 On Hand Deposits Investments For purposes of the statements of cash flows, the City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. B. Property Tax The City's property tax is levied by the Yuma County Treasurer on or before the third Monday in August based upon the previous January 1 full cash value as determined by the Yuma County Assessor. Under Arizona law two assessed valuations are used. One is for primary taxes (used to fund operating expenditures) and the other is for secondary taxes (used to meet general obligation debt service requirements). The primary tax levy is limited to a two percent increase over the previous year with adjustments for growth and annexation. Secondary taxes are tied to the annual debt service requirements of voter-approved general obligation bonds. Taxes are due 43 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 in two equal installments on October 1 and March 1 following the levy date and are delinquent on the first day of November and May, respectively. Liens are filed when taxes are delinquent for two years. Assessed values, levies and collections for fiscal year 2000-01 (Tax Year 2000) and fiscal year 2001-02 (Tax Year 2001), follow: Tax Year 2000 Tax Year 2001 $250,659,103 1.9902 $4,988,638 $256,612,102 $5,099,285 $144,699 $251,936 Primary Assessed Valuation Primary Tax Rate Primary Tax Levy Secondary Assessed Valuation Secondary Tax Rate Secondary Tax Levy Current Tax Collections Delinquent Tax Collections Delinquent Taxes Outstanding as of June 30 $271,369,779 1.9192 $5,240,594 $278,555,470 $5,071,973 $121,102 $181,788 C. Accounts Receivable Receivable balances are stated net of an allowance for doubtful accounts. Within the Special Revenue Solid Waste Fund, an allowance account is established to record the estimated uncollectible refuse collection billings. Within the Water and Wastewater Enterprise Funds, allowance accounts have been established to record estimated uncollectible water and wastewater billings. No allowance account has been made for other types of receivables. The balances of these accounts are as follow: Gross Receivable Allowance Amount June 30, 2002 Special Revenue Funds - Solid Waste Enterprise Funds: Water Wastewater $ 2001 142,510 $ 2002 138,110 1,617,392 770,377 $ 1,466,972 705,598 2001 3,391 $ 35,994 15,918 6,246 53,897 32,977 D. Due from Other Governments (Intergovernmental Receivables) Amounts due from other government units at June 30, 2002, are as follows: Fund Federal State Agencies County Local Total Governmental Funds Major Funds General Highway User Revenue City Road Tax Community Redevelopment Grants Non-major Funds Public Safety Tax Recreation Complex Solid Waste Mall Maintenance Enterprise Funds Water Wastewater Desert Hills Golf Course Total $ 280,187 270,418 - $ $ 1,508,436 583,709 503,612 204,329 820,629 $ 327,083 9,624 285,718 $ 55,809 259 - $ 1,891,328 593,592 503,612 484,516 1,376,765 201,376 116 - 3,057 9,995 - 201,376 9,995 116 3,057 92,821 - 379 538 - 168,755 - 538 261,576 379 643,426 $ 3,822,586 234,818 $ 5,326,850 44 $ 626,020 $ City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 E. Capital Assets In accordance with GASB Statement No. 34, capital assets have been restated at June 30, 2001 to include infrastructure assets of the City. The City used estimated historical cost on its entire street grid, based on street data on hand, current costs to construct and price indexes to deflate current cost. Depreciation of infrastructure based on this deflated cost was determined through June 30, 2001 and amounts restated. In addition, the City’s capitalization threshold was increased from $1,000 to $5,000. Capital asset activity for the year ended June 30, 2002, follows: Governmental Activities: Capital Assets Not Being Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated Other Capital Assets: Buildings Improvements Infrastructure Equipment Total Other Capital Assets Less Accumulated Depreciation for: Buildings Improvements Infrastructure Equipment Total Accumulated Depreciation Other Capital Assets, Net Total Capital Assets, Governmental Activities Restated Balance June 30, 2001 $ $ 5,810,040 7,017,441 12,827,481 Increases $ 2,496,878 8,937,968 11,434,846 Decreases $ - Balance June 30, 2002 $ 8,306,918 15,955,409 24,262,327 35,642,370 10,572,738 104,697,122 25,334,847 176,247,077 19,123,054 3,360,380 288,077 4,990,925 27,762,436 614,475 1,145,536 1,760,011 54,765,424 13,933,118 104,370,724 29,180,236 202,249,502 6,204,899 4,434,730 63,688,212 12,553,866 86,881,707 89,365,370 1,216,295 810,881 1,885,059 3,446,901 7,359,136 20,403,300 614,475 1,133,561 1,748,036 11,975 7,421,194 5,245,611 64,958,796 14,867,206 92,492,807 109,756,695 102,192,851 $ 31,838,146 $ 11,975 Government activities capital assets net of accumulated depreciation at June 30, 2002, are comprised of: General Capital Assets, Net Internal Service Fund Capital Assets, Net $ $ TOTAL 124,563,152 9,455,870 134,019,022 Depreciation was charged to governmental functions as follows: General Government Public Safety Parks, Recreation, and Culture Environmental Health and Protection Community Design and Development Streets Assets held by Internal Service Funds are charged based on usage of assets $ $ Total 45 1,015,843 1,261,059 968,845 17,078 72,678 1,889,215 2,134,418 7,359,136 $ 134,019,022 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 Balance June 30, 2001 Business-type activities: Capital Assets Not Being Depreciated: Land Construction in Progress $ 1,172,308 2,661,763 Increases $ 7,517,358 Balance June 30, 2002 Decreases $ 1,278 1,227,345 $ 1,171,030 8,951,776 Total Capital Assets Not Being Depreciated Other Capital Assets: Buildings Improvements Equipment 3,834,071 7,517,358 1,228,623 10,122,806 7,973,063 115,541,795 3,682,260 5,194 5,407,103 141,290 33,060 1,465,389 895,668 7,945,197 119,483,509 2,927,882 Total Other Capital Assets 127,197,118 5,553,587 2,394,117 130,356,588 Less Accumulated Depreciation for: Buildings Improvements Equipment 3,221,815 39,672,002 2,211,106 203,370 5,006,222 278,284 28,907 1,340,569 735,129 3,396,278 43,337,655 1,754,261 Total Accumulated Depreciation 45,104,923 5,487,876 2,104,605 48,488,194 82,092,195 65,711 289,512 81,868,394 Other Capital Assets, Net Total Capital Assets, Business-like activities $ 85,926,266 Depreciation was charged to programs as follows: Water $ Wastewater Golf courses 3,140,737 2,110,559 236,580 Total $ $ 7,583,069 $ 1,518,135 $ 91,991,200 5,487,876 Construction in progress is comprised mainly of water projects and a wastewater treatment plant project. F. Retirement Plans The City has adopted GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers. This statement requires the following disclosures. Plan Descriptions - The City contributes to the three plans described below. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor and health insurance premium benefits. The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefit pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a five-member board, known as The Fund Manager, and 167 local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The Elected Officials Retirement Plan (EORP) is a cost-sharing multiple-employer defined benefit pension plan that covers elected officials and judges of certain state and local governments. The EORP is governed by The Fund Manager of PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 3. 46 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by writing or calling the applicable plan. ASRS PSPRS and EORP 3300 North Central Avenue 1020 E. Missouri Avenue P.O. Box 33910 Phoenix, AZ 85014 Phoenix, AZ 85067-3910 (602)240-2200 or (800)621-3778 (602)255-5575 Funding Policy - The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rate. Cost-sharing plans - For the year ended June 30, 2002, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 2.49 percent (2.00 percent retirement and 0.49 percent long-term disability) of the members’ annual covered payroll. The City’s contribution to ASRS for the years ended June 30, 2002, 2001, and 2000 were $500,530, $407,230, and $478,247, respectively, which were equal to the required contributions for the year. In addition, active EORP members were required by statute to contribute 7 percent of the members’ annual covered payroll while the City was required to contribute at the actuarially determined rate of 6.67 percent. The City’s contributions to EORP for the years ended June 30, 2002, 2001 and 2000 were $8,027, $11,221, and $11,394, respectively, which were equal to the required contributions for the year. Agent plans - For the year ended June 30, 2002, 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 2.00 percent for police and 3.66 percent for fire. Annual Pension Cost - The City’s pension cost for the two agent plans for the year ended June 30, 2002, follows: Contribution Rates Annual Pension Cost Contributions Made Actuarial Valuation Date Actuarial Cost Method Actuarial Assumptions: Investment Rate of Return Projected Salary Increases Inflation projection Cost-of-Living Adjustments Amortization Method Remaining Amortization Period Asset Valuation Method Police Fire 2.00% $86,526 $86,526 June 30, 2001 Entry Age 3.66% $165,652 $165,652 June 30, 2001 Entry Age 9% 6.5% - 9.5% 5.5% None Level Percentage Open 20 years 4 year smoothed market 9% 6.5% - 9.5% 5.5% None Level Percentage Open 20 years 4 year smoothed market Trend Information - Information for each of the agent plans as of the most recent actuarial valuations follows: POLICE FIRE 1999 2000 2001 1999 2000 2001 Annual Percent Net Pension Pension Cost Contributed Obligation 300,774 223,767 86,526 256,381 255,074 165,652 47 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% - City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 G. Other Employee Benefit Plan In addition to the leave plans described under compensated absences, the City maintains a self funded insurance plan for employee and dependent related health, life, and dental claims. An Internal Service Fund is established to record employee and employer contributions. No minimum level of reserve has been established for the Fund; however, incurred but unreported claims have been accrued within the fund that amount to $47,642. At June 30, 2002, there was a retained earnings balance of $288,988. H. Long-Term Liabilities With the implementation of GASB Statement No. 34, the presentation of long-term debt has changed. In prior years, this long-term debt note focused on amounts reported within the General Long-Term Debt Account Group (GLTDAG). Retirements shown in the presentation of changes to long-term debt equaled the amount of debt retirement recorded in the Debt Service Funds. The long-term debt retirement (payable) was accrued in the Debt Service Fund while the actual debt retirement payment occurred on the following July 1 each year. Under Statement No. 34, the GLTDAG is no longer presented. Instead, long-term debt is presented on the government-wide financial statements. On the Statement of Net Assets, long-term debt due within one year is presented separately from remaining long-term debt. Since the bonds payable amount within the government fund Debt Service represents the ‘due within one year’ portion when it is ‘rolled’ into the statement, the remaining amount on the statement is the former GLTDAG long-term portion. Accordingly, the presentations below are revised to equal the combined balance of all long-term debt. The amount shown as retired represents the amount actually paid during the fiscal year as opposed to the amount accrued within the Debt Service Fund. This new method will make the following tables appear unchanged from the prior year when, in fact, they now present all long-term debt, not just amounts previously reported in the GLTDAG. The following changes occurred in long-term liabilities during the fiscal year ended June 30, 2002: Governmental activities: Yuma Municipal Property Corporation Revenue: Governmental Contracts Payable Compensated Absences Total Governmental Activity Long-Term Debt Business-like activities: General Obligation Bonds Contracts Payable Total Business-like Activity Long-Term Debt Balance July 1, 2001 (Restated) Additions $ 65,940,000 $ 210,000 1,683,113 Retirements Balance June 30, 2002 Due Within One Year 908,836 186,990 $ 3,625,000 210,000 335,502 39,536 $ 62,315,000 573,334 1,830,567 $ 3,800,000 280,799 901,019 $ 67,833,113 $ 1,095,826 $ 4,210,038 $ 64,718,901 $ 4,981,818 $ 12,995,000 106,516 $ - $ 785,000 48,923 $ 12,210,000 57,593 $ 825,000 52,984 $ 13,101,516 $ - $ 833,923 $ 12,267,593 $ 877,984 On the Statement of Net Assets, the current portion of governmental activity long-term debt of $4,080,799 excludes the current portion of compensated absences of $901,019 that is recorded within accrued liabilities. In addition, the current portion of business-type activities long-term debt of $259,234 excludes the current portion of bonds payable of $618,750 that is recorded within liabilities payable from restricted assets. Moreover, the longterm portion is net of $442,592 of unamortized issuance costs. 48 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 Contracts Payable During fiscal year 2002, the City purchased two buildings that resulted in long-term contracts payable. The first was purchased as right-of-way for future street improvements. This land and building purchase of $805,337 was funded through the Capital Projects Fund and future payments will be originated in that fund. The second purchase was to reclaim the historic Yuma Theater in preparation for the construction of the performing arts center during fiscal year 2003. The purchase of $103,499 was funded and future payments will be paid by the General Fund. Minimum payments due under these contracts are as follow: Contracts Payable Right-of-way Theater Year Ended June 30, 2003 2004 $ Total Minimum Future Payments 284,800 284,800 $ 569,600 Less Amount Representing Interest 36,266 Net Present Value of Contracts Payable $ 533,334 $ 20,000 20,000 Total $ 304,800 304,800 40,000 609,600 - 36,266 40,000 $ 573,334 Bonded Debt - Excluding Refunded Debt The following is a description of bonded indebtedness at June 30, 2002. In each instance, all bonds have been issued. For each issue, a number of covenants and restrictions are included in the bond indentures. The City is in compliance with these covenants and restrictions. Municipal Property Corporation Bonds – In 1970, the City created the Municipal Property Corporation to finance the acquisition or construction of various City projects. Bonds are issued by the corporation and are repaid through unrestricted revenues, primarily excise taxes, by the City. For each issue, the City has pledged its excise tax collections as follows: Excise Taxes – transaction privilege taxes, license fees and franchise fees, along with transaction privilege taxes, income taxes and excise taxes imposed by the State and distributed to the City (except public safety and special sales taxes); Public Safety Taxes – a special two-tenths of one percent (.2%) privilege license tax approved by qualified voters in 1994 for public safety and criminal justice facilities and equipment; and Special Sales Taxes – a special two percent (2%) privilege license tax approved by qualified voters in 1993 on the gross proceeds of sales or gross income from the business of bars, restaurants and hotels. For each bond series, the corresponding pledged tax was: 1995 – Series A 1995 – Series B 1995 – Series C 1996 Issue 1998 Issue 2001 Issue Excise and Public Safety Taxes Excise Taxes Excise and Special Sales Taxes Excise Taxes Excise Taxes Excise Taxes In addition to, or in lieu of, excise taxes, the City may use other operational revenues to repay the debt, as budgeted in each fund. These include payments from the Water, Wastewater and Desert Hills Golf Course Enterprise Funds, and Highway User Revenue and Solid Waste Special Revenue Funds, as determined by the projects acquired or constructed by the debt proceeds. General Obligation Bonds – These bonds are backed by the full faith and credit of the City and may be repaid through the levying of property taxes. However, because the bonds were issued for the construction or expansion of the City’s water treatment and delivery system, the bonds are recorded in the Water Enterprise Fund and are repaid through that fund. 49 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 General Obligation Bonds: 1992 Project 1997 Refunding Interest Issue Maturity Authorized Rate Date Date and Issued 6.13% 12/16/1992 2012 4.90% 12/1/1997 2012 $ 14,370,000 8,085,000 22,455,000 Yuma Municipal Property Corporation Bonds: 1995 - Series A 1995 - Series B 1995 - Series C 1996 Issue 1998 Issue 2001 Issue Total MPC Bonds 5.55% 5.38% 5.25% 5.07% 3.74% 4.94% 11/1/1995 11/1/1995 11/1/1995 9/1/1996 12/1/1998 3/21/2001 2015 2015 2010 2003 2004 2025 20,400,000 3,900,000 2,500,000 9,600,000 6,020,000 34,150,000 76,570,000 $ Total Bonds Authorized and Issued 99,025,000 Legal Debt Margin Under Arizona's Constitution, outstanding general obligation bonded debt for combined water, sewer, artificial light, parks, open space preserves, playgrounds and recreational facilities may not exceed 20% of a City's net secondary assessed valuation. Outstanding general obligation debt for all other purposes may not exceed 6% of a City's net secondary assessed valuation. The legal borrowing capacity of the City of Yuma at June 30, 2002 follows: Water, Etc. (20%) All Other (6%) Legal Limit Outstanding G.O. Debt $ 56,049,419 12,210,000 $ 16,814,826 - Available Debt Margin $ 43,839,419 $ 16,814,826 Advanced Refunding of Bonded Debt in Prior Years In prior years, the City issued new debt through an advanced refunding bond issue resulting in the defeasance of old debt. Under an advanced refunding arrangement, refunded bonds are issued and the new proceeds, plus additional resources that may be required, are used to purchase securities issued or guaranteed by the United States Government. These securities are then deposited in an irrevocable trust under an escrow agreement which provides that all proceeds from the trust will be used to fund the principal and interest payments of the previously issued bonded debt being refunded. The trust deposits have been computed so that the securities in the trust, along with future cash flow generated by the securities, will be sufficient to service the previously issued bonds. The outstanding balance of the refunded debt and the related assets are not included in the accompanying financial statements. At June 30, 2002, the only refunded issue outstanding is a portion of the City’s 1992 General Obligation Bonds refunded on December 1, 1997 for $7,250,000, due on July 1, 2003. 50 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 Annual Debt Service Requirements to Maturity July 1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 MPC Bonds 1995 - Series A Interest Total Principal $ 815,000 $ 865,000 910,000 955,000 1,005,000 1,060,000 1,115,000 1,175,000 1,240,000 1,315,000 1,385,000 1,465,000 1,550,000 1,645,000 $ 16,500,000 $ 883,361 $ 1,698,361 $ 820,199 1,685,199 753,161 1,663,161 707,661 1,662,661 661,344 1,666,344 611,093 1,671,093 558,093 1,673,093 500,950 1,675,950 439,850 1,679,850 374,750 1,689,750 305,713 1,690,713 233,000 1,698,000 159,750 1,709,750 82,250 1,727,250 $ 2003 2004 1,550,000 $ 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1,480,000 $ $ 3,030,000 $ 155,000 $ 165,000 175,000 185,000 190,000 200,000 215,000 225,000 240,000 250,000 265,000 280,000 295,000 315,000 166,360 $ 154,347 145,272 136,960 127,988 118,488 108,488 97,468 85,937 73,637 60,638 46,725 32,025 16,538 321,360 $ 319,347 320,272 321,960 317,988 318,488 323,488 322,468 325,937 323,637 325,638 326,725 327,025 331,538 MPC Bonds 1995 - Series C Principal Interest Total 155,000 $ 165,000 175,000 180,000 190,000 200,000 210,000 225,000 235,000 - 7,091,175 $ 23,591,175 $ 3,155,000 $ 1,370,871 $ 4,525,871 $ 1,735,000 $ MPC Bonds 1996 Series 2002 MPC Bonds 1995 - Series B Principal Interest Total 1,625,175 - 1,250,000 1,300,000 465,494 $ 2,200,494 1,647,825 $ 1,647,825 1,647,825 2,537,825 2,537,225 2,540,225 2,536,625 2,534,125 2,529,925 2,534,025 2,531,000 2,532,250 2,530,500 2,525,750 2,858,000 2,855,250 2,858,250 2,856,500 2,855,000 2,858,500 2,856,500 2,859,000 2,855,500 2,856,000 141,140 $ 1,336,140 96,925 50,050 220,650 $ 3,250,650 $ 3,745,000 $ MPC Bonds 2001 Series $ 1,647,825 $ 1,647,825 1,647,825 890,000 1,647,825 925,000 1,612,225 965,000 1,575,225 1,000,000 1,536,625 1,040,000 1,494,125 1,080,000 1,449,925 1,130,000 1,404,025 1,175,000 1,356,000 1,235,000 1,297,250 1,295,000 1,235,500 1,355,000 1,170,750 1,755,000 1,103,000 1,840,000 1,015,250 1,935,000 923,250 2,030,000 826,500 2,130,000 725,000 2,240,000 618,500 2,350,000 506,500 2,470,000 389,000 2,590,000 265,500 136,000 2,720,000 240,445 243,470 245,880 242,568 243,838 244,337 244,337 248,575 247,044 - MPC Bonds 1998 Series 145,475 $ 1,625,475 $ 1,195,000 $ 75,175 - 85,445 $ 78,470 70,880 62,568 53,838 44,337 34,337 23,575 12,044 - 1,346,925 1,350,050 288,115 $ 4,033,115 G.O. Bonds 1992 Issue 1997 Refunding Bonds 765,000 $ 252,245 $ 1,017,245 $ 60,000 $ 380,310 $ 815,000 209,405 1,024,405 65,000 377,580 865,000 162,950 1,027,950 65,000 374,622 920,000 112,780 1,032,780 70,000 371,665 975,000 58,500 1,033,500 75,000 368,480 1,115,000 365,067 1,170,000 312,105 1,210,000 257,115 1,275,000 196,615 1,345,000 134,140 1,420,000 69,580 - $ 34,150,000 $ 27,231,450 $ 61,381,450 $ 4,340,000 $ 51 440,310 442,580 439,622 441,665 443,480 1,480,067 1,482,105 1,467,115 1,471,615 1,479,140 1,489,580 - 795,880 $ 5,135,880 $ 7,870,000 $ 3,207,279 $ 11,077,279 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 I. Interfund Transfers Transfer To/From Transfer From/To General Fund HURF Road Tax Grants Community Redevelopment Capital Projects LTAF Public Safety Tax Solid Waste Recreation Complex 2% Tax Governmental activities - major funds: HURF $ 19,142 HURF Solid Waste 1,297,740 MPC Debt Service Mall Maintenance 216,135 MPC Debt Service 1,307,503 Capital Projects 1,909,214 MPC Debt Service 470,840 Capital Projects 1,311,557 Capital Projects 6,994,754 Capital Projects 1,650,018 Water 20,000 Revenue Bond Debt Service 218,631 Capital Projects 1,595 Capital Projects Debt Service 125,832 General Fund HURF Road Tax LTAF Public Safety Tax 2% Tax Community Redevelopment Recreation Complex Grants Capital Projects MPC Debt Service Capital Projects Equipment Replacement MPC Debt Service Capital Projects Recreation Complex MPC Debt Service Capital Projects Desert Hill G.C. Total Governmental Activities Desert Hills G.C. Water Wastewater General Fund $ General Fund HURF 2% Tax Public Safety Tax Capital Projects Solid Waste Desert Hills G.C. Wastewater Water MPC Debt Service MPC Debt Service MPC Debt Service Total Business-like Activities Total Transfers Out Nonmajor funds: 381,346 General Fund Solid Waste Recreation Complex 2,542,218 2% Tax Mall Maintenance 257,080 General Fund 460,463 Revenue Bond Debt Service 22,670 Community Redevelopment 15,628 1,450,000 234,731 347,589 246,727 21,501,413 Total Governmental Activities Internal Service Funds: Equipment Replacement Public Safety Tax Business-type activities: Water 245,380 67,382 Desert Hill Golf Course 335,649 648,411 $ 22,149,824 Total Business-like Activities Grants 2% Tax 19,142 1,307,503 470,840 234,731 2,542,218 125,832 22,670 245,380 335,649 67,382 1,909,214 1,311,557 6,994,754 381,346 257,080 347,589 1,595 15,628 1,650,018 1,297,740 1,450,000 216,135 218,631 21,422,634 460,463 20,000 246,727 266,727 Total Transfers In $ 22,149,824 The majority of the transfers listed above are for capital projects expenditures or for debt service requirements and are recognizable by the fund to which the transfer is made. This includes Enterprise Fund transfers to debt service as the majority of the related bond debt service is governmental in nature and is recorded in the MPC Debt Service Fund rather than within the Enterprise Funds. As for the remaining transfers, they include operating subsidies from the General Fund to HURF ($19,142), Solid Waste Fund ($1,297,740) and Mall Maintenance 52 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 ($216,135); and from the 2 Percent Fund to Recreation Complex Fund ($1,450,000) and Desert Hills Golf Course ($246,727). Also included is a transfer from the Grants Fund to the Water Fund ($20,000) for its portion of the cost of an outside study concerning areas related to riverfront development and a transfer from the Capital Projects Fund to MPC Debt Service ($125,832) for unexpended monies from the Series 1998 MPC Bonds. Interfund activity is eliminated within the governmental activities column of the Statement of Activities. Transfers appearing on that statement represent only those amounts transferred between governmental and business-type activities. The net transfers out of $381,684 (transfers out of $648,411 less transfers in of $266,727) are for debt service. J. Interfund Receivables and Payables A summary of interfund due to/due from balances at June 30, 2002, follows: Interfund Receivable Nonmajor Major Funds Fund Capital Projects General Interfund Payable 2 Percent Total Major Governmental Funds: General Fund Highway Users Revenue Fund Community Redevelopment Fund Grants Fund Nonmajor Governmental Funds: Solid Waste Fund Public Safety Tax Fund Internal Service Funds: Employee Benefits Trust $ Total Receivable $ - $ 458,094 - 132,886 1,096,070 - 6,148 - 216,420 - 6,148 216,420 15,000 - - 15,000 479,242 $ 1,445,376 $ $ 18,400 18,400 $ $ 132,886 1,096,070 458,094 18,400 1,943,018 Because they serve primarily governmental funds, the interfund activity noted above in the Internal Service Employee Benefits Trust is combined within the governmental activities for government-wide reporting. As such, the interfund activity is eliminated in the governmental activities column of the Statement of Net Assets. The internal balances amount appearing on that statement, $96,995, represents net balances allocated to businesslike activities for consolidation of internal service funds net profits. K. Fund Equity Unreserved Fund Balances – Designations - Uncompleted Projects - $3,355,019 is the uncompleted portion of capital projects for which Council has authorized the funding from current year available resources. Expenditures for these projects are rebudgeted in the subsequent fiscal year since unexpended appropriations lapse at yearend. Subsequent Years’ Expenditures – Insurance reserve - $1,028,827 for subsequent year expenditures for insurance purposes, of which $400,000 is designated for the Yuma Fine Arts Center fire loss; an additional $500,000 reserve for the new Yuma Performing Arts Center; and, public/educational/government (PEG) Facility $269 remaining for continuing development of the channel on the local cable system. Future Community Improvements - $845,524 represents special projects in subsequent years as designated by City Council. L. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; job-related illnesses and injuries to employees; natural disasters; and health and accident, dental and other medical benefits provided to employees. 53 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 The City uses the Employee Benefits Trust Fund, an Internal Service Fund, to account for the financing of its risks of loss relating to dental claims and its insured health programs. The City purchases commercial insurance for employee health coverage but retains the risk for its dental coverage. Dental coverage claims are limited annually by employee. As such, the prospect is unlikely that claims would be incurred in excess of the fund’s ability to pay. All funds of the City participate in the program and make payments to the Internal Service Fund based on the number of full time employees who receive health benefits assigned to the individual funds. The Employee Benefits Trust Fund Board set the amount to be charged per employee based upon contracts with the insurance provider for health coverage and based upon prior year claims for dental coverage. The claims liability of $47,642 reported in the Internal Service Fund, Employee Benefits Trust Fund at June 30, 2002 is based on the requirements of GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The City uses an application of historical experience to determine claims payable. Changes in the Employee Benefits Trust Fund claims liability amounts in fiscal year 2002, 2001, and 2000 were: Fiscal Year 2001-02 2000-01 1999-00 Beginning of Year Liability $ 42,000 39,600 39,700 Claims and Changes In Estimates $ 382,920 326,109 290,226 End of Year Liability Claim Payments $ 377,278 323,709 290,326 $ 47,642 42,000 39,600 The City is self-insured for Workman’s Compensation. The changes to claims liability amounts in fiscal year 2002, 2001, and 2000 were: Fiscal Year 2001-02 2000-01 1999-00 Beginning of Year Liability $ 336,656 131,638 27,956 Claims and Changes In Estimates $ 203,460 494,820 397,924 End of Year Liability Claim Payments $ 278,455 289,802 294,242 $ 261,661 336,656 131,638 The City carries commercial insurance for all other risks of loss, including property and liability. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. M. Construction Commitments As of June 30, 2002, the City is involved in several construction projects. The estimated cost to complete the construction projects is $3,335,019. N. Special Item - Litigation In July 2002, the City settled a lawsuit involving retirement system claims of current and former employees. The net settlement of $1,220,085, representing the award plus attorney fees less amounts that would have been paid over time by employees, establishes full retirement benefits for the employees under the Arizona State Retirement System. The employees were originally hired by the Arizona Water Company, purchased in 1968, and participated in a voluntary, noncontributory pension plan. The item was charged to fiscal year 2002 in that the settlement was reached initially during that period. 54 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2002 O. Subsequent Events Loan Agreement On August 7, 2002, the City Council adopted a resolution authorizing the execution of a loan agreement with the Water Infrastructure Financing Authority of Arizona to provide funding for the construction of two projects. The first, a water pollution control facility, was executed for $44 million, including collection system construction and upgrades. The second, a water treatment plant, was initially approved for $10 million with the loan to eventually fund the project at $60 million. Bond Sale The City Council will soon consider a resolution authorizing staff to prepare for the issuance of municipal property corporation bonds for the construction of a fire station and a performing arts center. The bond sale is anticipated in the amount of $9 million. In addition, the City Council will consider issuance of municipal property corporation refunding bonds, not be exceed $51 million, to refund an as yet undetermined number of Municipal Property Corporation Bonds. The refunding issue was authorized based on how favorable the interest rates will be at the time of sale. Council action is planned during October 2002. IV. CONTINGENT LIABILITIES A. Pending Litigation The City is contingently liable in respect to lawsuits and other claims incidental to the ordinary course of its operations. It is the opinion of the City management, based on the advice of the City Attorney, that such matters will not have a material adverse effect on the City's financial position at June 30, 2002. B. Compliance The City participates in federally-funded and state-funded programs administered by various government agencies. The programs included in these financial statements may be subject to program compliance and/or financial monitoring by the granting agency or its representatives. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. 55 56 REQUIRED SUPPLEMENTARY INFORMATION 57 Schedule of Funding Progress Public Safety Personnel Retirement System Unfunded POLICE 1999 2000 2001 FIRE 1999 2000 2001 Actual Value Actuarial Funding of Plan Accrued Liability Assets Liability (Excess) Annual Liability as Funded Covered Percentage Ratio Payroll of Payroll 31,533,360 36,064,305 38,686,969 23,221,136 25,623,095 26,356,089 (8,312,224) (10,441,210) (12,330,880) 135.8% 140.7% 146.8% 5,413,329 5,703,337 5,888,020 -% -% -% 26,695,236 29,687,106 31,549,536 23,229,386 24,894,069 25,790,543 (3,465,850) (4,793,037) (5,758,993) 114.9% 119.3% 122.3% 3,935,124 4,056,042 4,141,659 -% -% -% 58 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Original $ 8,489,239 Final $ 8,489,239 Actual Amounts $ 11,562,964 5,240,000 140,000 13,328,000 241,260 1,625,650 20,574,910 5,240,000 140,000 13,328,000 241,260 1,625,650 20,574,910 5,071,973 121,102 13,116,950 242,000 1,835,810 20,387,835 (168,027) (18,898) (211,050) 740 210,160 (187,075) 277,000 29,000 1,083,700 4,200 1,393,900 277,000 29,000 1,083,700 4,200 1,393,900 210,565 27,185 1,194,512 6,506 1,438,768 (66,435) (1,815) 110,812 2,306 44,868 6,194,783 8,083,619 2,310,000 17,000 16,605,402 6,194,783 8,083,619 2,310,000 17,000 16,605,402 5,973,339 8,084,914 2,345,195 19,432 2,832 16,425,712 (221,444) 1,295 35,195 2,432 2,832 (179,690) 350,000 324,600 426,500 45,450 1,146,550 350,000 324,600 426,500 45,450 1,146,550 355,560 341,523 459,564 60,172 1,216,819 5,560 16,923 33,064 14,722 70,269 638,250 638,250 638,250 638,250 670,837 670,837 32,587 32,587 280,000 82,950 362,950 280,000 82,950 362,950 461,606 211,270 672,876 181,606 128,320 309,926 7,000 68,500 75,500 40,797,462 1,584,500 7,000 68,500 75,500 40,797,462 1,584,500 50,871,201 31,946 68,251 100,197 40,913,044 52,476,008 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes: Property Tax - Primary Property Tax - Delinquent City Sales Tax Public Enterprise In-Lieu Franchise Tax Total Taxes Licenses: Business Licenses Liquor Licenses Building Permits Alcohol Permits Total Licenses Intergovernmental: Sales Tax - State State Revenue Sharing Auto Lieu Tax County Emergency Services Other Intergovernmental Total Intergovernmental Charges for Services: Building Inspection Fees Recreation Fees Police Services Other Charges Total Charges for Services Fines and Forfeitures: City Court Fines Total Fines and Forfeitures Use of Money and Property: Interest Rental Receipts Total Use of Money and Property Miscellaneous Sales of Surplus Property Other Total Miscellaneous Total Revenues Transfers From Other Funds 50,871,201 Amounts Available for Appropriation Variance with Final Budget Positive (Negative) $ 3,073,725 24,946 (249) 24,697 115,582 (1,584,500) 1,604,807 Continued on next page The accompanying notes are an integral part of these financial statements 59 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Budget Original Charges to Appropriations (outflows): General Government: Mayor and Council Elections City Administrator Communications Quality Initiatives General Government City Clerk Community Investment Trust City Attorney Litigation Administrative Services Accounting Customer Services Information Technology Services Materials Management Human Resources Intragovernmental Charges Total General Government Expenditures Less Capital Outlay Less Debt Service Principal Interest and Fiscal Agent Fees Total General Government Deductions General Government Operating Expenditures Public Safety: Police Administration - Field Operations Police Reserve Unit Police Support Services Fire Administration Fire Training Fire Suppression Fire Prevention Fire Maintenance Fire Special Operations Fire Emergency Medical Services Fire Emergency Management Animal Control Municipal Court Total Public Safety Expenditures Less Capital Outlay Public Safety Operating Expenditures Final Actual Amounts Variance with Final Budget Positive (Negative) 227,370 126,250 227,892 118,011 555,348 606,046 207,761 989,000 843,406 267,800 270,843 713,612 382,494 1,975,934 567,278 725,735 (2,381,912) 6,422,868 240,438 227,370 126,250 227,892 121,511 555,098 674,526 207,761 925,501 843,406 267,800 270,843 681,112 382,494 1,975,934 567,278 758,235 (2,381,912) 6,431,099 351,125 195,900 111,941 211,953 97,394 497,752 370,685 191,756 119,868 781,069 157,961 239,781 604,967 372,262 1,241,617 554,583 733,038 (2,381,912) 4,100,615 35,816 31,470 14,309 15,939 24,117 57,346 303,841 16,005 805,633 62,337 109,839 31,062 76,145 10,232 734,317 12,695 25,197 2,330,484 315,309 240,438 6,182,430 63,499 414,624 6,016,475 63,499 99,315 4,001,300 315,309 2,015,175 9,590,770 7,750 3,490,883 215,719 288,089 5,262,253 325,019 502,057 116,791 682,740 73,388 375,158 952,752 21,883,369 289,010 21,594,359 9,548,872 7,750 3,496,883 215,719 288,089 5,262,253 325,019 502,057 116,791 682,740 73,388 375,158 952,752 21,847,471 232,583 21,614,888 9,614,634 667 2,919,191 219,634 245,571 5,175,935 302,642 514,230 91,028 543,050 54,089 375,158 859,148 20,914,977 103,566 20,811,411 (65,762) 7,083 577,692 (3,915) 42,518 86,318 22,377 (12,173) 25,763 139,690 19,299 93,604 932,494 129,017 803,477 Continued on next page The accompanying notes are an integral part of these financial statements 60 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Budget Original Parks, Recreation and Culture: Parks and Recreation Administration Parks Maintenance Parks Development Recreation Administration Senior Adult Activities Adult Activities Youth Activities Aguatics Yuma Theatre Arts and Culture Intragovernmental Charges Total Parks, Recreation and Culture Less Capital Outlay Parks, Recreation and Culture Operating Expenditures Environmental Health and Protection: Environmental Management Health Services Intragovernmental Charges Total Environmental Health and Protection Less Capital Outlay Environmental Health and Protection Operating Expenditures Community Design and Development: Community Development Administration Engineering Business Development Planning and Neighborhood Services Outside Agencies Total Community Design and Development Less Capital Outlay Community Design and Development Operating Expenditures Total Operating Expenditures Capital Outlay Debt Service Principal Total Expenditures Transfers to Other Funds Total Charges to Appropriations Final 404,755 2,932,697 311,410 535,404 166,669 195,212 251,298 550,857 86,673 317,281 (86,943) 5,665,313 191,625 404,755 2,932,697 311,410 536,142 166,669 195,212 250,560 550,857 83,173 319,922 (86,943) 5,664,454 186,065 358,845 2,764,954 284,283 453,797 136,069 206,668 183,146 582,061 28,154 253,214 (86,943) 5,164,248 114,595 45,910 167,743 27,127 82,345 30,600 (11,456) 67,414 (31,204) 55,019 66,708 500,206 71,470 5,473,688 5,478,389 5,049,653 428,736 875,445 400,815 (658,890) 617,370 30,700 875,445 400,815 (658,890) 617,370 30,465 851,819 400,815 (658,890) 593,744 28,654 23,626 23,626 1,811 586,670 586,905 565,090 21,815 658,308 866,657 408,000 1,429,013 310,920 3,672,898 22,590 609,039 854,157 408,000 1,479,308 350,920 3,701,424 21,432 545,923 751,827 385,762 1,376,674 341,480 3,401,666 17,895 63,116 102,330 22,238 102,634 9,440 299,758 3,537 3,650,308 37,487,455 774,363 3,679,992 37,376,649 821,670 3,383,771 33,811,225 300,526 296,221 3,565,424 521,144 38,261,818 4,999,321 63,499 38,261,818 4,999,321 43,261,139 63,499 34,175,250 4,749,734 38,924,984 4,086,568 249,587 4,336,155 43,261,139 $ 7,610,062 $ 7,610,062 Budgetary Fund Balance, June 30 The accompanying notes are an integral part of these financial statements 61 Actual Amounts Variance with Final Budget Positive (Negative) $ 13,551,024 $ 5,940,962 Concluded City of Yuma, Arizona Budgetary Comparison Schedule Highway User Revenue Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Gasoline Tax Use of Money and Property Interest Miscellaneous Other Total Revenues Transfers From Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Public Safety Traffic Signals, Signs, and Striping Streets Street Maintenance Street Lighting Street Sweeping Storm Drain Maintenance Curbs, Gutters, and Sidewalks Environmental Health Lot Cleaning Capital Outlay Total Expenditures Transfers To Other Funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Final Original $ 3,472,938 $ 3,472,938 Actual Amounts $ 3,356,095 Variance with Final Budget Positive (Negative) $ (116,843) 6,700,000 6,700,000 6,414,401 (285,599) 250,000 250,000 153,748 (96,252) 10,000 6,960,000 22,865 10,455,803 10,000 6,960,000 22,865 10,455,803 41,146 6,609,295 19,142 9,984,532 31,146 (350,705) (3,723) (471,271) 818,776 809,872 702,674 107,198 2,698,025 456,910 410,995 386,318 411,860 2,679,929 483,910 410,995 365,318 411,860 2,390,748 453,370 407,719 301,070 358,811 289,181 30,540 3,276 64,248 53,049 23,351 12,000 5,218,235 3,366,726 8,584,961 23,351 33,000 19,142 - 5,218,235 3,366,726 8,584,961 4,633,534 1,782,397 6,415,931 4,209 33,000 584,701 1,584,329 2,169,030 $ 1,870,842 $ 1,870,842 The accompanying notes are an integral part of these financial statements 62 $ 3,568,601 $ 1,697,759 City of Yuma, Arizona Budgetary Comparison Schedule Road Tax Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Special Road Sales Tax Use of Money and Property Interest Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Streets Street Maintenance Retention Basin Maintenance Capital Outlay Total Expenditures Transfers to Other Funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Final Original $ 3,613,889 $ 3,613,889 Actual Amounts $ 4,154,683 Variance with Final Budget Positive (Negative) $ 540,794 6,664,000 6,664,000 6,448,954 (215,046) 165,000 6,829,000 10,442,889 165,000 6,829,000 10,442,889 175,521 6,624,475 10,779,158 10,521 (204,525) 336,269 196,556 307,620 3,500 507,676 8,628,500 9,136,176 196,556 311,101 19 507,676 8,628,500 9,136,176 196,556 284,929 481,485 6,994,754 7,476,239 $ 1,306,713 $ 1,306,713 $ 3,302,919 The accompanying notes are an integral part of these financial statements 63 26,172 19 26,191 1,633,746 1,659,937 $ 1,996,206 City of Yuma, Arizona Budgetary Comparison Schedule Grants Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government State Government Budget Authority Reserve Use of Money and Property Interest Contributions/Donations Total Revenues Budget Final Original $ 386,490 $ 386,490 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Public Safety Parks, Recreation and Culture Environmental Health and Protection Community Design & Development Capital Outlay Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 8,668 Variance with Final Budget Positive (Negative) $ (377,822) 7,496,101 1,591,590 600,000 7,496,101 1,591,590 600,000 1,919,406 1,054,932 - (5,576,695) (536,658) (600,000) 11,000 9,698,691 10,085,181 11,000 9,698,691 10,085,181 76,379 1,440 3,052,157 3,060,825 76,379 (9,560) (6,646,534) (7,024,356) 1,326,764 9,410 976,000 110,000 2,422,174 7,620,897 10,043,071 1,347,077 9,410 977,095 88,592 2,422,174 7,620,897 10,043,071 1,145,816 7,400 192,224 183 36,516 1,382,139 1,670,018 3,052,157 201,261 2,010 784,871 (183) 52,076 1,040,035 5,950,879 6,990,914 42,110 $ 42,110 The accompanying notes are an integral part of these financial statements 64 $ 8,668 $ (33,442) City of Yuma, Arizona Budgetary Comparison Schedule Community Redevelopment Fund For the Year Ended June 30, 2002 Budget Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government State Government Use of Money and Property Rental Receipts Miscellaneous Loan Repayments Other Sale of Real Property Original $ - $ 6,907,974 - Final - Actual Amounts $ - 6,907,974 - - Variance with Final Budget Positive (Negative) $ - 874,036 570,305 - (6,033,938) 570,305 16,393 16,393 Total Revenues Amounts Available for Appropriation 1,218,631 8,126,605 8,126,605 1,218,631 8,126,605 8,126,605 16,011 15,035 454,747 1,946,527 1,946,527 16,011 (1,203,596) 454,747 (6,180,078) (6,180,078) Charges to Appropriations (outflows): Current: Community Design and Development Capital Outlay Total Expenditures Operating Transfers Out Total Charges to Appropriations 4,249,974 8,000 4,257,974 3,868,631 8,126,605 4,018,836 239,138 4,257,974 3,868,631 8,126,605 1,572,724 153,577 1,726,301 220,226 1,946,527 2,446,112 85,561 2,531,673 3,648,405 6,180,078 Budgetary Fund Balance, June 30 $ - $ - The accompanying notes are an integral part of these financial statements 65 $ - $ - 66 OTHER SUPPLEMENTARY INFORMATION 67 68 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds account for the proceeds of special revenue sources that are used to finance projects or activities as required by law or contractual agreements. Local Transportation Assistance To record the receipts and uses of monies originating from Arizona Lottery sales. These monies are restricted to transportation uses. Public Safety Tax To account for the two-tenths percent sales tax designated for public safety and criminal justice facilities and equipment. Solid Waste To record the financial activities of the city-owned and operated residential garbage collection service. Expenditures in excess of fees are financed by a transfer from the General Fund. Recreation Complex Baseball Complex. To record the financial activities of the Civic Center and Two Percent Tax To record the financial activities of the Two Percent Special Revenue Excise Tax on hotel, motel, restaurant and bar sales. This tax can finance the operations of the Civic and Convention Center, Baseball Complex, Golf Courses, the Yuma Crossing Area and Convention and Tourism. Yuma Mall Maintenance To record the special maintenance levy for the Yuma Downtown Mall District. The assessment supports cleaning, maintenance, landscaping and utility costs of common areas. Costs in excess of the assessment are financed by a transfer from the General Fund. Debt Service Fund Debt Service Funds account for the payment of interest and principal on all bonded debt other than debt issued for and serviced by enterprise funds. Revenue Bonds To account for shared revenue sources used to service certain pledged-revenue debt 69 City of Yuma, Arizona Combining Balance Sheet Nonmajor Governmental Funds June 30, 2002 Assets Cash and Investments Receivables (Net of Allowances for Uncollectibles): Accounts Receivable Intergovernmental Accrued Interest Due From Other Funds Inventory, at cost Prepaid Items Total Assets Liabilities Liabilities: Accounts Payable Accrued Payroll and Related Taxes Due to Other Funds Deferred Revenue Total Liabilities Fund Balances Reserved for: Inventory Prepaid Items Unreserved: Designated for Subsequent Years' Expenditures Undesignated Total Fund Balance Total Liabilities and Fund Balance Special Revenue Public Safety Solid Tax Waste Recreation Complex $ 1,570,237 $ 516,002 Local Transportation Assistance $ 19,605 $ 953 20,558 $ 170 $ - $ 201,376 21,486 1,793,099 $ 139,119 116 139,235 $ 13,042 9,995 14,038 7,136 577 560,790 $ 1,580 $ 103,522 $ 42,583 170 - 20,388 20,388 20,558 $ 70 $ 216,420 218,000 29,565 6,148 139,235 - - 1,575,099 1,575,099 1,793,099 $ 139,235 37,928 20,204 100,715 7,136 577 $ 40,477 411,885 460,075 560,790 Special Revenue Yuma Mall 2 Percent Maintenance $ 477,864 $ 7,547 $ 464 18,400 75,000 571,728 $ 2,478 3,057 13,082 $ 287 $ 4,887 287 $ Total Nonmajor Governmental Funds $ 2,591,255 $ 154,639 214,544 36,941 18,400 7,136 75,577 3,098,492 $ 153,029 8,195 13,082 75,688 222,568 20,204 471,489 75,000 - 7,136 75,577 496,441 571,441 571,728 13,082 $ $ 40,477 2,503,813 2,627,003 3,098,492 71 City of Yuma, Arizona Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2002 Local Transportation Assistance Revenues: Taxes Intergovernmental Charges for Services Use of Money and Property Contributions/Donations Miscellaneous Total Revenues $ Expenditures: Current: Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Debt Service: Principal Retirement Interest and Fiscal Agent Fees Total Expenditures Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Operating Transfers In Operating Transfers Out Total Other Financing Sources/(Uses) Revenues and Other Financing Sources Over/(Under) Expenditures and Other Uses $ Recreation Complex 2,578,704 $ $ 1,114,179 122,506 10,814 2,701,210 1,124,993 - 465,486 7,831 473,317 - - - - 2,398,266 83,458 - - 1,797 32,287 83,458 - 2,400,063 1,777,572 1,745,285 - 390,950 2,701,210 (1,275,070) (1,304,255) (381,346) (3,259,760) 1,297,740 (22,670) 1,450,000 (15,628) (381,346) (3,259,760) 1,275,070 1,434,372 9,604 Fund Balances, July 1 Fund Balances, June 30 $ 440,004 10,004 24,400 474,408 Special Revenue Public Safety Solid Tax Waste (558,550) - 130,117 329,958 10,784 2,133,649 - 20,388 $ 1,575,099 $ - The accompanying notes are an integral part of these financial statements 72 $ 460,075 Special Revenue 2 Percent Yuma Special Mall Revenue Maintenance $ $ 2,652,152 $ 28,340 2,680,492 Debt Service Total Nonmajor Governmental Funds Revenue Bond 64,172 $ 10,442 74,614 - $ 5,295,028 440,004 1,114,179 626,336 24,400 29,087 7,529,034 625,612 - - 2,370,897 - - - 2,398,266 - 290,749 - - 374,207 34,084 625,612 290,749 210,000 8,631 218,631 210,000 8,631 5,396,085 2,054,880 (216,135) (218,631) 2,132,949 (2,279,047) 216,135 - 218,631 - 3,182,506 (5,958,451) (2,279,047) 216,135 218,631 (2,775,945) (224,167) - - 795,608 - - 571,441 $ - $ (642,996) 3,269,999 - $ 73 2,627,003 City of Yuma, Arizona Budgetary Comparison Schedule Municipal Property Corporation Bonds Debt Service Fund For the Year Ended June 30, 2002 Budget Budgetary Fund Balance, July 1 Resources (inflows): Use of Money and Property: Interest Total Revenues Transfers In from Other Funds Original $ - Amounts Available for Appropriation Charges to Appropriations (outflows): Debt Service: Bond Principal Bond Interest Fiscal Agent Fees Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Final $ - Variance with Final Budget Actual Positive Amounts (Negative) $ 3,087,408 $ 3,087,408 5,355,795 5,355,795 5,355,795 5,355,795 50,387 50,387 5,352,205 8,490,000 50,387 50,387 (3,590) 3,134,205 3,800,000 1,431,891 123,904 5,355,795 5,355,795 3,800,000 1,431,891 123,904 5,355,795 5,355,795 3,800,000 3,081,884 123,904 7,005,788 7,005,788 (1,649,993) (1,649,993) (1,649,993) - $ - The accompanying notes are an integral part of these financial statements 74 $ 1,484,212 $ 1,484,212 City of Yuma, Arizona Budgetary Comparison Schedule Capital Projects Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Budget Budgetary Fund Balance, July 1 Resources (inflows): Charges for Services Developer Charges Use of Money and Property Rents Interest Miscellaneous Bond Proceeds Total Revenues Transfers From Other Funds Amounts Available for Appropriation $ Charges to Appropriations (outflows): Capital Outlay: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Debt Service: Principal Interest and Fiscal Agent Fees Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Original 13,277,916 $ Variance with Final Budget Actual Positive Final Amounts (Negative) 13,277,916 $ 25,450,235 $ 12,172,319 150,000 150,000 544,960 50,000 1,010,000 30,000,000 31,210,000 25,450,497 69,938,413 50,000 1,010,000 30,000,000 31,210,000 25,450,497 69,938,413 150,345 571,988 57,032 1,324,325 12,868,781 39,643,341 100,345 571,988 (952,968) (30,000,000) (29,885,675) (12,581,716) (30,295,072) 35,759,000 3,318,000 13,539,678 7,838,716 4,344,000 36,250,604 3,638,900 14,679,540 8,148,054 2,082,296 21,554,863 296,405 10,245,394 3,055,888 724,918 14,695,741 3,342,495 4,434,146 5,092,166 1,357,378 64,799,394 64,799,394 64,799,394 64,799,394 272,003 13,019 36,162,490 125,832 36,288,322 (272,003) (13,019) 28,636,904 (125,832) 28,511,072 5,139,019 $ 5,139,019 The accompanying notes are an integral part of these financial statements 75 $ 3,355,019 394,960 $ (1,784,000) City of Yuma, Arizona Budgetary Comparison Schedule Local Transportation Assistance Special Revenue Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Lottery Distribution Use of Money and Property Interest Contributions/Donations Total Revenues Budget Final Original $ 20,000 $ 20,000 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Outside Agencies - Cultural Council Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 10,784 Variance with Final Budget Positive (Negative) $ (9,216) 418,000 418,000 440,004 22,004 1,500 40,000 459,500 479,500 1,500 40,000 459,500 479,500 10,004 24,400 474,408 485,192 8,504 (15,600) 14,908 5,692 103,458 103,458 356,042 459,500 103,458 103,458 356,042 459,500 83,458 83,458 381,346 464,804 20,000 20,000 (25,304) (5,304) 20,000 $ 20,000 The accompanying notes are an integral part of these financial statements 76 $ 20,388 $ 388 City of Yuma, Arizona Budgetary Comparison Schedule Public Safety Tax Special Revenue Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Public Safety Sales Tax Use of Money and Property Interest Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Capital Outlay Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Final Original $ 1,760,453 $ 1,760,453 Actual Amounts $ 2,133,649 Variance with Final Budget Positive (Negative) $ 373,196 2,665,600 2,665,600 2,578,704 (86,896) 120,000 2,785,600 4,546,053 120,000 2,785,600 4,546,053 122,506 2,701,210 4,834,859 2,506 (84,390) 288,806 16,000 16,000 2,657,669 2,673,669 16,000 16,000 2,657,669 2,673,669 3,259,760 3,259,760 16,000 16,000 (602,091) (586,091) $ 1,872,384 $ 1,872,384 The accompanying notes are an integral part of these financial statements 77 $ 1,575,099 $ 297,285 City of Yuma, Arizona Budgetary Comparison Schedule Solid Waste Special Revenue Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Charges for Service Collection Fees Miscellaneous Other Total Revenues Transfers from Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Environmental Health and Protection Residential Services Uncontained Waste Recycling Roll-Off Containers Capital Outlay Total Expenditures Transfers to Other Funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Positive (Negative) $ - Budget Final Original $ $ - Actual Amounts $ - 1,109,580 1,109,580 1,114,179 4,599 5,000 1,114,580 1,318,135 2,432,715 5,000 1,114,580 1,318,135 2,432,715 10,814 1,124,993 1,297,740 2,422,733 5,814 10,413 (20,395) (9,982) 2,056,533 331,157 14,859 2,500 2,405,049 27,666 2,432,715 2,056,533 331,157 14,859 2,500 2,405,049 27,666 2,432,715 2,092,116 275,659 30,591 (100) 1,797 2,400,063 22,670 2,422,733 (35,583) 55,498 (15,732) 100 703 4,986 4,996 9,982 $ $ $ - - The accompanying notes are an integral part of these financial statements 78 - $ - City of Yuma, Arizona Budgetary Comparison Schedule Recreation Complex Special Revenue Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Use of Money and Property Rents and Concessions Interest Miscellaneous Other Total Revenues Transfers from Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Parks, Recreation and Culture Civic and Convention Center Baseball Complex Capital Outlay Total Expenditures Transfers to Other Funds Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Final Original $ 201,741 $ 201,741 Actual Amounts $ 329,958 Variance with Final Budget Positive (Negative) $ 128,217 497,850 7,000 497,850 7,000 450,488 14,998 (47,362) 7,998 4,500 509,350 1,450,000 2,161,091 4,500 509,350 1,450,000 2,161,091 7,831 473,317 1,450,000 2,253,275 3,331 (36,033) 92,184 1,366,729 567,721 77,204 2,011,654 16,000 2,027,654 1,361,825 578,019 71,810 2,011,654 16,000 2,027,654 1,181,135 564,150 32,287 1,777,572 15,628 1,793,200 180,690 13,869 39,523 234,082 372 234,454 $ 133,437 $ 133,437 $ The accompanying notes are an integral part of these financial statements 79 460,075 $ 326,638 City of Yuma, Arizona Budgetary Comparison Schedule 2 Percent Tax Special Revenue Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Taxes 2% Special Revenue Tax Use of Money and Property Interest Miscellaneous Other Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Parks, Recreation and Culture Administration Outside Agencies Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Final Original $ 420,042 $ 420,042 Actual Amounts $ 795,608 Variance with Final Budget Positive (Negative) $ 375,566 2,604,000 2,604,000 2,652,152 48,152 25,000 25,000 28,340 3,340 2,629,000 3,049,042 2,629,000 3,049,042 2,680,492 3,476,100 51,492 427,058 15,612 610,000 625,612 2,218,684 2,844,296 15,612 610,000 625,612 2,218,684 2,844,296 15,612 610,000 625,612 2,279,047 2,904,659 (60,363) (60,363) $ 204,746 $ 204,746 $ 571,441 The accompanying notes are an integral part of these financial statements 80 $ 366,695 City of Yuma, Arizona Budgetary Comparison Schedule Yuma Mall Maintenance Special Revenue Fund For the Year Ended June 30, 2002 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Mall Assessments Miscellaneous Other Total Revenues Transfers from Other Funds Original $ - Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Mall Maintenance Capital Outlay Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Final $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 60,000 60,000 64,172 4,172 7,000 67,000 307,024 374,024 7,000 67,000 307,024 374,024 10,442 74,614 216,135 290,749 3,442 7,614 (90,889) (83,275) 370,024 4,000 374,024 374,024 370,024 4,000 374,024 374,024 290,749 290,749 290,749 79,275 4,000 83,275 83,275 $ - $ - The accompanying notes are an integral part of these financial statements 81 $ - $ - City of Yuma, Arizona Budgetary Comparison Schedule Revenue Bond Debt Service Fund For the Year Ended June 30, 2002 Budgetary Fund Balance, July 1 Resources (inflows): Budget Final Original $ $ - Operating Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Debt Service: Bond Principal Bond Interest Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 218,631 218,631 218,631 218,631 218,631 218,631 - 210,000 8,631 218,631 218,631 210,000 8,631 218,631 218,631 210,000 8,631 218,631 218,631 - $ - $ - The accompanying notes are an integral part of these financial statements 82 $ - $ - NONMAJOR ENTERPRISE FUNDS Enterprise funds are used to account for activities that are financed and operated in a manner similar to private businesses. The intent of the City Council is that the costs of providing the goods or services be recovered primarily through user charges. Enterprise funds are designed so that creditors, legislators and the general public can evaluate the performance of the municipal enterprise on the same basis as commercial enterprises in the same industry. Desert Hills Golf Course To account for the financial activity of the operation of the Desert Hills Municipal Golf Course. Arroyo Dunes Golf Course To account for the financial activity of the operation of the Arroyo Dunes Municipal Golf Course. 83 City of Yuma, Arizona Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2002 Total Nonmajor Proprietary Funds Enterprise Funds Desert Hills Arroyo Dunes Golf Course Golf Course Assets Current Assets: Cash and Investments Receivables, Net of Allowance for Uncollectibles: Accounts Receivable Intergovernmental Accrued Interest Inventory, at cost Prepaid Expenses Total Current Assets $ Fixed Assets: Buildings Improvements Other than Buildings Equipment Gross Fixed Assets Less Accumulated Depreciation Fixed Assets Net of Depreciation Construction In Progress Total Fixed Assets Total Assets 12,830 $ 167,952 $ 180,782 4,493 379 149,529 3,429 170,660 1,645 2,021 171,618 4,493 379 1,645 151,550 3,429 342,278 3,102,865 2,357,191 216,060 5,676,116 645,571 21,866 667,437 3,102,865 3,002,762 237,926 6,343,553 1,677,602 332,038 2,009,640 3,998,514 8,362 4,006,876 4,177,536 335,399 335,399 507,017 4,333,913 8,362 4,342,275 4,684,553 Liabilities Current Liabilities: Accounts Payable Accrued Payroll and Related Taxes Current Portion-Long-Term Contracts Deferred Revenue Total Current Liabilities Payable from Current Assets 58,513 88,795 9,434 2,760 7,017 52,984 - 61,273 95,812 52,984 9,434 156,742 62,761 219,503 Long-Term Liabilities: Long-Term Contracts Payable Total Long-Term Liabilities Total Liabilities 156,742 4,609 4,609 67,370 4,609 4,609 224,112 4,006,876 13,918 $ 4,020,794 335,399 104,248 439,647 4,342,275 118,166 4,460,441 Net Assets Invested in capital assets, net of related debt Unrestricted Total Net Assets $ The accompanying notes are an integral part of these financial statements 84 $ City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Nonmajor Proprietary Funds For the Year Ended June 30, 2002 Total Nonmajor Proprietary Funds Enterprise Funds Desert Hills Arroyo Dunes Golf Course Golf Course Operating Revenues: Green Fees Cart and Club Rental Pro Shop Sales Restaurant Sales Total Operating Revenues $ Operating Expenses: Operations and Maintenance Depreciation and Amortization Total Operating Expenses 1,072,496 111,218 398,557 420,458 2,002,729 $ 2,051,206 206,791 2,257,997 Operating Income/(Loss) Non-Operating Revenues/(Expenses): Interest Interest and Fiscal Agent Fees Loss on Sale of Surplus Miscellaneous Revenues/(Expenses) Net Non-OperatingRevenues/(Expenses) Income/(Deficit) before Contributions and Transfers Operating Transfers In Operating Transfers Out $ (255,444) (25,985) 4,904 (21,081) 6,906 (2,463) (2,680) 219 1,982 6,906 (2,463) (28,665) 5,123 (19,099) (276,349) 1,806 (274,543) 4,020,794 The accompanying notes are an integral part of these financial statements 85 2,261,291 236,580 2,497,871 (176) - 246,727 (245,380) 1,806 (273,196) 437,841 4,295,796 Net Assets-ending 1,301,791 119,487 400,691 420,458 2,242,427 (255,268) (275,002) Net Assets-beginning $ 210,085 29,789 239,874 246,727 (245,380) Change in Net Assets 229,295 8,269 2,134 239,698 $ 439,647 4,733,637 $ 4,460,441 City of Yuma, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2002 Total Nonmajor Proprietary Funds Enterprise Funds Desert Hills Arroyo Dunes Golf Course Golf Course Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Other Operating Activity Revenue/(Expense) Net Cash Provided by Operating Activities $ Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Provided by/(Used for) Noncapital Financing Activities 2,009,149 $ (864,118) (1,208,460) 4,903 (58,526) 246,727 (245,380) Cash Flow from Capital and Related Financing Acitivities: Acquisition and Construction of Assets Net Cash Used for Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, July 1 Cash and Cash Equivalents, June 30 $ Reconciliation of Operating Income/(Loss) to Net Cash Provided by Operating Activities: Operating Income/(Loss) $ Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense (Increase)/Decrease in Accounts Receivables (Increase)/Decrease in Inventories Increase/(Decrease) in Accounts Payable (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accrued Wages and Taxes Payab Increase/(Decrease) in Deferred Revenue Other Operating Activity Revenue/(Expense) Total Adjustments $ Net Cash Provided by Operating Activities 2,248,847 (953,430) (1,339,697) 5,122 (39,158) (51,386) 246,727 (296,766) 1,347 (51,386) (50,039) (49,080) - (49,080) (49,080) - (49,080) - 7,087 7,087 (106,259) (24,931) 119,089 12,830 $ 192,883 167,952 7,087 7,087 (131,190) $ 311,972 180,782 (255,268) $ (176) $ (255,444) 206,791 (2,014) 11,645 (23,088) 782 (10,711) 8,434 4,903 196,742 (58,526) $ 29,789 (1,793) (9,516) 845 219 19,544 19,368 $ 236,580 (2,014) 9,852 (32,604) 782 (9,866) 8,434 5,122 216,286 (39,158) The accompanying notes are an integral part of these financial statements. 86 239,698 $ (89,312) (131,237) 219 19,368 City of Yuma, Arizona Budgetary Comparison Schedule Water Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Actual Amounts Budget Final Original Resources (inflows): Inside City Outside City Commercial Raw Water Meters, Connections and Services Capital Contributions: System Development Capacity Rights Proceeds from Long-Term Debt Interest Miscellaneous Total Revenues Transfers from Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Administration Treatment Water Transmission Customer Services Water Transfer Laboratory Capital Outlay: Capital Outlay Capital Projects Debt Service: Principal Retirement Interest and Fiscal Agent Fees Total Expenditures Transfers to Other Funds Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 7,477,800 1,281,350 190,000 249,704 $ 7,477,800 1,281,350 190,000 249,704 $ 7,763,357 1,057,700 237,948 214,781 Variance with Final Budget Positive (Negative) $ 285,557 (223,650) 47,948 (34,923) 120,000 1,100,000 9,153,000 555,000 16,000 20,142,854 20,142,854 120,000 1,100,000 9,153,000 555,000 16,000 20,142,854 20,142,854 220,133 1,248,785 491,919 47,171 11,281,794 20,000 11,301,794 1,421,299 3,435,817 1,012,473 356,191 37,710 229,885 1,421,299 3,389,672 1,024,531 356,191 37,710 236,003 1,383,995 3,037,193 922,262 354,450 12,200 151,975 37,304 352,479 102,269 1,741 25,510 84,028 215,128 13,572,260 243,097 13,572,260 90,107 5,483,274 152,990 8,088,986 893,117 653,808 21,827,688 267,370 22,095,058 893,117 653,808 21,827,688 267,370 22,095,058 825,000 633,764 12,894,220 67,382 12,961,602 68,117 20,044 8,933,468 199,988 9,133,456 $ (1,952,204) $ (1,952,204) (1,659,808) $ Reconciliation to Change in Net Assets: Capital Outlay Capital Projects Principal Retirement Capital Contributions for Subdivider Additions to System Special item-litigation Loss on Disposal of Assets Depreciation and Amortization Change in Net Assets 100,133 148,785 (9,153,000) (63,081) 31,171 (8,861,060) 20,000 (8,841,060) 90,107 5,483,274 825,000 957,984 (1,220,085) (146,657) (3,232,611) $ 1,097,204 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 87 292,396 City of Yuma, Arizona Budgetary Comparison Schedule Wastewater Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Budget Final Original Resources (inflows): Inside City Outside City Contractual/Industrial Services Meters, Connections and Services Capital Contributions: Capacity Rights Wastewater Interceptor Wastewater Trunk Line Charges Proceeds from Long-Term Debt Interest Miscellaneous $ 4,631,400 261,800 542,500 30,900 4,631,400 261,800 542,500 30,900 $ 4,615,555 300,570 666,566 44,430 500,000 150,000 4,500 2,549,400 676,000 2,000 9,348,500 9,348,500 500,000 150,000 4,500 2,549,400 676,000 2,000 9,348,500 9,348,500 1,823,803 224,535 2,894 500,119 12,469 8,190,941 8,190,941 794,469 2,842,979 281,095 415,048 203,453 794,937 2,864,747 283,270 415,048 207,235 733,047 2,771,247 232,094 404,872 135,725 61,890 93,500 51,176 10,176 71,510 135,245 5,211,000 9,883,289 340,941 10,224,230 107,052 5,211,000 9,883,289 340,941 10,224,230 68,774 3,416,587 7,762,346 335,649 8,097,995 38,278 1,794,413 2,120,943 5,292 2,126,235 Total Revenues Amounts Available for Appropriation Current: Administration Treatment Pretreatment Collection Laboratory Capital Outlay: Capital Outlay Capital Projects Total Expenditures Transfers To Other Funds Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ Actual Amounts Variance with Final Budget Positive (Negative) (875,730) $ $ Reconciliation to Change in Net Assets: Capital Outlay Capital Projects Capital Contributions for Subdivider Additions to System Loss on Disposal of Assets Depreciation and Amortization Change in Net Assets (875,730) 92,946 $ (15,845) 38,770 124,066 13,530 1,323,803 74,535 (1,606) (2,549,400) (175,881) 10,469 (1,157,559) (1,157,559) $ 968,676 68,774 3,416,587 1,782,103 (115,468) (2,110,559) $ 3,134,383 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 88 City of Yuma, Arizona Budgetary Comparison Schedule Desert Hills Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Actual Amounts Budget Final Original Resources (inflows): Green Fees Cart and Club Rental Pro Shop Sales Restaurant Sales Miscellaneous Total Revenues Transfers From Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Maintenance Concession Restaurant Capital Outlay: Capital Outlay Capital Projects Total Expenditures Transfers To Other Funds Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 1,220,995 327,400 392,000 535,739 2,000 2,478,134 246,727 2,724,861 $ 1,220,995 327,400 392,000 535,739 2,000 2,478,134 246,727 2,724,861 958,790 659,608 557,743 51,850 92,000 2,319,991 246,727 2,566,718 $ 158,143 Reconciliation to Change in Net Assets: Capital Outlay Capital Projects Loss on Disposal of Assets Depreciation and Amortization Change in Net Assets $ $ Variance with Final Budget Positive (Negative) 1,072,496 111,218 398,557 420,458 4,904 2,007,633 246,727 2,254,360 $ (148,499) (216,182) 6,557 (115,281) 2,904 (470,501) (470,501) 956,290 664,737 557,743 860,337 726,999 463,870 95,953 (62,262) 93,873 49,221 92,000 2,319,991 246,727 2,566,718 2,222 45,776 2,099,204 245,380 2,344,584 46,999 46,224 220,787 1,347 222,134 (90,224) $ (248,367) 158,143 $ 2,222 45,776 (25,985) (206,791) (275,002) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 89 City of Yuma, Arizona Budgetary Comparison Schedule Arroyo Dunes Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Actual Amounts Budget Final Original Resources (inflows): Green Fees Cart and Club Rental Pro Shop Sales Interest Miscellaneous $ Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Maintenance Concession Debt Service: Principal Retirement Interest Total Expenditures Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 305,700 14,650 2,500 6,500 600 329,950 329,950 $ 305,700 14,650 2,500 6,500 600 329,950 329,950 $ 229,295 8,269 2,134 6,906 219 246,823 246,823 Variance with Final Budget Positive (Negative) $ (76,405) (6,381) (366) 406 (381) (83,127) (83,127) 225,362 73,574 225,362 73,574 160,258 49,827 65,104 23,747 48,950 5,500 353,386 353,386 48,950 5,500 353,386 353,386 48,923 2,463 261,471 261,471 27 3,037 91,915 91,915 (23,436) $ (23,436) (14,648) $ Reconciliation to Change in Net Assets: Principal Retirement Loss on Disposal of Assets Depreciation and Amortization Change in Net Assets $ 8,788 48,923 (2,680) (29,789) 1,806 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 90 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments of the City and to other governmental units, on a costreimbursement basis. Equipment Replacement Fund To account for the associated costs of purchasing vehicles and equipment for rental to other departments. Employee Benefits Trust Fund To record the financial activity of a self funded insurance trust fund that covers eligible employees and dependent health, life, and dental claims. Workman’s Compensation Trust Fund To record the financial activity of a self-funded worker’s compensation insurance trust fund. 91 City of Yuma, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2002 Assets Current Assets: Cash and Investments Accounts Receivable Accrued Interest Total Current Assets Fixed Assets: Equipment Less Accumulated Depreciation Total Fixed Assets Total Assets Equipment Replacement $ Liabilities Liabilities: Accounts Payable Estimated Claims and Judgements Due to Other Funds Total Liabilities Net Assets Invested in capital assets, net of related debt Unrestricted $ Employee Workman's Benefits Compensation Trust Fund Trust Fund 13,457,818 $ 67,568 13,525,386 435,382 8,070 856 444,308 19,751,441 10,295,571 9,455,870 22,981,256 403,348 213 823 404,384 $ 14,296,548 8,283 69,247 14,374,078 444,308 404,384 19,751,441 10,295,571 9,455,870 23,829,948 105,546 105,546 92,677 47,642 15,000 155,319 170 261,661 261,831 198,393 309,303 15,000 522,696 9,455,870 13,419,840 22,875,710 $ 288,988 288,988 142,554 142,554 9,455,870 13,851,382 $ 23,307,252 92 $ Totals $ City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Fiscal Year Ended June 30, 2002 Employee Benefits Trust Fund Equipment Replacement Operating Revenue: Contributions Employees City Equipment Rental Miscellaneous Total Operating Revenues $ Operating Expenses: Claims Incurred Premiums to Insurance Carriers Administration Depreciation Total Operating Expenses Operating Income/(Loss) Non-Operating Revenue: Interest Gain on the Sale of Assets Total Non-Operating Revenues Income/(Loss) before Operating Transfers Workman's Compensation Trust Fund $ 352,825 15,005 367,830 Totals 2002 2,584,544 2,584,544 $ 1,264,980 2,648,041 1,814 3,914,835 $ 1,264,980 3,000,866 2,584,544 16,819 6,867,209 42,387 2,134,418 2,176,805 407,739 377,278 3,486,880 29,205 3,893,363 21,472 278,455 39,250 7,822 325,527 42,303 655,733 3,526,130 79,414 2,134,418 6,395,695 471,514 523,539 119,072 642,611 22,557 22,557 15,455 15,455 561,551 119,072 680,623 1,050,350 44,029 57,758 1,152,137 - - Operating Transfers: Operating Transfers In Net Operating Transfers 460,463 Change in Net Assets 1,510,813 44,029 57,758 1,612,600 21,364,897 244,959 84,796 21,694,652 22,875,710 $ 288,988 142,554 $ 23,307,252 Net Assets, Beginning Net Assets, Ending $ The accompanying notes are an integral part of these financial statements 93 $ 460,463 460,463 City of Yuma, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2002 Equipment Replacement Cash Flows from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Net Cash Flows Provided by/(Used for) Operating Activities $ Workman's Compensation Trust Fund Totals 2,542,157 - $ 3,909,227 $ (107,554) (3,770,792) 2,542,157 30,881 (44,337) 460,463 - - - 460,463 - 460,463 - - 460,463 124,718 (2,203,369) - - 124,718 (2,203,369) (2,078,651) - - (2,078,651) 536,720 536,720 1,460,689 22,224 22,224 53,105 17,236 17,236 (27,101) 576,180 576,180 1,486,693 11,997,129 $ 13,457,818 $ 382,277 435,382 $ 430,449 403,348 $ 21,472 $ 42,303 $ (5,607) 9,374 5,642 9,409 30,881 $ Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Flows Provided by/(Used for) Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from Sale of Capital Assets Payments for Capital Acquisitions Net Cash Flows Used for Capital and Related Financing Activities Cash Flows from Investing Activities Receipt of Interest Net Cash Flows Provided by Investing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, July 1, 2001 Cash and Cash Equivalents, June 30, 2002 Employee Benefits Trust Fund 367,616 $ 6,819,000 (107,554) (411,953) (4,182,745) 2,528,701 12,809,855 $ 14,296,548 Reconciliation of Operating Income/(Loss) to Net Cash Provided by/(Used for) Operating Activities: Operating Income/(Loss) $ 407,739 $ 2,134,418 2,134,418 2,542,157 Noncash Transactions Affecting Financial Position: Purchase of Capital Assets with Financing Provided by Vendor $ Contributions of Fixed Assets Total Noncash Transactions Affecting Financial Position $ 96,780 96,780 Adjustments to Reconcile Operating Income/(Loss) to Net Cash Provided by/(Used for) Operating Activities: Depreciation Expense Decrease in Accounts Receivable Increase/(Decrease) in Accounts Payable Increase in Claims Incurred but Not Reported Total Adjustments Net Cash Provided by/(Used for) Operating Activities The accompanying notes are an integral part of these financial statements. 94 $ $ - $ $ $ 471,514 2,134,418 (213) (5,820) (11,432) (2,058) (74,995) (69,353) (86,640) 2,057,187 (44,337) $ 2,528,701 - $ $ 96,780 96,780 City of Yuma, Arizona Budgetary Comparison Schedule Equipment Replacement Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2002 Actual Amounts Budget Final Original Resources (inflows): Charges for Services Interest Total Revenues $ Transfers From Other Funds Amounts Available for Appropriation $ 3,278,026 Charges to Appropriations (outflows): Current Administration Capital Outlay Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 2,688,026 590,000 3,278,026 - 42,387 2,880,200 2,922,587 2,922,587 $ 355,439 Reconciliation to Change in Net Assets: Capital Outlay Gain on Sale of Assets Depreciation and Amortization Change in Net Assets $ 2,688,026 590,000 3,278,026 3,278,026 $ 2,584,544 523,539 3,108,083 460,463 3,568,546 42,387 2,880,200 2,922,587 2,922,587 42,387 2,300,149 2,342,536 2,342,536 355,439 1,226,010 Variance with Final Budget Positive (Negative) $ (103,482) (66,461) (169,943) 460,463 290,520 580,051 580,051 580,051 $ 870,571 2,300,149 119,072 (2,134,418) $ 1,510,813 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 95 96 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS 97 City of Yuma, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule of Capital Assets by Source June 30, 2002 Governmental funds capital assets: Land and Buildings Infrastructure Construction in Progress Equipment Total governmental funds fixed assets $ 77,005,462 104,370,724 15,955,409 9,428,794 $ 206,760,389 $ 75,219,202 124,969,341 5,826,357 745,489 $ 206,760,389 Investments in governmental funds capital assets by source: From Current Revenues From Special Revenues From Grant-in-Aid From Gifts Total governmental funds fixed assets NOTE: 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 Yuma, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Function and Activity June 30, 2002 Land and Buildings General Government: Mayor and Council General Government City Administrator City Attorney Administrative Services Information Technology Total General Government Public Safety Police Fire Municipal Court Building Safety Total Public Safety Parks, Recreation and Culture General Recreation and Administration Recreation Complex Environmental Health and Protection Public Works Administration Equipment Maintenance Shop Solid Waste Total Environmental Health and Protection Community Design and Development Engineering, Planning and Administration Mall Maintenance Total Community Design and Development Streets Total Governmental Funds Capital Assets $ 25,955,033 495,165 270,162 74,870 26,795,230 Infrastructure $ - Construction In Progress $ - Equipment $ 12,088 4,907,806 19,704 14,493 105,679 704,506 5,764,276 Total $ 12,088 30,862,839 514,869 14,493 375,841 779,376 32,559,506 20,282,754 5,679,619 25,962,373 - - 541,962 2,159,601 38,904 46,516 2,786,983 20,824,716 7,839,220 38,904 46,516 28,749,356 15,452,541 3,404,875 18,857,416 - - 483,722 73,315 557,037 15,936,263 3,478,190 19,414,453 304,407 282,476 50,738 - - 55,272 55,544 1,797 359,679 338,020 52,535 637,621 - - 112,613 750,234 991,391 6,200 - - 127,084 - 1,118,475 6,200 997,591 - - 127,084 1,124,675 80,801 124,162,165 9,428,794 $ 206,760,389 3,755,231 104,370,724 15,955,409 $ 77,005,462 $ 104,370,724 $ 15,955,409 $ NOTE: 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. 99 City of Yuma, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule of Changes By Function and Activity June 30, 2002 Balance June 30, 2001 (Restated) General Goverment Mayor and Council General Government City Administrator City Attorney Administrative Services Information Technology Total General Government $ Additions 12,088 $ $ 9,357,567 21,505,272 514,869 14,493 360,811 15,030 15,209 806,129 11,065,957 21,535,511 Deletions 41,962 41,962 Balance June 30, 2002 $ 12,088 30,862,839 514,869 14,493 375,841 779,376 32,559,506 Public Safety Police Fire Municipal Court Building Safety Total Public Safety 20,676,683 7,571,213 36,299 43,952 28,328,147 153,266 269,709 2,605 2,564 428,144 Parks, Recreation and Culture General Recreation and Administration Recreation Complex Total Parks, Recreation and Culture 12,802,412 3,430,241 16,232,653 3,133,851 47,949 3,181,800 - 15,936,263 3,478,190 19,414,453 336,069 336,068 50,738 23,610 1,952 1,797 - 359,679 338,020 52,535 722,875 27,359 - 750,234 964,608 6,200 175,237 - 21,370 - 1,118,475 6,200 970,808 175,237 21,370 1,124,675 114,106,806 10,669,834 614,475 124,162,165 684,742 $ 206,760,389 Environmental Health and Protection Public Works Administration Equipment Maintenance Shop Solid Waste Total Environmental Health and Protection Community Design and Development Engineering, Planning and Administration Mall Maintenance Total Community Design and Development Streets Total Governmental Funds Capital Assets $ 171,427,246 $ 36,017,885 $ 5,233 1,702 6,935 20,824,716 7,839,220 38,904 46,516 28,749,356 NOTE: 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. 100 STATISTICAL SECTION 101 City of Yuma, Arizona Table I Government-wide Expenses by Function One Fiscal Year Fiscal Year 2001-02 General Government $ 3,477,585 Source: Statement of Activities Public Safety $ 23,566,887 Streets $ 6,155,398 Parks Environmental Recreation and Health and Culture Protection Community Design and Development $ $ 8,526,230 103 $ 3,250,679 5,246,150 Interest on Long-Term Debt $ 3,227,438 Total $ 53,450,367 City of Yuma, Arizona Table II Government-wide Revenues One Fiscal Year Fiscal Year 2001-02 General Revenues Program Revenues Operating Capital Grants Charges for Grants and and Services Contributions Contributions $ 23,302,928 Source: Statement of Activities $ 2,794,501 $ 7,910,255 Taxes Shared Revenues $ 32,212,207 $ 23,257,853 104 Unrestricted Investment Earnings $ 2,227,028 Total $ 91,704,772 City of Yuma, Arizona Table III General Governmental Expenditures by Function Last Ten Fiscal Years Fiscal Year General Government Public Safety Streets 2,717,806 $ 12,596,916 $ 3,419,840 1993-94 2,966,622 13,390,672 1994-95 3,310,521 1995-96 1992-93 $ Parks Environmental Recreation and Health and Culture Protection Community Design and Development $ $ Capital Outlay Debt Service Total 2,035,627 $ 2,350,037 $ 870,577 $ 30,672,183 3,961,118 $ 2,720,262 3,390,811 4,393,630 2,616,090 2,686,705 4,061,308 635,823 34,141,661 14,540,768 3,818,333 4,927,496 2,936,146 2,540,748 6,268,560 311,743 38,654,315 3,507,223 15,414,741 4,087,147 5,295,885 2,679,826 3,065,678 14,233,788 2,102,423 50,386,711 1996-97 2,892,817 16,598,461 4,333,310 5,716,071 3,459,715 2,804,504 21,141,249 4,356,132 61,302,259 1997-98 3,201,449 17,159,134 3,525,923 5,557,476 2,933,404 2,598,481 26,763,764 4,555,709 66,295,340 1998-99 3,431,900 17,695,284 3,421,245 5,798,588 2,313,673 4,241,837 19,101,666 4,499,767 60,503,960 1999-00 3,833,734 19,422,879 4,156,528 6,541,240 2,400,834 4,826,992 12,773,991 5,699,179 59,655,377 2000-01 3,498,091 20,732,963 4,163,416 6,704,068 2,823,020 4,810,570 23,091,843 6,047,871 71,871,842 2001-02 4,001,300 22,659,901 4,393,203 7,427,950 3,174,722 5,330,885 37,311,007 7,572,940 91,871,908 Source: General, Special Revenue, Debt Service and Capital Projects Funds 105 City of Yuma, Arizona Table IV General Revenues by Source Last Ten Fiscal Years Fiscal Year 1992-93 $ Taxes Licenses and Permits Intergovernmental Charges for Services 13,334,768 $ 334,349 $ 14,249,550 $ 2,226,947 Fines and Forfeitures $ 415,295 Use of Money and Property Miscellaneous Revenue $ $ 569,837 428,279 Total $ 31,559,025 1993-94 15,350,018 346,468 16,134,529 1,954,112 444,465 879,535 725,476 35,834,603 1994-95 18,985,947 448,347 18,226,966 1,933,434 384,598 1,268,540 647,741 41,895,573 1995-96 21,524,540 1,277,644 20,711,518 1,855,171 525,982 2,100,613 745,012 48,740,480 1996-97 23,198,296 708,271 18,929,681 1,685,051 420,915 2,639,263 1,532,728 49,114,205 1997-98 24,710,870 681,672 19,635,508 1,528,534 486,047 2,291,095 1,063,783 50,397,509 1998-99 25,666,570 947,752 23,329,979 1,671,621 511,115 1,634,317 274,530 54,035,884 1999-00 28,412,684 1,249,632 24,683,344 2,110,970 447,813 1,922,970 371,053 59,198,466 2000-01 31,994,899 1,464,096 24,587,495 2,411,318 587,620 2,630,216 354,744 64,030,388 2001-02 32,131,817 1,438,768 27,698,796 2,875,958 670,837 2,493,973 284,348 67,594,497 Source: General, Special Revenue, Debt Service and Capital Projects Funds 106 City of Yuma, Arizona Table V Tax Revenues by Source Last Ten Fiscal Years Fiscal Year Property Tax General Sales Tax City Road Sales Tax 1992-93 $3,469,648 $ 7,032,083 1993-94 3,670,845 7,855,849 913,222 1994-95 3,579,519 8,172,410 1995-96 3,962,082 1996-97 Mall District Levy Total $ 75,018 $13,334,768 Public Safety Sales Tax Civic Center 2% Special Excise Tax Revenue Tax $ - $ 1,704,517 - 940,775 806,815 1,024,123 42,000 96,389 15,350,018 3,903,429 391,077 17,793 1,766,817 1,025,146 42,000 87,756 18,985,947 8,497,121 4,146,044 1,701,619 10,902 1,997,930 1,028,738 42,000 138,104 21,524,540 4,050,744 9,190,489 4,470,925 1,838,760 721 2,097,687 1,447,845 42,030 59,095 23,198,296 1997-98 4,355,377 9,848,292 4,836,428 2,002,155 3,301 2,187,192 1,392,706 42,000 43,419 24,710,870 1998-99 4,486,819 10,354,676 5,088,978 2,105,780 1,263 2,313,453 1,224,830 42,000 48,771 25,666,570 1999-00 4,730,665 11,342,233 5,574,996 2,306,895 5,674 2,363,269 1,796,281 242,000 50,671 28,412,684 2000-01 5,243,984 12,836,934 6,417,376 2,566,078 - 2,490,071 2,135,544 242,000 62,912 31,994,899 2001-02 5,193,075 13,116,950 6,448,954 2,578,704 - 2,652,152 1,835,810 242,000 64,172 32,131,817 $ - Source: General, Special Revenue and Debt Service Funds 107 $ - Utility Franchise Public Enterprise In-Lieu $ 1,053,502 $ - City of Yuma, Arizona Table VI Intergovernmental Shared Revenues Last Ten Fiscal Years Fiscal Year Sales Tax 1992-93 $ 3,588,475 1993-94 Revenue Sharing $ Auto In-Lieu Highway Users 3,550,861 $ 1,090,006 3,889,282 3,580,336 1,212,759 5,110,653 1994-95 4,350,840 4,056,699 1,267,830 1995-96 4,595,727 4,350,984 1996-97 4,267,201 1997-98 $ $ 440,062 Total $ 14,249,550 435,468 1,906,031 16,134,529 5,258,881 430,730 2,861,986 18,226,966 1,488,372 5,575,537 435,038 4,265,860 20,711,518 4,577,465 1,654,496 5,115,826 428,877 2,885,816 18,929,681 4,506,916 5,171,767 1,595,995 5,768,654 439,556 2,152,620 19,635,508 1998-99 5,002,193 6,212,451 2,030,291 6,038,703 424,669 3,621,672 23,329,979 1999-00 5,515,532 6,958,385 2,075,329 6,715,766 418,463 2,999,869 24,683,344 2000-01 5,779,653 7,303,100 2,235,482 6,157,241 425,571 2,686,448 24,587,495 2001-02 5,973,339 8,084,914 2,345,195 6,414,401 440,004 4,440,943 27,698,796 108 4,596,478 Grants and Others (Table V) 983,668 Source: General, Special Revenue and Capital Projects Funds $ Local Transportion Assistance City of Yuma, Arizona Table VII Intergovernmental Revenues - Grants and Other Last Ten Fiscal Years Federal State of Arizona Housing/Urban Economic Development Development (CDBG) Administration Other Local Government Total - $184,967 $ 39,079 $ 983,668 - - 284,242 89,927 1,906,031 99,252 - 162,102 598,561 2,861,986 92,927 - 430 99,490 4,265,860 - 17,907 - - 165,378 2,885,816 - 36,000 3,935 - 257,318 50,753 2,152,620 - 38,543 - 286,709 600,000 275,869 60,031 3,621,672 - 82,536 89,525 169,567 20,339 40,000 46,535 214,856 2,999,869 706,783 - 199,998 156,327 393,823 10,054 640,280 - 229,712 507,488 753,502 264,684 Other HUD Fiscal Year Justice 1992-93 $ 684,919 1993-94 797,712 - 734,150 - - - - 1994-95 771,975 - 595,269 634,827 - - - 1995-96 780,737 - 1,857,444 1,429,672 - - 1996-97 986,309 405,521 857,700 453,001 - - 1997-98 855,001 119,355 794,492 35,766 - 1998-99 869,432 109,421 1,372,433 9,234 1999-00 948,716 172,030 1,215,765 2000-01 970,255 158,271 2001-02 1,010,764 405,198 Interior $ - $ 74,703 $ - Source: General, Special Revenue, and Capital Projects Funds $ Other - $ 109 - Parks $ - 5,160 TransporCommerce tation $ - $ 240,890 90,937 366,161 22,264 2,686,448 4,440,943 City of Yuma, Arizona Table VIII Property Tax Levies and Collections Last Ten Fiscal Years Percent of Levy Collected Fiscal Year Tax Levy Current Tax Collections 1992-93 $ 3,384,416 $ 3,189,441 94.24% 1993-94 3,541,505 3,414,770 1994-95 3,726,867 1995-96 Delinquent Tax Collections 280,207 $ 3,469,648 102.52% 96.42% 256,075 $ 3,670,845 103.65% 3,427,048 91.96% 152,471 $ 3,579,519 96.05% 3,857,407 3,750,005 97.22% 212,077 $ 3,962,082 102.71% 1996-97 4,081,166 3,869,125 94.80% 181,689 $ 4,050,814 99.26% 1997-98 4,285,195 4,163,448 97.16% 191,929 $ 4,355,377 101.64% 1998-99 4,463,402 4,334,970 97.12% 151,849 $ 4,486,819 100.52% 1999-00 4,711,704 4,569,886 96.99% 160,779 $ 4,730,665 100.40% 2000-01 4,988,638 5,099,285 102.22% 144,699 $ 5,243,984 105.12% 2001-02 5,240,594 5,071,973 96.78% 121,102 $ 5,193,075 99.09% Source: Collections - General Fund Levy - Yuma County Assessor 110 $ Total Tax Collections Total Collection as Percent of Current Levy City of Yuma, Arizona Table IX Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Secured Personal Property and Real Property Assessed Value Estimated Actual Value Unsecured Personal Property Assessed Value Estimated Actual Value Assessed Value $ $ $ Tax Year Type 1992 Primary Secondary 1993 Primary Secondary 168,006,922 179,173,631 1,303,125,916 1,397,930,759 14,554,274 14,397,544 69,675,023 69,625,407 1994 Primary Secondary 175,479,480 179,173,631 1,369,542,338 1,397,930,759 14,397,544 14,397,544 1995 Primary Secondary 175,509,342 178,842,668 1,412,395,181 1,535,651,900 1996 Primary Secondary 183,597,249 185,412,281 1997 Primary Secondary 1998 $ 165,042,930 169,370,863 1,337,841,395 1,294,178,532 14,149,936 14,754,447 12.71% 13.47% 182,561,196 193,571,175 1,372,800,939 1,467,556,166 13.30% 13.19% 69,625,407 69,625,407 189,877,024 193,571,175 1,439,167,745 1,467,556,166 13.19% 13.19% 20,816,777 20,816,777 97,214,650 97,214,650 196,326,119 199,659,445 1,509,609,831 1,632,866,550 13.01% 12.23% 1,482,687,149 1,497,377,895 22,929,055 22,929,055 111,984,926 111,984,926 206,526,304 208,341,336 1,594,672,075 1,609,362,821 12.95% 12.95% 193,255,960 196,715,779 1,572,307,887 1,592,972,175 22,059,428 22,047,206 98,854,853 98,854,853 215,315,388 218,762,985 1,671,162,740 1,691,827,028 12.88% 12.93% Primary Secondary 201,032,944 209,173,222 1,635,071,855 1,680,497,739 23,235,158 23,224,769 99,853,151 99,863,151 224,268,102 232,397,991 1,734,925,006 1,780,360,890 12.93% 13.05% 1999 Primary Secondary 198,440,910 206,647,958 1,669,781,968 1,720,335,233 38,303,391 38,361,011 182,242,377 182,490,372 236,744,301 245,008,969 1,852,024,345 1,902,825,605 12.78% 12.88% 2000 Primary Secondary 237,647,832 243,568,945 1,855,283,531 1,893,146,460 13,011,271 13,043,157 75,532,333 76,701,583 250,659,103 256,612,102 1,930,815,864 1,969,848,043 12.98% 13.03% 2001 Primary Secondary 257,577,033 264,761,666 2,057,839,955 2,117,806,342 13,792,746 13,793,804 83,851,167 83,861,748 271,369,779 278,555,470 2,141,691,122 2,201,668,090 12.67% 12.65% 111 71,607,146 73,187,430 179,192,866 184,125,310 Estimated Actual Value $ Ratio of Total Assessed to Total Estimated Value 1,409,448,541 1,367,365,962 Source: Yuma County Assessor $ Total City of Yuma, Arizona Table X Property Tax Rates Per $100 of Assessed Valuation-Direct and Overlapping Governments Last Ten Fiscal Years Tax Year Type State County City $ 2.4642 0.3135 $ 1.8887 0.1115 Yuma Union High School District No. 70 School District No. 13 2.5449 0.6277 $ 2.4449 0.8132 $ 2.2309 1.4973 1992 Primary $ 0.4700 Secondary - 1993 Primary Secondary 0.4700 - 2.4642 0.3128 1.9399 - 2.3915 0.6185 2.2567 0.9094 1994 Primary Secondary 0.4700 - 2.4642 - 1.9628 - 2.5603 1.1109 1995 Primary Secondary 0.4700 - 2.4500 - 1.9771 - 1996 Primary Secondary - 2.4500 - 1997 Primary Secondary - 1998 Primary Secondary 1999 Community Library College District District Flood Control District $ Total Within School School District District No. 1 No. 13 1.7484 0.2734 $ - $ - $ 11.5611 2.1393 $ 11.3471 2.8234 2.3420 1.5269 1.8400 0.3772 - - 11.3623 2.2179 11.4476 2.8354 2.4097 1.1627 2.2080 1.6386 1.8722 0.3517 0.4352 0.5000 11.7392 3.5605 11.5375 4.0364 2.5636 1.1041 2.2795 1.1892 2.3105 1.4128 1.8356 0.3301 0.4831 0.5000 11.5758 3.6065 11.6068 3.8301 1.9771 - 2.5670 1.1058 2.2859 1.2157 2.3071 1.4367 1.4106 0.3454 0.4831 0.5000 10.6906 3.6500 10.7118 3.8710 2.8480 - 1.9902 - 2.3610 0.9954 2.2923 1.3415 2.6132 1.1248 1.8218 0.3305 0.5040 0.2490 11.3133 3.4204 11.6342 3.2037 - 2.8480 - 1.9902 - 2.3759 0.9307 2.5027 1.3002 2.6191 1.3949 1.8072 0.3138 0.5040 0.3500 11.5240 3.3987 11.6404 3.4934 Primary Secondary - 2.8397 - 1.9902 - 2.2269 0.9121 2.5612 1.5049 2.1935 1.2755 1.8216 0.3012 0.5040 0.3500 11.4396 3.5722 11.0719 3.3428 2000 Primary Secondary - 2.8303 - 1.9902 - 2.2387 0.8793 2.4934 1.5377 2.0975 1.4225 1.8181 0.2815 0.5040 0.3500 11.3707 3.5525 10.9748 3.4373 2001 Primary Secondary - 2.3180 - 1.9192 - 2.4303 0.8753 2.8157 1.2510 2.5481 1.3288 1.8267 0.2759 0.5040 0.3500 - - Source: Yuma County Assessor $ School District No. 1 112 City of Yuma, Arizona Table XI Computation of Direct and Overlapping Debt June 30, 2002 Debt Jurisdiction City of Yuma Outstanding $ - Allocable to City of Yuma Percent Amount 100.00% $ - Yuma County 42,260,000 48.92% 20,673,122 Yuma County Community College District 12,405,000 48.92% 6,068,388 Yuma Union High School District No. 70 18,145,000 52.62% 9,547,136 Yuma School District No. 1 29,390,000 55.43% 16,289,414 Yuma School District No. 13 11,535,000 68.37% 7,886,106 $ Total Overlapping Debt Source: Yuma County Treasurer and Yuma County Assessor 113 60,464,166 City of Yuma, Arizona Table XII Ratio of General Bonded Debt to Assessed Value and General Bonded Debt Per Capita Last Ten Fiscal Years Fiscal Year Population (1)(2) Assessed Value General Bonded Debt $ $ 184,125,310 59,749 1993-94 60,125 185,073,619 - - - 1994-95 60,457 193,571,175 - - - 1995-96 63,150 198,439,931 - - - 1996-97 65,130 208,341,336 - - - 1997-98 68,160 218,762,985 - - - 1998-99 69,055 232,397,991 - - - 1999-00 71,000 245,008,969 - - - 2000-01 77,515 256,612,102 - - - 2001-02 79,530 280,247,097 - - - 114 0.001 General Bonded Debt per Capita 1992-93 Source: (1) Census data (2) City of Yuma, Department of Community Development 175,000 Ratio of General Bonded Debt to Assessed Value $ 2.93 City of Yuma, Arizona Table XIII Special Assessments Collections Last Ten Fiscal Years Fiscal Year 1992-93 Current Assessments Due Assessments Collected $ $ 362,690 Ratio of Collections to Amount Due 362,690 100% Outstanding Delinquent Assessments (1) $ - 1993-94 352,611 352,611 100% - 1994-95 296,000 296,000 100% - 1995-96 278,052 278,052 100% - 1996-97 243,965 243,965 100% - 1997-98 234,868 234,868 100% - 1998-99 12,480 12,480 100% - 1999-00 12,701 13,094 103% - 2000-01 6,181 6,181 100% - 2001-02 - - - - (1) All assessments are either paid when due or sold to independent bidders when delinquent. In the event there are no interested bidders, the delinquency must be satisfied from available funds of the City; therefore, all assessments are considered collected currently. Fiscal year 1999-00 included $393 prepaid for the subsequent fiscal year, reducing FY 2000-01 assessments due from $6,574 to $6,181. 115 City of Yuma, Arizona Table XIV Computation of Legal Debt Limitation June 30, 2002 General Obligation Bonds Water, Sewer Lights, Parks (20%) Legal Debt Limitation 2001 Tax Year Secondary Assessed Valuation $ 280,247,097 $ Outstanding General Obligation Debt: Project 1992 Project 1997 Total General Obligation Debt 56,049,419 All Others (6%) $ 16,814,826 3,575,000 7,810,000 11,385,000 $ 44,664,419 $ 16,814,826 (1) Under the Arizona Constitution, cities may issue General Obligation Bonds for purposes of water, sewer, artificial light and parks, open space preserves, playgrounds and recreational facilities up to an amount not exceeding 20% of secondary assessed valuation. (2) Under the Arizona Constitution, cities may issue General Obligation Bonds for all purposes other than those listed in (1) above up to an amount not to exceed 6% of secondary assessed valuation. 116 City of Yuma, Arizona Table XV Ratio of Debt Service of General Bonded Debt to Total General Governmental Expenditures Last Ten Fiscal Years Fiscal Year 1992-93 Principal $ 175,000 Interest $ 16,450 Total Debt Service Total General Governmental Expenditures $ 191,450 $ Ratio of Debt Service to General Governmental Expenditures 30,672,183 0.6242% 1993-94 - - - 34,141,661 - 1994-95 - - - 38,654,315 - 1995-96 - - - 50,386,711 - 1996-97 - - - 61,302,259 - 1997-98 - - - 66,568,726 - 1998-99 - - - 60,503,960 - 1999-00 - - - 59,655,377 - 2000-01 - - - 71,871,842 - 2001-02 - - - 91,871,908 - Source: City of Yuma Comprehensive Annual Financial Report 117 City of Yuma, Arizona Table XVI Schedule of Water and Wastewater Revenue Bond Coverage Last Ten Fiscal Years Fiscal Year Gross Revenues 1992-93 $ 10,876,401 1993-94 11,632,799 1994-95 Operating Expenses (1) Net Revenues Available for Debt Service $ $ Debt Service Requirements Principal Interest 4,536,107 $ 720,000 $ 332,988 6,553,131 5,079,668 785,000 273,588 1,058,588 12,019,211 7,130,005 4,889,206 860,000 206,863 1,066,863 1995-96 13,051,001 7,610,591 5,440,410 935,000 131,612 1,066,612 1996-97 13,940,833 8,075,960 5,864,873 650,000 59,150 709,150 1997-98 13,497,421 8,011,547 5,485,874 - - - 1998-99 13,382,190 8,267,029 5,115,161 - - - 1999-00 14,433,719 8,902,681 5,531,038 - - - 2000-01 15,114,842 9,562,567 5,552,275 - - - 2001-02 15,952,585 10,139,060 5,813,525 6,340,294 (1) Excludes depreciation, amortization and other water expenses subordinate to debt service. 118 Total $ 1,052,988 - City of Yuma, Arizona Table XVII Pledged Tax Collections 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 $ 9,190,489 1,489,875 $ 9,848,292 1,434,706 $ 10,354,676 1,266,830 $ 11,342,233 2,038,281 $ 12,836,934 2,377,544 $ 13,116,950 2,077,810 4,577,465 4,267,201 1,654,496 14,634 5,171,767 4,506,916 1,595,995 17,702 6,212,451 5,002,193 2,030,291 18,079 6,958,385 5,515,532 2,075,329 21,856 7,303,100 5,779,653 2,235,482 19,675 8,084,914 5,973,339 2,345,195 22,264 282,976 34,020 288,771 32,342 286,644 32,395 273,704 26,560 262,991 27,990 210,565 27,185 537,079 282,596 210,534 499,810 267,065 434,843 912,959 286,838 253,442 1,318,636 305,014 423,643 1,543,648 332,466 495,782 1,550,072 341,523 482,394 226,266 149,523 174,856 278,612 457,415 461,606 420,915 23,188,546 486,047 24,733,779 511,115 27,342,769 447,813 31,025,598 587,620 34,260,300 670,837 35,364,654 1,838,760 25,027,306 2,002,155 26,735,934 2,105,780 29,448,549 2,306,895 33,332,493 2,566,078 36,826,378 2,578,704 37,943,358 2,098,408 2,190,493 2,313,453 2,363,269 2,490,071 2,652,152 Total Series C Pledged Taxes $ 24,682,913 $ 25,286,954 $ 26,924,272 $ 29,656,222 $ 33,388,867 $ 36,750,371 $ 38,016,806 Gross Excise Tax Pledged Revenues $ 26,384,532 $ 27,125,714 $ 28,926,427 $ 31,762,002 $ 35,695,762 $ 39,316,449 $ 40,595,510 Local Taxes Sales Tax (1%) $ 8,497,121 Franchise Fee 1,644,567 Intergovernmental Revenues: State Revenue Sharing 4,350,984 State Sales Tax 4,595,727 Auto In-Lieu Tax 1,488,372 Emergency Services and Other 20,051 Licenses: Business Licenses 260,881 Liquor Licenses 30,720 Fees for Services: Building Permits and Inspection Fees 549,605 Recreation Fees 255,668 Police Services and Other Public Safety Fees 176,954 Use of Money and Property: Investment Income 277,449 Fines, Forfeitures and Penalties: City Court Fines 525,982 Total Series B Pledged Taxes 22,674,081 Additional Series A Pledged Taxes City Public Safety Taxes (.2%) 1,701,619 Total Series A Pledged Taxes 24,375,700 Additional Series C Pledged Taxes City Special Taxes (2%) 2,008,832 The Series C Pledged Taxes consist of the Excise Taxes and the City Special Taxes. Source: City of Yuma Financial Services Department 119 City of Yuma, Arizona Table XVIII Schedule of Municipal Property Corporation Debt Service Requirements and Coverage Series 1995, 1998 and 2001 Covenants 1995 A 1995 B 1995 C 2001-02 Pledged Taxes $ 37,943,358 $ 35,364,654 $ 2002-03 Debt related to pledge: 1995 Series A $ 1,685,199 1995 Series B 1995 Series C 1998 Series 2001 Series $ 1,685,199 Total Debt Coverage Required Coverage Collective Coverage 2001-02 Pledged Taxes Total 2002-03 Debt Coverage Required Coverage 22.5 4.0 $ $ $ $ 319,347 1,346,925 1,647,825 4,961,922 $ . $ 7.1 3.0 37,943,358 $ 35,364,654 $ 5,242,766 $ 5,242,766 $ 7.2 4.0 6.7 3.0 38,016,806 243,470 243,470 156.1 3.5 38,016,806 5,242,766 7.3 3.5 Total $ 1,685,199 319,347 243,470 1,346,925 1,647,825 $ 5,242,766 Series 1996 Covenants 1995 B 2001-02 Pledged Taxes $ 35,364,654 Less: Series B Debt Service (319,347) Excess of debt requirements over pledged revenue: Series A Series C $ 35,045,307 Net Series B Revenues $ 1,625,175 Series 1996 2002-03 Debt Coverage 21.6 Required Coverage 2.0 Collective Coverage 2001-02 Gross Excess Taxes Total Senior Series Highest Debt Series 1996 Series Highest Debt Total Debt-All Series Coverage Required Coverage $ 39,316,449 3,655,882 1,625,175 $ 5,281,057 7.44 2.0 1995, 1998 and 2001 Series: Bond covenants require that each series cover both its related debt and the collective debt for the succeeding year. 1996 Series: The Series B pledged revenues are first reduced by the sum of current year debt service for the 1995 Series B bond and any excess debt service of the Series A and Series C pledged revenues. This "Net Series B" revenue must then cover the current year 1996 Series debt. Additionally, Gross Excess Taxes must cover all succeeding year debt (Series 1995 A-C, 1996 and 1998). 120 City of Yuma, Arizona Table XIX Building Permits, Bank Deposits and Retail Sales Last Ten Fiscal Years Building Permits (1) Tax Year No. 1992 312 1993 Commercial Value $ Yuma County Residential Value No. 29,714,967 577 286 28,456,506 1994 605 1995 $ Bank Retail Deposits(2) Sales(3) In Thousands 21,124,371 $ 636,281 $ 527,406 619 23,480,659 599,336 535,681 20,795,722 239 19,313,100 606,842 590,452 265 17,613,928 620 23,915,670 651,312 626,043 1996 582 26,664,589 391 34,298,598 538,041 650,114 1997 430 40,281,141 373 20,370,303 606,965 671,821 1998 247 17,236,498 431 37,795,329 782,120 715,746 1999 241 25,249,505 633 26,625,914 740,482 762,778 2000 186 24,818,824 466 49,925,047 725,000 820,348 2001 343 42,381,125 568 60,363,660 792,000 855,556 (1) Calendar year permits issued by City of Yuma Community Development Department (2) Arizona Banker's Association, 2001 N. Third Street, Ste 205, Phoenix, AZ (602)258-1200 (3) Arizona Department of Revenue website, Annual Report (excludes restaurants, bars, hotels and motor fuel) 121 City of Yuma, Arizona Table XX Assessed Valuation of Ten Major Property Taxpayers June 30, 2002 Primary Assessed Valuation Taxpayer Dole Fresh Vegetables HPI-FW West Partners (Super WalMart Center) Shaw Industries Simon Real Estate Group (Southgate Mall) Tanimura and Antle, Inc. Weyerhauser Paper Company Shilo Inn Dayton-Hudson Corporation (Target Stores) Queen Carpets HSL Properties (Radisson Hotel) Total Taxpayers Total Assessed Valuation $ $ $ 4,182,779 1,571,961 1,780,061 1,699,484 1,657,873 1,644,859 1,435,139 1,395,380 1,254,137 1,160,015 17,781,688 271,369,779 Source: Yuma County Assessor Note: Excluded from the list are centrally-assessed utility and railroad values. These properties represent approximately 8%-9% of total assessed valuation. 122 Percentage of Total 1.54% 0.58% 0.66% 0.63% 0.61% 0.61% 0.53% 0.51% 0.46% 0.43% 6.55% 100.00% City of Yuma, Arizona Table XX Assessed Valuation of Ten Major Property Taxpayers June 30, 2002 Primary Assessed Valuation Taxpayer Dole Fresh Vegetables HPI-FW West Partners (Super WalMart Center) Shaw Industries Simon Real Estate Group (Southgate Mall) Tanimura and Antle, Inc. Weyerhauser Paper Company Shilo Inn Dayton-Hudson Corporation (Target Stores) Queen Carpets HSL Properties (Radisson Hotel) Total Taxpayers Total Assessed Valuation $ $ $ 4,182,779 1,571,961 1,780,061 1,699,484 1,657,873 1,644,859 1,435,139 1,395,380 1,254,137 1,160,015 17,781,688 271,369,779 Source: Yuma County Assessor Note: Excluded from the list are centrally-assessed utility and railroad values. These properties represent approximately 8%-9% of total assessed valuation. 122 Percentage of Total 1.54% 0.58% 0.66% 0.63% 0.61% 0.61% 0.53% 0.51% 0.46% 0.43% 6.55% 100.00% City of Yuma, Arizona Table XXI Miscellaneous Statistical Data June 30, 2002 Incorporated: First Charter: Last Charter Amendment: Form of Government: April 14, 1914 June 11, 1914 January 2, 2002 Council-Manager Year Square Miles Population 2002 2000 1995 1990 1985 1980 1975 1970 1960 108.45 106.60 22.90 21.74 21.55 18.46 8.00 7.92 7.79 Public Safety: Fire Protection: Stations: Employees: Police Protection: Units-marked: Units-unmarke Motorcycles: Employees: 81,380 77,515 60,457 56,966 46,400 43,057 30,081 29,007 23,974 5 113 57 63 7 217 Most Recent Election: Primary: November 6, 2001 Registered Voters: 23,099 Votes Cast: 4,380 Percentage Voting: 19.00% Schools: (Estimated) Schools Teachers (est) Enrollment (est) 37 1,392 26,422 Parks: Park acreage Municipal golf courses(acres) Swimming Pools Activity Centers Cemetery (acres) Retention Basins (acres) Public Works: Streets (Miles est.) Paved Unpaved Alleys Street lights Refuse Collection: Accounts Quantity Collected(tons) Water Services: Connections Customers Miles of Lines Storage Capacity (million gallons) Daily Treatment Capacity (million gallons) Annual Quantity Processed(billion gallons) Wastewater Services: Sanitary Sewers Miles of Lines Processing Capacity (million gallons daily) Quantity Processed (million gallons daily) 553 175 3 7 40 128 City of Yuma 123 300 5 45 4,250 18,166 29,358 22,129 21,662 416 13.5 30 8.17 255 12.26 8.31 124