Comprehensive Annual Financial Report City of Yuma, Arizona For the Fiscal Year Ended June 30, 2004 City of Yuma Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2004 Prepared by: CITY COUNCIL Lawrence K. Nelson, Mayor Bobby L. Brooks Gerald (Gerry) D. Giss Paul B. Johnson Scott D. Johnson Alan (Al) L. Krieger Ema Lea Shoop City Administration Robert L. Wagner City Administrator Robert L. Stull Deputy City Administrator City Departments City Attorney Steven W. Moore City Clerk Brigitta M. Kuiper Finance Department Donald (Pat) Wicks, CPA Director Bonnie A. Robinson Accounting Manager Community Development Gary R. Burroughs Finance Donald (Pat) Wicks Fire Department Jack McArthur, Chief Information Technology Laura S. Neinast Municipal Court Douglas S. Stanley, Judge About the Cover: The Yuma Art Center in Historic Downtown Yuma opened in February 2004. The renovated 1912 Historic Yuma Theatre is the centerpiece of the Art Center. The facility also has four visual art galleries and abundant classroom/workshop space. Over 30,000 people have enjoyed a performance, exhibition, class or an event in our new home for the arts!. Color Photograph used with permission by Nels Akerlund Photography - WWW.NelsAkerlund.com Parks and Recreation Stephen D. Bills Police Department William D. (Robby) Robinson, Chief Public Works Gary R. Burroughs Deputy City Administrator Citizens of Yuma Strategic Communications/ Public Affairs Mayor and Council Heritage Area Municipal Court Judge City Administrator Municipal Court City Clerk 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 FINANCE _______________ HUMAN RESOURCES _______________ INFORMATION TECHNOLOGY _______________ Human Resources Business Applications and Support Accounting Customer Serivces Purchasing Facilities Management Assistant Director Parks/Mall Maintenance Support Services Solid Waste PARKS AND RECREATION _______________ Recreation Civic and Convention Center/Baseball Complex Arts and Culture Golf Courses CITY ATTORNEY _______________ General Counsel Risk Management Telecommunications and Support Litigation Prosecution City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2004 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal from the Finance Director Certificate of Achievement for Excellence in Financial Reporting FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis (Required Supplementary Information) BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net 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 City 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 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 Two Percent Tax Special Revenue Fund Yuma Mall Maintenance Special Revenue Fund i Page v x 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 81 City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2004 TABLE OF CONTENTS (Concluded) FINANCIAL SECTION (Continued) 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 Budgetary Comparison Schedule - Equipment Maintenance 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 Page 84 85 86 87 88 89 90 92 93 94 95 96 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 Other - Last Ten Fiscal Years Property Tax Levies and Collections - Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years Property Tax Rates 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 to Maturity and Coverage Building Permits, Bank Deposits and Retail Sales - Last Ten Fiscal Years Assessed Valuation of Ten Major Property Taxpayers Miscellaneous Statistical Data ii 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 117 118 119 XVIII XIX XX XXI 120 121 122 123 INTRODUCTORY SECTION iii iv FINANCE DEPARTMENT One City Plaza P.O. Box 13012 Yuma, Arizona 85366-3012 (928) 373-5087 Fax: (928) 373-5084 City of YUMA September 23, 2004 To the Citizens, Honorable Mayor and City Council, and City Administrator The Finance Department is pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Yuma, Arizona for the fiscal year ended June 30, 2004. 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, 2004, 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, 2004, are fairly presented in conformity with accounting principles generally accepted in the United States. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of Federal awards. These reports are available in the City’s separately issued Single Audit Reporting Package. This report has been prepared using the 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, overview, and v 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 part of the City’s operations and are combined within the report. The Yuma Municipal Property Corporation and the City of Yuma Employee Benefits Trust have been included in the reporting entity. Conversely, the report does not include the City of Yuma Housing Authority as the City is not financially accountable for the authority, nor does the City directly or indirectly rely upon or benefit from the financial activity of the authority. ECONOMIC CONDITION AND OUTLOOK Industrial Expansion. Yuma’s economy is based primarily in agriculture, tourism and government, although further diversification continues. Agriculture remains the Yuma area’s dominant industry, producing almost $1 billion 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. The importance of these two bases to the military establishment has been magnified by the conflict in Iraq and the continued fight against terrorism. 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. 16 15 14 G e n e ra l S a le s T a x 13 12 11 10 9 8 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 6 1994 7 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 twelve years of data. Until the last few years, collections averaged a better than 7% increase annually. Beginning after 2001, Yuma’s collections dipped slightly to a 1% growth, although Yuma escaped the dramatic downturns affecting the larger population centers. For 2004, sales tax more than rebounded and surpassed its historic growth pattern with a 12% increase over 2003. Planning for fiscal year 2005 includes a conservative 5% growth in sales tax collections. F is c a l Y e a r E n d e d J u n e 3 0 , Yuma’s basis as a regional retail center expanded during 2004 with the construction of a 1 million square foot shopping center. A number of nationally known retail operations will be opening shortly after the beginning of the fiscal year. A grand opening celebration is scheduled for November 2004. 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 continues to be a popular destination with the winter population rebounding after a slight decrease the previous year. This contributed to the strengthening of sales tax collections. LONG-TERM FINANCIAL PLANNING Yuma Crossing National Heritage Area. Plans to restore, preserve and interpret the Yuma Crossing National Heritage area began more than thirty years ago. 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 National Heritage Area in 2000, the first such National Heritage Area west of the Mississippi River. During fiscal year 2004, the West Wetlands Park opened. Once a landfill, this park is becoming a showcase of riverfront revitalization. During the year, the East Wetlands portion of the plan began construction to restore natural vegetation and wildlife habitat. With continued diligence, the City is determined to continue 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. During 2004, the City completed construction and renovation related to the historic Yuma Theater vii and new Yuma Arts Center. Along with recent private developments in the area, the opening of the new art center will help the downtown area to grow into a cultural and recreational portion of the Heritage Area. East Mesa development. Construction of the new East Mesa Water and Wastewater Treatment plants continued during 2004. The eastern edge of the City on the Yuma Mesa continues to grow. These two plants will not only establish the infrastructure necessary to accommodate that growth, but will improve capacity of existing plants in the older Yuma area to accommodate that dramatic growth. The Water Infrastructure Financing Authority (WIFA) of the State of Arizona has been invaluable in providing lower-cost financing for these important projects. 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 two 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 increased to $99,606,216 at June 30, 2004 from $87,634,643 last year. The increase reflects in part the unexpended proceeds of the District 67 Improvement District bonds. Following market conditions, average yield on investments again declined at June 30, 2004, to 1.83%. 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 selffunds 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, 2003. This is the twenty-second consecutive year the City has received this viii prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report. The report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another award. I wish to express my sincere thanks to the employees of the Accounting Division for their dedicated service in preparing this report. Their work, along with those services provided by other members of the Finance Department, 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, Donald (Pat) Wicks, CPA Finance Director ix Certificate of Achievement for Excellence in Financial Reporting Presented to City of Yuma, Arizona For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2003 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. x FINANCIAL SECTION 1 2 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, 2004. 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 $28.7 million for the fiscal year, $18.8 million of which was generated by governmental activities while $9.9 million was due to businesstype activities of the City. • The City’s combined net assets total $268.6 million at June 30, 2004. Of this amount, $87.3 million is available (unrestricted) to finance ongoing programs, $55.8 million in governmental programs and $31.5 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: General Highway User Revenue City Road Tax Grants Community Redevelopment Municipal Property Corporation Debt Service Capital Projects Nonmajor Governmental Funds: Local Transportation Assistance Public Safety Tax Solid Waste Recreation Complex Two 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 and maintenance programs 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: Water Fund Wastewater Fund Nonmajor Enterprise Funds: 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. 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 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 $268.6 million at the close of the fiscal year. Net Assets Governmental Activities June 30, 2004 (millions) Current and other assets 2004 $ Capital assets Total assets 74.3 169.7 244.0 Business-type Activities 2003 $ 63.4 153.8 217.2 2004 $ 38.1 130.2 168.3 Total 2003 $ 35.5 96.4 131.9 2004 $ 112.4 299.9 412.3 2003 $ 98.9 250.2 349.1 Long-term liabilities outstanding Other liabilities Total liabilities 75.2 18.0 93.2 72.6 12.7 85.3 44.0 6.5 50.5 20.7 3.3 24.0 119.2 24.5 143.7 93.3 16.0 109.3 Net assets: Invested in capital assets, net of related debt Unrestricted 95.0 55.8 70.1 61.8 86.3 31.5 85.4 22.5 181.3 87.3 155.5 84.3 117.8 $ 107.9 Total net assets $ 150.8 $ 131.9 $ $ 268.6 $ 239.8 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. The remaining balance of unrestricted net assets may be used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, including the City as a whole, as well as for its separate governmental and business-type activities. The same held true for the previous fiscal year. Net assets rose to $268.6 million, up $28.7 million from the prior year. Governmental activities accounted for $18.8 million of the increase while business-type activities amounted to $9.9 million. Most of the increase would be attributable to capital asset acquisitions, particularly infrastructure, as governmental capital assets increased almost $16 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 ‘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. 7 MANAGEMENT’S DISCUSSION AND ANALYSIS Statement of Activities. Already noted was the statement of activities’ purpose in presenting information in how the government's net assets changed during the most recent fiscal year. A chart of changes in net assets follows. Changes in Net Assets Fiscal Year Ended June 30, 2004 (millions) 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 grants and contributions Unrestricted investment earnings Total revenues Expenses: Governmental acitivites 2004 $ 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 9.2 Business-type activities 2003 $ 2004 2003 $ Total 2004 2003 7.1 $ 21.1 18.9 $ 30.3 $ 26.0 3.3 3.7 3.4 1.7 8.9 5.4 3.3 12.6 3.4 7.1 6.0 28.5 1.9 24.0 5.2 0.3 82.1 5.7 25.5 1.7 24.2 7.6 0.9 77.8 - - 0.1 30.1 0.6 24.9 6.0 28.5 1.9 24.0 5.2 0.4 112.2 5.7 25.5 1.7 24.2 7.6 1.5 102.7 7.1 27.0 8.6 9.5 3.0 5.6 2.9 63.7 6.9 25.5 7.9 8.9 2.9 6.4 2.9 61.4 10.9 7.3 2.5 20.7 10.3 7.0 2.5 19.8 7.1 27.0 8.6 9.5 3.0 5.6 2.9 10.9 7.3 2.5 84.4 6.9 25.5 7.9 8.9 2.9 6.4 2.9 10.3 7.0 2.5 81.2 (0.5) 0.9 0.6 - 0.5 - (0.6) - 0.9 - Changes in net assets before transfers and special item Transfers Gain on sale of fixed assets Change in net assets $ 18.8 $ 17.0 $ 9.9 $ 4.5 $ 28.7 $ 21.5 For the fiscal year, net assets increased $28.7 million, with $18.8 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). Governmental Activities Revenues Governmental activities revenues totaled $82.1 million for fiscal year 2004, up 5.5% from 2003. 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 source. Stateshared revenues include state sales tax, urban revenue sharing (income tax), auto in-lieu tax and highway user 8 MANAGEMENT’S DISCUSSION AND ANALYSIS funds (gas tax). Sales taxes and state shared revenues account for 65% of governmental revenues for the year, which is comparable to 2003. 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 11% of governmental revenues. Property taxes represent 7% of governmental revenues. The large majority of property taxes are levied for general purposes with a small levy for downtown mall maintenance. No property taxes are levied for debt service. Various grants and contributions and franchise taxes account for most of the remaining governmental revenues. Some of the more significant changes in governmental activities revenues are noted: • • • Charges for services rose 29% to $9.2 million for the year. The increase reflects the City’s growth as building permit fees saw a 55% increase to $2.6 million combined with growth in sanitation fees as the result of the creation of the $2 per month collection fee. Capital grants and contributions grew $2.0 million to $3.7 million in large part due to a technology grant from the US Department of Justice for the implementation of mobile data computing in public safety vehicles. Sales taxes increased $3 million or 12% from 2003 reflecting better than anticipated economic activity. Early forecasts predicted a moderate increase of 5% but double-digit increases in collections began during the holiday period of 2003 and continued for the remainder of the fiscal year. RevenuesGovernmental Activities Franchise taxes 2% Sales taxes 36% Shared revenues 29% Property taxes 7% Unrestricted grants and contributions 6% Capital grants and contributions 5% Unrestricted investment earnings 0% Operating grants and contributions 4% Charges for services 11% Expenses Millions Governmental expenses totaled $63.7 million for the fiscal year. Of the expenditures, 42% or $27.0 million is related to public safety for police, fire and municipal court services. Parks, recreation and culture expenses amounted to $9.5 million, or 14.9%, Expenses and Program Revenues-Governmental Activities while streets and community design and 30.0 development expenses amounted to 13.5% and 8.7% respectively. Interest 25.0 on long-term debt accounted for 4.7% of Expenses governmental expenses. Overall, Program Revenues 20.0 governmental activities expenses rose 3.75%, or $2.3 million, over 2003. The 15.0 most notable increase among programs was the $1.5 million increase in public 10.0 safety expenses. This increase was due for the most part from substantive 5.0 increases in pension costs. - The chart governmental at right compares activities with their General government 9 Public safety Streets Parks, recreation and culture Environmental health and protection Community design and development Interest on long-term debt MANAGEMENT’S DISCUSSION AND ANALYSIS respective program revenues, if any. Because the ultimate beneficiary of services of these types is often difficult to ascertain or the services apply to a broad spectrum of users (such as in fire protection), user fees are not created and general revenues provide the funding support for most of these services. Moreover, where ultimate users of the services are determinable, program revenues may generate only a portion of the funding, such as in recreation programs. Business-type activities Revenues General revenues do not support the City’s business-type activities; thus, the largest source of revenues comes from charges for services. Of the $21.1 million in charges, 89% 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 $8.9 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 less than 1% of revenues for the City’s business activities. Revenues-Business-type Activities Capital grants and contributions 30% Charges for services 70% Investment earnings <1% Expenses Water and wastewater services account for 88% of the City’s business-type activities with golf courses making up the remaining 12%. Water expenses amounted to $10.9 million while wastewater expenses totaled $7.3 million. 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 vs. Program Revenues-Business-type Activities A B C D E F Contributions 16 Charges for Services 14 Expenses Millions 12 10 8 6 4 2 0 Water Wastewater 10 Golf MANAGEMENT’S DISCUSSION AND ANALYSIS Because the City’s business-type activities are supported by user charges, the chart above shows more reliance on program revenues. Moreover, for both water and wastewater, program revenues include capacity charges for new service and developer additions to the utility infrastructure. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental funds. The combined fund balances of governmental funds for the fiscal year ended June 30, 2004, is $37.9 million. This represents a $5.8 million increase in fund balances, fueled in part from unexpected improvements in sales tax revenues. 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 $2.4 million, led by a $2.1 million jump in sales taxes and $1.2 million increase in building permit and inspection fees. Expenditures rose a moderate 5.9% to $38.5 million. Public safety expenditures showed the largest increase as pension expenditures rose for the year. Another contributor to the increase was a rise in technology expenditures with the hiring of consulting services related to geographic information systems. Highway User Revenue Fund (HURF) This fund, which accounts for the expenditure of state-shared gasoline taxes, was another major operating fund to contribute to the increase in the overall governmental fund balance. The City’s portion of those taxes grew by 6.9% for the fiscal year to $7.2 million. An increase in transfers for capital expenditure projects still allowed an increase in the fund’s balance of $.5 million. City Road Tax Fund This fund accounts for the one-half cent sales tax for use on the City’s roadways in conjunction with HURF. In the same manner as general sales tax in the General Fund, sales taxes increased by more than 12% over 2003 to $7.4 million. Transfers to the Capital Projects Fund for streets projects decreased again over 2003 resulting in an increase in fund balance of $1.3 million. Grants Fund The City continues to acquire much needed assistance from both the state and federal levels. During 2004, the mobile data computing project was completed using U.S. Department of Justice grants. Other forms of assistance in public safety were ongoing, such as the high intensity drug traffic program. Community Redevelopment Fund The City utilized in part its Community Development Block Grant funding and its Arizona Department of Commerce Action Grant Program funding to complete the Martin Luther King Community Center. Debt Service Debt Service Fund expenditures decreased by $.9 million reflecting the redemption of the 1996 Series Municipal Property Corporation Bond. The remaining principal and interest expenditures of the fund matched transfers from the other operating funds. Capital Projects Fund The Capital Projects Fund’s fund balance grew by $1 million this year as a result of bond proceeds of the new improvement district related to the Yuma Palms Regional Center (see the discussion on Debt Administration). The $6.9 million remaining in the fund, made up of the aforementioned bond proceeds as well as balances in developer contribution accounts, is designated for these projects for fiscal 2005 and later. 11 MANAGEMENT’S DISCUSSION AND ANALYSIS Proprietary funds. The City’s enterprise funds posted an overall increase in net assets of $9.8 million for the fiscal year ended June 30, 2004. The City’s utility funds, water and wastewater, accounted for most of the increase as both have benefited from system growth and rate increases to sustain that growth. The two golf courses combined for a $216,362 decrease in net assets. Water Enterprise Fund Operating revenues for the Water Fund increased by 10.9% for the year ending June 30, 2004. This is due both to an ongoing series of rate increases and to a 4.1% growth in the customer base to 23,665. Operating expenses rose by 5.4% and the fund produced operating income of $752,091. Additional rate increases are in store through 2008 to finance the construction of a new water treatment facility on the East Mesa and to make improvements within the current water system needed to maintain service levels and system pressure. Wastewater Enterprise Fund With the end of fiscal 2004, the Wastewater Fund completed its fifth 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 15.9% over fiscal 2003. Operating expenditures held steady resulting in income from operations of $734,532. At year end, an additional series of rate increases is under consideration as costs of construction of the wastewater plant have escalated. Golf Courses Although revenues improved for the City’s nonmajor enterprise funds, both the Desert Hills Golf Course and the Arroyo Dunes Golf Course suffered operating losses for the year ended June 30, 2004. Revenues for Desert Hills, once voted “Best Municipal Golf Course in Arizona” by Golf Digest, rose 3.2% over 2003 but even a 2% reduction in operating expenses was not sufficient to avoid an operating loss of $199,218. The same held true for Arroyo Dunes Golf Course in that revenues increased by 2% but the fund still suffered a loss. Plans are under consideration for converting the grounds to a soccer and softball recreation center. Until that should happen, the city will continue to operate the course and implement strategies to improve its financial outlook. GENERAL FUND BUDGETARY HIGHLIGHTS A detailed budgetary comparison schedule for the fiscal year ended June 30, 2004, can be found starting on page 59. A summary of that schedule follows: Budget Revenues and Transfers In Taxes Intergovernmental Other Transfers In Total Expenditures and Transfers Out Expenditures Transfers Out Total Change in Fund Balance Original Final Actual $ 22,453,384 15,738,640 4,567,508 863,000 43,622,532 $ 22,453,384 15,738,640 4,567,508 863,000 43,622,532 $ 22,885,761 16,451,193 6,242,384 151,985 45,731,323 42,147,514 42,147,514 38,530,429 6,096,806 6,096,806 5,239,420 48,244,320 43,769,849 48,244,320 $ (4,621,788) $ (4,621,788) $ 1,961,474 Variance with Final $ 432,377 712,553 1,674,876 (711,015) 2,108,791 3,617,085 857,386 4,474,471 $ 6,583,262 General Fund tax revenues exceed expectations because of an unanticipated surge in sales tax collections. Intergovernmental revenues increased as state sales tax increased by 7.8%, far outpacing its expected 1% growth. Also notable is growth in building permits and related revenues. The jump in these fees is an indicator of the substantial construction activity throughout the city. 12 MANAGEMENT’S DISCUSSION AND ANALYSIS Expenditures for the fund came in at $3.6 million under budget with General Government producing $1.8 million of the savings and Public Safety adding just over $1 million. The General Government savings were realized through unexpended Community Investment Trust monies and by delayed project expenditures in the Information Technology Department. Public Safety savings occurred mostly in the Police Department through a combination of payroll-related attrition savings and a one-year reduction in the employer pension rate in the Arizona Public Safety Retirement System. The remaining savings occur because city departments rarely spend up to their respective budgets, primarily due to personnel attrition and the like. 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, 2004, the City of Yuma’s investment in capital assets in both governmental and business-type activities amounted to $300 million, net of depreciation. This includes land, buildings, equipment, and infrastructure (roadways and bridges). Capital assets for governmental activities increased by 10.3% while business-type capital assets increased 35%. These changes included the following: • • • • • Land purchases for governmental activities amounted to $2 million for right-of-way for the Avenue A street widening project. Construction continued on the new East Mesa water treatment plant. Construction on the new East Mesa wastewater plant continued. Renovation of the Yuma Theater and construction of the Art Center were completed. Infrastructure additions are primarily for street construction by subdivision developers. Change in Capital Assets (In Millions) Governmental Activities Business-type Activities July 1, Net Additions/ June 30, July 1, Net Additions/ June 30, Deletions 2004 2003 Deletions 2004 2003 Land Buildings Improvements Infrastructure Equipment Construction in Progress Accumulated Depreciation $ $ Total 11.6 $ 56.3 16.7 121.2 31.7 14.9 (98.6) 153.8 $ 2.0 $ 1.5 2.5 6.1 1.0 10.9 (8.1) 15.9 $ 13.6 $ 57.8 19.2 127.3 32.7 25.8 (106.7) 169.7 $ 1.2 $ 8.0 123.7 3.0 14.5 (54.0) 96.4 $ - $ 8.0 0.1 31.4 (5.7) 33.8 $ 1.2 $ 8.0 131.7 3.1 45.9 (59.7) 130.2 $ Total 14.8 65.8 150.9 127.3 35.8 71.7 (166.4) 299.9 Additional information on capital assets can be found in Note III-E starting on page 45. DEBT ADMINISTRATION For the year ended June 30, 2004, the City’s long-term debt increased by a net of $25.1 million, as noted below. The increases in debt for the fiscal year were related primarily to acquisition of capital assets through the issuance of long-term contracts payable and improvement bonds payable, as follow: • • The City created Improvement District 67 and issued $7,280,000 in improvement bonds for construction of public improvements near the new Yuma Palms Regional Center. An additional $23 million from the Water Infrastructure Financing Authority was incurred in the continuing construction of the water and wastewater plants on the East Mesa. In each case, payments were made on the contracts during the fiscal year. 13 MANAGEMENT’S DISCUSSION AND ANALYSIS 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 $64.5 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. The City’s recently issued improvement district bonds were rated by Fitch Ratings as “A”. All other bond issues have been upgraded to a “A+” rating by Fitch. 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”. With the exception of the improvement district bonds, 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. Summary of Long-Term Debt General Obligation Bonds Yuma Municipal Property Corporation Bonds Improvement District Contracts Payable Compensated Absences Total Long-Term Debt $ Governmental activities Business-type activities 2004 2004 63.4 7.3 2.5 2.1 2003 $ - $ 67.4 3.3 2.0 $ 75.3 $ 72.7 $ 2003 Total 2004 2003 10.5 $ 11.4 $ 10.5 $ 11.4 33.8 - 10.4 - 44.3 $ 21.8 $ 119.6 $ 94.5 63.4 7.3 36.3 2.1 67.4 13.7 2.0 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 46% to an estimated 83,330 at July 1, 2003, the most recent numbers available. The City’s economy is based on a triad of agriculture, tourism and military/government spending. Agriculture continues to lead the economy, now contributing more than $1 billion 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, posted a dramatic 12% increase this year, surpassing its historic growth rate of 7%. This compared to a lesser increase in the large metropolitan areas of the state, Yuma’s steady growth is positive. For fiscal year 2005, revenues were projected using a conservative 5% growth in sales taxes. 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, 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. 14 MANAGEMENT’S DISCUSSION AND ANALYSIS CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to familiarize our citizens, taxpayers and customers with the City’s finances and to demonstrate the City’s fiscal accountability for its operations. Questions concerning this report, or requests for additional financial information, should be directed to Mr. Donald (Pat) Wicks, Finance Director, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012, telephone (928) 373-5087. The reader may also visit the City’s website at www.ci.yuma.az.us for an electronic version of this report. 15 16 BASIC FINANCIAL STATEMENTS 17 18 GOVERNMENT-WIDE FINANCIAL STATEMENTS 19 City of Yuma, Arizona Statement of Net Assets June 30, 2004 Assets Cash and Investments Receivables, Net Internal Balances Inventory, at cost Prepaid Items Deferred Charges Capital Assets, Net Total Assets and Other Debits Governmental Activities Business-type Activities Total $ 65,953,318 $ 33,925,966 $ 99,879,284 3,697,579 11,664,584 7,967,005 (147,480) 147,480 448,548 139,139 587,687 69,873 19,282 89,155 129,471 129,471 169,695,385 130,220,715 299,916,100 243,986,649 168,279,632 412,266,281 Liabilities Accounts Payable Accrued Liabilities Accrued Interest Payable Deferred Revenue Long-Term Debt: Due within one year Due in more than one year Total Liabilities 3,271,680 3,215,101 1,491,321 10,065,550 5,235,714 553,197 656,068 77,232 8,507,394 3,768,298 2,147,389 10,142,782 3,812,000 71,378,827 93,234,479 1,316,400 42,638,118 50,476,729 5,128,400 114,016,945 143,711,208 Net Assets Invested in Capital Assets, Net of Related Debt Unrestricted Total Net Assets 95,004,558 86,266,197 181,270,755 31,536,706 87,284,318 55,747,612 $ 150,752,170 $ 117,802,903 $ 268,555,073 The accompanying notes are an integral part of these financial statements 20 City of Yuma, Arizona Statement of Activities For the Year Ended June 30, 2004 Net (Expense) Revenue and Changes in Net Assets Program Revenues 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 Expenses $ $ Operating Grants and Contributions 1,176,182 $ 2,175,893 - Capital Grants and Contributions Governmental Activities 31,059 $ 1,294,397 - $ 2,458,321 - (5,851,564) $ (21,059,462) (8,654,095) - Total $ 21,596 - 2,994,063 1,694,941 349,794 979,607 30,279 - 30,279 5,550,562 3,230,174 1,593,050 264,834 (462,504) - (462,504) (2,971,917) - (2,971,917) (47,547,080) - (47,547,080) 63,692,329 9,152,591 10,884,239 7,341,094 2,493,252 11,132,788 7,690,612 2,285,185 20,718,585 21,108,585 84,410,914 $ 30,261,176 $ 3,289,896 3,702,762 - 4,089,497 4,833,686 - - 8,923,183 (47,547,080) 3,289,896 $ 12,625,945 General Revenues: Property taxes Sales taxes Franchise taxes Shared revenues Grants and contributions not restricted to specific programs Unrestricted investment earnings Total general revenues Gain from sale of fixed assets Transfers Total general revenues and transfers Change in net assets Net assets-beginning $ Net assets-ending The accompanying notes are an integral part of these financial statements. 21 - (5,851,564) (21,059,462) (8,654,095) 875,401 - (8,577,817) Business-type Activities 9,474,814 2,971,917 Business-type Activities: Water Wastewater Golf Courses Total Business-type Activities Total 7,058,805 $ 26,988,073 8,654,095 Charges for Services 4,338,046 5,183,204 (208,067) (8,577,817) 4,338,046 5,183,204 (208,067) 9,313,183 9,313,183 9,313,183 (38,233,897) 5,952,927 28,528,841 1,935,952 24,021,381 - 5,952,927 28,528,841 1,935,952 24,021,381 5,198,434 292,259 65,929,794 125,389 125,389 5,198,434 417,648 66,055,183 920,401 (473,254) 66,376,941 18,829,861 131,922,309 473,254 598,643 9,911,826 107,891,077 920,401 66,975,584 28,741,687 239,813,386 150,752,170 $ 117,802,903 $ 268,555,073 22 FUND FINANCIAL STATEMENTS 23 City of Yuma, Arizona Balance Sheet Governmental Funds June 30, 2004 Major 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 $ $ 17,168,850 $ - 5,013,565 - 267,867 2,494,459 20,169 223,534 56,234 729,136 86,066 15,290 21,061,605 $ 258 653,980 18,945 635 5,687,383 City Road Tax Grants $ 3,976,667 $ 725,679 11,009 4,713,355 $ $ 615,664 2,755 618,419 Liabilities and Fund Balances Accounts Payable Accrued Payroll, Taxes and Benefits Payable Long-Term Debt - Current Portion Due to Other Funds Accrued Interest Payable Deposits Deferred Revenue Total Liabilities Fund Balance: Reserved for: Inventory Prepaid Items Unreserved: Designated for Uncompleted Projects Designated for Subsequent Years' Expenditures Designated for Future Community Improvements Undesignated, reported in: General Fund Special Revenue Funds Total Fund Balances Total Liabilities and Fund Balances $ $ 887,501 2,287,496 116,857 232,379 3,524,233 $ 150,170 209,618 300 360,088 $ 6,447 11,171 500,000 13,252 168,972 699,842 $ 161,923 8,843 27,812 412,976 611,554 86,066 15,290 635 - - 1,429,769 797,224 81,422 - - - 15,209,023 17,537,372 5,245,238 5,327,295 21,061,605 $ 5,687,383 The accompanying notes are an integral part of these financial statements. 24 4,013,513 4,013,513 $ 4,713,355 6,865 6,865 $ 618,419 Community Redevelopment Debt Service $ 13,770 $ $ 1,564,357 137,706 1,715,833 $ $ 45,994,872 4,402,757 $ 52,228 410,000 8,262 52,500 16,511,312 $ 265,709 308,101 16,025 156,210 9,014 890 4,499,839 2,150,419 5,345,589 20,169 223,534 113,230 885,346 95,080 69,315 $ 59,300,311 25 $ 3,020,000 1,472,540 4,492,565 1,615,318 $ 19,685 7,903,354 9,538,357 192,799 83,217 132,130 21,453 429,599 $ 3,084,094 2,611,820 3,520,000 228,533 1,485,792 136,542 10,305,290 21,372,071 - - 52,500 9,014 890 95,080 69,315 - - 6,920,455 - 44,600 - 6,920,455 1,555,791 797,224 4,015,736 4,070,240 4,499,839 15,209,023 13,281,352 37,928,240 $ 59,300,311 69,911 11,475 $ 1,565,856 1,715,833 1,715,833 $ 4,492,565 4,492,565 $ Total 3,743,890 - 68,591 - $ Capital Projects 15,988,322 $ - $ 89,808 4,402,757 Other Nonmajor Governmental Funds $ 6,972,955 16,511,312 $ 25 City of Yuma, Arizona Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Assets June 30, 2004 Amounts reported for governmental activities in the statement of net assets are different because: Total Fund Balances per the Balance Sheet-Governmental Funds: $ Property taxes receivable that are not financial resources are not reported in the funds. 37,928,240 4,566 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 159,639,618 Property tax revenue deferred to later years recognized in year levied in governmental activities. 239,740 Interest payments accrued in government-wide statements not recorded until payment in governmental activities. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: Compensated absences Contracts payable MPC bonds payable Improvement District #67 Unamortized deferred costs (5,529) (2,074,331) (2,015,000) (60,420,000) (7,280,000) 118,502 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. 24,616,363 $ 150,752,170 Net assets of governmental activities 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, 2004 Major Special Revenue Funds Highway User Revenue 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 Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Proceeds From Long-Term Debt Sale of Real Property Transfers In Transfers Out Total Other Financing Sources/(Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ City Road Tax Grants 22,885,761 $ 3,016,094 16,451,193 1,851,862 725,948 217,270 85,809 45,233,937 7,198,891 26,621 21,840 7,247,352 5,408,820 23,622,697 5,383,388 783,718 4,195,398 - 194,139 16,122 - 303,730 3,667,833 233,552 22,476 - 31,047 52,294 20,000 38,530,429 5,017,714 700,000 38,034 1,309,754 1,677,800 6,703,508 2,229,638 6,197,762 3,505,112 345,401 151,985 (5,239,420) (4,742,034) 16,124 (1,797,194) (1,781,070) (4,902,060) (4,902,060) (3,506,915) (3,506,915) $ 7,423,730 15,553 68,233 7,507,516 $ 571,720 - 5,169,554 5,626 7,732 5,182,912 1,269,025 21,704 1,961,474 448,568 1,295,702 (1,803) 15,575,898 4,878,727 2,717,811 8,668 17,537,372 $ The accompanying notes are an integral part of these financial statements. 28 5,327,295 $ 4,013,513 $ 6,865 Community Redevelopment $ - Debt Service $ 1,758,693 165,858 1,924,551 199 199 $ 31,059 364,789 391,531 96,872 884,251 $ 6,101,538 431,754 1,688,146 497,037 25,620 41,534 8,785,629 Total Governmental Funds $ 36,411,029 3,016,094 31,041,144 3,904,797 725,948 1,153,837 33,352 480,146 76,766,347 - - - 76,188 2,422,970 5,408,820 25,751,628 4,767,118 7,828,062 - - - 2,547,728 3,061,719 19,140,379 291,942 207,319 5,428,709 19,656,020 3,020,000 2,909,717 5,929,717 19,140,379 5,546,147 3,825,000 2,961,764 78,688,840 387,651 (5,929,518) (18,256,128) 3,239,482 (1,922,493) 575,000 (962,651) (387,651) 5,929,397 5,929,397 7,280,000 12,794,044 (812,175) 19,261,869 2,717,144 (4,861,533) (2,144,389) 7,280,000 920,401 21,608,694 (22,081,948) 7,727,147 1,437,887 - - 85,000 14,013 1,536,900 $ Capital Projects Other Nonmajor Governmental Funds - (121) 1,005,741 1,095,093 5,804,654 - 121 5,967,214 2,975,147 32,123,586 - $ - $ 6,972,955 29 $ 4,070,240 $ 37,928,240 City of Yuma, Arizona Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances-Governmental Funds to the Statement of Activities For the Year Ended June 30, 2004 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-governmental funds $ 5,804,654 A portion of property tax revenues recorded on the statement of activities does not provide current financial resources and 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 Increase in compensated absences expense not recorded in governmental funds Contribution of net assets of governmental activities related to creation of Internal Service Fund-Equipment Maintenance Long-term debt proceeds are recorded as other financing sources in governmental funds (10,770) (7,093,316) 19,656,020 (1,498,548) 3,825,000 (93,948) (255,534) (7,280,000) Investment earnings of the internal service funds are general revenues on the statement of activities 103,571 Interest payments accrued in government-wide statements are not recorded in governmental activities until paid (10,153) Net revenues of internal service funds in excess of expenses reduce governmental activities expenses on the statement of activities 484,451 Contributions of infrastructure assets are not recorded as revenues in the governmental funds 5,198,434 $ 18,829,861 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, 2004 Business-Type Activities-Enterprise Funds Water Wastewater Other Fund Fund Funds Totals Assets Current Assets: Cash and Investments $ 9,915,231 $ 5,351,650 $ 132,682 $ 15,399,563 Receivables, Net of Allowance for Uncollectibles: Accounts Receivable 2,022,409 1,053,774 4,407 3,080,590 Intergovernmental 508 507,522 633 508,663 Accrued Interest 29,394 3,484 546 33,424 Inventory, at cost 65,428 73,711 139,139 15,242 950 3,090 19,282 Prepaid Expenses 6,917,380 215,069 19,180,661 12,048,212 Total Current Assets Restricted Assets: Cash and Investments: Current Debt Service 1,198,785 1,198,785 Advancement for Future Expansion 1,084,180 15,975,623 17,059,803 Customer Deposits 267,815 267,815 Receivables: 22,513 52,389 74,902 Accrued Interest 2,573,293 16,028,012 18,601,305 Total Restricted Assets Capital Assets: Land 1,043,951 127,079 1,171,030 Buildings 2,911,198 1,931,133 3,102,865 7,945,196 Improvements Other than Buildings 76,482,580 52,210,924 3,015,667 131,709,171 1,687,256 1,188,589 263,618 3,139,463 Equipment Gross Capital Assets 82,124,985 55,457,725 6,382,150 143,964,860 35,800,191 21,373,037 2,529,515 59,702,743 Less Accumulated Depreciation Capital Assets Net of Depreciation 46,324,794 34,084,688 3,852,635 84,262,117 16,543,640 29,414,501 457 45,958,598 Construction In Progress 63,499,189 3,853,092 130,220,715 62,868,434 Total Capital Assets Other Assets: 129,471 129,471 Deferred Charges 86,444,581 4,068,161 168,132,152 77,619,410 Total Assets Liabilities Current Liabilities Payable from Current Assets: Accounts Payable 1,682,079 3,240,897 44,923 4,967,899 Accrued Payroll and Related Taxes 251,992 205,645 95,560 553,197 Current Portion-Long-Term Contracts-Principal 84,347 84,347 Current Portion-Bonds Payable 232,500 232,500 Estimated Claims and Judgements Due to Other Funds 156,210 156,210 Accrued Interest Payable 83,852 10,340 94,192 44,894 44,894 Deferred Revenue 3,456,882 341,587 6,133,239 2,334,770 Total Current Liabilities Payable from Current Assets Current Liabilities Payable from Restricted Assets: Deposits 267,815 267,815 Deferred Revenue 32,338 32,338 Current Portion-Long-Term Contracts-Principal 302,053 302,053 Current Portion-Long-Term Contracts-Interest 59,642 300,645 360,287 Current Portion-Bonds Payable 697,500 697,500 201,589 201,589 Accrued Interest Payable 332,983 1,861,582 1,528,599 Total Current Liabilities Payable from Restricted Assets Long-Term Liabilities: Long-Term Contracts Payable 5,917,699 27,482,038 33,399,737 9,238,381 9,238,381 Bonds Payable 27,482,038 42,638,118 15,156,080 Total Long-Term Liabilities 31,271,903 341,587 50,632,939 19,019,449 Total Liabilities Net Assets Invested in capital assets, net of related debt 46,395,954 36,017,151 3,853,092 86,266,197 12,204,007 19,155,527 (126,518) 31,233,016 Unrestricted 117,499,213 $ 58,599,961 $ 55,172,678 $ 3,726,574 Total Net Assets 303,690 Adjustment to reflect consolidation of internal service fund activities related to enterprise funds Net assets of business-type activities The accompanying notes are an integral part of these financial statements. $ 117,802,903 31 Governmental Activities Internal Service Funds $ 15,555,689 48,168 62 61,269 353,468 558 16,019,214 219,610 19,251 21,751,249 21,990,110 11,934,343 10,055,767 10,055,767 26,074,981 51,044 76,790 526,491 500,603 1,154,928 1,154,928 $ 10,055,767 14,864,286 24,920,053 City of Yuma, Arizona Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2004 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 $ Wastewater Fund Other Funds 10,481,236 $ 216,789 - $ 7,612,688 289,482 5,673 10,993,180 69,410 7,682,098 1,992,041 288,511 2,280,552 358,892 1,992,041 288,511 5,673 20,955,830 2,348,767 7,817,737 10,166,504 6,777,258 3,463,831 10,241,089 4,848,910 2,098,656 6,947,566 2,218,024 283,957 2,501,981 13,844,192 5,846,444 19,690,636 7,935,291 2,015,034 9,950,325 752,091 734,532 1,265,194 216,179 53,980 (2,208) (678,108) 139,608 70,969 (441,815) 8,514 440 (6) 4,633 125,389 (2,208) (1,119,929) 152,755 103,571 106,926 - (486,728) (362,332) 5,067 (843,993) 210,497 265,363 372,200 (216,362) 421,201 426,676 4,089,497 (62,042) 4,833,686 561,909 (26,613) 233,340 (233,340) 8,923,183 795,249 (321,995) 255,534 - Change in Net Assets 4,292,818 5,741,182 (216,362) 9,817,638 682,210 Net Assets - Beginning 54,307,143 49,431,496 Operating Expenses: Operations and Maintenance Depreciation and Amortization Total Operating Expenses Operating Income/(Loss) Non-Operating Revenues/(Expenses): Interest Gain/(Loss) on Disposal of Assets Interest and Fiscal Agent Fees Miscellaneous Revenues Total Non-Operating Revenues/(Expenses) Income/(Loss) before Contributions and Transfers Capital Contributions Transfers In Transfers Out Net Assets - Ending $ 58,599,961 $ 55,172,678 $ - Totals $ (221,429) 32 - 24,237,843 3,726,574 $ 94,190 $ The accompanying notes are an integral part of these financial statements. $ 3,942,936 Adjustment for consolidation of internal service fund activities related to enterprise funds Net assets of business-type activities 10,481,236 216,789 7,612,688 Governmental Activities Internal Service Funds 9,911,828 24,920,053 City of Yuma, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2004 Governmental Activities Business-Type Activities-Enterprise Funds Water Fund Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Other Operating Activity Revenue Net Cash Provided by Operating Activities Wastewater Fund $ 10,672,018 $ (2,463,420) (4,288,031) 139,609 4,060,175 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 WIFA - Contracted Loan Interest and Fiscal Agent Fee Payments Net Cash Provided by/(Used for) Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities Other Funds Totals 7,533,255 $ 2,285,757 $ (1,900,069) (981,131) (2,960,675) (1,274,564) 8,514 4,633 2,681,025 (62,042) 566,519 (26,613) (62,042) 539,906 34,695 20,491,030 (5,344,620) (8,523,270) 152,756 Internal Service Funds $ 6,775,895 233,340 (237,955) (4,615) 10,071,808 (829,830) (311,770) (7,044,826) 1,885,382 799,859 (326,610) 165,000 320,603 473,249 485,603 2,826,218 (10,989,863) (493,600) 2,221,158 (675,328) 3,878,964 (22,837,735) 20,770,389 (194,958) (28,074) - 6,705,182 (33,855,672) (493,600) 22,991,547 (870,286) (1,779,243) 110,346 - (7,111,415) 1,616,660 (28,074) (5,522,829) (1,668,897) 49,721 49,721 64,856 64,856 449 449 115,026 115,026 97,857 97,857 Net Increase/(Decrease) in Cash and Cash Equivalents (3,063,560) 4,902,447 2,455 1,841,342 799,945 Cash and Cash Equivalents, July 1 15,529,571 16,424,825 130,228 32,084,624 14,755,743 21,327,272 $ 132,683 $ 33,925,966 $ 15,555,688 734,532 $ (221,427) $ 1,265,196 $ 216,179 Cash and Cash Equivalents, June 30 $ 12,466,011 $ 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 Decrease in Inventories (Increase)/Decrease in Prepaid Items Increase in Accounts Payable Increase in Accrued Wages and Taxes Payable Increase/(Decrease) in Claims Incurred but Not Reported Increase/(Decrease) in Customer Deposits Other Operating Activity Revenue Total Adjustments Net Cash Provided by Operating Activities Noncash Transactions Affecting Financial Position Purchase of Assets with Vendor Provided Financing Contributions of Fixed Assets Total Noncash Transactions Affecting Financial Position 752,091 $ 3,463,832 (378,264) 2,337 (2,377) 18,532 2,098,657 (195,509) (888) 16,455 283,957 2,077 10,885 1,107 14,438 5,846,445 (571,696) 13,222 (2,158) 49,425 2,015,034 (36,671) (353,468) (558) (83,068) 21,727 42,688 139,609 3,308,084 21,189 (1,925) 8,514 1,946,493 1,164 (65,357) 3,218 4,633 256,122 44,080 (65,357) 43,981 152,756 5,510,699 76,790 51,146 1,669,205 $ 4,060,175 $ 2,681,025 $ $ 1,322,317 $ 1,263,279 3,025,058 $ 954,722 - $ 2,585,596 $ 3,979,779 $ - The accompanying notes are an integral part of these financial statements. 33 34,695 $ 6,775,895 $ 1,885,384 $ 4,347,375 2,218,001 $ 6,622 - $ 6,565,375 $ 6,622 34 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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. The following is a summary of the more significant policies. A. Reporting Entity The City is a municipal entity governed by an elected mayor and council. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations and so data from these units are combined with data of the City, the primary government. The component units presented have a June 30 year-end. Blended Component Units Yuma Municipal Property Corporation. The Yuma Municipal Property Corporation's board members are appointed by the City Council. The Corporation was formed to finance the acquisition of certain improvements such as the Yuma Civic and Convention Center, Baseball Complex and Desert Hills Golf Course. The Corporation was also used to finance the acquisition of three public safety buildings, (the police headquarters, a fire station and the Municipal Court facility) and Public Works facilities, along with a clubhouse for the municipal golf course and the new Municipal Complex. The Corporation conducts no business other than with the City and that business is solely the retirement of debt related to the aforementioned acquisitions. Complete financial statements may be obtained at the City of Yuma, City Clerk’s Office, One City Plaza, 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. 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, a statement showing 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, 35 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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. Debt Service Fund – This fund accounts for expenditures to service the debt of the City of Yuma Municipal Property Corporation, a blended component unit, and Special Assessment Improvement Districts. Pledged excise tax and other revenues are transferred to this fund along with property owner’s revenue for payments of long-term bonded debt. Capital Projects 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. 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 Fund. 36 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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 within the business-type 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, Equipment Maintenance, Workers Compensation 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. Proprietary funds classify revenues and expenses as operating or nonoperating items. Operating revenues and expenses relate to the fund’s ongoing operations in providing goods and services. Operating revenues for the City’s proprietary funds are customer charges for sales and services. Operating expenses include the cost of sales or services, administrative expenses and depreciation. All other revenues and expenses are classified as nonoperating revenues and expenses. 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, 2004 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 and Employee Benefits Trust Internal Services Funds are not budgeted). Appropriations not expended at fiscal year end lapse. vi. Budgetary amounts include those as originally adopted, and as amended by Council or City Administrator through the end of the fiscal year. Arizona State Statute does not allow supplemental budgets. vii. Expenditures incurred during the fiscal year may not legally exceed the publicly published budget. The maximum legal expenditure permitted for the fiscal year is the total adopted budget. 2) Budgetary Reporting and Budgetary Basis of Accounting: The City has opted to display budgetary information schedules in a manner similar to its adopted budget; therefore, the information is displayed outside its basic financial statements. Budgetary comparisons are presented for the General Fund and the major Special Revenue Funds in the Required Supplementary Information section. Budgetary comparisons for the Debt Service Fund, the Capital Projects Fund, the nonmajor governmental funds and the proprietary funds are presented in the Other Supplementary Information sections. For proprietary funds, the budgetary comparison includes reconciliation to the accrual-based operating statements. The budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP) with the exception of the Enterprise Funds and for Internal Service Funds for which budgets are adopted. For these funds, expenditures related to debt service and to capital acquisition are budgeted in the same manner as governmental funds. Depreciation is not budgeted. 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 (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. 38 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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, 2004, the estimated amounts of unbilled revenues for the Water and Wastewater Enterprise Funds and the Solid Waste Special Revenue Fund are $1,220,551, $599,330, and $165,314, 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 33 to 100 years 20 to 50 years Infrastructure Equipment 35 years 2 to 50 years For proprietary fund assets constructed with bond proceeds, interest costs have been capitalized, net of interest revenue. Gains or losses are recognized when assets are retired from service or are otherwise disposed. 7) 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, 39 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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. All governmental funds (excepting the Capital Projects, Debt Service, Local Transportation Assistance and Two Percent Tax Funds), to varying degrees, liquidate these benefits. General and holiday leave with related benefits in excess of this accumulation, $1,614,924, 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 $144,906, $128,426, $53,756 and $3,116 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, 2004, the amount accumulated in sick pay and related benefits is $6,136,618, including $143,278 attributable to Internal Service Funds and $767,070 to Enterprise Funds. Under GASB Statement No. 16, Accounting for Compensated Absences, the City uses the “termination payment” method to determine its provision for major illness leave liability. The portion of the major illness leave liability related to governmental fund types, $459,407, is reported within the governmental activities column of the government-wide financial statements, as current amounts of that liability have been determined to be immaterial and are not recorded within the respective governmental funds. The provision for probable future major illness leave and related benefits attributable to the Equipment Maintenance Internal Service Fund is $7,820 and Water, Wastewater, and Desert Hills and Arroyo Dunes Golf Course 40 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Enterprise Funds of $37,144, $25,414, $12,672 and $1,012 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 the Debt Service Fund. The City had not budgeted for its annual interest payment for the new Special Assessment Improvement District #67. As a result, the City exceeded its appropriations by $80,251. 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, which 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. 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, excluding mortgagebacked securities; 41 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 2. Fully insured or collateralized certificates of deposit and other evidence of deposit at banks and savings and loan associations; 3. Bankers acceptances issued by the ten largest domestic banks; 4. Commercial paper rated A-1/P-1; 5. Repurchase agreements whose underlying collateral consists of the foregoing, provided a signed PSA Master Repurchase Agreement is on file with the counter party bank or broker/dealer; 6. Money Market Funds whose portfolio consists of the foregoing; 7. The State of Arizona Local Government Investment Pool. 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 enterprises .......................................................................No more than 80% 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 35% Maximum per issuer...........................................................................10% 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 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, 2004, the carrying amount of the City’s deposits was $251,459 and the bank balance was $335,783. The difference of $84,324 relates to outstanding checks and unrecorded deposits in transit. The City’s deposits of $335,783 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 42 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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 $100,000 covered by federal depository insurance, which is Category 1, and $235,783 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. Reported Amount Category 1 U.S. Treasuries Federal Agencies $ 17,286,451 50,557,697 $ 67,844,148 $ Money Market Investments in State Investment Pool $ 17,286,451 50,557,697 67,844,148 8,095,630 23,666,437 99,606,215 Fair Value $ $ 17,285,598 50,541,187 67,826,785 8,095,630 23,666,437 99,588,852 Cash and Investments are presented on the Statement of Net Assets as follows: On Hand $ Deposits Investments Total Cash and Investments per Statement of Net Assets $ 21,610 251,459 99,606,215 99,879,284 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 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 2002-03 (Tax Year 2002) and fiscal year 2003-04 (Tax Year 2003), follow: 43 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Tax Year 2002 Tax Year 2003 $299,108,816 1.8621 $5,569,705 $305,708,909 None $5,339,296 $186,250 $234,420 Primary Assessed Valuation Primary Tax Rate Primary Tax Levy Secondary Assessed Valuation Secondary Tax Rate/Levy Current Tax Collections Delinquent Tax Collections Delinquent Taxes Outstanding as of June 30 $315,700,166 1.8693 $5,901,384 $322,623,524 None $5,656,980 $200,845 $223,534 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, 2004 Special Revenue Funds - Solid Waste Enterprise Funds: Water Wastewater $ 2003 254,056 $ 2,082,768 1,080,997 2004 158,815 $ 1,687,517 975,090 2003 10,802 60,359 27,223 $ 4,551 43,371 21,297 D. Due from Other Governments (Intergovernmental Receivables) Amounts due from other government units at June 30, 2004, are as follows: Fund Federal Agencies County State Local Total Governmental Funds Major Funds General Highway User Revenue City Road Tax Community Redevelopment Grants Capital Projects Non-major Funds Public Safety Tax Recreation Complex Solid Waste Mall Maintenance Enterprise Funds Water Wastewater Desert Hills Golf Course $ 2,272,717 137,706 498,418 - $ - 151,089 638,410 725,679 80,749 410,000 $ 290,173 50 - 43,843 - 15,570 36,497 - $ 2,943 70,653 - $ 2,494,459 653,980 725,679 137,706 615,664 410,000 14,935 - 290,173 14,935 50 2,943 508 507,522 633 508 633 - 463,679 - 62 - - Internal Service Funds Equipment Maintenance Total $ 2,952,684 $ 2,297,353 44 $ 55,010 $ 549,267 62 $ 5,854,314 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 E. Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2004, follows: Balance Balance June 30, 2003 Increases Decreases June 30, 2004 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 $ 11,576,484 $ 14,926,264 2,297,226 $ 11,776,908 26,502,748 14,074,134 1,242,419 39,334,463 56,295,678 16,747,299 121,214,375 31,693,349 225,950,701 1,548,858 2,501,075 6,125,362 2,378,161 12,553,456 25,454 3,025 1,391,650 1,420,129 57,819,082 19,248,374 127,336,712 32,679,861 237,084,029 9,247,228 6,375,039 65,966,468 17,070,074 98,658,809 1,892,442 1,412,628 2,917,930 3,212,908 9,435,908 19,124 1,613 1,350,873 1,371,610 11,120,546 7,787,667 68,882,785 18,932,110 106,723,107 127,291,892 3,117,548 48,519 130,360,922 $ 153,794,640 $ 294,321 $ 948,098 17,191,681 $ 1,290,939 $ 169,695,385 Government activities capital assets net of accumulated depreciation at June 30, 2004, include: General Capital Assets, Net Internal Service Fund Capital Assets, Net Total $ 159,639,618 10,055,767 $ 169,695,385 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 $ 1,608,652 1,227,443 1,505,581 27,426 126,851 2,928,640 2,011,315 Total $ 45 13,579,389 25,755,074 9,435,908 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Business-type activities: Balance June 30, 2003 Capital Assets Not Being Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated $ Other Capital Assets: Buildings Improvements Equipment Total Other Capital Assets 1,171,030 14,528,591 15,699,621 Increases $ 31,430,007 31,430,007 Decreases $ - Balance June 30, 2004 $ 1,171,030 45,958,598 47,129,628 7,945,197 123,694,117 3,047,246 134,686,560 8,015,052 152,742 8,167,794 60,524 60,524 7,945,197 131,709,169 3,139,464 142,793,830 Less Accumulated Depreciation for: Buildings Improvements Equipment Total Accumulated Depreciation 3,599,501 48,456,962 1,954,912 54,011,375 202,088 5,329,840 217,756 5,749,684 58,316 58,316 3,801,589 53,786,802 2,114,352 59,702,743 Other Capital Assets, Net 80,675,185 2,418,110 2,208 83,091,087 Total Capital Assets, Business-type activities $ 96,374,806 $ 3,367,069 2,098,657 283,958 5,749,684 $ 33,848,117 $ 2,208 $ 130,220,715 Depreciation was charged to programs as follows: W ater W astewater Golf courses Total $ 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. 46 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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. 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, 2004, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 5.70 percent (5.20 percent retirement and 0.50 percent long-term disability) of the members’ annual covered payroll. The City’s contribution to ASRS for the years ended June 30, 2004, 2003, and 2002 were $1,275,114, $538,377, and $500,530, 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 13.49 percent. The City’s contributions to EORP for the years ended June 30, 2004, 2003 and 2002 were $27,524, $11,103, and $8,027, respectively, which were equal to the required contributions for the year. Agent plans - For the year ended June 30, 2004, 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 5.40 percent for police and 10.77 percent for fire. Annual Pension Cost - The City’s pension cost for the two agent plans for the year ended June 30, 2004, 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 5.40% $10,881 $10,881 June 30, 2003 Entry Age 10.77% $213,451 $213,451 June 30, 2003 Entry Age 9% 6.5% - 9.5% 5.5% None Level Percentage Open 20 years Smoothed market 9% 6.5% - 9.5% 5.5% None Level Percentage Open 20 years Smoothed market 47 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Trend Information - Information for each of the agent plans as of the most recent actuarial valuations follows: POLICE FIRE 2001 2002 2003 2001 2002 2003 Annual Percent Net Pension Pension Cost Contributed Obligation 86,526 133,141 10,881 251,685 168,473 213,451 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% - 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 $62,141. At June 30, 2004, unrestricted net assets amounted to $206,290. In May, Council passed a resolution authorizing City membership in the Yuma Area Benefit Consortium. The Consortium, established in 1997, is composed of other governmental entities in the Yuma area for the purpose of providing insurance benefits to employees through self-funded or insured programs. Council also approved a $200,000 contribution to fund start-up costs as estimated by the Consortium. Effective July 1, 2004 City employees will be insured under the Consortium plans for health, dental and employee assistance programs. H. Long-Term Liabilities The following changes occurred in long-term liabilities during the fiscal year ended June 30, 2004: Governmental activities: July 1, 2003 Yuma Municipal Property Corporation Improvement District #67 Contracts Payable Compensated Absences $ 67,435,000 3,320,000 1,980,387 $ 7,280,000 272,408 $ 3,995,000 805,000 178,464 $ 63,440,000 7,280,000 2,515,000 2,074,331 $ 3,020,000 792,000 1,364,236 $ 72,735,387 $ 7,552,408 $ 4,978,464 $ 75,309,331 $ 5,176,236 $ 11,385,000 10,412,799 $ 23,377,947 $ 880,000 4,609 $ 10,505,000 33,786,137 $ 930,000 386,400 $ 21,797,799 $ 23,377,947 $ 884,609 $ 44,291,137 $ 1,316,400 Total Governmental Activity Long-Term Debt Additions Retirements June 30, 2004 Within One Year Business-type activities: General Obligation Bonds Contracts Payable Total Business-type Activity Long-Term Debt On the Statement of Net Assets, the current portion of governmental activity long-term debt of $3,812,000 excludes the current portion of compensated absences of $1,364,236 that is recorded within accrued liabilities. The long-term portion of governmental activity long-term debt is net of $118,502 of unamortized deferred charges. For business-type activities, long-term debt excludes the current portion of bonds payable of $697,500 and current portion of contracts payable of $302,053 that is recorded within liabilities payable from restricted assets. Also, the long-term portion is net of $336,619 of unamortized issuance costs. 48 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Contracts Payable Governmental Activities - During fiscal year 2004, the City held two loans recorded as long-term contracts payable. The first was a $500,000 note with the U.S. Department of Housing and Urban Development Section 108 program for use in neighborhood revitalization. Proceeds will generate loans to qualified neighborhood residents and future payments will be funded by loan repayments of the recipients. Two loans were obtained from the Arizona State Department of Transportation Highway Expansion and Extension Program (HELP). Proceeds of $2,000,000 and $1,000,000 were used for two street projects. Payments will originate from the City Road Tax Fund. Annual debt service requirements under these contracts are as follow: C o n tra c ts P a ya b le J u ly 1 , S e c tio n 1 0 8 P rin c ip a l HELP In te re s t P rin c ip a l T o ta l In te re s t P rin c ip a l 2004 2005 2006 2007 $ 9 2 ,0 0 0 9 9 ,0 0 0 1 0 7 ,0 0 0 1 1 7 ,0 0 0 $ 1 2 ,7 5 8 1 0 ,6 6 6 7 ,8 2 2 4 ,2 7 4 $ 7 0 0 ,0 0 0 7 0 0 ,0 0 0 7 0 0 ,0 0 0 - $ 3 8 ,0 3 4 2 5 ,9 0 5 1 3 ,7 7 6 1 ,6 4 7 $ 7 9 2 ,0 0 0 7 9 9 ,0 0 0 8 0 7 ,0 0 0 1 1 7 ,0 0 0 T o ta l $ 4 1 5 ,0 0 0 $ 3 5 ,5 2 0 $ 2 ,1 0 0 ,0 0 0 $ 7 9 ,3 6 2 $ 2 ,5 1 5 ,0 0 0 In te re s t $ 5 0 ,7 9 2 3 6 ,5 7 1 2 1 ,5 9 8 5 ,9 2 1 $ 1 1 4 ,8 8 2 Business-type activities – During fiscal year 2004, the City began construction of major additions to its utility infrastructure, including new, additional treatment plants for its water and wastewater systems. Financing for these additions comes from the Arizona Water Infrastructure Financing Authority (WIFA) in the form of 20 year loan contracts. The City will draw from these approved loans until their limits are reached. Current loans are $10 million for water projects ($6,304,099 drawn) and $44 million for wastewater projects ($27,482,038 drawn). An additional $36 million loan for water projects was requested and approved July 14, 2004. Debt retirement schedules will be finalized once the disbursement of loan proceeds is complete. Bonded Debt - Excluding Refunded Debt New Debt Issue – Special Assessment Bonds – Special assessment bonds are issued by the City on behalf of improvement districts created by property owners for a specific purpose. Property owners in the designated districts agree to be assessed for the principal and interest costs of repaying the bonds. As trustee for improvement districts, the City is responsible for collecting the assessments levied against the owners of the property within the improvement districts and for disbursing these amounts to retire the bonds issued to finance the improvements. All activity related to these bonds is recorded in the City’s Debt Service Fund. In September 2003 the Council, by resolution, authorized an agreement with Yuma Palms, L.L.C. related to the development of a regional shopping center in Yuma. Improvement District #67 was created with Yuma Palms L.L.C. as the sole property owner. On March 4, 2004, $7,280,000 in special assessment bonds was issued for the purpose of constructing City-owned water and sewer utilities, street, and storm drainage improvements. The ten-year bonds have a stated rate of 3.70 percent with annual principal payments commencing January 2006 through 2014. The development agreement also contains provisions for the City to establish a bond enhancement account and to pay sales tax rebates (matching the debt service payments) to the developer. 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 49 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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: 1998 Issue 2001 Issue 2003 – Series A 2003 – Series B 2003 – Series C Excise Taxes Excise Taxes Excise and Public Safety Taxes Excise Taxes Excise and Special Sales 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. Interest Rate G eneral O bligation Bonds: 1992 Project 1997 Refunding Issue Date M aturity Date 6.13% 12/16/1992 2012 4.90% 12/1/1997 2012 Authorized and Issued $ 14,370,000 3.74% 4.94% 4.21% 3.67% 2.97% 4.18% $ 8,085,000 12/1/1998 3/21/2001 2/18/2003 2/18/2003 2/18/2003 2/18/2003 2004 2025 2015 2015 2010 2022 $ Total Bonds Authorized and Issued 2,760,000 7,745,000 (336,619) - Unam ortized deferred am ount on refunding Yum a M unicipal Property Corporation Bonds: 1998 Issue 2001 Issue 2003 - Series A Refunding 2003 - Series B Refunding 2003 - Series C Refunding 2003 - Series B Addition Total M PC Bonds O utstanding 22,455,000 10,168,381 6,020,000 34,150,000 14,640,000 2,905,000 1,445,000 9,000,000 1,300,000 34,150,000 14,640,000 2,905,000 1,445,000 9,000,000 68,160,000 63,440,000 90,615,000 $ 73,608,381 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, 2004 follows: Water, Etc. (20%) All Other (6%) Legal Limit Outstanding G.O. Debt $ 64,524,705 9,575,000 $ 19,357,411 - Available Debt Margin $ 54,949,705 $ 19,357,411 50 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Annual Debt Service Requirements to Maturity G.O. Bonds 1992 Issue Principal Interest Total 865,000 162,950 1,027,950 920,000 112,780 1,032,780 975,000 58,500 1,033,500 $ 2,760,000 $ 334,230 $ 3,094,230 MPC Bonds 1998 Series Principal Interest Total 1,300,000 50,050 1,350,050 $ 1,300,000 $ 50,050 $ 1,350,050 Improvement District No. 67 Bonds Principal Interest Total 89,787 89,787 269,360 269,360 680,000 256,780 936,780 710,000 231,065 941,065 740,000 204,240 944,240 770,000 176,305 946,305 805,000 147,168 952,168 840,000 116,736 956,736 875,000 85,008 960,008 910,000 51,985 961,985 950,000 17,575 967,575 $ 7,280,000 $ 1,646,009 $ 8,926,009 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1997 Refunding Bonds 65,000 374,622 439,622 70,000 371,665 441,665 75,000 368,480 443,480 1,115,000 365,067 1,480,067 1,170,000 312,105 1,482,105 1,210,000 257,115 1,467,115 1,275,000 196,615 1,471,615 1,345,000 134,140 1,479,140 1,420,000 69,580 1,489,580 $ 7,745,000 $ 2,449,389 $ 10,194,389 MPC Bonds 2001 Series 1,647,825 1,647,825 890,000 1,647,825 2,537,825 925,000 1,612,225 2,537,225 965,000 1,575,225 2,540,225 1,000,000 1,536,625 2,536,625 1,040,000 1,494,125 2,534,125 1,080,000 1,449,925 2,529,925 1,130,000 1,404,025 2,534,025 1,175,000 1,356,000 2,531,000 1,235,000 1,297,250 2,532,250 1,295,000 1,235,500 2,530,500 1,355,000 1,170,750 2,525,750 1,755,000 1,103,000 2,858,000 1,840,000 1,015,250 2,855,250 1,935,000 923,250 2,858,250 2,030,000 826,500 2,856,500 2,130,000 725,000 2,855,000 2,240,000 618,500 2,858,500 2,350,000 506,500 2,856,500 2,470,000 389,000 2,859,000 2,590,000 265,500 2,855,500 2,720,000 136,000 2,856,000 $ 34,150,000 $ 23,935,800 $58,085,800 MPC Bonds 2003 Series 345,000 346,858 691,858 355,000 338,232 693,232 365,000 329,358 694,358 375,000 320,233 695,233 385,000 309,920 694,920 395,000 298,370 693,370 410,000 285,532 695,532 420,000 272,207 692,207 435,000 257,507 692,507 450,000 241,847 691,847 470,000 224,973 694,973 490,000 207,347 697,347 515,000 182,847 697,847 535,000 157,098 692,098 560,000 134,628 694,628 585,000 110,828 695,828 610,000 85,672 695,672 635,000 58,833 693,833 665,000 30,258 695,258 $ 9,000,000 $ 4,192,548 $ 13,192,548 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 MPC Bonds 2003 Refunding 1995A 980,000 582,228 1,562,228 1,005,000 557,728 1,562,728 1,030,000 532,603 1,562,603 1,060,000 506,853 1,566,853 1,095,000 477,703 1,572,703 1,150,000 422,953 1,572,953 1,210,000 365,453 1,575,453 1,285,000 304,953 1,589,953 1,350,000 240,703 1,590,703 1,425,000 173,203 1,598,203 1,490,000 119,765 1,609,765 1,560,000 62,400 1,622,400 $ 14,640,000 $ 4,346,545 $ 18,986,545 MPC Bonds 2003 Refunding 1995B 205,000 97,523 302,523 210,000 92,397 302,397 210,000 87,147 297,147 215,000 81,897 296,897 230,000 75,985 305,985 235,000 69,085 304,085 245,000 61,448 306,448 250,000 53,485 303,485 260,000 44,735 304,735 270,000 35,375 305,375 280,000 25,250 305,250 295,000 14,750 309,750 $ 2,905,000 $ 739,077 $ 3,644,077 MPC Bonds 2003 Refunding 1995C 190,000 41,025 231,025 195,000 36,275 231,275 200,000 31,400 231,400 205,000 26,400 231,400 210,000 20,763 230,763 220,000 14,463 234,463 225,000 7,313 232,313 $ 1,445,000 $ 177,639 $ 1,622,639 July 1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 51 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 I. Interfund Transfers Transfers Out From / Into General Fund Into / From Governmental activities - major funds: HURF $ 16,124 General Fund Solid Waste 943,914 Mall Maintenance 123,230 HURF Debt Service 3,119,164 Capital Projects 1,036,988 Debt Service Road Tax Debt Service Capital Projects Capital Projects Grants Capital Projects Community Redevelopment Capital Projects HURF Capital Projects LTAF General Fund Debt Service Wastewater Capital Projects Debt Service Capital Projects Debt Service Solid Waste Capital Projects Recreation Complex Recreation Complex Two Percent Tax Capital Projects Desert Hill G.C. Total Governmental Activities Public Safety Tax Desert Hills G.C. Water Wastewater Transfers In Debt Service Debt Service Debt Service Capital Projects Capital Projects $ 151,985 General Fund 16,124 General Fund HURF 100,902 Capital Projects 1,696,292 Public Safety Tax 4,902,060 Solid Waste Desert Hills G.C. 3,506,915 Wastewater Water General Fund Capital Projects 962,651 HURF Road Tax 151,985 Community Redevelopment 98,281 Grants 561,909 LTAF Public Safety Tax Two Percent Tax Recreation Complex Wastewater Nonmajor funds: 376,068 General Fund Solid Waste 3,119,164 100,902 98,281 2,270,853 20,873 233,340 23,942 62,042 1,036,988 1,696,292 4,902,060 962,651 3,506,915 376,068 134,881 145,002 30,516 2,671 2,270,853 134,881 20,873 30,516 1,650,000 145,002 233,340 22,081,948 Recreation Complex Mall Maintenance 943,914 Two Percent Tax General Fund 1,650,000 123,230 Total Governmental Activities 21,608,694 Business-type activities: 233,340 Desert Hills G.C. 62,042 Wastewater 23,942 2,671 Two Percent Tax Capital Projects 233,340 561,909 321,995 795,249 Total Transfers Out $ 22,403,943 $ 22,403,943 Total Enterprise Funds Total Transfers In 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 Debt Service Fund rather than within the Enterprise Funds. As for the remaining transfers, they include operating subsidies from the General Fund to HURF ($16,124), Solid Waste Fund ($943,914) and Mall Maintenance ($123,230); and from the Two Percent Tax Fund to Recreation Complex Fund ($1,650,000) and Desert Hills Golf Course ($233,340). 52 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 Interfund activity is eliminated within the governmental activities column of the Statement of Activities. Only transfers between governmental and business-type activities appear on that statement. The net asset transfers in of $473,254 are for capital assets. J. Interfund Receivables and Payables Interfund balances at June 30, 2004, follow: Interfund Receivable Nonmajor Fund Major Funds Two Percent Interfund Payable Major Governmental Funds: Community Redevelopment Fund Grants Fund Nonmajor Governmental Funds: Solid Waste Fund Nonmajor Enterprise Funds: Desert Hills Golf Course Fund Internal Service Funds: Equipment Maintenance Workers Compensation Total Receivable Tax General $ Total 68,591 27,812 - 68,591 27,812 132,130 - 132,130 - 156,210 156,210 335,603 165,000 - 335,603 165,000 729,136 $ 156,210 $ 885,346 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, $147,480, represents net balances allocated to businesstype activities for consolidation of internal service funds net profits. K. Fund Equity Unreserved Fund Balances – Designations - Uncompleted Projects - $6,920,455 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 - $1,055,522 for subsequent year expenditures for insurance purposes; an additional $500,000 for capital projects; and, public/educational/government (PEG) Facility -$269 remaining for continuing development of the channel on the local cable system. Future Community Improvements - $797,224 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. 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 have annual limits per employee, making unlikely the prospect that claims would be incurred in excess of the fund’s ability to pay. 53 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 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 $62,141 reported in the Internal Service Fund, Employee Benefits Trust Fund at June 30, 2004 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 2004, 2003, and 2002 were: Fiscal Year 2003-04 2002-03 2001-02 Beginning of Year Liability $ 51,775 47,642 42,000 Claim s and Changes In Estim ates $ 496,971 400,801 382,920 End of Year Liability Claim Paym ents $ 486,605 396,668 377,278 $ 62,141 51,775 47,642 The City is self-insured for Workers Compensation. The changes to claims liability amounts in fiscal years 2004, 2003, and 2002 were: Fiscal Year Beginning of Year Liability 2003-04 2002-03 2001-02 $ 423,570 261,661 336,656 Claims and Changes In Estimates $ 345,353 582,648 203,460 Claim Payments End of Year Liability $ 304,573 420,739 278,455 $ 464,350 423,570 261,661 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 The City has active construction projects as of June 30, 2004. At year-end the government’s commitments with contractors for specific projects are as follows: Construction Commitments Original Contract General Government Public Safety Parks & Recreation Environmental Health Streets Water System Wastewater System Expenditures to Date 100,618 4,054,814 3,991,679 347,865 7,742,528 17,522,627 48,024,567 $ 81,784,698 54 Remaining Commitment 26,392 2,361,434 3,038,505 331,138 2,296,722 8,590,983 22,897,103 $ 39,542,277 74,226 1,693,380 953,174 16,727 5,445,806 8,931,644 25,127,464 $ 42,242,421 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2004 V. 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, 2004. B. Compliance The City participates in federally-funded and state-funded programs administered by various government agencies. The programs included in these financial statements may be subject to program compliance and/or financial monitoring by the granting agency or its representatives. The amount, if any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time. 55 56 REQUIRED SUPPLEMENTARY INFORMATION 57 Schedule of Funding Progress Public Safety Personnel Retirement System Unfunded POLICE 2001 2002 2003 FIRE 2001 2002 2003 Actuarial Funding Actual Value Accrued Liability of Plan Assets Liability (Excess) Annual Liability as Funded Covered Percentage of Ratio Payroll Payroll 38,686,969 38,521,463 38,872,623 26,356,089 30,716,985 34,348,986 (12,330,880) (7,804,478) (4,523,637) 146.8% 125.4% 113.2% 5,888,020 6,766,977 7,103,014 -% -% -% 31,549,536 30,698,121 30,424,278 25,790,543 29,078,933 31,830,479 (5,758,993) (1,619,188) 1,406,201 122.3% 105.6% 95.6% 4,141,659 4,466,840 4,459,268 -% -% 31.5% 58 City of Yuma, Arizona Budgetary Comparison Schedule General Fund For the Year Ended June 30, 2004 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 Amounts Available for Appropriation Budget Final Original $ 13,233,000 $ 13,233,000 Variance with Final Budget Actual Positive Amounts (Negative) $ 15,575,898 $ 2,342,898 5,901,384 150,000 14,325,000 248,000 1,829,000 22,453,384 5,901,384 150,000 14,325,000 248,000 1,829,000 22,453,384 5,656,980 200,845 14,849,984 242,000 1,935,952 22,885,761 260,000 27,000 1,443,500 6,000 1,736,500 260,000 27,000 1,443,500 6,000 1,736,500 291,080 32,115 2,683,414 9,485 3,016,094 31,080 5,115 1,239,914 3,485 1,279,594 6,132,504 6,996,136 2,587,000 23,000 15,738,640 6,132,504 6,996,136 2,587,000 23,000 15,738,640 6,535,654 7,002,250 2,852,832 36,132 24,325 16,451,193 403,150 6,114 265,832 13,132 24,325 712,553 509,500 440,000 649,848 44,660 1,644,008 509,500 440,000 649,848 44,660 1,644,008 925,551 381,442 488,262 56,607 1,851,862 416,051 (58,558) (161,586) 11,947 207,854 685,000 685,000 685,000 685,000 725,948 725,948 40,948 40,948 320,000 83,500 403,500 320,000 83,500 403,500 70,322 146,948 217,270 (249,678) 63,448 (186,230) 10,000 88,500 98,500 42,759,532 863,000 56,855,532 10,000 88,500 98,500 42,759,532 863,000 56,855,532 59 (244,404) 50,845 524,984 (6,000) 106,952 432,377 345,401 335,401 85,809 (2,691) 431,210 332,710 45,579,338 2,819,806 151,985 (711,015) 61,307,221 4,451,689 Continued on next page City of Yuma, Arizona Budgetary Comparison Schedule General Fund For the Year Ended June 30, 2004 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 City Prosecutor Administrative Services Accounting Customer Services Information Technology Services Materials Management Human Resources Facilities Maintenance Intragovernmental Charges Total General Government Expenditures Less Capital Outlay Less Debt Service Principal Total General Government Deductions General Government Operating Expenditures Public Safety: Police Administration - Field Operations Police Reserve Unit Police Support Services Police Communication Center 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 60 Final Actual Amounts Variance with Final Budget Positive (Negative) 241,308 138,750 525,047 104,440 310,696 569,564 222,292 863,000 688,091 445,200 192,818 187,557 708,938 395,625 2,137,497 559,534 704,649 897,484 (2,575,230) 7,317,260 376,462 241,308 138,750 525,047 104,440 310,696 575,564 222,292 863,000 688,091 445,200 192,818 187,557 708,938 395,625 2,137,497 559,534 704,649 897,484 (2,575,230) 7,323,260 360,811 207,603 110,926 524,653 131,691 290,384 228,617 213,456 383,595 856,939 197,048 181,189 150,057 603,175 360,766 1,657,433 572,532 639,213 729,691 (2,575,230) 5,463,738 34,918 33,705 27,824 394 (27,251) 20,312 346,947 8,836 479,405 (168,848) 248,152 11,629 37,500 105,763 34,859 480,064 (12,998) 65,436 167,793 1,859,522 325,893 376,462 6,940,798 360,811 6,962,449 20,000 54,918 5,408,820 (20,000) 305,893 1,553,629 11,613,260 5,750 2,259,865 1,670,843 432,071 188,520 5,865,650 484,259 531,287 74,969 91,003 78,012 405,733 1,084,817 24,786,039 45,020 24,741,019 11,613,260 5,750 2,258,251 1,666,457 423,901 185,690 5,882,355 482,559 531,287 70,964 91,003 78,012 405,733 1,084,817 24,780,039 80,015 24,700,024 10,890,527 722,733 2,752 2,998 2,023,868 234,383 1,520,585 145,872 369,198 54,703 170,341 15,349 6,047,031 (164,676) 445,773 36,786 509,492 21,795 41,790 29,174 86,387 4,616 88,830 (10,818) 405,733 1,097,136 (12,319) 23,699,443 1,080,596 76,746 3,269 23,622,697 1,077,327 Continued on next page City of Yuma, Arizona Budgetary Comparison Schedule General Fund For the Year Ended June 30, 2004 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 Art Center Intragovernmental Charges Total Parks, Recreation and Culture Less Capital Outlay Parks, Recreation and Culture Operating Expenditures Environmental Health and Protection: Environmental Management Intragovernmental Charges Environmental Health and Protection Operating Expenditures Community Design and Development: Community Development Administration Engineering Business Development Planning and Neighborhood Services Heritage Area Development 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 Budgetary Fund Balance, June 30 Final Actual Amounts Variance with Final Budget Positive (Negative) 364,674 3,318,156 249,069 508,930 149,664 207,265 236,826 551,293 503,862 (145,001) 5,944,738 80,657 364,674 3,318,156 249,069 510,613 149,664 207,265 236,826 549,610 503,862 (145,001) 5,944,738 125,257 363,488 3,113,667 222,528 496,662 114,504 184,426 207,549 511,550 404,331 (145,001) 5,473,704 90,316 1,186 204,489 26,541 13,951 35,160 22,839 29,277 38,060 99,531 471,034 34,941 5,864,081 5,819,481 5,383,388 436,093 1,005,368 (799,124) 1,005,368 (799,124) 993,263 (799,124) 12,105 - 206,244 206,244 194,139 12,105 539,425 979,067 425,000 1,448,865 182,903 317,973 3,893,233 27,650 533,125 954,902 425,000 1,479,330 182,903 317,973 3,893,233 29,090 543,371 830,492 409,233 1,414,338 184,548 317,423 3,699,405 31,572 3,865,583 41,617,725 529,789 3,864,143 41,552,341 595,173 3,667,833 38,276,877 233,552 196,310 3,275,464 361,621 42,147,514 6,096,806 48,244,320 42,147,514 6,096,806 48,244,320 20,000 38,530,429 5,239,420 43,769,849 (20,000) 3,617,085 857,386 4,474,471 $ 8,611,212 $ 8,611,212 61 (10,246) 124,410 15,767 64,992 (1,645) 550 193,828 (2,482) $ 17,537,372 $ 8,926,160 Concluded City of Yuma, Arizona Budgetary Comparison Schedule Highway User Revenue Fund For the Year Ended June 30, 2004 Final 3,418,374 Actual Amounts $ 4,878,727 7,299,620 7,299,620 7,198,891 (100,729) 110,000 110,000 26,621 (83,379) 10,000 7,419,620 21,773 10,859,767 10,000 7,419,620 21,773 10,859,767 21,840 7,247,352 16,124 12,142,203 11,840 (172,268) (5,649) 1,282,436 845,236 845,236 783,718 273,042 2,635,503 478,344 437,465 523,685 393,954 273,042 2,635,503 478,344 437,465 523,685 393,954 9,639 2,412,502 493,570 442,175 424,319 413,193 21,773 75,000 5,684,002 3,823,565 9,507,567 21,773 75,000 5,684,002 3,823,565 9,507,567 16,122 22,476 5,017,714 1,797,194 6,814,908 Budget 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 Engineering 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 $ Variance with Final Budget Positive (Negative) $ 1,460,353 Original 3,418,374 1,352,200 62 $ $ 1,352,200 $ 5,327,295 61,518 263,403 223,001 (15,226) (4,710) 99,366 (19,239) 5,651 52,524 666,288 2,026,371 2,692,659 $ 3,975,095 City of Yuma, Arizona Budgetary Comparison Schedule City Road Tax Fund For the Year Ended June 30, 2004 Final $ 2,624,538 7,042,000 7,042,000 7,423,730 68,000 68,000 15,553 7,110,000 9,734,538 7,110,000 9,734,538 68,233 7,507,516 10,225,327 68,233 397,516 490,789 242,340 336,995 242,340 336,995 242,340 329,380 7,615 700,000 38,034 1,317,369 7,967,200 9,284,569 700,000 38,034 1,317,369 7,967,200 9,284,569 700,000 38,034 1,309,754 4,902,060 6,211,814 7,615 3,065,140 3,072,755 449,969 $ 4,013,513 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Streets Street Maintenance Retention Basin Maintenance Debt Service Principal Interest and Fiscal Agent Fees Total Expenditures Transfers to Other Funds Total Charges to Appropriations Budgetary Fund Balance, June 30 381,730 Original $ 2,624,538 Actual Amounts $ 2,717,811 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Special Road Sales Tax Use of Money and Property Interest Miscellaneous Other Total Revenues Variance with Final Budget Positive (Negative) $ 93,273 $ 449,969 63 $ (52,447) $ 3,563,544 City of Yuma, Arizona Budgetary Comparison Schedule Grants Fund For the Year Ended June 30, 2004 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 $ 8,668 $ 8,668 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) $ - 10,289,744 2,122,204 3,638,822 10,289,744 2,122,204 3,638,822 4,934,157 235,397 - (5,355,587) (1,886,807) (3,638,822) 43,797 16,094,567 16,103,235 43,797 16,094,567 16,103,235 5,626 7,732 5,182,912 5,191,580 5,626 (36,065) (10,911,655) (10,911,655) 2,461,150 49,297 2,662,470 1,000 436,850 5,610,767 10,483,800 16,094,567 2,169,677 54,781 2,918,459 31,000 436,850 5,610,767 10,483,800 16,094,567 1,269,025 21,704 303,730 31,047 52,294 1,677,800 3,506,915 5,184,715 900,652 33,077 2,614,729 (47) 384,556 3,932,967 6,976,885 10,909,852 8,668 64 $ 8,668 $ 6,865 $ (1,803) City of Yuma, Arizona Budgetary Comparison Schedule Community Redevelopment Fund For the Year Ended June 30, 2004 Budget Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government State Government Miscellaneous Loan Repayments Other Sale of Real Property Original $ - Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Debt Service Principal Interest and Fiscal Agent Fees Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Final $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 2,949,869 - 2,949,869 - 1,755,242 3,451 (1,194,627) 3,451 600,000 3,549,869 3,549,869 600,000 3,549,869 3,549,869 36,110 129,748 575,000 2,499,551 2,499,551 36,110 (470,252) 575,000 (1,050,318) (1,050,318) 2,319,001 2,319,001 1,437,887 881,114 85,000 13,468 2,417,469 1,132,400 3,549,869 85,000 13,468 2,417,469 1,132,400 3,549,869 85,000 14,013 1,536,900 962,651 2,499,551 (545) 880,569 169,749 1,050,318 - 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. 69 City of Yuma, Arizona Combining Balance Sheet Nonmajor Governmental Funds June 30, 2004 Special Revenue 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 Local Transportation Assistance Solid Waste 35,096 $ 1,854,757 $ $ 842 35,938 290,173 10,262 $ 2,155,192 243,254 50 $ 243,304 12,146 14,935 2,507 9,014 890 $ 1,338,483 $ 145 $ 58,294 $ 75,669 $ 58,294 35,505 132,130 243,304 - - 9,014 890 - 44,600 1,169,051 1,223,555 145 - $ 35,793 35,793 2,096,898 2,096,898 35,938 $ 2,155,192 70 - Recreation Complex $ Fund Balances Reserved for: Inventory Prepaid Items Unreserved: Designated for Subsequent Years' Expenditures Undesignated Total Fund Balance Total Liabilities and Fund Balance Public Safety Tax $ 243,304 $ 1,298,991 49,762 43,713 21,453 114,928 $ 1,338,483 Special Revenue Yuma Two Percent Mall Tax Maintenance $ 550,331 $ 4,715 $ 5,257 2,414 156,210 714,212 $ 5,052 2,943 12,710 $ 218 $ 8,711 218 $ Total Nonmajor Governmental Funds $ 3,743,890 $ 265,709 308,101 16,025 156,210 9,014 890 4,499,839 $ 192,799 3,999 12,710 83,217 132,130 21,453 429,599 - - 9,014 890 713,994 713,994 - 44,600 4,015,736 4,070,240 714,212 $ 12,710 $ 4,499,839 71 City of Yuma, Arizona Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2004 Local Transportation Assistance Revenues: Taxes Intergovernmental Charges for Services Use of Money and Property Contributions/Donations Miscellaneous Total Revenues $ Expenditures: Current: Public Safety Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Total Expenditures Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Transfers In Transfers Out Total Other Financing Sources/(Uses) Special Revenue Public Safety Solid Tax Waste Recreation Complex $ 2,968,482 $ $ 431,754 1,688,146 486 14,326 25,620 6,795 457,860 2,982,808 1,694,941 - 479,518 11,225 490,743 - 76,188 - 1,579,434 - - 2,547,728 64,188 64,188 108,664 184,852 70,254 2,617,982 393,672 2,797,956 (923,041) (1,117,092) (376,068) (2,405,734) 943,914 (20,873) 1,650,000 (30,516) (376,068) (2,405,734) 923,041 1,619,484 28,401 1,607,835 Revenues and Other Financing Sources Over Expenditures and Other Uses 17,604 392,222 - 502,392 Fund Balances, July 1 18,189 1,704,676 - 721,163 - $ 1,223,555 Fund Balances, June 30 $ 35,793 $ 2,096,898 $ 72 Special Revenue Yuma Two Percent Mall Tax Maintenance Total Nonmajor Governmental Funds $ 3,044,645 $ 2,707 7,401 3,054,753 $ $ 88,411 16,113 104,524 6,101,538 431,754 1,688,146 497,037 25,620 41,534 8,785,629 843,536 - 76,188 2,422,970 - - 2,547,728 843,536 227,754 227,754 291,942 207,319 5,546,147 2,211,217 (123,230) 3,239,482 (2,028,342) 123,230 - 2,717,144 (4,861,533) (2,028,342) 123,230 (2,144,389) 182,875 - 1,095,093 531,119 - 2,975,147 713,994 $ - $ 4,070,240 73 City of Yuma, Arizona Budgetary Comparison Schedule Debt Service Fund For the Year Ended June 30, 2004 Budgetary Fund Balance, July 1 Resources (inflows): Use of Money and Property: Interest Total Revenues Transfers In from Other Funds 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 Variance with Final Budget Positive (Negative) $ 121 Budget Final Original $ $ - Actual Amounts $ 121 5,849,466 5,849,466 8,694,897 8,694,897 199 199 5,929,397 5,929,717 199 199 (2,765,500) (2,765,180) 3,020,000 2,779,619 49,847 5,849,466 5,849,466 3,020,000 2,779,619 49,847 5,849,466 5,849,466 3,020,000 2,859,870 49,847 5,929,717 5,929,717 (80,251) (80,251) (80,251) $ - $ 2,845,431 74 $ - $ (2,845,431) City of Yuma, Arizona Budgetary Comparison Schedule Capital Projects Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2004 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Arizona Department of Transportation Charges for Services Developer Charges Use of Money and Property Rents Interest Miscellaneous Total Revenues Proceeds from Long-Term Debt Transfers From Other Funds Amounts Available for Appropriation Budget Original Final $ 9,821,133 $ 9,821,133 Actual Amounts $ 5,967,214 Variance with Final Budget Positive (Negative) $ (3,853,919) - - 31,059 31,059 674,079 674,079 364,789 (309,290) 305,000 2,992,600 3,971,679 12,360,000 25,973,900 52,126,712 305,000 2,992,600 3,971,679 9,382,000 25,973,900 49,148,712 342,868 48,663 96,872 884,251 7,280,000 12,794,044 26,925,509 37,868 48,663 (2,895,728) (3,087,428) (2,102,000) (13,179,856) (22,223,203) Charges to Appropriations (outflows): Capital Outlay: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Total Expenditures Operating Transfers Out Total Charges to Appropriations 7,712,400 7,149,000 13,160,879 9,638,100 4,582,000 42,242,379 42,242,379 3,700,145 7,151,600 17,712,968 7,878,041 4,587,625 41,030,379 41,030,379 2,033,517 3,050,269 7,868,742 4,908,276 1,279,575 19,140,379 812,175 19,952,554 1,666,628 4,101,331 9,844,226 2,969,765 3,308,050 21,890,000 (812,175) 21,077,825 Budgetary Fund Balance, June 30 $ 9,884,333 $ 8,118,333 $ 6,972,955 75 $ (1,145,378) City of Yuma, Arizona Budgetary Comparison Schedule Local Transportation Assistance Special Revenue Fund For the Year Ended June 30, 2004 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Lottery Distribution Use of Money and Property Interest Contributions/Donations Total Revenues 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 Budget Final Original $ 20,000 $ 20,000 Actual Amounts $ 18,189 Variance with Final Budget Positive (Negative) $ (1,811) 431,752 431,752 431,754 5,000 42,500 479,252 499,252 5,000 42,500 479,252 499,252 486 25,620 457,860 476,049 (4,514) (16,880) (21,392) (23,203) 104,188 104,188 375,064 479,252 104,188 104,188 375,064 479,252 64,188 64,188 376,068 440,256 40,000 40,000 (1,004) 38,996 $ 20,000 $ 20,000 $ 35,793 76 2 $ 15,793 City of Yuma, Arizona Budgetary Comparison Schedule Public Safety Tax Special Revenue Fund For the Year Ended June 30, 2004 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Public Safety Sales Tax Use of Money and Property Interest Total Revenues Budget Final Original $ 1,494,285 $ 1,494,285 Amounts Available for Appropriation Actual Amounts $ 1,704,676 Variance with Final Budget Positive (Negative) $ 210,391 2,815,000 2,815,000 2,968,482 153,482 37,500 2,852,500 4,346,785 37,500 2,852,500 4,346,785 14,326 2,982,808 4,687,484 (23,174) 130,308 340,699 15,000 300,000 335,000 650,000 15,000 300,000 335,000 650,000 2,553 61,720 11,915 108,664 184,852 12,447 238,280 (11,915) 226,336 465,148 2,718,460 3,368,460 2,718,460 3,368,460 2,405,734 2,590,586 978,325 $ 2,096,898 Charges to Appropriations (outflows): Current: Public Safety: Police Support Services Police Communication Center Municipal Court Capital Outlay Total Expenditures Operating Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 978,325 77 $ 312,726 777,874 $ 1,118,573 City of Yuma, Arizona Budgetary Comparison Schedule Solid Waste Special Revenue Fund For the Year Ended June 30, 2004 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 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 $ - 1,724,000 1,724,000 1,688,146 (35,854) 5,000 1,729,000 921,495 2,650,495 5,000 1,729,000 921,495 2,650,495 6,795 1,694,941 943,914 2,638,855 1,795 (34,059) 22,419 (11,640) 2,122,434 352,822 40,905 105,000 2,621,161 29,334 2,650,495 2,122,434 352,822 40,905 105,000 2,621,161 29,334 2,650,495 2,197,808 322,488 27,432 70,254 2,617,982 20,873 2,638,855 (75,374) 30,334 13,473 34,746 3,179 8,461 11,640 $ $ $ - 78 - - $ - City of Yuma, Arizona Budgetary Comparison Schedule Recreation Complex Special Revenue Fund For the Year Ended June 30, 2004 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 $ 563,097 $ 563,097 Actual Amounts $ 721,163 Variance with Final Budget Positive (Negative) $ 158,066 421,500 10,000 421,500 10,000 475,333 4,185 7,500 439,000 1,650,000 2,652,097 7,500 439,000 1,650,000 2,652,097 11,225 490,743 1,650,000 2,861,906 3,725 51,743 209,809 1,262,472 547,994 43,000 1,853,466 481,200 2,334,666 1,262,472 547,994 43,000 1,853,466 481,200 2,334,666 1,068,726 510,708 28,401 1,607,835 30,516 1,638,351 193,746 37,286 14,599 245,631 450,684 696,315 $ 317,431 $ 317,431 $ 1,223,555 79 53,833 (5,815) $ 906,124 City of Yuma, Arizona Budgetary Comparison Schedule Two Percent Tax Special Revenue Fund For the Year Ended June 30, 2004 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Two PercentTax 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 Variance with Final Budget Positive (Negative) $ (61,746) Budget Original Final $ 592,865 $ 592,865 Actual Amounts $ 531,119 2,834,750 2,834,750 3,044,645 12,500 12,500 2,707 2,847,250 3,440,115 2,847,250 3,440,115 7,401 3,054,753 3,585,872 7,401 207,503 145,757 31,536 812,000 843,536 2,082,005 2,925,541 31,536 812,000 843,536 2,082,005 2,925,541 31,536 812,000 843,536 2,028,342 2,871,878 53,663 53,663 $ 514,574 $ 514,574 $ 713,994 80 209,895 (9,793) $ 199,420 City of Yuma, Arizona Budgetary Comparison Schedule Yuma Mall Maintenance Special Revenue Fund For the Year Ended June 30, 2004 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Mall Assessments Miscellaneous Other Total Revenues Transfers from Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Mall Maintenance Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Final Original $ $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 74,000 74,000 88,411 14,411 7,000 81,000 169,381 250,381 7,000 81,000 169,381 250,381 16,113 104,524 123,230 227,754 9,113 23,524 (46,151) (22,627) 250,381 250,381 250,381 250,381 250,381 250,381 227,754 227,754 227,754 22,627 22,627 22,627 $ $ - 81 - $ - $ - 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, 2004 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 3,351 $ 129,331 $ 132,682 4,407 633 71,112 3,090 82,593 546 2,599 132,476 4,407 633 546 73,711 3,090 215,069 3,102,865 2,370,096 241,752 5,714,713 645,571 21,866 667,437 3,102,865 3,015,667 263,618 6,382,150 2,138,972 390,543 2,529,515 3,575,741 457 3,576,198 3,658,791 276,894 276,894 409,370 3,852,635 457 3,853,092 4,068,161 40,497 89,041 156,210 44,894 4,426 6,519 - 44,923 95,560 156,210 44,894 330,642 330,642 10,945 10,945 341,587 341,587 276,894 121,531 398,425 3,853,092 (126,518) 3,726,574 Liabilities Current Liabilities: Accounts Payable Accrued Payroll and Related Taxes Due to Other Funds Deferred Revenue Total Current Liabilities Payable from Current Assets Total Liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total Net Assets 3,576,198 (248,049) $ 3,328,149 $ 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, 2004 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 991,306 277,671 300,831 464,608 2,034,416 $ 1,978,929 254,705 2,233,634 Non-Operating Revenues/(Expenses): Interest Interest and Fiscal Agent Fees Miscellaneous Revenues Net Non-Operating Revenues Transfers In Transfers Out Change in Net Assets $ Net Assets-ending 85 2,218,024 283,957 2,501,981 (221,429) 440 (6) 27 461 440 (6) 4,633 5,067 (194,612) (21,750) (216,362) 233,340 (233,340) - 233,340 (233,340) (194,612) (21,750) (216,362) 420,175 3,522,761 Net Assets-beginning 1,223,355 288,511 304,078 464,608 2,280,552 (22,211) 4,606 4,606 Deficit before Contributions and Transfers $ 239,095 29,252 268,347 (199,218) Operating Loss 232,049 10,840 3,247 246,136 3,328,149 $ 398,425 3,942,936 $ 3,726,574 City of Yuma, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Year Ended June 30, 2004 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 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 (Used for) Noncapital Financing Activities 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 2,039,622 $ (862,919) (1,152,634) 4,606 28,675 233,340 (233,340) (4,615) 233,340 (237,955) - (4,615) (4,615) (28,074) - (28,074) (28,074) - (28,074) - Net Increase in Cash and Cash Equivalents 601 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 (Loss) Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense Decrease in Accounts Receivables (Increase)/Decrease in Inventories Increase/(Decrease) in Accounts Payable Decrease in Prepaid Items Increase in Accrued Wages and Taxes Payable (Decrease) in Due to Other Funds Increase in Deferred Revenue Other Operating Activity Revenue Total Adjustments Net Cash Provided by Operating Activities 86 246,135 $ 2,285,757 (118,212) (981,131) (121,930) (1,274,564) 27 4,633 6,020 34,695 449 449 449 449 1,854 2,455 127,477 129,331 130,228 132,683 $ 2,751 3,352 $ (199,217) $ (22,210) $ (221,427) $ 254,705 2,077 11,322 15,198 1,107 1,016 (65,357) 3,218 4,606 227,892 28,675 $ 29,252 (437) (760) 148 27 28,230 6,020 $ 283,957 2,077 10,885 14,438 1,107 1,164 (65,357) 3,218 4,633 256,122 34,695 $ $ City of Yuma, Arizona Budgetary Comparison Schedule Water Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2004 Budget 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 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 $ 8,300,000 $ 1,227,800 250,000 219,704 Actual Amounts Final 8,300,000 $ 1,227,800 250,000 219,704 Variance with Final Budget Positive (Negative) 8,924,424 $ 1,556,812 216,789 289,482 624,424 329,012 (33,211) 69,778 200,000 1,500,000 40,019,920 347,000 21,000 52,085,424 52,085,424 200,000 1,500,000 40,019,920 347,000 21,000 52,085,424 52,085,424 493,361 2,332,857 2,607,558 53,980 145,281 16,620,544 16,620,544 293,361 832,857 (37,412,362) (293,020) 124,281 (35,464,880) (35,464,880) 1,552,035 3,596,752 1,045,051 462,559 20,650 332,309 1,552,035 3,595,239 1,045,051 462,559 20,650 332,309 1,654,004 3,482,505 998,644 453,021 19,829 169,255 (101,969) 112,734 46,407 9,538 821 163,054 345,642 53,156,080 347,155 51,924,233 73,322 11,670,792 273,833 40,253,441 1,316,400 872,472 62,699,950 216,411 62,916,361 1,316,400 872,472 61,468,103 216,411 61,684,514 1,316,400 678,108 20,515,880 62,042 20,577,922 194,364 40,952,223 154,369 41,106,592 $ (10,830,937) $ (9,599,090) (3,957,378) $ Reconciliation to Change in Net Assets: Capital Outlay Capital Projects Principal Retirement Proceeds from Long-Term Debt Capital Contributions for Subdivider Additions to System Depreciation and Amortization Change in Net Assets 5,641,712 73,322 11,670,792 1,316,400 (2,607,558) 1,263,279 (3,463,831) $ 4,292,818 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 City of Yuma, Arizona Budgetary Comparison Schedule Wastewater Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2004 Budget Original Resources (inflows): Inside City Outside City Contractual/Industrial Services Meters, Connections and Services Capital Contributions: Capacity Rights Wastewater Interceptor Wastewater Trunk Line Charges Proceeds from Long-Term Debt Interest Miscellaneous $ Total Revenues Transfers From Other Funds Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Administration Treatment Pretreatment Collection Laboratory Capital Outlay: Capital Outlay Capital Projects Debt Service: Interest and Fiscal Agent Fees Total Expenditures Transfers To Other Funds Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 5,100,000 $ 329,000 647,500 41,000 Actual Amounts Final 5,100,000 $ 329,000 647,500 41,000 Variance with Final Budget Positive (Negative) 6,007,120 $ 388,010 1,217,558 69,410 907,120 59,010 570,058 28,410 500,000 200,000 2,800 33,000,000 338,700 5,000 40,164,000 40,164,000 500,000 200,000 2,800 33,000,000 338,700 5,000 40,164,000 40,164,000 3,123,492 751,222 4,250 20,770,389 70,969 8,514 32,410,934 561,909 32,972,843 2,623,492 551,222 1,450 (12,229,611) (267,731) 3,514 (7,753,066) 561,909 (7,191,157) 882,827 3,075,431 350,636 536,674 300,149 882,827 3,116,931 350,636 536,674 300,149 870,497 2,948,751 335,062 549,699 144,901 12,330 168,180 15,574 (13,025) 155,248 318,863 46,643,000 277,363 49,086,847 56,328 25,556,779 221,035 23,530,068 728,420 52,836,000 30,470 52,866,470 728,420 55,279,847 30,470 55,310,317 441,815 30,903,832 26,613 30,930,445 286,605 24,376,015 3,857 24,379,872 (12,702,470) $ (15,146,317) Reconciliation to Change in Net Assets: Capital Outlay Capital Projects Proceeds from Long-Term Debt Capital Contributions for Subdivider Additions to System Depreciation and Amortization Change in Net Assets 2,042,398 $ 17,188,715 56,328 25,556,779 (20,770,389) 954,722 (2,098,656) $ 5,741,182 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, 2004 Budget 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 Actual Amounts Variance with Final Budget Positive (Negative) Original Final $ 1,081,700 342,000 379,500 535,000 2,338,200 237,005 2,575,205 $ 1,081,700 342,000 379,500 535,000 2,338,200 237,005 2,575,205 1,015,107 637,680 462,433 1,015,107 637,680 462,433 951,130 567,707 460,092 16,000 50,000 2,181,220 237,005 2,418,225 16,000 50,000 2,181,220 237,005 2,418,225 23,092 2,002,021 233,340 2,235,361 (7,092) 50,000 179,199 3,665 182,864 156,980 37,001 $ (119,979) $ 156,980 $ $ Reconciliation to Change in Net Assets: Capital Outlay Depreciation and Amortization 991,306 277,671 300,831 464,608 4,606 2,039,022 233,340 2,272,362 $ (90,394) (64,329) (78,669) (70,392) 4,606 (299,178) (3,665) (302,843) 63,977 69,973 2,341 23,092 (254,705) $ Change in Net Assets (194,612) 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, 2004 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 $ $ 224,800 9,400 2,500 4,000 500 241,200 241,200 $ 224,800 9,400 2,500 4,000 500 241,200 241,200 $ 232,049 10,840 3,247 440 27 246,603 246,603 Variance with Final Budget Positive (Negative) $ 7,249 1,440 747 (3,560) (473) 5,403 5,403 211,047 61,625 211,047 61,625 183,013 56,082 28,034 5,543 4,610 50 277,332 277,332 4,610 50 277,332 277,332 4,609 6 243,710 243,710 1 44 33,622 33,622 (36,132) $ (36,132) 2,893 Reconciliation to Change in Net Assets: Principal Retirement Depreciation and Amortization $ 39,025 4,609 (29,252) $ Change in Net Assets (21,750) 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 To account for the associated costs of purchasing vehicles and equipment for rental to other departments. Equipment Maintenance maintenance operations. To record the financial activity of fleet Employee Benefits Trust To record the financial activity of a self funded insurance trust fund that covers eligible employees and dependent health, life, and dental claims. Workers Compensation To record the financial activity of a selffunded worker’s compensation insurance trust fund. 91 City of Yuma, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2004 Assets Current Assets: Cash and Investments Accounts Receivable Intergovernmental Receivable Accrued Interest Inventory, at cost Prepaid Items Total Current Assets Capital Assets: Land Buildings Equipment Less Accumulated Depreciation Total Fixed Assets Total Assets Liabilities Liabilities: Accounts Payable Accrued Payroll, Taxes and Benefits Payable Estimated Claims and Judgements Due to Other Funds Total Liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total Net Assets Equipment Equipment Replacement Maintenance $ 14,546,037 $ 57,012 14,603,049 Employee Benefits Workers Trust Compensation Totals 84,036 $ 250,197 $ 31,399 16,769 62 1,889 353,468 558 469,523 268,855 675,419 $ 15,555,689 48,168 62 2,368 61,269 353,468 558 677,787 16,019,214 21,695,705 11,891,753 9,803,952 24,407,001 219,610 19,251 55,544 42,590 251,815 721,338 268,855 677,787 219,610 19,251 21,751,249 11,934,343 10,055,767 26,074,981 6,622 6,622 41,698 76,790 335,603 454,091 424 62,141 62,565 2,300 464,350 165,000 631,650 51,044 76,790 526,491 500,603 1,154,928 9,803,952 14,596,427 $ 24,400,379 $ 92 251,815 15,432 206,290 267,247 $ 206,290 $ 10,055,767 46,137 14,864,286 46,137 $ 24,920,053 City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Year Ended June 30, 2004 Equipment Replacement Operating Revenues: Charges For Services 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/(Expenses): Interest Miscellaneous Expense Capital Contribution Gain on the Sale of Assets Total Non-Operating Revenues Change in Net Assets $ $ 2,387,548 $ - Workers Compensation $ - Totals $ 2,387,548 2,348,767 2,348,767 2,387,548 1,408,508 3,617,853 2,184 5,028,545 388,860 12,784 401,644 1,408,508 4,006,713 2,348,767 14,968 10,166,504 58,022 2,011,315 2,069,337 279,430 2,372,116 3,719 2,375,835 11,713 486,605 4,590,527 32,270 5,109,402 (80,857) 304,573 62,982 28,196 395,751 5,893 791,178 4,653,509 2,490,604 2,015,034 9,950,325 216,179 92,250 106,926 199,176 255,534 255,534 3,216 - 8,105 - 3,216 8,105 103,571 255,534 106,926 466,031 478,606 267,247 (77,641) 13,998 682,210 - 283,931 32,139 24,237,843 23,921,773 Net Assets, Beginning Net Assets, Ending - Employee Benefits Trust Equipment Maintenance 24,400,379 $ 93 267,247 $ 206,290 $ 46,137 $ 24,920,053 City of Yuma, Arizona Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2004 Equipment Replacement Cash Flows from Operating Activities Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Cash Paid For Operating Expenses Net Cash Flows Provided by/(Used for Operating 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, 2003 Cash and Cash Equivalents, June 30, 2004 Workers Compensation 2,292,458 $ 2,356,087 $ 5,021,620 $ (698,546) (131,284) (311,770) (1,597,338) (5,094,786) 2,292,458 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 Employee Benefits Trust Equipment Maintenance Totals 401,644 $ (352,702) 10,071,808 (829,830) (311,770) (7,044,826) (251,567) (204,449) 48,941 - 335,603 - (15,000) 165,000 - 500,603 (15,000) - 335,603 (15,000) 165,000 485,603 110,346 (1,779,243) - - - 110,346 (1,779,243) (1,668,897) - - - (1,668,897) 84,036 3,221 3,221 (216,228) 7,506 7,506 221,448 87,130 87,130 710,690 1,885,382 97,857 97,857 799,945 $ 13,835,346 14,546,036 $ 84,036 $ 466,425 250,197 $ 453,972 675,420 $ $ 279,430 $ 11,713 $ (80,857) $ 5,893 14,755,743 15,555,688 Reconciliation of Operating Income/(Loss) to Net Cash Provided by/(Used for) Operating Activities: Operating Income/(Loss) Adjustments to Reconcile Operating Income/(Loss) to Net Cash Provided by/(Used for) Operating Activities: Depreciation Expense (Increase)/Decrease in Accounts Receivable (Increase) in Inventory (Increase) in Prepaid Items Increase/(Decrease) in Accounts Payable Increase in Payroll Liabilities Increase in Claims Incurred but Not Reported Total Adjustments Net Cash Provided by/(Used for) Operating Activities Noncash Transactions Affecting Financial Position Purchase of Capital Assets with Financing Provided by Vendor Total Noncash Transactions Affecting Financial Position - 216,179 2,011,315 1,714 2,013,029 3,719 (31,461) (353,468) (558) 41,698 76,790 (263,280) (127,034) 10,366 (123,592) 2,268 40,780 43,048 2,015,034 (36,671) (353,468) (558) (83,068) 76,790 51,146 1,669,205 $ 2,292,459 $ (251,567) $ (204,449) $ 48,941 $ 1,885,384 $ 6,622 $ - $ - $ - $ 6,622 $ 6,622 $ - $ - $ - $ 6,622 94 (6,924) $ City of Yuma, Arizona Budgetary Comparison Schedule Equipment Replacement Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2004 Actual Amounts Budget Final Original Resources (inflows): Charges for Services Interest Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current Administration Capital Outlay Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 2,365,070 350,000 2,715,070 2,715,070 $ 58,022 2,777,210 2,835,232 2,835,232 $ (120,162) $ Reconciliation to Change in Net Assets: Capital Outlay Gain on Sale of Assets Depreciation and Amortization Change in Net Assets 2,365,070 350,000 2,715,070 2,715,070 58,022 2,777,210 2,835,232 2,835,232 (120,162) $ 2,348,767 92,250 2,441,017 2,441,017 Variance with Final Budget Positive (Negative) $ 58,022 1,656,607 1,714,629 1,714,629 726,388 (16,303) (257,750) (274,053) (274,053) 1,120,603 1,120,603 1,120,603 $ 846,550 1,656,607 106,926 (2,011,315) $ 478,606 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 95 City of Yuma, Arizona Budgetary Comparison Schedule Equipment Maintenance Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2004 Actual Amounts Budget Final Original Resources (inflows): Charges for Services Amounts Available for Appropriation $ Charges to Appropriations (outflows): Current Administration Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 1,802,556 1,802,556 $ 1,802,556 1,802,556 - Reconciliation to Change in Net Assets: Capital Outlay Capital Contribution Depreciation and Amortization Change in Net Assets $ 1,802,556 1,802,556 1,802,556 1,802,556 $ 1,802,556 1,802,556 $ 2,387,548 2,387,548 Variance with Final Budget Positive (Negative) $ 2,372,116 2,372,116 2,372,116 15,432 - $ 584,992 584,992 (569,560) (569,560) (569,560) $ 15,432 255,534 (3,719) 267,247 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. 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, 2004 Governmental funds capital assets: Land Buildings and Improvements Infrastructure Construction in Progress Equipment $ 13,359,779 77,048,206 127,336,712 25,755,074 10,928,611 $ 254,428,382 Total governmental funds fixed assets Investments in governmental funds capital assets by source: From Current Revenues From Special Revenues From Grants-in-Aid From Gifts $ 92,520,457 140,551,299 11,891,484 9,465,142 $ 254,428,382 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, 2004 Land 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 Total Parks, Recreation and Culture 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 $ 3,328,934 10,732 3,339,666 Buildings and Improvements Infrastructure Construction In Progress $ $ $ 26,614,613 478,233 270,162 74,870 27,437,878 - 839,636 839,636 Equipment $ 12,088 5,621,623 22,298 14,493 99,413 734,047 6,503,962 Total $ 12,088 36,404,806 511,263 14,493 369,575 808,917 38,121,142 602,254 602,254 20,289,009 5,295,538 253,249 25,837,796 - 109,471 1,383 251,493 362,346 802,333 2,244,081 53,010 72,993 3,172,417 21,200,813 8,143,256 557,752 72,993 29,974,813 1,064,214 1,064,214 19,274,221 3,453,229 22,727,450 - 3,255,888 3,255,888 591,045 173,641 764,686 24,185,368 3,626,870 27,812,238 127,713 - 220,309 50,738 - - 56,964 72,052 404,986 122,790 127,713 271,047 - - 129,016 527,776 217,358 6,200 774,035 - - - 191,875 12,999 1,183,268 19,199 223,558 774,035 - - 204,874 1,202,467 8,002,374 $ 13,359,779 $ 77,048,206 127,336,712 21,297,204 153,656 156,789,946 $ 127,336,712 $ 25,755,074 $ 10,928,611 $ 254,428,382 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 For the Year Ended June 30, 2004 Balance June 30, 2003 General Goverment Mayor and Council General Government City Administrator City Attorney Administrative Services Information Technology Total General Government $ 12,088 $ 34,815,848 517,463 14,493 375,841 773,999 36,509,732 Additions 1,663,668 34,917 1,698,586 Balance June 30, 2004 Deletions $ 74,711 6,200 6,266 87,177 $ 12,088 36,404,806 511,263 14,493 369,575 808,917 38,121,142 Public Safety Police Fire Municipal Court Building Safety Total Public Safety 21,035,858 7,983,375 290,397 51,648 29,361,277 164,955 159,881 267,355 21,345 613,536 - 21,200,813 8,143,256 557,752 72,993 29,974,813 Parks, Recreation and Culture General Recreation and Administration Recreation Complex Total Parks, Recreation and Culture 21,991,136 3,548,496 25,539,632 2,194,233 78,374 2,272,607 - 24,185,368 3,626,870 27,812,238 381,056 338,020 52,535 43,615 70,254 19,684 338,020 - 404,986 122,790 771,611 113,869 357,704 527,776 1,169,638 19,199 13,631 - - 1,183,268 19,199 1,188,837 13,631 - 1,202,467 137,742,111 20,000,132 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 952,297 $ 231,113,200 $ 24,712,360 $ 1,397,177 156,789,946 $ 254,428,382 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 101 102 City of Yuma, Arizona Table I Government-wide Expenses by Function Three Fiscal Years Fiscal General Year Government Public Safety 2001-02 $ 3,477,585 Streets Parks Environmental Community Recreation Health and Design and and Culture Protection Development Interest on Long-Term Debt Water Wastewater Golf Courses Total $23,566,887 $9,098,421 $ 8,526,230 $ 3,250,679 $ 5,246,150 $ 3,227,438 $ 9,835,626 $ 6,484,166 $ 2,490,371 $ 75,203,553 2002-03 6,949,944 25,454,716 7,943,638 8,862,044 2,936,066 6,368,629 2,877,856 10,325,641 7,024,037 2,524,444 81,267,015 2003-04 7,058,805 26,988,073 8,654,095 9,474,814 2,994,063 5,550,562 2,971,917 10,884,239 7,341,094 2,493,252 84,410,914 103 Source: Statement of Activities City of Yuma, Arizona Table II Government-wide Revenues Three Fiscal Years Program Revenues Operating Grants and Contributions General Revenues Grants and contributions not restricted to Shared specific Revenues programs Capital Grants and Contributions Taxes 2,794,501 $ 7,910,255 $ 32,212,207 $ 23,257,853 Unrestricted Investment Earnings Fiscal Year Charges for Services 2001-02 $ 23,302,928 2002-03 25,956,177 3,683,638 6,836,846 32,882,114 24,225,246 7,576,850 1,451,814 102,612,685 2003-04 30,261,176 3,289,896 12,625,945 36,417,720 24,021,381 5,198,434 417,648 112,232,200 104 Source: Statement of Activities $ $ - $ 3,225,972 Total $ 92,703,716 City of Yuma, Arizona Table III General Governmental Expenditures by Function Last Ten Fiscal Years Fiscal Year General Government Public Safety Streets 3,310,521 $ 14,540,768 $ 3,818,333 1995-96 3,507,223 15,414,741 1996-97 2,892,817 1997-98 1994-95 $ Parks Environmental Recreation and Health and Culture Protection Community Design and Development $ $ Capital Outlay Debt Service Total 2,540,748 $ 6,268,560 $ 311,743 $ 38,654,315 105 4,927,496 $ 2,936,146 4,087,147 5,295,885 2,679,826 3,065,678 14,233,788 2,102,423 50,386,711 16,598,461 4,333,310 5,716,071 3,459,715 2,804,504 21,141,249 4,356,132 61,302,259 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 2002-03 4,732,282 24,364,021 4,884,040 7,765,244 3,000,245 6,337,964 19,197,677 8,120,042 78,401,515 2003-04 5,418,459 25,751,628 4,757,479 7,828,062 3,061,719 5,428,709 19,656,020 6,786,764 78,688,840 Source: General, Special Revenue, Debt Service and Capital Projects Funds City of Yuma, Arizona Table IV General Revenues by Source Last Ten Fiscal Years Fiscal Year 1994-95 $ Taxes Licenses and Permits Intergovernmental Charges for Services 18,985,947 $ 448,347 $ 18,226,966 $ 1,933,434 Fines and Forfeitures $ 384,598 Use of Money and Property Miscellaneous Revenue $ $ 1,268,540 647,741 Total $ 41,895,573 106 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 2002-03 32,812,488 2,062,847 29,298,169 2,982,623 801,121 1,429,018 363,829 69,750,095 2003-04 36,411,029 3,016,094 31,041,144 3,904,797 725,948 1,153,837 513,498 76,766,347 Source: General, Special Revenue, Debt Service and Capital Projects Funds 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 1994-95 $3,579,519 $ 8,172,410 $ 3,903,429 1995-96 3,962,082 8,497,121 4,146,044 1996-97 4,050,744 9,190,489 1997-98 4,355,377 1998-99 Public Safety Sales Tax Civic Center Two Percent Excise Tax Tax $ $ Mall District Levy Total 107 17,793 $ 1,766,817 $ 1,025,146 $ 42,000 $ 87,756 $18,985,947 1,701,619 10,902 1,997,930 1,028,738 42,000 138,104 21,524,540 4,470,925 1,838,760 721 2,097,687 1,447,845 42,030 59,095 23,198,296 9,848,292 4,836,428 2,002,155 3,301 2,187,192 1,392,706 42,000 43,419 24,710,870 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 2002-03 5,525,546 13,237,042 6,617,396 2,646,059 - 2,741,989 1,719,272 242,000 83,184 32,812,488 2003-04 5,857,825 14,849,984 7,423,730 2,968,482 - 3,044,645 1,935,952 242,000 88,411 36,411,029 Source: General and Special Revenue Funds 391,077 Utility Franchise Public Enterprise In-Lieu City of Yuma, Arizona Table VI Intergovernmental Shared Revenues Last Ten Fiscal Years Local Transportion Assistance Grants and Others (Table VII) Total $ 430,730 $ 2,861,986 $ 18,226,966 108 Fiscal Year Sales Tax Revenue Sharing 1994-95 $ 4,350,840 $ 4,056,699 $ 1,267,830 $ 5,258,881 1995-96 4,595,727 4,350,984 1,488,372 5,575,537 435,038 4,265,860 20,711,518 1996-97 4,267,201 4,577,465 1,654,496 5,115,826 428,877 2,885,816 18,929,681 1997-98 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 2002-03 6,062,278 8,250,011 2,746,086 6,732,659 434,212 5,072,923 29,298,169 2003-04 6,535,654 7,002,250 2,852,832 7,198,891 431,754 7,019,763 31,041,144 Source: General and Special Revenue Auto In-Lieu Highway Users City of Yuma, Arizona Table VII Intergovernmental Revenues - Grants and Other Last Ten Fiscal Years State of Arizona Federal 109 Fiscal Year Justice 1994-95 $ 771,975 1995-96 780,737 - 1996-97 986,309 1997-98 Interior $ - Housing/Urban Economic Development Development (CDBG) Administration $ 595,269 $ 634,827 Other HUD $ - Other $ - 1,857,444 1,429,672 - - 405,521 857,700 453,001 - - 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 - 2000-01 970,255 158,271 706,783 2001-02 1,010,764 405,198 2002-03 1,309,351 2003-04 3,462,972 $ Parks Commerce Transportation - $ 99,252 $ 5,160 36,000 Other Local Government Total - $ 162,102 $ 598,561 $ 2,861,986 92,927 - 430 99,490 4,265,860 17,907 - - 165,378 2,885,816 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 - 199,998 156,327 393,823 10,054 - 90,937 - 2,686,448 640,280 - 229,712 507,488 753,502 264,684 240,890 366,161 22,264 4,440,943 1,398,560 991,044 - 169,579 413,527 96,498 441,101 - 233,831 19,432 5,072,923 575,124 1,349,178 - 405,814 896,311 87,359 - 151,489 60,457 7,019,763 Source: General, Special Revenue, and Capital Projects Funds 31,059 City of Yuma, Arizona Table VIII Property Tax Levies and Collections Last Ten Fiscal Years Percent of Levy Collected 110 Fiscal Year Tax Levy Current Tax Collections 1994-95 $ 3,726,867 $ 3,427,048 91.96% 1995-96 3,857,407 3,750,005 1996-97 4,081,166 1997-98 Delinquent Tax Collections 152,471 $ 3,579,519 96.05% 97.22% 212,077 3,962,082 102.71% 3,869,125 94.80% 181,689 4,050,814 99.26% 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% 2002-03 5,569,705 5,339,296 95.86% 186,250 5,525,546 99.21% 2003-04 5,901,384 5,656,980 95.86% 200,845 5,857,825 99.26% Source: Collections - General Fund Levy - Yuma County Assessor $ 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 Tax Year Type 1994 Primary Secondary 1995 Primary Secondary 1996 Assessed Value 189,877,024 193,571,175 $ Ratio of Assessed to Estimated Value 111 1,439,167,745 1,467,556,166 13.19% 13.19% 196,326,119 199,659,445 1,509,609,831 1,632,866,550 13.01% 12.23% Primary Secondary 206,526,304 208,341,336 1,594,672,075 1,609,362,821 12.95% 12.95% 1997 Primary Secondary 215,315,388 218,762,985 1,671,162,740 1,691,827,028 12.88% 12.93% 1998 Primary Secondary 224,268,102 232,397,991 1,734,925,006 1,780,360,890 12.93% 13.05% 1999 Primary Secondary 236,744,301 245,008,969 1,852,024,345 1,902,825,605 12.78% 12.88% 2000 Primary Secondary 250,659,103 256,612,102 1,930,815,864 1,969,848,043 12.98% 13.03% 2001 Primary Secondary 271,369,779 278,555,470 2,141,691,122 2,201,668,090 12.67% 12.65% 2002 Primary Secondary 299,108,816 305,708,909 2,343,016,774 2,395,671,220 12.77% 12.76% 2003 Primary Secondary 315,700,166 322,623,524 2,461,666,561 2,509,101,578 12.82% 12.86% Source: Collections - General Fund Levy - Yuma County Assessor $ Estimated Actual Value 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 - $ 1.9628 - Yuma Union High School District No. 70 School District No. 13 2.5603 1.1109 $ 2.4097 1.1627 $ 2.2080 1.6386 Community College District $ Total Within School School District District No. 1 No. 13 Library District Flood Control District 1.8722 0.3517 $ 0.4352 $ 0.5000 $ 11.7392 3.5605 $ 11.5375 4.0364 112 1994 Primary $ 0.4700 Secondary - 1995 Primary Secondary 0.4700 - 2.4500 - 1.9771 - 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 1996 Primary Secondary - 2.4500 - 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 1997 Primary Secondary - 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 1998 Primary Secondary - 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 1999 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 11.3099 3.2562 11.0423 3.3340 2002 Primary Secondary - 2.3180 - 1.8621 - 2.4792 0.7880 2.2718 1.4277 2.5445 1.2473 1.7542 0.2550 0.5040 0.3500 10.6853 3.3247 10.9580 3.1443 2003 Primary Secondary - 2.3180 - 1.8693 - 2.1097 0.7868 1.8144 0.8349 2.1670 1.1845 1.7113 0.2301 0.5040 0.3500 9.8227 2.7058 10.1753 3.0554 Source: Yuma County Assessor $ School District No. 1 City of Yuma, Arizona Table XI Computation of Direct and Overlapping Debt June 30, 2004 Debt Jurisdiction City of Yuma Outstanding $ Yuma County - Allocable to City of Yuma Percent Amount 100.00% $ - 38,450,000 50.14% 19,280,355 9,845,000 50.14% 4,936,673 Yuma Union High School District No. 70 12,825,000 54.04% 6,930,212 Yuma School District No. 1 26,005,000 56.13% 14,597,784 Yuma School District No. 13 9,600,000 64.49% 6,191,066 Yuma County Community College District 113 Total Overlapping Debt Source: Yuma County Treasurer and Yuma County Assessor $ 51,936,090 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 Ratio of General Bonded Debt to Assessed Value General Bonded Debt per Capita $ $ $ 114 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 79,530 278,555,470 - - - 2002-03 80,300 305,708,909 - - - 2003-04 83,330 322,623,524 - - - Source: (1) Census data (2) City of Yuma, Department of Community Development - - - City of Yuma, Arizona Table XIII Special Assessments Collections Last Ten Fiscal Years Fiscal Year 1994-95 Current Assessments Due Assessments Collected $ $ 296,000 Ratio of Collections to Amount Due 296,000 100% Outstanding Delinquent Assessments (1) $ - 115 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 - - - - 2002-03 - - - - 2003-04 - - - - (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. City of Yuma, Arizona Table XIV Computation of Legal Debt Limitation June 30, 2004 General Obligation Bonds Legal Debt Limitation 2003 Tax Year Secondary Assessed Valuation 116 Outstanding General Obligation Debt: Project 1992 Project 1997 Total General Obligation Debt $ 322,623,524 Water, Sewer Lights, Parks (20%) All Others (6%) $ 64,524,705 $ 19,357,411 1,895,000 7,680,000 9,575,000 $ 54,949,705 $19,357,411 (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. 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 1994-95 Principal $ - Interest $ - Total Debt Service Total General Governmental Expenditures $ $ - Ratio of Debt Service to General Governmental Expenditures 38,654,315 - 117 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 - 2002-03 - - - 78,401,515 - 2003-04 - - - 78,688,840 - Source: City of Yuma Comprehensive Annual Financial Report City of Yuma, Arizona Table XVI Schedule of Water and Wastewater Revenue Bond Coverage Last Ten Fiscal Years Operating Expenses (1) Net Revenues Available for Debt Service Principal Interest Total $ 7,130,005 $ 4,889,206 $ 860,000 $ 206,863 $ 1,066,863 Debt Service Requirements 118 Fiscal Year Gross Revenues 1994-95 $ 12,019,211 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 - - - 2002-03 17,221,289 11,307,682 5,913,607 - - - 2003-04 18,948,349 11,626,168 7,322,181 - - - (1) Excludes depreciation, amortization and other water expenses subordinate to debt service. City of Yuma, Arizona Table XVII Pledged Tax Collections 1997-98 119 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 $ 10,354,676 1,266,830 $ 11,342,233 2,038,281 $ 12,836,934 2,377,544 $ 13,116,950 2,077,810 $ 13,237,042 1,961,272 $ 14,849,984 2,177,952 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 8,250,011 6,062,278 2,746,086 19,432 7,002,250 6,535,654 2,852,832 36,132 286,644 32,395 273,704 26,560 262,991 27,990 210,565 27,185 297,643 27,765 291,080 32,115 912,959 286,838 253,442 1,318,636 305,014 423,643 1,543,648 332,466 495,782 1,550,072 341,523 482,394 2,343,219 355,658 705,976 3,608,965 381,442 544,869 174,856 278,612 457,415 461,606 243,955 70,322 511,115 27,342,769 447,813 31,025,598 587,620 34,260,300 670,837 35,364,654 801,121 37,051,458 725,948 39,109,545 Local Taxes Sales Tax (1%) $ 9,848,292 Franchise Fee 1,434,706 Intergovernmental Revenues: State Revenue Sharing 5,171,767 State Sales Tax 4,506,916 Auto In-Lieu Tax 1,595,995 Emergency Services and Other 17,702 Licenses: Business Licenses 288,771 Liquor Licenses 32,342 Fees for Services: Building Permits and Inspection Fees 499,810 Recreation Fees 267,065 Police Services and Other Public Safety Fees 434,843 Use of Money and Property: Investment Income 149,523 Fines, Forfeitures and Penalties: City Court Fines 486,047 Total Series B Pledged Taxes 24,733,779 Additional Series A Pledged Taxes City Public Safety Taxes (.2%) 2,002,155 Total Series A Pledged Taxes 26,735,934 Additional Series C Pledged Taxes City Special Taxes (2%) 2,190,493 Total Series C Pledged Taxes $ 26,924,272 2,105,780 29,448,549 2,306,895 33,332,493 2,566,078 36,826,378 2,578,704 37,943,358 2,646,059 39,697,517 2,968,482 42,078,027 2,313,453 $ 29,656,222 2,363,269 $ 33,388,867 2,490,071 $ 36,750,371 2,652,152 $ 38,016,806 2,741,989 $ 39,793,447 3,044,645 $ 42,154,190 Gross Excise Tax Pledged Revenues $ 28,926,427 $ 31,762,002 $ 35,695,762 $ 39,316,449 $ 40,595,510 $ 42,439,506 $ 45,122,672 The Series C Pledged Taxes consist of the Excise Taxes and the City Special Taxes. Source: City of Yuma Administrative Services Department City of Yuma, Arizona Table XVIII Schedule of Municipal Property Corporation Debt Service Requirements to Maturity and Coverage Series 1998, 2001, and 2003 Refunding 1995 Covenants 2003 Ref 1995A 2003 Ref 1995B 2003 Ref 1995C 2003-04 Pledged Taxes 120 2004-05 Debt related to pledge: 2003 Ref 1995 Series A 2003 Ref 1995 Series B 2003 Ref 1995 Series C 1998 Series 2001 Series Total Debt Coverage Required Coverage Collective Coverage 2003-04 Pledged Taxes Total 2003-04 Debt Coverage Required Coverage $ 42,078,027 $ 39,109,545 $ 42,154,190 $ 1,562,228 1,562,228 26.9 4.0 $ 995,631 2,537,825 3,533,456 11.1 3.0 $ 231,275 231,275 182.3 3.5 42,078,027 5,326,959 7.9 4.0 $ $ 39,109,545 5,326,959 7.3 3.0 $ $ $ $ $ $ $ Total $ 1,562,228 995,631 231,275 2,537,825 $ 5,326,959 42,154,190 5,326,959 7.9 3.5 1998, 2001, and 2003 Refunding 1995 Series: Bond covenants require that each series cover both its related debt and the collective debt for the succeeding year. City of Yuma, Arizona Table XIX Building Permits, Bank Deposits and Retail Sales Last Ten Fiscal Years Building Permits (1) Tax Year No. 1994 605 1995 Commercial Value $ No. Residential Value Yuma County Bank Retail Deposits(2) Sales(3) In Thousands 121 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 2002 313 29,838,982 576 66,248,737 922,000 866,972 2003 999 141,020,407 685 98,696,100 997,000 930,333 (1) Calendar year permits issued by City of Yuma Community Development Department (2) Federal Deposit Insurance Corporation (3) Arizona Department of Revenue website, Annual Report (excludes restaurants, bars, hotels and motor fuel) City of Yuma, Arizona Table XX Assessed Valuation of Ten Major Property Taxpayers June 30, 2004 Taxpayer 122 Arizona Public Service Company Qwest Corporation Yuma Cogeneration Associates Dole Fresh Vegetables Inc. CA Corporation Southwest Gas Corporation HPI-FW West Partners (Super WalMart Center) Reynolds Robert L. Trust Agreement Natural Selection Foods LLC Shaw Diversified Services Inc. UIRT - Big Curve Inc AZ Corporation Total Taxpayers Source: Yuma County Assessor Assessed Valuation $ 11,334,063 8,072,468 4,815,251 3,504,169 2,069,693 1,954,997 1,816,405 1,567,737 1,458,043 1,453,746 $ 38,046,572 City of Yuma, Arizona Table XXI Miscellaneous Statistical Data June 30, 2004 Incorporated: First Charter: Last Charter Amendment: Form of Government: Year 123 2004 2000 1995 1990 1985 1980 1975 1970 1960 Square Miles 107.86 106.60 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-unmarked: Motorcycles: Employees: April 14, 1914 June 11, 1914 January 2, 2002 Council-Manager Population 83,330 77,515 60,457 56,966 46,400 43,057 30,081 29,007 23,974 5 105 63 53 7 229 Most Recent Election: November 4, 2003 General: Registered Voters: 22,793 Ballots Cast: 6,089 Percentage Voting: 26.71% Schools: (Estimated) Schools Teachers (est) Enrollment (est) Parks: Park acreage Municipal golf courses (acres) Swimming Pools Activity Centers Cemetery (acres) Retention Basins (acres) 41 1,592 26,255 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 40 160 City of Yuma 300 5 45 4,500 18,382 27,781 24,909 23,665 437 13.5 45 9.32 266 12.26 8.31 124