City of Glendale, Arizona Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2002 [back of card-stock divider] City of Glendale, Arizona Comprehensive Annual Financial Report Fiscal Year 2001-02, Ended June 30, 2002 Elaine M. Scruggs Mayor Thomas R. Eggleston Vice Mayor Barrel District Councilmembers Joyce V. Clark – Yucca District Steven E. Frate – Sahuaro District David M. Goulet – Ocotillo District H. Philip Lieberman – Cactus District Manuel D. Martinez – Cholla District Management Staff Ed Beasley – City Manager Terry Zerkle – Assistant City Manager Tim Ernster Deputy City Manager – Community Development Pamela Kavanaugh Deputy City Manager – Community Services Kenneth A. Reedy Deputy City Manager – Public Works Chris Zapata Deputy City Manager – Administrative Services Prepared by the Finance Department Arthur R. Lynch, Chief Financial Officer i ii Introductory Section [back of card-stock divider] City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2002 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Title Page.................................................................................................................. i Table of Contents ..................................................................................................... iii Letter of Transmittal .................................................................................................. 1 GFOA Certificate of Achievement .............................................................................. 5 Glendale, Arizona and Neighboring Communities map ................................................ 6 City Officials ............................................................................................................. 7 Glendale Council District Boundaries map .................................................................. 8 Organizational Chart ................................................................................................. 9 II. FINANCIAL SECTION Report of Independent Accountants............................................................................11 A. MANAGEMENT’S DISCUSSION & ANALYSIS ........................................................13 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Assets...........................................................................................25 Statement of Activities ..............................................................................................26 Fund Financial Statements: Balance Sheet – Governmental Funds ...................................................................28 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets.........................................................................................................29 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds .........................................................................................30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................31 Statement of Net Assets – Proprietary Funds ..........................................................32 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds ...............................................................................................................33 Statement of Cash Flows – Proprietary Funds ........................................................34 Notes to the Financial Statements (including an Index of the Notes) ........................36 Required Supplementary Information Budgetary Comparison Schedule – General Fund ..................................................77 iii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2002 TABLE OF CONTENTS Page C. COMBINING STATEMENTS Non-Major Governmental Funds Combining Balance Sheet .....................................................................................82 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...........................................................................................................84 Non-Major Proprietary Funds – Business-type activities Combining Statement of Net Assets.......................................................................86 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets.....87 Combining Statement of Cash Flows......................................................................88 Internal Service Funds Combining Statement of Net Assets.......................................................................90 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets.....91 Combining Statement of Cash Flows......................................................................92 D. SUPPLEMENTAL INFORMATION Budgetary Comparison Schedules – Other Funds Community Development Block Grants Fund.......................................................93 Highway Users Gas Tax Fund ............................................................................94 Development Impact Fees Fund .........................................................................95 Transportation Fund...........................................................................................96 Other Special Revenue Fund..............................................................................97 General Obligation Debt Service Fund .............................................................. 98 Special Assessment Debt Service..................................................................... 99 Highway User Debt Service Fund ..................................................................... 100 Municipal Property Corporation Debt Service Fund ............................................ 101 Streets Construction Fund ................................................................................ 102 Fire and Police Construction Fund .................................................................... 103 Parks Bond Construction Fund ......................................................................... 104 Other Construction Fund .................................................................................. 105 Cemetery Perpetual Care Permanent Fund ....................................................... 106 Water and Sewer Fund .................................................................................... 108 Landfill Fund.................................................................................................... 110 Sanitation Fund ............................................................................................... 111 Housing Fund .................................................................................................. 112 Risk Management Fund ................................................................................... 113 Workers’ Compensation Fund........................................................................... 114 Employee Benefits Fund .................................................................................. 115 Federal Financial Data Schedule ......................................................................... 116 Capital Assets Used in the Operation of Governmental Funds Schedule by Function and Activity..................................................................... 118 Schedule of Changes by Function and Activity................................................... 120 iv City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2002 TABLE OF CONTENTS III. STATISTICAL SECTION Table Page General Governmental Expenditures by Function............................................... 1............. 121 General Governmental Revenues by Source ...................................................... 2............. 122 Property Tax Levies and Collections ................................................................... 3............. 123 Assessed and Estimated Actual Value of Taxable Property................................ 4............. 124 Property Tax Rates – Direct and Overlapping Governments .............................. 5............. 125 Principal Property Taxpayers............................................................................... 6............. 126 Special Assessment Billings and Collections ...................................................... 7............. 127 Computation of Legal Debt Margins .................................................................... 8............. 128 Ratio of General Obligation Bonded Debt to Assessed Value and Net Direct Bonded Debt Per Capita.......................................................................... 9............. 129 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures ............................................................................. 10............. 130 Computation of Net Direct and overlapping General Obligation Bonded Debt.. 11............. 131 Water and Sewer Revenue Bond Coverage...................................................... 12............. 132 Demographic Statistics ...................................................................................... 13............. 133 Property Value, Construction and Bank Deposits.............................................. 14............. 134 Miscellaneous Statistics ..................................................................................... 15............. 135 Insurance Coverage........................................................................................... 16............. 136 Miscellaneous Water and Sewer Rate Statistics ............................................... 17............. 137 Miscellaneous Water and Sewer Statistics ........................................................ 18............. 138 v vi January 31, 2003 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Glendale, Arizona: State law requires that cities annually publish after the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS) by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Glendale, Arizona (the “City”) for the fiscal year ended June 30, 2002. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City’s financial statements have been audited by PricewaterhouseCoopers, L.L.P., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2002, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent 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 Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. 1 Profile of the Government The City, incorporated in 1910, is located in the northwestern part of metropolitan Phoenix, which is considered to be one of the top growth areas in the country. The City currently occupies a land area of 55.6 square miles and serves a population of 227,763. The City is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the city council. The City has operated under the council-manager form of government since 1910. Policy-making and legislative authority are vested in a city council consisting of the mayor and six other members. The city council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the government’s manager, clerk, and attorney. The government’s manager is responsible for carrying out the policies and ordinances of the city council, for overseeing the day-to-day operations of the government, and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council members serve four-year terms, with three council members elected every two years. The mayor is elected to serve a two-year term. The council members are elected by district. The mayor is elected at large. The City provides a full range of services, including police and fire protection; the construction and maintenance of highways, streets, public facilities and other infrastructure; and recreational activities and cultural events. Certain housing services are provided by the city’s public housing authority, which functions, in essence, as a department of the City and therefore has been included as an integral part of the City’s financial statements. The City also is financially accountable for a legally separate municipal property corporation, which is reported separately within the City’s financial statements. The annual budget serves as the foundation for the City’s financial planning and control. All agencies of the City are required to submit requests for appropriation to the government’s manager on or before the last week in January each year. The government’s manager uses these requests as the starting point for developing a proposed budget. The government’s manager then presents this proposed budget to the council for review during the month of April. The council is required to hold public hearings on the proposed budget and to adopt a final budget no later than June 30th, the close of the City’s fiscal year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments, however, require the special approval of the governing council. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Local economy. The City currently enjoys a favorable economic environment and local indicators point to continued stability. The economy of Glendale is based on manufacturing, defense activities, services, private graduate schools, retail trade, and restaurants. The Arizona Department of Economic Security currently lists the average total labor force in the City as 118,727 for the period January through November 2002 (the latest information available). Average employment for the same period is 112,596, demonstrating that the positive growth in jobs has kept pace with population growth. 2 The City receives significant “State Shared Revenues” that are allocated to various funds. The State is facing a significant deficit due to an economic slowdown, which could impact the revenues received by the City. Through strategic budgetary planning, the City reduced expenditures in anticipation of decreased “State Shared Revenues.” The growth in the various sectors of the City’s economy is reflective of the positive growth trends of the Phoenix metropolitan area and of the state of Arizona. The County’s population is th approximately 3.2 million, making it the 4 most populous county in the nation. The state’s population reached 5.3 million in 2001, representing a 3.6% increase over the previous fiscal year. Long-term financial planning. On November 29, 2001, the City council approved development agreements, which laid the foundation for a 223-acre sports/mixed use/entertainment development. The agreement includes a National Hockey League (NHL) multi-purpose/recreational facility to be completed during the later part of 2004. The agreement also includes a mixed-use component contains at least 1.6 million square feet of development. Additionally, a 54 acre mall property will be developed over the next 5 years. Another key development is the anticipated 2005-06 completion of the multi-purpose National Football League (NFL) stadium. The retail, entertainment, restaurants, luxury condominiums, and other miscellaneous development activities will produce long-term financial benefits. This development is strategically located at Glendale Avenue and the 101 freeway. Build out for the mixed-use project should occur over the next seven to ten years and is estimated to provide the City with approximately $400 million in excise taxes over the next 30 years. On November 6, 2001 the citizens of Glendale approved a new one-half percent transportation sales tax, which is slated to fund the $1 billion Transportation program. These resources will be used for additional bus routes, intersection improvements, express bus services and implementation of the regional light rail system connection. In addition, the City planned to consider an increase in revenue from the telecommunications tax in Fall 2002. Substantial investments have been made by the City of Glendale to enact and stay current on issues faced by the water and sewer system in addition to proceeding with the necessary federally mandated upgrades. These have been and continue to be funded with revenue bonds in order to meet the long-term water needs of the City. The debt service funds of the City are backed by property taxes and excise taxes. The City has continued its practice of paying off its general obligation and revenue bond debt rapidly. Cash management policies and practices. Staff invests temporarily idle cash in repurchase agreements collateralized by high quality U.S. government securities, the Arizona State Treasurer’s Local Government Investment Pool or U.S. Treasury obligations. The average yield on City investments was 3.46% for the year. In 2001-02, the City earned $4.6 million on all investments. The City’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits are either insured by the Federal Deposit Insurance Corporation or collateralized. All collateral on deposits is held by the City’s agent or financial institution’s trust department in the City’s name. City investments are classified in credit risk categories 1 or 3 as defined by the Governmental Accounting Standards Board (GASB). 3 Risk management. During 2001-02, the City continued its self-insurance program for public liability and property damage claims. As part of the Risk Management Plan, resources are maintained in the risk management fund to meet potential losses. In the event of a deficit in the fund at June 30, premiums charged to other funds are increased in the following fiscal year to cover shortages. The City has implemented various risk control techniques such as employee accident prevention training to minimize accident-related losses. The Risk Management Division also conducts a competitive bidding process to obtain other types of commercial insurance. Pension and other postemployment benefits. Other than the pension benefits through the Arizona State Retirement System or the Arizona Public Safety Personnel Retirement System, the City does not provide postemployment benefits. However, the City does allow all of its retired employees to participate in the health care and life insurance plan provided to active employees. The plan provides health, dental, vision, and/or life insurance to participants. The retired employees pay the entire cost of their participation in the plan. The City makes no contribution to the plan for former employees. Since the number of retirees is small, and their portion of the premium cost is paid to providers at the same time as the general fund’s employee portion, the City has chosen to account for moneys received from retirees, but not yet paid out, as part of the internal service funds. Awards and acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2001. This was the sixteenth year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document dated 2001-02. This is the thirteenth year in a row that the City has received the highest form of recognition in governmental budgeting. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance and Administration Department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and governing Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City’s finances. Respectfully submitted, Arthur R. Lynch Chief Financial Officer 4 5 Glendale, Arizona And Neighboring Communities 6 Mayor & City Council Mayor Elaine M. Scruggs Vice Mayor Thomas R. Eggleston Barrel District Councilmember Joyce V. Clark Yucca District Councilmember Steven E. Frate Sahuaro District Councilmember David M. Goulet Ocotillo District Councilmember H. Philip Lieberman Cactus District Councilmember Manuel D. Martinez Cholla District 7 Glendale Council District Boundaries Pinnacle Peak Rd. Deer Valley Rd. CHOLLA Beardsley Rd. Greenway Rd. Thunderbird Rd. 63rd Ave. Cactus Rd. Peoria Ave. N Olive Ave. Mtn. View Rd. 47th Ave. SAHUARO Bell Rd. 55th Ave. 63rd Ave. Union Hills Dr. BARREL 51st Ave. 59th Ave. 67th Ave. 91st Ave. 99th Ave. 107th Ave. El Mirage Rd. Dysart Rd. Litchfield Rd. Bullard Ave. Reems Rd. 115th Ave. 8 75th Ave. YUCCA Camelback Rd. 43rd Ave. OCOTILLO YUCCA 83rd Ave. Bethany Home Rd. 53rd Ave. Orangewood Ave. Myrtle Ave. Glendale Ave. CACTUS Northern Ave. Citizens of Glendale MAYOR Elaine M. Scruggs VICE MAYOR Thomas R. Eggleston COUNCIL Joyce V. Clark Steven E. Frate David M. Goulet H. Philip Lieberman Manuel D. Martinez CITY COURT CITY CLERK CITY ATTORNEY CECIL B. PATTERSON JR. PAM OLIVEIRA RICK FLAAEN ACTING CITY MANAGER ED BEASLEY 9 ECONOMIC DEVELOPMENT FIRE MARK BURDICK JIM COLSON POLICE CITY AUDITOR ASSISTANT CITY MANAGER RANDY HENDERLITE CANDACE MAC LEOD TERRY ZERKLE ACTING INTER-GOV’TAL RELATIONS HUMAN RESOURCES AMY RUDIBAUGH DUFFY LA VERNE PARKER DIGGS Deputy City Manager Deputy City Manager Deputy City Manager Deputy City Manager COMMUNITY DEVELOPMENT COMMUNITY SERVICES ADMINISTRATIVE SERVICES PUBLIC WORKS TIM ERNSTER PAM KAVANAUGH CHRIS ZAPATA KEN REEDY COMMUNICATIONS ENGINEERING TRANSPORTATION JULIE FRISONI LARRY BROYLES JIM BOOK NEIGHBORHOOD SERVICES GLORIA COMMUNITY PARTNERSHIPS SANTIAGO-ESPINO ERIK STRUNK CULTURAL EVENTS & SERVICES BOBBYE HAMILTON ACTING MANAGEMENT & BUDGET FIELD OPERATIONS UTILITIES PILAR AGUILAR MICHAEL HOYT ROGER BAILEY ACTING PLANNING BUILDING SAFETY LIBRARY PARKS & RECREATION FINANCE JON FROKE DEBORAH MAZOYER RODEANE WIDOM WARREN SMITH INFORMATION TECHNOLOGY ART LYNCH CHUCK MURPHY COUNCIL/MANAGER RELATIONS CATHY GORHAM ENVIRONMENTAL RESOURCES DOUG KUKINO 10/02 10 Financial Section [back of card-stock divider] PricewaterhouseCoopers LLP Suite 700 1850 N. Central Ave. Phoenix AZ 85004-4563 Telephone (602) 364 8000 Facsimile (602) 364 8001 Report of Independent Accountants Honorable Mayor and Members of the City Council City of Glendale, Arizona We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Glendale (the “City”), Arizona, as of and for the year ended June 30, 2002, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Glendale, Arizona, as of June 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As described in Note 1 to the financial statements, the City adopted the provisions of the Governmental Accounting Standard Board (“GASB”) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments, as amended by GASB Statement No. 37, Basic Financial Statements and Management’s Discussion and Analysis – for State and Local Governments: Omnibus – an Amendment of GASB Statements No. 21 and No. 34 and GASB Statement No. 38, Certain Financial Statement Note Disclosures, as of July 1, 2001. The accompanying required supplementary information, including management’s discussion and analysis, and budgetary comparison information, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 11 Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and the statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. January 13, 2003 12 Management’s Discussion & Analysis [back of card-stock divider] CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Management’s Discussion and Analysis As management of the City of Glendale (the City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2002. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Financial Highlights The financial statements, which follow Management’s Discussion and Analysis, provide these significant key financial highlights for 2001-02 as follows. Comparative financial information will be required in subsequent years, but the City will not be presenting this information in the current year. • The City’s total net assets of $131,695 in governmental activities and $353,411 in businesstype activities represent 27.15% and 72.85% respectively, of the total net assets of $485,106. • General revenues from governmental activities accounted for $132,149 in revenue, or 90.08% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $34,931 or 26.43% of total governmental activities revenues. The City had $75,173 of program revenues and $8,563 in general revenues related to business-type activities. • The major governmental fund, the general fund, had $104,359 in revenues, which primarily consisted of local taxes and intergovernmental taxes. The total expenditures of the general fund were $107,567 and the fund balance decreased from $37,948 to $25,117, resulting in the planned fund balance decrease from $37,948 to $25,117. This decline was due to the Northern Crossing development project, which now has preliminary planned area development approval. • The City issued $40,235 in general obligation bonds. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) Governmentwide 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 themselves. Government-wide financial statements. The Government-wide financial statements are designed to provide readers with a broad overview of the City’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. Net assets are categorized as capital assets less related debt, restricted by an outside party, and unrestricted. 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 City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the 13 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 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 (e.g., uncollected taxes and earned but unused compensated absences). Both of the government-wide financial statements distinguish functions of the City 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, public works, community services, community environment and street maintenance. The business-type activities of the City include water and sewer, landfill, sanitation, and housing. 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, like other state and 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 three categories: governmental funds, proprietary funds, and fiduciary funds. 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 City’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. The City maintains 15 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 major funds. Data from the other 12 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 and schedules. Proprietary funds. The City 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 uses enterprise funds to account for its water and sewer, landfill, sanitation, and housing services. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its risk management, workers’ compensation and employee benefit activities. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer, and landfill services, which are considered to be major funds 14 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) of the City. Data from the other two enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor enterprise funds are provided in the form of Combining Statements and Schedules. Conversely, all three 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 elsewhere in this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has no fiduciary funds. 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. Additional Required Supplementary Information. Following the basic financial statements is Required Supplementary Information (RSI) that further explains and supports the financial information in the financial statements. RSI presents the Budgetary Comparison Schedule for General Fund. The City had no major special revenue funds, so none are included in RSI. Other information. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the notes to the financial statements. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a City’s financial position. In the case of the City, assets exceeded liabilities by $485,106 as of June 30, 2002. By far the largest portion of the City’s net assets reflects its investment in capital assets (e.g., land, building, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. 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 liquidate these liabilities. The following tables discuss the financial position and changes to the financial position for the City as a whole as of and for the year ended June 30, 2002. The prior year’s financial position and results have not been restated in "Basic Financial Statements--and Management's Discussion and Analysis--State and Local Governments" (GASB34) format, therefore, complete comparative information is not presented. The City’s financial position is the product of several financial transactions including the net results of activities, the acquisition and repayment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. 15 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Net Assets The following table reflects the condensed Statement of Net Assets as of June 30, 2002. Condensed Statement of Net Assets (in thousands) Business-type Activities 2002 Total Primary Government 2002 $ 170,321 161,597 331,918 $ 101,107 355,271 456,378 $ 271,428 516,868 788,296 42,136 158,087 200,223 6,784 96,183 102,967 48,920 254,270 303,190 31,260 91,203 9,232 $ 131,695 269,007 20,092 64,312 $ 353,411 300,267 111,295 73,544 $ 485,106 Governmental Activities 2002 Current and other assets Capital assets Total assets Current liabilities Long-term liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the City as a whole, as well as for its separate governmental and business-type activities. 16 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2002, were $252,383. The total cost of all programs and services was $202,143. The following table presents a summary of the changes in net assets for the fiscal year ended June 30, 2002. Changes in Net Assets (in thousands) Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Franchise fees License fees Impact fees Investment earnings, unrestricted Miscellaneous Capital contributions Total revenues Expenses: General government Public safety Public works Community services Community environment Street maintenance Other Interest on long-term debt Water and sewer Landfill Sanitation Community housing Loss on disposal of capital assets Loss on joint venture Total expenses Excess before transfers Transfers in (out) Governmental Activities Business-type Activities Total Primary Government $ $ $ 9,702 22,640 2,589 67,908 6,592 673 77,610 29,232 3,262 16,459 52,580 16,862 22,822 7,219 3,260 634 4,995 1,397 289 6,205 167,653 3,751 1,215 4,591 84,730 16,459 52,580 16,862 22,822 7,219 3,260 634 8,746 2,612 289 10,796 252,383 22,490 53,779 12,766 30,919 3,414 12,534 19 5,864 345 142,130 39,909 1,189 10,180 7,513 168 1,054 60,013 22,490 53,779 12,766 30,919 3,414 12,534 19 5,864 39,909 1,189 10,180 7,513 513 1,054 202,143 25,523 24,717 50,240 228 - (228) Increase in net assets 25,295 24,945 50,240 Net assets - beginning Net assets - ending 106,400 $ 131,695 328,466 $ 353,411 434,866 $ 485,106 17 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) expenses program revenues Expenses and Program Revenues - Governmental Activities 60,000 50,000 40,000 30,000 20,000 10,000 General Public safety Public works government Community services Community Street environment maintenance Other Interest on long-term debt expenses program revenues Expenses and Program Revenues - Business-type Activities 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Water and sewer Landfill 18 Sanitation Community housing CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Revenue Sources Fiscal Year 2001-02 Capital contributions 4.28% Investment earnings, unrestricted 1.03% Charges for services 30.75% Miscellaneous 0.12% Impact fees 3.47% License fees 0.25% Franchise fees 1.29% Auto in-lieu taxes 2.86% Operating grants and contributions 11.58% Urban revenue sharing (state shared income tax) 9.04% State shared sales tax 6.68% Sales taxes 20.83% Capital grants and contributions 1.29% Property taxes 6.52% Functional Expenses Fiscal Year 2001-02 Interest on longterm debt 2.92% Water and sewer 19.90% Landfill 0.59% Sanitation 5.08% Community housing 3.75% Other 0.01% General government 11.21% Street maintenance 6.25% Community environment 1.70% Community services 15.42% Public works 6.36% Public safety 26.81% Financial Analysis of the City’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 19 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a City’s net resources available for spending at the end of the fiscal year. The financial performance of the City as a whole is reflected in its governmental funds. • As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $100,105, an increase of $8,449 in comparison with the prior year. • Unreserved undesignated fund balance, which is available for spending at the City’s discretion was $15,692. • The City also had $37,955 in unreserved, designated fund balance, which represents selfimposed limitations on the use of otherwise available expendable financial resources in governmental funds as discussed in Note XV beginning on page 71. • The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed for a variety of restricted purposes, such as perpetual care for the City’s cemetery, debt service, and development impact fees. Summary of Reserved Fund Balances by Fund Type (in thousands) General Special revenue Debt service Capital projects Permanent Total $ 17,998 14,374 9,888 98 4,100 $ 46,458 The general fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the general fund was $7,119, while total fund balance reached $25,117. As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 6.62% of total general fund expenditures, while total fund balance represents 23.35% of that same amount. The planned reduction in fund balance of the City's general fund resulted in a decrease of $12,831 during the current fiscal year, which was affected by several factors: • Acquisition of land and related demolition for the planned Northern Crossing retail shopping center. • Investment income decreased by $3,273 due to unfavorable market conditions. • Increased expenditures for public safety, community services and principal retirement due to increased service levels and early extinguishment of obligations. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. 20 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Net assets of the enterprise funds and the internal service funds at the end of the year amounted to $353,160 and $7,584, respectively. The enterprise funds total net assets were 5.69% restricted and 18.14% unrestricted. Internal service funds were 100.00% unrestricted. General Fund Budgetary Highlights Consistent with national economic conditions, the City's investment revenue was adversely impacted by the economic decline. • Investment revenue was negatively impacted by the decline in overnight and Local Government Investors Pool interest rates. • General fund total revenues fell short of budget by $4,544 (3.83%), mostly in intergovernmental and investment revenues. • General Fund expenditures were less than budgetary estimates by $14,385 (10.43%). Capital Asset and Debt Administration Capital Assets. The City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2002 for its governmental type activities was $161,597 and for the business type activities was $355,271. The investment in governmental and business type capital assets consisted of land, buildings, machinery and equipment, and infrastructure for streets, parks, airport and street lighting, water and wastewater treatment plants. Major capital asset events during the current fiscal year included the following: • Purchase of land to be used for a multipurpose recreational facility; • A fire department radio system and related infrastructure; • A variety of street construction projects were completed during the year totaling $11,283; • The City began construction on enhancements at the Cholla Water Treatment Plant totaling $4,444; • Additional water extension lines totaling $595 were installed on 115 Avenue; • Purchased $351 of water wagons for public construction projects; • Eight side loader trucks were purchased by sanitation for a total of $1,325. th 21 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) The following table is a summary of capital assets reflected in the June 30, 2002 financial statements. Capital Assets at Year End (Net of depreciation) (in thousands) Construction in progress Land Artwork Buildings Improvements other than buildings Infrastructure-streets Infrastructure-parks Infrastructure-airport Infrastructure-lighting Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and equipment Computer equipment Software Automotive equipment Total Governmental Activities $ 17,373 52,706 938 44,990 19,934 11,283 491 13 294 5,172 458 356 7,589 $ 161,597 Business-type Activities $ 23,798 5,625 10,128 5,332 59,260 66,819 61,496 87,286 21,255 3,986 3,935 160 6,191 $ 355,271 Total Primary Government $ 41,171 58,331 938 55,118 25,266 11,283 491 13 294 59,260 66,819 61,496 87,286 21,255 3,986 9,107 618 356 13,780 $ 516,868 Additional information on capital assets can be found in Note IV of the financial statements. Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $229,099. Of this amount, $90,135 comprises debt backed by the full faith and credit of the City and $16,247 is special assessment debt for which the City is liable in the event of default by the property owners subject to the assessment. General obligation Special assessments Highway user revenue bonds Municipal Property Corporation Revenue bonds Capital lease obligations Water and sewer revenue bonds Notes payable Total Governmental Activities $ 82,637 16,247 24,310 11,215 4,498 4,340 $ 143,247 22 Business-type Activities $ 7,498 15,291 56,705 6,358 $ 85,852 Total Primary Government $ 90,135 16,247 24,310 11,215 19,789 56,705 10,698 $ 229,099 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) The City’s total long-term debt net of new 2001-02 fiscal year debt issued and payments increased by $33,073 (16.87%) from prior year. The key factor in this increase was a $35,690 general obligation bonds issuance, primarily for public infrastructure at the new arena site. During the current fiscal year, the City refinanced some of its existing debt to take advantage of favorable interest rates through a current refunding. • The City issued $4,545 general obligation bonds to refinance previously outstanding general obligation bonds in the amount of $4,515. The result is expected to be a decrease in future debt service payments of $199. The City maintains an “AA” rating from Standard & Poor’s and an “Aa2” rating from Moody’s for general obligation debt. The Highway Users revenue bonds have been rated “Aa3” by Moody’s and “A+” by Standard and Poors. State statutes limit the amount of general obligation debt a governmental entity may issue to 20% of its total secondary assessed valuation for combined water, sewer, light, parks, open space preserves, playgrounds and recreational facilities nor may outstanding debt for all other purposes exceed 6% of the net secondary assessed valuation. The City’s current unused 6% and 20% debt limitation on June 30, 2002 was $27,080 and $146,852 respectively. Additional information on long-term debt can be found in Note VIII of the financal statements. Economic Factors and Next Year’s Budgets and Rates The adopted fiscal year 2002-03 budget is $635,000 (up 57.57% from 2001-02), including a $227,000 operating budget (an increase of 1.34% from 2002) and $350,181 in capital outlay (up 174.79% from 2002). The Coyote hockey arena was first budgeted in 2002-03. The City’s commitment related to this project is $180,000. The fiscal year 2002-03 budget includes thirty-six and three-quarters (36.75) new staff positions to support City services. • Fiscal year 2001-02 saw the national, state and regional economies struggle to recover from the effects of an ongoing recession, the events of September 11, 2001, and low consumer confidence. • While the regional economy remains strong, it is traditionally largely driven by construction, due to the continued population growth of the state and metropolitan area, as well as the financial services and tourism sectors. Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. • The City’s unemployment rate for June 2002 was 5.6%, which is an increase from a rate of 3.8% a year ago. This compares favorably to the state’s average unemployment rate of 6.3% and the national average rate of 5.9%. Request for Information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Chief Financial Officer, 5850 West Glendale Avenue, Suite 302, City of Glendale, Arizona, 85301. 23 24 Basic Financial Statements [back of card-stock divider] City of Glendale, Arizona Statement of Net Assets June 30, 2002 (amounts expressed in thousands) Governmental Activities ASSETS Current assets: Equity in pooled cash and investments Receivables (net of allowance for uncollectibles) Property taxes Accounts Accrued interest Due from other governments Internal balances Inventories and prepaid items Total current assets $ 128,568 Primary Government Business-type Activities $ 695 8,507 727 5,057 (189) 1,284 144,649 Noncurrent assets: Restricted cash and investments Capital assets: Non-depreciable Depreciable (net) Deferred receivable Water storage right (net) Equity in joint venture Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued expenses Accrued interest payable Due to other governments Deposits Unearned rent Deferred revenue Total current liabilities Noncurrent liabilities (Note VIII.E) Due within one year Due in more than one year Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital projects Debt service Revenue bond retirement, replacement, and extension Perpetual care - nonexpendable Other purposes Unrestricted Total net assets $ The notes to the financial statements are an integral part of this statement. 25 32,618 Total $ 161,186 9,308 138 139 189 486 42,878 695 17,815 865 5,196 1,770 187,527 4,007 21,946 25,953 71,017 90,580 21,665 187,269 331,918 29,423 325,848 6,478 29,805 413,500 456,378 100,440 416,428 21,665 6,478 29,805 600,769 788,296 9,273 4,526 2,667 448 25,222 42,136 3,137 1,061 1,939 15 631 1 6,784 12,410 5,587 4,606 15 1,079 1 25,222 48,920 24,860 133,227 158,087 200,223 14,166 82,017 96,183 102,967 39,026 215,244 254,270 303,190 31,260 269,007 300,267 58,986 10,351 4,208 17,658 9,232 131,695 9,012 9,808 1,272 64,312 353,411 58,986 19,363 9,808 4,208 18,930 73,544 485,106 $ $ City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 1 of 2 Charges for Services Expenses Functions/Programs Primary government: Governmental activities: General government Public safety Public works Community services Community environment Street maintenance Other Interest on long-term debt Total governmental activities Business-type activities: Water and sewer Landfill Sanitation Housing Total business-type activities Total primary government $ 22,490 53,779 12,766 30,919 3,414 12,534 19 5,864 141,785 $ 39,909 1,189 10,180 7,513 58,791 $ 200,576 $ 4,464 325 479 4,409 25 9,702 46,068 9,610 11,808 422 67,908 77,610 Program Revenues Operating Grants and Contributions $ $ 239 2,113 152 1,713 3,071 15,352 22,640 11 98 6,483 6,592 29,232 General revenues: Taxes: Property taxes levied for: General purposes Debt service Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Franchise fees License fees Impact fees Investment earnings, unrestricted Gain (loss) on disposal of capital assets Gain (loss) on joint venture Miscellaneous Capital contributions Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The notes to the financial statements are an integral part of this statement. 26 Capital Grants and Contributions $ $ 1 629 1,959 2,589 307 37 22 307 673 3,262 City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 2 of 2 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ $ (17,786) (51,341) (12,135) (24,168) (343) 4,802 (19) (5,864) (106,854) $ - $ (17,786) (51,341) (12,135) (24,168) (343) 4,802 (19) (5,864) (106,854) (106,854) 6,477 8,556 1,650 (301) 16,382 16,382 6,477 8,556 1,650 (301) 16,382 (90,472) 3,306 13,153 52,580 16,862 22,822 7,219 3,260 634 4,995 1,397 (345) 289 6,205 (228) 132,149 25,295 106,400 131,695 3,751 1,215 (168) (1,054) 4,591 228 8,563 24,945 328,466 353,411 3,306 13,153 52,580 16,862 22,822 7,219 3,260 634 8,746 2,612 (513) (1,054) 289 10,796 140,712 50,240 434,866 485,106 $ $ 27 City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2002 (amounts expressed in thousands) Major Funds General ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Property taxes Accounts Accrued interest Due from other funds Due from other governments Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets LIABILITIES AND FUND BALANCE Liabilities: Accounts payable Compensated absences - current Accrued expenses Due to other funds Matured interest payable Deposits Deferred revenue Matured bonds payable Total liabilities Fund Balances: Reserved (Note XV) Unreserved: Designated (Note XV) Undesignated, reported in General fund Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances $ 23,632 $ 142 6,698 656 935 2,033 346 2,209 36,651 $ $ 3,043 1,380 4,236 431 2,444 11,534 General Obligation Debt Service $ 14,962 $ 553 107 15,622 $ 2 1,240 441 8,058 9,741 Special Other Non-major Assessment Governmental Debt Service Funds $ 4,412 $ 18,928 23,340 $ 3 487 18,928 19,418 $ 72,355 $ 1,763 71 3,024 227 1,660 2,737 81,837 $ 5,231 219 222 873 872 17 4,058 5,160 16,652 Total Governmental Funds $ 115,361 $ 695 8,461 727 935 5,057 573 3,976 21,665 157,450 $ 8,279 1,599 4,458 873 2,599 448 25,871 13,218 57,345 17,998 5,881 3,922 18,657 46,458 4,715 - - 33,240 37,955 2,404 25,117 36,651 5,881 15,622 3,922 23,340 8,014 5,274 65,185 81,837 2,404 8,014 5,274 100,105 157,450 $ The notes to the financial statements are an integral part of this statement. 28 $ $ $ City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2002 (amounts expressed in thousands) Amounts reported for governmental activities in the statement of net assets are different because: Fund balances - Total governmental funds balance sheet $ 100,105 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental capital assets Less accumulated depreciation $ 236,441 (74,844) 161,597 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 374 Internal service funds are used by management to charge the costs of workers' compensation, risk management, and employee benefits to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. Long-term liabilities, including bonds payable are not due and payable in the current period and, therefore, are not reported in the funds. Bonds payable Loans payable Compensated absences Bond premium Arbitrage rebate payable 7,333 (121,191) (8,838) (7,572) (318) (391) (138,310) Interest payable (68) Deferred revenue not expected to be received within sixty days is unavailable for governmental funds statements but is recognized for governmental-wide statements. 664 Net assets of governmental activities $ 131,695 29 City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) General REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investments Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures $ 12,864 12,864 $ $ 1,847 1,847 Other Non-Major Governmental Funds $ 10,932 5,015 21,501 1,124 1,395 1,307 41,274 Total Governmental Funds $ 70,526 10,663 68,479 2,516 2,859 2,572 2,729 160,344 51 7 951 5,223 16 7,291 3,223 11,493 13 20,064 49,126 11,364 27,502 3,223 11,493 71 5,287 659 7,046 107,567 8,058 2,440 10,549 1,374 1,017 2,398 5,855 1,809 31,590 67,464 20,574 5,925 38,636 187,978 (26,190) (27,634) 35,979 200 - 40,563 200 82 2,315 82 Net change in fund balances Special Assessment Debt Service 19,113 43,903 11,348 20,211 - (3,208) OTHER FINANCING SOURCES (USES) Proceeds from bonds sold Proceeds from loans Proceeds from equipment disposal Payment to refunded bonds escrow agent Transfers in Transfers out Total other financing sources and uses Fund balances, July 1 Change in accounting principle (Note I.T) Fund balances, July 1 - restated Fund balances, June 30 44,883 5,648 46,978 1,392 2,859 1,177 1,422 104,359 Major Funds General Obligation Debt Service (551) 4,584 - - 356 (10,061) (9,623) (4,533) 51 420 420 15,160 (6,104) 45,235 (4,533) 15,936 (16,165) 36,083 (12,831) 2,366 (131) 19,045 8,449 37,948 37,948 25,117 3,515 3,515 5,881 42,860 3,280 46,140 65,185 88,376 3,280 91,656 100,105 $ The notes to the financial statements are an integral part of this statement. 30 $ 4,053 4,053 3,922 $ $ City of Glendale, Arizona Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Amounts for governmental activities in the statement of net assets are different because: Net change in fund balances - total governmental funds $ 8,449 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation. This is the amount by which capital outlays $38,636 exceeded depreciation ($8,026) for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Loss on sales 30,610 6,205 (82) (345) 5,778 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. The issuance of long-term debt ($40,435) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt ($20,574) and refunding of bonds ($4,545) consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, and related items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Compensated absences reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. The net revenue of certain activities of internal service funds is reported with governmental activities. Interest expense on the statement of activities differ from governmental funds because of the portion not accrued on the governmental funds. Change in net assets of governmental activities 664 (15,363) (6,087) 1,187 57 $ 25,295 31 City of Glendale, Arizona Statement of Net Assets Proprietary Funds June 30, 2002 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Water and Proprietary Sewer Landfill Funds ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for doubtful accounts Accrued interest Due from other governments Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Water storage rights, net Equity in joint venture Total noncurrent assets Total assets 14,294 $ 16,753 $ 1,571 $ Total 32,618 7,117 (203) 136 74 474 21,892 964 (8) 2 17,711 1,463 (25) 65 12 3,086 9,544 (236) 138 139 486 42,689 19,781 1,656 509 21,946 416,104 (87,313) 328,791 21,141 (4,644) 16,497 19,285 (9,302) 9,983 Governmental Activities Internal Service Funds $ 13,207 46 337 13,590 31 456,530 (101,259) 355,271 - 6,478 - - 6,478 - 29,805 - - 29,805 - 384,855 18,153 10,492 413,500 31 406,747 35,864 13,578 456,189 13,621 LIABILITIES Current liabilities: Accounts payable Compensated absences Accrued expenses Due to other funds Due to other government Deposits Unearned rent Claims payable Current portion of long-term debt: General obligation bonds Revenue bonds payable Capital lease payable Other long-term debt Interest payable Total current liabilities 2,643 657 928 399 - 368 125 73 129 - 126 206 60 62 15 103 1 - 3,137 988 1,061 62 15 631 1 - 994 68 2,755 2,195 7,425 26 1,090 1,669 17,032 147 1,407 246 2,495 888 24 1,485 2,342 7,425 2,321 1,090 1,939 21,012 3,817 Noncurrent liabilities: Deferred revenue Compensated absences General obligation bonds Unamortized premium on debt issuance Revenue bonds payable Other long-term debt Note payable Capital lease obligations Claims payable Estimated closure and post-closure costs Total noncurrent liabilities Total liabilities 272 3,970 360 49,280 5,320 109 59,311 76,343 47 1,186 10,301 8,466 20,000 22,495 145 1 2,560 2,706 4,191 464 5,156 360 49,280 1 5,320 12,970 8,466 82,017 103,029 15 2,205 2,220 6,037 259,016 3,456 6,535 269,007 - 9,012 - - 9,012 - 9,808 827 51,741 330,404 9,913 13,369 434 2,418 9,387 9,808 1,261 64,072 353,160 7,584 7,584 NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Revenue bond retirement, replacement, and extension Other purposes Unrestricted Total net assets $ $ $ Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds Net assets of business-type activities The notes to the financial statements are an integral part of this statement. 32 $ 251 353,411 $ City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Water and Sewer Operating revenues: Intergovernmental Metered water sales Sewer service charges Container service Curb service Landfill user fees Self-insurance premium Recycling sales Other fees Total operating revenues $ Operating expenses: Water Sewer Landfill Housing Closure/post-closure care adjustment Sanitation Administrative and general Insurance claims Amortization and Depreciation Total operating expenses Operating income (loss) Business-type Activities - Enterprise Funds Other Proprietary Landfill Funds 51 26,769 18,281 1,019 46,120 $ 10,577 7,449 9,594 8,104 35,724 10,396 8,441 1,139 30 9,610 $ 6,483 4,499 7,309 422 18,713 $ Totals 6,534 26,769 18,281 4,499 7,309 8,441 1,139 1,471 74,443 4,534 (6,211) 878 1,089 290 9,320 7,157 9,277 1,200 1,148 18,782 (69) 10,577 7,449 4,534 7,157 (6,211) 9,277 11,672 10,341 54,796 19,647 Governmental ActivitiesInternal Service Funds $ 15,570 15,570 14,570 14,570 1,000 Nonoperating revenues (expenses): Impact fees Investments Interest expense Net loss from joint venture Gain (loss) on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 3,503 926 (3,123) (1,054) (147) 105 151 659 (938) (43) (171) 97 53 (185) 22 307 294 3,751 1,638 (4,246) (1,054) (168) 307 228 440 - Income before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets 10,501 4,591 (148) 14,944 9,149 (14) 9,135 225 390 615 19,875 4,591 390 (162) 24,694 1,440 1,440 Total net assets - beginning Change in accounting principle (Note I.T) Total net assets - beginning, restated Total net assets - ending $ 315,460 315,460 330,404 $ 4,234 4,234 13,369 $ 2,208 6,564 8,772 9,387 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities The notes to the financial statements are an integral part of this statement. 33 440 $ $ 251 24,945 6,144 6,144 7,584 City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 1 of 2 Water and Sewer Cash flows from operating activities: Cash received from customers Cash received from federal government Cash paid to suppliers: Internal city departments External vendors Cash paid for insurance and in settlement of claims Cash paid to employees for services Net cash provided by operating activities $ Cash flows used for noncapital financing activities: Received from other programs Paid to other programs Paid to other projects Transfers in Transfers out Net cash provided by or used for noncapital financing activities Landfill $ Cash flows from investing activities: Sale or maturity of investment securities Interest received from investments Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents during fiscal year $ 9,363 - $ 11,937 5,887 Totals $ 67,000 5,887 Governmental Activities Internal Service Funds $ 15,581 - (20,361) (12,795) (1,121) (2,775) (5,921) (7,408) (27,403) (22,978) (9,550) 2,994 (1,679) 3,788 (4,338) 157 (15,567) 6,939 24 (135) (10) 395 (162) - 112 - - Cash flows from capital and related financing activities: Proceeds from sale of capital assets Proceeds from loans Proceeds from capital leases Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Capital grant proceeds Net cash used for capital and related financing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 45,700 - Other Proprietary Funds - (14,036) 1,545 (148) (14) 24 (135) (10) 395 - (148) (14) 274 2 2,276 135 (8,865) (17,778) 3,503 (3,295) - 355 (1,448) (2,094) 151 (772) - 1,020 (857) (1,842) 97 (161) 307 2 2,276 1,510 (11,170) (21,714) 3,751 (4,228) 307 - (24,022) (3,808) (1,436) (29,266) - 2,804 1,094 3,898 709 709 61 61 2,804 1,864 4,668 (17,278) 675 (944) (17,547) 51,353 34,075 $ The notes to the financial statements are an integral part of this statement. 34 17,734 18,409 $ 3,024 2,080 $ 72,111 54,564 439 439 1,984 $ 11,254 13,238 City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 2 of 2 Water and Sewer Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Amortization and Depreciation Changes in assets and liabilities: Accounts receivable Due from other governments Inventories and prepaid items Accounts payable Accrued expenses Due to other funds Deposits Unearned rent Deferred revenue Compensated absences Claims payable Estimated closure and post-closure costs Net cash provided by operating activities Reconciliation of balance sheet cash and investments to the statement of cash flows: Per combined balance sheet: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents Noncash investing, capital, and financing activities. Contributions of capital assets Loss on joint venture Non-cash loss on asset disposal Estimated closure and post-closure costs Trade in of capital asset Landfill $ 10,396 $ 9,320 8,104 1,089 (337) (64) (162) (402) (321) (14,134) 1 (87) - Other Proprietary Funds $ (69) 1,148 (277) (204) 73 30 (32) - Totals $ 19,647 Governmental Activities Internal Service Funds $ 10,341 1,000 - (158) 238 (10) (41) (1) (991) 23 (2) 20 - (772) 174 (172) (647) (249) (15,125) 54 (2) (99) - (5) (44) 739 (335) (83) 15 258 157 (6,211) $ 6,939 $ $ 2,994 (6,211) $ 3,788 $ $ 14,294 19,781 $ 34,075 $ 16,753 1,656 $ 18,409 $ 1,571 509 $ 2,080 $ 32,618 21,946 $ 54,564 $ 13,207 31 $ 13,238 $ 4,591 (1,054) (147) $ $ $ 4,591 (1,054) (212) $ - (43) 6,211 114 35 (22) - 6,211 114 1,545 - Notes to the Financial Statements The Notes to the Basic Financial Statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying financial statements. Index Summary of Significant Accounting Policies Stewardship, Compliance and Accounting Deposits and Investments Capital Assets Construction and Other Significant Commitments Self Insurance Leases Long Term Debt Landfill Obligations Interfund Transactions Encumbrances Equity in Joint Venture Jointly Governed Organizations Related Party Transactions Fund Balance/Net Assets Reservation and Designation Employee Retirement Systems and Pension Plans Other Postemployment Benefits Contingent Liabilities and Commitments Subsequent Events 36 Note Page I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIII XIX 37 46 47 49 51 52 53 55 63 64 66 66 67 67 67 72 75 75 75 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) I. Summary of significant accounting policies A. Entity-wide and fund financial statements The Entity-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary City and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. B. Reporting entity The City of Glendale, Arizona (City) was incorporated June 18, 1910, under the provisions of Article 13, Sections 1 through 6 of the Constitution of Arizona and Title 9 of the Arizona Revised Statutes. It is governed by Mayor elected at large, and six district council members. The City operates under a Council-Manager government. As required by GAAP, these financial statements present the government and its component unit, an entity for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of a government’s operations, so data from these units are combined with data of the primary government. A discretely presented component unit, on the other hand, is reported in a separate column in combined financial statements to emphasize that it is legally separate from the government. The City has no discrete component units. Blended component unit City of Glendale, Arizona, Municipal Property Corporation (MPC) is a non-profit corporation organized under the laws of the State of Arizona to assist the City in the acquisition and financing of municipal projects and facilities. MPC is governed by a board of directors, who are responsible for approving the corporation’s bond sales. Bond sales must also be approved by the City Council. Although it is legally separate from the City, MPC is reported as if it is part of the primary government because its sole purpose is to finance and construct public facilities for the City. MPC does not issue separate audited financial statements. However, it does file a separate annual report with the Arizona Corporation Commission (ACC). Copies of the ACC report are available from the City’s Finance Department. It is the only blended component unit. C. Form of presentation – Government-wide financial statements The City reports the following major governmental funds: 37 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) The general fund is the City’s primary operating fund. It accounts for all financial resources of the general City, except those required to be accounted for in another fund. The general obligation debt service fund accounts for the resources accumulated through a secondary property tax levy and payments made for principal and interest on long-term general obligation debt of governmental funds. The special assessment debt service fund accumulates monies for payment of the City’s improvement districts’ debt. Each district makes assessments to pay its debt service. The City reports the following major proprietary funds: The water and sewer fund accounts for operations, maintenance and construction projects of the City-owned water and sewer systems. The landfill fund accounts for operations of the City-owned landfill. It provides services to residential and commercial users of the City. Additionally, the City reports the following fund types: Internal service funds account for risk management, worker’s compensation and employee benefits provided to other departments. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the City-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Cities also have the option of following subsequent privatesector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. D. Form of presentation – fund financial statements The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures/expenses, as appropriate. Government resources are allocated to, and accounted for, in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The following funds are presented in the accompanying combined financial statements. Governmental funds Governmental funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City’s expendable financial resources and related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is based upon determination of financial position and changes in financial position, rather than upon the determination of net income. The following governmental funds are presented in the accompanying combined financial statements. General fund: The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. 38 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Special revenue funds: Special revenue funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts if any, or major capital projects) that are legally restricted to expenditures for specified purposes. Debt service funds: Debt service funds are used to account for the accumulation of financial resources for the payment of general long-term debt principal, interest, and related costs, except the debt service accounted for in the enterprise funds. Debt service funds also include the debt payable from special assessments. The repayment of debt is principally funded by property taxes levied by the City on property located within the City. Capital projects funds: Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). These funds also include activity for construction of various public improvements, which are financed through assessments levied against individual property owners who have benefited from the service or improvement. Permanent funds: Permanent funds are used to account for the revenues received by the City from the sale of cemetery lots and other related services. Proprietary funds Proprietary funds are used to account for the City’s ongoing organizations and activities, which are similar to those found in the private sector. The measurement focus is based upon the determination of net income. Enterprise funds: Enterprise funds are used to account for operations, including debt service, 1) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or 2) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The enterprise funds, which the City currently maintains, are the water and sewer, landfill, sanitation, and housing funds. Internal service funds: Internal service funds are used to account for the financing of selfinsurance provided by one City department to other City departments on a costreimbursement basis. Fiduciary funds: The City has none. E. Measurement focus and basis of accounting The City-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported 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 to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of 39 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the related debt service fund for payments to be made shortly after fiscal year end. Revenues susceptible to accrual include property tax, sales tax, highway users tax, state shared sales tax, vehicle license tax, and interest earned on investments. Licenses and permits, charges for services, fines and forfeitures, and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. In applying the susceptible to accrual concept to intergovernmental revenues, the decision to accrue depends on the terms of the arrangement or agreement. Generally, these resources are reflected as revenue at the time of receipt or earlier if they meet the available criterion. Certain grant revenues are recognized based on expenditures recorded. Special assessment levies are reported as revenue when measurable and available. F. Interfund transactions There are several types of transactions that are reported in the financial statements as interfund items. Transactions that would be treated as revenue, expenditures or expenses if they involved organizations external to the governmental unit, like the sale of water from the water and sewer fund to various functions of the general fund, are accounted for as revenue and expenditures or expenses in the funds involved. Transactions that constitute reimbursement to a fund for expenditures or expenses initially made from that fund, which are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is being reimbursed. Governmental Accounting Standards Board Statement (GASBS) 34 also requires that administrative service fees charged to other operating funds to support general services used by the other operating funds (like purchasing, accounting and administration) should be treated as reimbursement transactions and the revenue and expenditures/expenses reduced in the allocating fund. Transfers between funds are included in the results of both governmental and proprietary funds (as other sources/uses in governmental funds and as non-operating revenues/expenses in proprietary funds). Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported in the fund financial statements as “due to/from other funds.” Certain transactions occurring between funds that are combined within the same fund type or displayed in the same financial statement column for presentation in these annual financial statements have been eliminated from the financial statements. These transactions include transfers between funds and interdepartmental service charges. In the government-wide financial statements, only the net interfund activity and balances between governmental activities and business-type activities are shown (reported as “internal balances”). G. Statement of cash flows The City considers short-term investments (including restricted assets) in the State of Arizona Local Government Investment Pool (LGIP), mutual fund-money market, U.S. Treasury bills and notes with original maturities of three months or less at acquisition date to be cash equivalents. 40 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) H. Inventories and Prepaid Items Inventories of the governmental and enterprise funds consist primarily of expendable supplies held for consumption. These inventories are maintained on a perpetual system verified through cyclical physical counts and are valued using a weighted average cost. Generally, expenditures are recorded at the time inventories are used (i.e., the Consumption Method) for both GAAP reporting and budgetary purposes. However, the City postage inventory is recorded as an expenditure at time of purchase (i.e., the Purchase Method) for budgetary purposes. At June 30, 2002, the postage portion of the general fund supplies inventory was $37. Certain expenditures are recorded for financial reporting purposes as prepaid items. Special reporting treatment is applied to governmental fund inventories to indicate that they do not represent available expendable financial resources, even though they are a component of current assets. Such amounts have been offset by a fund balance reserve account. I. Restricted assets Certain proceeds of the City’s bonds, as well as certain resources set aside for their repayment, are classified as restricted on the balance sheet, or statement of net assets, because they are maintained in separate bank accounts and their use is limited by applicable debt covenants. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. J. Capital assets Prior to GASB Statement 34, capital assets for governmental funds were recorded in the general fixed assets account group and were not depreciated. The new model requires that all capital assets, whether owned by governmental activities or business-type activities, be recorded and depreciated in the government-wide financial statements. The City has chosen not to apply the modified approach to any networks or subsystems of infrastructure assets. No long-term assets or depreciation are shown in the governmental fund financial statements. Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are defined as assets with an initial, individual cost of more than $5 and an estimated useful life greater than three years. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense incurred by the enterprise funds during the current fiscal year was $4,246. Of this amount, $220 was included as part of the cost of capital assets under construction in connection with water and sewer projects and $30 was included as part of the cost of capital assets under construction in connection with landfill facility projects. Property, plant, and equipment is depreciated using the straight line method over the following estimated useful lives: 41 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Assets Buildings Improvements other than buildings Infrastructure Machinery and equipment Automotive equipment Software Computer equipment Useful Life (Years) 30 10-20 20-100 5-8 6-8 3 3-5 Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation) as of the date of the transfer. K. Water storage rights The City has entered into a lease agreement with Salt River Pima-Maricopa Indian Community (SRP-MIC) for the rights to 1814 acre-feet of water each year through 2099. These rights costing $2,693 are being amortized over 40 years on a straight-line basis starting January 1, 2000. Current year amortization was $67. The net book value of water rights as of June 30, 2002, is $2,525. In addition, the City will be responsible for paying for the cost of water delivered each year. The City participates in the Plan Six cost sharing agreement to construct the Waddell Dam on the Agua Fria River and modify the Roosevelt and Stewart Mountain Dams on the Salt River. The parties to this agreement include the United States government, State of Arizona, Central Arizona Water Conservation District, Salt River Project, and the cities of Phoenix, Chandler, Glendale, Mesa, Scottsdale, Tempe and Tucson. The federal government has determined that this agreement does not constitute a joint venture. As of June 30, 2002, the City has capitalized payment of $3,954 for these water rights. Upon completion, the City will amortize this asset over 40 years on a straight-line basis. L. Fund balance/net assets reservations and designations In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation by legislative action by the City Council or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Only restrictions imposed by external sources are shown as Restricted Net Assets on the government-wide financial statements. Reservations or designations of net assets imposed by the reporting government, whether by administrative policy or legislative action of the reporting government, are shown in aggregate on the governmental fund financial statements. M. Property tax The City levies taxes on real and personal property located within its boundaries. Property values are assessed by the Maricopa County Tax Assessor. The tax levy is then approved by the State of Arizona Property Tax Oversight Commission. The County Treasurer bills and collects property taxes and remits them to the City monthly. City property tax revenues are recognized when levied to the extent that they are received within the current period, or soon enough thereafter (within 60 days of year end), to pay liabilities of the current period. Remaining collectible taxes are accrued and reflected as deferred revenue. 42 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Property Tax Calendar Lien date Levy (assessment) date (third Monday in August) Due dates: First half of assessment Second half of assessment Penalties and interest added (collection dates): First half of assessment Second half of assessment January 1, 2001 August 20, 2001 October 1, 2001 March 1, 2002 November 1, 2001 May 1, 2002 The City currently levies less than the maximum allowed by State Statutes for primary property taxes. The City is permitted to levy an increase of two percent over the previous year’s maximum allowable primary levy plus an increased dollar amount due to a net gain in property not taxed the previous year. The secondary property tax levy is made for the purpose of retiring the principal, interest and servicing fees on bonded indebtedness. The City may levy the amount deemed necessary to meet its bonded debt service requirements. Assessed values are established by the Maricopa County Tax Assessor each year on a uniform basis ratios to full cash value of each property class as required by State Statutes. The distribution of the City’s levy (tax rate per $100 assessed value) to its funds for the year ended June 30, 2002, is as follows: Fund General fund General obligation debt service fund Total Rate $ 0.36 1.36 $ 1.72 N. Compensated absences Vacation time is accumulated up to a maximum of six work weeks. Compensatory time is earned in lieu of cash payment for overtime and is accumulated up to a maximum of 48 hours. Both vacation and compensatory time can either be taken as time off from work within certain limitations or may be payable to employees upon termination or retirement. Sick leave is accumulated without limit and can be used in the event of an illness in the immediate family. Accumulated sick leave is convertible to a partial-cash benefit upon termination or retirement after five years of service, or annually through an irrevocable declaration. The current portion of the liability for compensated absences recorded in the governmental funds, which is equal to: 1) vacation and compensatory time taken and paid during the sixty days following the year ended June 30, 2002, and 2) sick leave, taken and paid for illness during that period, paid to terminating employees or paid under the optional annual declaration. Long-term liabilities of governmental funds are not shown on the fund financial statements. For the government-wide financial statements, as well as the proprietary fund financial statements, all of the outstanding vacation, compensatory time, and sick leave are recorded as a liability. O. Deferred revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. 43 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Revenues related to time payment contracts are recorded as deferred revenue earned but not available in the permanent fund. Revenues related to Court fines are recorded as unearned revenue until adjudicated by the Court. Revenues related to property tax levies are recorded as deferred revenue until available to fund current activities. Special revenue funds’ deferred revenue and receivables consist principally of low interest rate loans made with grants from the Community Development Block Grant program for rehabilitation of homes for low to moderate income Glendale residents. Revenue will be recognized in future periods as loans are repaid or forgiven based on the homeowner’s loan contract. An expenditure was recorded when the loans were made. P. Long-term obligations In the City-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method, which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund fi nancial 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. Q. Operating revenues and expenses Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds, and of the City’s internal service funds are charges to customers for sales and services, or housing operational grants from a federal agency. The water and sewer fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. R. Deferred compensation Voluntary Deferred Compensation Plan for Employees of the City of Glendale, State of Arizona; Restated Plan Document (the “Plan document”) was adopted by the Mayor and City Council on November 10, 1998, and amended on January 8, 2002, to incorporate the federal Economic Growth and Tax Relief Reconciliation Act of 2001. In addition, the Mayor and City Council adopted a defined contribution deferred compensation plan document on April 9, 2002, under 44 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) the Internal Revenue Code Section 401(a). Through the Plan document, the City offers its employees a deferred compensation plan that permits them to defer a portion of their current salary until future years. Any contributions made to the deferred compensation plan, in compliance with Section 457 and 401(a) of the Internal Revenue Code, are not available to employees until termination of employment, retirement, death or an unforeseen emergency. Contributions to the plan are administered by one of two third party administrators, ICMA Retirement Corporation (ICMA-RC) and PEBSCO Securities Corporation (Nationwide Retirement Solutions). In compliance with the provisions of the U.S. Internal Revenue Code Sections 457(g) and 401(a), the plan assets are in custodial or trust accounts for the exclusive benefit of the plans’ participants and beneficiaries. In accordance with GASBS 32, the City provides neither administrative services nor investment advice to the plans and therefore, no fiduciary relationship exists between the City and the deferred compensation pension plan. Therefore, Plan assets are not included as a fund of the City. To further clarify the legal trust status in Arizona of plan assets with ICMA-RC and Nationwide Retirement Solutions, a Trust Agreement was executed by the City management on May 19, 2001. S. Investments The City utilizes the following methods and assumptions to account for its investments: 1. 2. 3. Aside from investments clearly identified as belonging to a specific fund, any unrealized gain/loss resulting from the valuation is recognized within the general fund as investment revenue. Investments are recorded at fair value, which is based on quoted market prices as of the valuation date. Pooled investment income is allocated to various funds monthly based on the average equity balances maintained during the month. Arizona Revised Statutes require the City to deposit certain crime-related forfeitures with the County Treasurer. The County Treasurer determines the fair value of those pooled investments. The structure of the pool does not provide for shares and the County has not provided or obtained any legally binding guarantees to support the value of the participants’ investments. The City’s investment in LGIP represents shares of the pool’s portfolio. The fair value of each share in the LGIP is $1. These shares are not identified with specific investments and are not subject to custodial credit risk. Both the County and LGIP are not registered with the Securities and Exchange Commission as investment companies. The State Board of Deposits provides oversight, and the Local Government Investment Pool Advisory Committee provides consultation and advice to the LGIP. There is no regulatory oversight of the County Treasurer’s operations. The net decrease in the fair value of investments during fiscal year 2001-02 was $99. T. Change in accounting principle The implementation of GASBS 34, 37 (“Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments: Omnibus”), and 38 (“Certain Financial Statement Disclosures”) are a change in accounting principle, which caused certain prior year net assets/fund balances to be restated. The City also reclassified certain funds 45 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) during fiscal year 2001-02 between governmental funds and proprietary funds. The net effect of these movements is shown as an adjustment to beginning net assets/fund balance as of July 1, 2001. Governmental funds: Housing special revenue fund reclassified into a proprietary fund Cemetery perpetual care permanent fund established, net of $101 land previously reported as a fund asset Net increase in beginning net assets Proprietary funds: Housing enterprise fund established Cemetery perpetual care nonexpendable trust fund reclassified to be a permanent fund Net increase in beginning net assets II. $ (301) $ 3,581 3,280 $ 6,564 $ (3,682) 2,882 Stewardship, compliance and accountability A. Budgetary ba sis of accounting The City prepares its annual budget on a basis, which differs from the GAAP basis. A budgetary comparison schedule for the general fund is included as required supplementary information to provide a meaningful comparison of actual results to budget on the budget basis. Budgetary comparison schedules for all other funds are presented as other supplement information after the combining statements. In all cases, the budgetary schedules include a reconciliation of the adjustments required to convert the budgetary revenues and expenditures or change in net assets on a budgetary basis, to revenues and expenditures/expenses or change in net assets on a GAAP basis. B. Budgetary information The City utilizes the following procedures in establishing the budgetary data reflected in the combined financial statements. 1. 2. 3. 4. Prior to the first of June of each year, the City Manager submits to the Mayor and Council a proposed operating budget for the fiscal year commencing the following July 1. The budget includes proposed operating and capital expenditures and the means of financing them. The projected beginning budgeted fund balances for each fund are based on preliminary th estimates of the June 30 ending actual budget basis fund balances rather than the June th 30 ending budgeted fund balances. These two amounts will differ because of differences in actual results for the year versus planned results and by unused contingency appropriations. Prior to July 1, after receiving comments in a public hearing, a tentative budget is adopted by the City Council, which fixes an upper-dollar limit for all funds combined, beyond which the City may not increase appropriations. After two weeks of legal advertising, the City Council legally adopts a final budget ordinance, which fixes appropriations for each fund, except for the nonexpendable trust fund. Budget basis expenditures may not exceed appropriations for each fund, except in conjunction with the transfer of contingency funds. Contingency funds are appropriated for several funds as identified in the budget basis schedules and may only be transferred with City Council approval. The City Council may reallocate appropriations through amendment, but may not increase total appropriations above the total budget, which was legally adopted for the fiscal year. 46 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) 5. 6. The Director of Management and Budget is generally authorized to transfer budgeted amounts within departments’ approved capital or operating budgets, and the City Manager is authorized to transfer appropriations between departments. Any new capital improvement projects or any nonbudgeted projects require City Council approval. Formal budgetary integration is employed as a management control device during the year for all funds. C. Excess of expenditure over appropriations For the year ended June 30, 2002, expenditures exceeded appropriations in the general obligation debt service and workers compensation funds (the legal level of budgetary control) by $168 and $73, respectively. These over-expenditures were funded by available fund balance in the funds. D. Contingency appropriation The principal purpose of a contingency appropriation is to cover any unforeseen expenditure, which may arise after the budget is adopted. It is impossible to estimate revenues exactly or to determine in a prior year the exact expenditures of each program or activity for the ensuing year. Thus, a contingency is essential for budgetary purposes. Any balance of contingency appropriation not used during one fiscal year is available to help finance the following year’s budget. The unused balances of contingency appropriations are reflected in the budget basis financial statements. III. Deposits and investments The City maintains a cash management pool for its cash and cash equivalents in which each fund and/or account or sub-account of a fund participates on a dollar equivalent basis. Deposits At year-end, the carrying amount of the City’s deposits, excluding restricted cash, was $34,435. The bank ledger balances were $40,195, of which $285 was insured by the Federal Depository Insurance Corporation (FDIC), $38,851 was collateralized by the bank’s agent in the City’s name. The remaining amount was uninsured and uncollaterialized. The difference between the carrying amount and the bank balance represents outstanding transactions that had not cleared the bank as of June 30, 2002. At year-end, the carrying amount of the City’s cash with fiscal agents totaled $1,039. Cash with the fiscal agent is credited to the name of the bondholder upon receipt by the fiscal agent from the City and as such, the monies are not collateralized. Rights to the monies are collateralized by the FDIC in the name of the bondholder. Of this amount, $827 was held in an escrow account maintained by the Arizona State Treasurer and is not subject to credit risk categorization. Investments State Statues and the City’s investment policy authorize the City to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, repurchase agreements, commercial paper (A -1/P-1 rated), interest-earning money market accounts, certificates of deposit, and the State of Arizona Local Government Investment Pool (LGIP). Investments may not exceed three years to maturity from the date of purchase. 47 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) The City’s investments are categorized as follows to give an indication of the level of credit risk assumed at year-end. Category 1 Investments that are insured or registered or for which the Securities are held by the City or its agent in the City’s name. Category 2 Uninsured and unregistered investments for which the securities are held by the counterparty’s trust department or agent in the City’s name. Category 3 Uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City’s name. Fair Value Credit risk category 1 U.S. Treasury securities U.S. instrumentalities $ Investments not subject to credit risk categorization: LGIP Maricopa County Treasurer’s Investment Pool Wells Fargo Money Market Wells Fargo Treasury Plus Total investments 14,227 29,733 101,342 327 4,895 1,141 $ 151,665 48 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) IV. Capital assets A summary of capital asset activity, for the government-wide financial statements, for the year ended June 30, 2002, is as follows: Balances June 30, 2001 Governmental activities Non-depreciable assets: Construction in progress Land Artwork Total non-depreciable assets $ 432 43,245 938 44,615 Additions / Transfers In $ 23,079 9,461 32,540 Disposals / Transfers Out $ (6,138) (6,138) Balances June 30, 2002 $ 17,373 52,706 938 71,017 Depreciable assets: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - airport Infrastructure - lighting Machinery and equipment Computer equipment Software Automotive equipment Total depreciable assets at historical cost 68,158 53,970 8,745 1,960 40 21,635 154,508 419 11,283 491 13 294 3,888 244 394 1,502 18,528 (154) (4,569) (1,272) (1,617) (7,612) 68,158 54,235 11,283 491 13 294 8,064 932 434 21,520 165,424 Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - airport Infrastructure - lighting Machinery and equipment Computer equipment Software Automotive equipment Total accumulated depreciation (20,917) (31,704) (6,518) (1,367) (37) (13,461) (74,004) (2,251) (2,717) (642) (339) (41) (2,037) (8,027) 120 4,268 1,232 1,567 7,187 (23,168) (34,301) (2,892) (474) (78) (13,931) (74,844) 80,504 10,501 Total depreciable assets, net Governmental activities capital assets, net $ 125,119 49 $ 43,041 (425) $ (6,563) 90,580 $ 161,597 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Balances June 30, 2001 Business-type activities: Non-depreciable assets: Construction in progress - water and sewer Construction in progress - landfill Construction in progress - landfill bonds Construction in progress - housing authority Land Total non-depreciable assets $ 64,297 14 813 5,612 70,736 Depreciable assets: Buildings Improvements other than buildings Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and Equipment Computer equipment Automotive equipment Total depreciable assets at historical cost 12,441 6,687 74,928 91,716 89,837 34,560 25,780 5,187 7,267 845 16,248 365,496 Less accumulated depreciation for: Buildings Improvements other than buildings Water lines Sewer lines Water treatment plant Sewer treatment plant Meters and services Fire hydrants Machinery and Equipment Computer equipment Automotive equipment Total accumulated depreciation (2,575) (1,547) (17,574) (25,134) (26,527) (1,711) (3,977) (1,100) (2,754) (630) (10,289) (93,818) Total depreciable assets, net 271,678 Business-type activities capital assets, net $ 50 342,414 Additions / Transfer In $ $ $ 14,468 31 1,564 298 13 16,374 Disposals / Transfer Out $ $ (56,897) (30) (760) (57,687) Balances June 30, 2002 $ $ 21,868 15 1,564 351 5,625 29,423 887 410 3,156 2,003 745 55,416 168 1,815 54 2,178 66,832 (2,260) (24) (2,937) (5,221) 13,328 7,097 78,084 93,719 90,582 89,976 25,948 5,187 6,822 875 15,489 427,107 (625) (218) (1,250) (1,766) (2,559) (979) (716) (101) (594) (107) (1,359) (10,274) 461 22 2,350 2,833 (3,200) (1,765) (18,824) (26,900) (29,086) (2,690) (4,693) (1,201) (2,887) (715) (9,298) (101,259) 56,558 (2,388) 325,848 72,932 $ (60,075) $ 355,271 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Depreciation was charged to functions/programs as follows: Governmental activities: General Public safety Public works Street maintenance Community service Community environment Total depreciation expense $ 2,053 1,912 726 598 2,592 146 $ 8,027 Business-type activities: Water and sewer Landfill Sanitation Community housing Total depreciation expense $ 8,037 1,089 781 367 $ 10,274 Effective with these financial statements, the City has implemented infrastructure reporting requirements of GASB Statement 34, not including retroactive infrastructure. The City plans to implement the retroactive infrastructure within the required GASB Statement 34 phase in period. V. Construction and other significant commitments The City has expanded its Pyramid Peak Water treatment plant to a capacity sufficient to treat up to six million gallons per day of City of Peoria’s allocation of Central Arizona Project (CAP) water. Peoria has paid its pro-rata share of the costs of the necessary facilities in the amount of $9,956. The City has also entered into an ongoing operations agreement with Peoria. The agreement requires Peoria to pay 23% of the cost of power, chemicals, labor, overhead and maintenance costs of the Pyramid Peak Plant. On July 24, 2001, the City entered into an agreement to purchase 29.6 acres of land previously used for raising livestock or poultry. The agreement provides for a total purchase price not to exceed $7,000 plus closing costs. The City has paid $500 plus closing costs through fiscal year 2002 with a purchase commitment of $2,300 plus closing cost in fiscal year 2003, $2,000 in fiscal year 2004 and $2,200 in fiscal year 2005. Payment will be funded from each fiscal year revenues out of the general fund. The City entered into an agreement on June 27, 2002, to purchase a new communication system. The agreement calls for a total purchase price not to exceed $9,000 payable over 13 months with $3,600 due 30 days after the agreement date. Payment will be funded out of the Public Safety CIP fund. On November 27, 2001, the City entered into several agreements with a private developer who is related to the company redeveloping Manistee Town Center. Those agreements guide the development and management of a 223-acre mixed-use project that will contain at least 1.6 million square feet of retail development; a multi-purpose facility that meets or exceeds National Hockey League (NHL) standards; and substantial additional development including restaurants, Class A office, entertainment and recreational uses, hotels and residential units. The agreements provide for the City to fund up to $180,000 for the construction of the multi-purpose facility, which will be owned by the City. The $180,000 will consist of up to $30,000 in general obligation bond funding, which will be repaid through revenue generated directly from the project, and backed by a citywide pledge of excise tax revenues. The developer and related parties have provided certain financial guarantees to provide the City assurance that development will occur according to an agreed upon 51 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) development schedule. As of June 30, 2002, the City has issued $28,010 in General Obligation Bonds and has paid $6,470 in land acquisition and other related costs. VI. Self-insurance funds The City is exposed to various risks of loss. Certain of these risks are accounted for within the internal service fund type. A. Risk management On January 1, 1987, the City established a risk management fund for torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disaster. The City’s risk management fund purchases commercial insurance for property, aviation, Inland Marine, errors and omissions, boiler and machinery, special events, and vehicle property damage. The risk management fund was fully self-insured through June 30, 1998, for tort liability loss. Effective July 1, 1998, the City purchased excess public entity liability insurance with $1 million of selfinsurance retention for claims incurred on or after July 1, 1998. Funds receiving insurance coverage pay monthly premiums to the risk management fund based upon an actuarial review and recommendation made by the insurance advisor. Premium payments to insurance carriers are made directly from the risk management fund. There have been no settlements paid in excess of insurance in any of the past three years nor has insurance coverage been significantly reduced in recent years. B. Workers’ compensation On July 1, 1994, the City established a workers’ compensation fund for work-related injuries to employees. The workers’ compensation fund provides coverage up to a maximum of $250 for each workers’ compensation claim and purchases commercial insurance for claims in excess of $250. Funds receiving insurance coverage pay monthly premiums to the workers’ compensation fund based upon an actuarial review and recommendation made by the insurance advisor. Premium payments to insurance carriers are made directly from the workers’ compensation fund. There have been no settlements paid in excess of insurance in any of the past three years. The City’s insurance coverage decreased from $5,000 to $2,000 due to limited insurance availability after the September 11, 2001, terrorist attacks. C. Employee benefits trust On July 1, 2000, the City established an employee benefits trust fund to meet future cost increases for health-related insurance. Premiums are collected through contributions from employee paychecks and department budgets. Retirees and COBRA participants contribute 100% of premiums for their insurance benefit coverage. Premiums for the vision, dental, and life insurance plans are determined prior to each renewal period by a variety of factors including: the number of plan participants, the demographics of the group and previous claims history. These insurance benefits are provided through fully insured plans with the insurer having 100% liability for all claims. The fund pays all prescription claims submitted for the plan year. 52 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) The fund has an annual aggregate stop loss limit for medical claims. These premiums are set prior to the beginning of each plan year equal to 110% of the expected claims liability. The insurer covers claims in excess of the 110% mark. Premium payments to insurance carriers are made directly from the fund. There have been no settlements paid in excess of insurance in any of the past three years nor has insurance coverage been significantly reduced in recent years. D. Estimated liability Based on information provided by the actuary, liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported, the effects of specific, incremental claim adjustment expenses, and other allocated claim adjustment expenses. The City’s workers’ compensation self-insurance program liability includes recoveries related to subrogation. Salvage and subrogation are immaterial to both risk management and employee benefits self-insurance programs and are not incorporated into the liability. None of the self-insurance programs include a provision for unallocated claim adjustment expenses. The City claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and societal factors. The City reports the estimated liability in net present value dollars using a future investment yield assumption of 5%. These liabilities are reported in the internal service funds at their present value of $4,960 as of June 30, 2002. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2002 2001 VII. Unpaid claims, beginning of fiscal year Current year claims and changes in estimate Claims payments $ Balance at fiscal year end $ 1,715 $ 680 (751) 1,644 4,999 Workers' Compensation 2002 2001 $ (2,755) (529) $ 1,715 2,073 $ 559 (764) $ 1,868 1,952 Employee Benefits 2002 2001 $ 704 (583) $ 2,073 914 $ 11,379 (10,845) $ 1,448 7,606 (6,692) $ 914 Leases A. Capital leases The City’s capital lease activity consists principally of leasing various types of heavy equipment for landfill, sanitation, and fire. Additionally, the City has entered into capital leases involving real property for various funds. The City’s lease obligations meet the criteria of a capital lease as defined by Statement of Financial Accounting Standards No. 13 “Accounting for Leases,” and have been recorded on the government-wide statements. The future minimum lease obligation and net present value of lease payments for the leases at June 30, 2002, is as follows: 53 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Capital Leases Year Ending June 30 2003 2004 2005 2006 2007 2008-2012 2013-2017 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments $ $ 4,077 3,824 3,760 3,150 2,335 5,454 2,509 25,109 (5,320) 19,789 The assets acquired through capital leases are as follows: Class of Property Equipment Automotive equipment Building Other Less: Accumulated depreciation Total Governmental Activities Business-type Activities $ $ $ 87 2,975 197 683 3,942 (1,677) 2,265 $ 2,012 6,464 4,989 2,498 15,963 (2,514) 13,449 B. Operating lease expenditures The City leases office space and vehicles under various cancelable operating lease agreements expiring at various dates. Certain leases contain provisions for possible future increased rentals based upon changes in the Consumer Price Index. In reporting year 1999-00, the police department entered into a 5-year lease agreement for office space. The office space allowed the Sex Crimes Investigations Unit to move offsite and to form the Northwest Valley Advocacy Center, which provides a one-stop alternative for adults and children who are victims of sexual and domestic violence abuse. In 1993-1994, the police department entered into an 8-year office space agreement. Combined annual rental payments in fiscal year 2001-02 were $55. During the reporting year 2000-01, the City entered into various lease agreements for police, environmental quality, and city clerk vehicles. Combined annual rental payments in fiscal year 2001-02 were $116. C. Operating lease revenue The City also leases various City-owned properties and buildings under cancelable and noncancelable long-term lease agreements through fiscal year 2007 and beyond. The carrying value of leased assets is $9,691 (cost of $10,061 less accumulated depreciation of $370). The leased properties and buildings are included as capital assets in the government-wide financial statements. Certain leases contain provisions for future increased revenues based upon changes in the Consumer Price Index. 54 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Scheduled minimum revenues for non-cancelable leases for succeeding fiscal years ending June 30 are as follows: Fiscal Year 2003 2004 2005 2006 2007 Beyond 2007 Total Total Revenues $ 647 475 392 392 392 33 $2,331 VIII. Long-term debt A. General obligation bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City and are repaid through the City’s levying of property taxes. Retirement of the general obligation bonds in the business type activities are intended to be paid back by the revenues of the business type activities. B. Revenue bonds Highway User Revenue Bonds are used to construct street and highway projects. The debt service is repaid through the Highway User Revenue Fund, a special revenue fund, from the City’s share of the gasoline taxes that are collected by the State of Arizona and distributed to cities and towns based on a formula of population and gasoline sales within the county. Water and Sewer Revenue Bonds are issued, pursuant to voter authorization, for the construction, acquisition, and equipping of water and sewer facilities and related systems and infrastructure. The bonds are backed by the revenues of the water and sewer systems. C. Municipal Property Corporation bonds In 1982, the MPC, a nonprofit corporation, issued bonds to finance the construction of a new municipal office complex. On October 19, 1982, the City entered into a lease purchase agreement with MPC, whereby the City is purchasing the constructed municipal office complex from MPC. An amount equal to the MPC debt service and related miscellaneous fees, is payable to the MPC in monthly installments by the City, which commenced July 1, 1983. Under the provisions of the purchase agreement, the City has pledged for the payment of the purchase price: 1) all net revenues derived by it from the municipal office complex, and 2) all excise, transaction, privilege and franchise taxes which it currently collects, which it may collect or which are allocated to it by any other governmental unit or municipal corporation, except its share of such amounts which by state law, rule or regulation must be expended for other purposes. However, under no circumstances shall such pledge constitute a general obligation of the City or will the purchase price be payable from the proceeds of ad valorem taxes. 55 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) D. Special assessment bonds The City has a trust relationship for special assessment districts whereby it collects the assessments levied against owners of property within established districts and disburses the amounts collected to retire the bonds issued to finance related improvements. The City is required to annually appropriate from the tax revenues of the general fund monies to be applied in payment of the outstanding bonds to the extent that the funds derived from the collection of the unpaid special assessments are insufficient for the payment of the principal and interest falling due in any year. At June 30, 2002, special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, are adequate to meet the scheduled maturities of the bonds payable and related interest. Improvement bonds are collateralized by properties within the districts. In the event of default by the property owner, the City may auction the property to satisfy debt service requirements subject to federal bankruptcy laws. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. E. Changes in long-term liabilities The following is a summary of changes in long-term liabilities reported in the government-wide financial statements for the year ended June 30, 2002. July 1, 2001 General obligation (G.O.) bonds Special assessment debt with governmental commitment Revenue bonds: Street and highway Municipal property corporation Total bonds payable $ Capital leases and other debt: Capital lease obligations Notes payable Total capital leases and other debt Other long-term obligations: Compensated absences Claims and judgments Unamortized premium on debt issuance Arbitrage rebate payable Total other long-term obligations Total $ 46,917 Additions $ June 30, 2002 Reductions 40,235 $ (4,515) $ 82,637 Amounts Due Within One Year $ 8,058 17,621 - (1,374) 16,247 921 24,310 11,215 100,063 40,235 (5,889) 24,310 11,215 134,409 4,280 880 14,139 8,865 5,754 14,619 200 200 (4,367) (1,614) (5,981) 4,498 4,340 8,838 693 885 1,578 9,550 4,702 12,618 (379) (12,360) 9,171 4,960 6,368 2,755 669 14,921 318 12,936 (278) (13,017) 318 391 14,840 17 3 9,143 129,603 56 $ 53,371 $ (24,887) $ 158,087 $ 24,860 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) The following is a summary of changes in long-term liabilities reported in the business-type financial statements for the year ended June 30, 2002. July 1, 2001 Water and sewer G.O. bonds Landfill G.O. bonds Unamortized premium on debt issuance Water and sewer revenue bonds Note payable Capital lease obligations Estimated closure and post-closure costs Compensated absences Housing noncurrent liabilities Total $ $ Additions 6,165 1,333 $ June 30, 2002 Reductions - $ - $ 6,165 1,333 Amounts Due Within One Year $ 2,195 147 463 56,705 3,358 13,783 3,000 1,508 (51) - 412 56,705 6,358 15,291 52 7,425 1,038 2,321 14,677 1,486 1 97,971 4,508 (6,211) (34) (6,296) 8,466 1,452 1 96,183 988 14,166 $ $ $ $ F. Advance refunded bonds In prior years, the City issued refunding bonds to defease certain outstanding bonds, thus achieving debt service savings. The City has placed the proceeds from the refunding issues in irrevocable escrow accounts with a trust agent, which will provide amounts sufficient for future payment of principal and interest of the issues refunded. Accordingly, the trust account assets and liabilities for the defeased bonds are not included in the City's financial statement. Although defeased, the refunded debt from these earlier issues will not be actually retired until the call dates have come due or until maturity if they are not callable issues. No advance refundings were done by the City for the fiscal year ending June 30, 2002. The remaining balance of bonds considered defeased at June 30, 2002 are as follows: Issue Refunded Date Refunded Water and sewer revenue bonds: Refunding series of 1983 December 1, 1984 Water and sewer G.O. bonds: Series 1984 May 1, 1985 Total refunded bonds Remaining Balance $ 5,010 2,225 $ 7,235 57 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2002, are comprised of the following: Classified in governmental activities on the government-wide financial statements: General Obligation Bonds: Purpose Interest Rate Issued Fiscal Year Ending June 30 Year Series Matures Amount of Original Issue G.O. bonds payable from secondary assessed property taxes Refunding 5.05-5.55 1993 2007 $ 36,125 Various 4.50-4.90 1996 2006 10,000 Various 4.15-4.60 1998 2008 12,000 Refunding 4.25-4.35 2000 2003 370 Various 5.00-5.40 2000 2015 20,215 Various 2.50-5.00 2002 2022 40,235 Total Revenue bonds payable from highway user revenue funds Refunding 5.00 1993 2003 Streets 5.05-5.75 1995 2011 Streets 4.00-4.90 1996 2005 Streets 5.00-5.37 2000 2010 Total 16,470 4,590 9,000 8,750 Municipal property corporation payable from general fund lease payments Refunding 4.25-4.90 2000 2009 12,615 Special assessment bonds payable due from assessments on property owners District 57 6.00 1993 2014 9,725 District 59 6.00 1993 2014 11,600 District 73 5.35 1997 2007 299 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 58 Bonds Outstanding June 30, 2002 $ 12,590 1,010 8,985 370 19,447 40,235 82,637 4,940 2,615 8,205 8,550 24,310 11,215 7,330 8,745 172 16,247 134,409 (14,139) $ 120,270 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) H. Classified in business-type activities on the government-wide financial statements: Purpose Interest Rate Issued Fiscal Year Ending June 30 Year Series Matures G.O. bonds payable from landfill fund Landfill 5.00-5.40 2000 2015 G.O. bonds payable from water and sewer fund Refunding 5.05-5.55 1993 Refunding 4.35 2000 Total Amount of Original Issue Bonds Outstanding June 30, 2002 $ $ 1,460 1,333 2007 2007 20,375 2,180 3,985 2,180 6,165 Revenue bonds payable from water and sewer fund Refunding 4.25-4.50 1994 2005 Various 4.75-5.75 2000 2010 Total 17,010 53,000 7,680 49,025 56,705 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities 64,203 (9,767) 54,436 $ Under the provisions of the State Constitution, outstanding G.O. bonded debt for combined water, sewer, light, parks, open space preserves, playgrounds and recreational facilities may not exceed 20% of the City’s net secondary assessed valuation, nor may outstanding G.O. bonded debt for all other purposes exceed 6% of the City’s net secondary assessed valuation. The City’s unused bonded debt borrowing capacity as of June 30, 2002 is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 57,247 (30,167) 27,080 20% $ $ 190,824 (43,972) 146,852 The various bond indentures contain significant limitations and restrictions on annual debt service requirements, maintenance and flow of monies through various restricted accounts, and minimum revenue and bond coverage. The City is in compliance with all such significant limitations and restrictions. 59 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) I. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of July 1, 2002, as shown below: G.O. Bonds: Voter authorized prior to 1981 Water and sewer Authorized Amount Issued through June 30, 2002 Authorized but Unissued $ $ $ Voter authorized October 20, 1981 Operations center 26,125 13,875 6,750 550 6,200 9,698 6,000 11,558 34,694 8,000 600 10,525 23,332 1,698 5,400 1,033 11,362 18,215 50,500 38,860 40,910 17,000 15,398 53,700 57,188 64,801 38,050 6,935 $ 510,257 $ 15,088 3,955 910 1,460 450 5,297 16,472 185 112,949 18,215 35,412 34,905 40,000 15,540 15,398 53,250 51,891 64,801 21,578 6,750 $ 397,308 $ $ 9,663 Voter authorized March 10, 1987 Library Maintenance Parks Police and fire Voter authorized November 2, 1999 Cultural facility Economic development Flood control Governmental facilities Landfill development Library Open spaces Parks and recreation Public safety Streets and parking Transit Total G.O. bonds 40,000 Revenue bonds: Voter authorized prior to 1981 Water and sewer Voter authorized March 10, 1987 Streets and highway Water and sewer Voter authorized November 2, 1999 Water and sewer Total revenue bonds Total bonds 17,775 $ 8,112 57,770 56,000 36,340 47,350 21,430 8,650 10,000 141,545 93,353 10,000 48,192 206,302 $ 445,500 $ 651,802 60 $ CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) J. Other debt (notes, long-term) Classified in the governmental activities in the government-wide financial statements: Downtown Glendale Building Purchase - The $3,500 note dated June 5, 2000, is payable in fourteen semi-annual installments at an interest rate of 8.20% with the final payment due on or before June 1, 2007. $ Downtown Glendale Building Purchase - The $1,779 note dated June 5, 2000, is an assumed loan payable in 98 installments at an interest rate of 9.00% with the final payment due on or before September 1, 2008. 2,500 1,466 Civic Center Land Purchase - The $682 note dated April 15, 1998, is payable in three annual installments at an interest rate of 5.50% with the final payment due on or before April 15, 2002. The note will be repaid from the general fund 189 Paseo Racquet Club Purchase - The $200 note dated August 1, 2001 is payable in ten annual installments at an interest rate of 5.90% with the final payment due on or before August 1, 2010. The note will be repaid from the general fund. 185 Total notes payable recorded in governmental activities Less current portion Long-term portion of notes payable recorded in governmental activities 4,340 (885) 3,455 $ Classified in the business-type activities in the government-wide financial statements: Arrowhead Ranch Wastewater Reclamation Facility – The total loan amount Of $7,171 is scheduled to be paid in 10 annual installments through July 1, 2006, with an interest rate of 3.69%. Principal and interest are payable from Water and Sewer Fund on a parity with outstanding revenue bond obligations pursuant to the provisions of the City’s Master Ordinance 1323 new series. $3,866 Cholla Water Treatment Plant Solids Handling Facilities – The maximum available under the loan is $9,000 of which $2,492 was drawn down and recorded as a liability as of June 30, 2002. The loan is scheduled to be paid in annual installments over 20 years with an interest rate of 4.40%. Principal and interest are payable from the Water and Sewer Fund. 2,492 Total notes payable recorded in business-type acitivities Less current portion Long-term portion of notes payable recorded in business-type activities 61 $6,358 (1,038) $ 5,320 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) K. Debt service requirements Fiscal Year Ending 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total Less interest Principal Highway User Revenue Bonds Landfill G.O. Bonds Municipal Special Property Assessment Corporation District Bonds Bonds $ 5,527 5,452 2,776 2,037 1,963 1,964 1,966 1,973 222 23,880 $ 213 214 215 215 216 216 138 1,427 $ 1,718 1,734 1,752 1,769 1,792 1,809 1,820 12,394 $ 1,867 1,871 1,882 1,894 1,907 1,879 1,891 1,902 1,912 1,931 1,948 1,962 22,846 $ 11,572 8,898 8,737 8,739 6,839 6,215 4,758 4,900 4,907 4,912 4,923 4,927 4,936 2,791 2,761 2,767 2,759 2,759 2,761 2,762 104,589 $ 1,229 987 946 904 863 331 128 27 27 5,442 $ 2,210 2,048 5 4,263 $ 1,998 1,431 1,998 1,998 1,072 8,497 $ 10,343 7,751 7,772 7,002 7,023 7,044 7,040 7,038 61,013 $ 36,677 30,386 26,078 24,563 21,653 19,446 17,741 15,840 7,068 6,843 6,871 6,889 4,936 2,791 2,761 2,767 2,759 2,759 2,761 2,762 244,351 - 3,850 241 2,059 6,599 30,010 1,103 293 3,177 11,733 $ 20,030 $ 1,186 $ 10,335 $ 16,247 $ 74,579 $ 4,339 $ 3,970 $ 5,320 $ 49,280 59,065 $ 185,286 Various Purposes G.O. Notes Bonds Payable G.O. Bonds Water and Sewer Notes Revenue Payable Bonds Total The following table discloses the debt service requirements as of June 30, 2002, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2003 2004 2005 2006 2007 2008-2012 2013-2017 2018-2022 Total Principal 26,896 21,987 18,721 18,093 15,993 52,586 19,020 11,990 $ 185,286 Interest $ 9,781 8,399 7,357 6,470 5,660 14,353 5,228 1,817 $ 59,065 $ Total 36,677 30,386 26,078 24,563 21,653 66,939 24,248 13,807 $ 244,351 $ L. New bonds On June 27, 2002, the City issued $40,235 in General Obligation and Refunding Bonds. Of this amount, $4,545 was issued to currently refund $4,515 of the City’s 1996A General Obligation bonds on August 1, 2002. This transaction resulted in a total economic gain of $194 and a 62 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) reduction of $200 in future debt service payments. This current refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $30. IX. Landfill obligations The City operates a municipal sanitary landfill under an Aquifer Protection Permit and Solid Waste Facility Plan approval issued by the Arizona Department of Environmental Quality requiring future closure work and post-closure monitoring. The permit meets federal and state regulations. These laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and post-closure care costs will not be paid until near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and post-closure costs as an operating expense in each period based on landfill capacity used. The landfill closure and post-closure care liability at June 30, 2002, calculated below, represents the cumulative amount reported to date based on the use of estimated capacity of the landfill. North Cell South Cell 32,100 0% 22,594 14,669 65% Capacity (cubic yards) Capacity used to date Percentage of capacity used Total closure and post-closure costs in present dollars: as of June 30, 2002 as of June 30, 2001 $ 13,925 18,187 $ 13,039 17,068 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2002 $ 13,925 $ 4,573 Liability recognized as of June 30, 2002 $ $ 8,466 - These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2001-02. The estimated costs are subject to changes due to inflation, deflation, new technology, and applicable laws and regulations. Assets are not restricted to fund the obligations. The estimated remaining life of the landfill is approximately 44 years. The landfill facility plan amendment was approved in January 2002. This amendment changed the configuration of the landfill, significantly increasing the capacity and operating life of the landfill. In addition to the increase in capacity, the amendment increased the depth of the north parcel. This increase in the depth of the north parcel excavation eliminated the need to import soil for use as final cover, resulting in significant decrease in closure costs. According to state and federal laws and regulations, the City must comply with the local government financial test requirements that assure the City can meet the cost of landfill closure, post-closure, and corrective action when needed. The City is in compliance with these requirements. 63 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) X. Interfund transactions A. Interfund receivables Interfund balances at June 30, 2002, consisted of the following (amounts in thousands): Due To General $ 935 Due From $ - Non-major governmental funds: Community development block grant fund Highway user revenue fund - 552 321 Non-major enterprise funds: Housing fund - 62 Total $ 935 $ 935 The interfund balances at June 30, 2002 are short -term loans to cover temporary cash deficits in various funds. This occasionally occurs prior to bond sales or grant reimbursements. All interfund balances outstanding at June 30, 2002 are expected to be repaid within one year. The remainder of this page left blank intentionally. 64 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) B. Interfund transfers Interfund transfers for the year ended June 30, 2002, consisted of the following: Transfers to General Fund From: Non-Major governmental Funds Highway Users Gas Tax Special Revenue Fund Development Impact Fees Special Revenue Fund Other Special Revenue Fund Streets Construction Capital Project Fund Other Construction Capital Project Fund Parks Bond Construction Fund Water and Sewer Enterprise Fund Landfill Enterprise Fund Total transfers to General Fund Transfers to Special Assessment Debt Service Funds From: General Fund Non-Major Governmental Funds Highway Users Gas Tax Revenue Fund Total transfers to Special Assessment Debt Service Fund $ 21 40 1 42 3 87 148 14 356 2 418 420 Transfers to Non-Major Governmental Funds From: General Fund 8,219 Non-Major Governmental Funds Community Development Block Grants 2 Parks Bond Construction Fund 37 Total transfers to Non-Major Governmental Funds 8,258 Transfers to Non-Major Debt Service Funds From: General Fund 1,395 Non-Major Governmental Funds Highway Users Gas Tax Special Revenue Fund Total transfers to Non-Major Debt Service Funds 5,456 6,851 Transfers to Non-Major Capital Projects Funds From: General Fund 53 Transfers to Non-Major Enterprise Housing Fund From: General Fund 390 Grand total all transfers $ 16,328 Transfers are used to: 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, 2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and 3) use unrestricted revenues collected in the general fund 65 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) to finance various programs accounted for in other funds in accordance with budgetary authorizations. The interfund transfers are all classified as operating transfers and are included in the results of operations of both governmental and proprietary funds. There were no significant transfers during fiscal year 2002 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. XI. Encumbrances The Arizona Revised Statutes allow cities to encumber unused appropriations for up to sixty days after the end of the fiscal year. However, effective July 1, 1987, the City adopted a policy of not recognizing encumbrances at year-end. All appropriations lapse on the last day of the fiscal year. Any outstanding commitments that the City intends to honor are rebudgeted in the new fiscal year. At June 30, 2002, the City intended to honor $5,441 of outstanding encumbrances in the new year. XII. Equity in joint venture The City, along with the cities of Phoenix, Mesa, Scottsdale and Tempe participates in the SubRegional Operating Group (SROG), a joint venture. SROG constructs, operates and maintains jointly used facilities including the 91st Avenue Waste Water Treatment Plant (Plant) and certain sewage transportation facilities. The City of Phoenix acts as lead agency, and as such, is responsible for the planning, budgeting, construction, operation and maintenance of the Plant. In addition, the City of Phoenix provides all management personnel and financing arrangements and accepts federal grants on behalf of the participants. Each participant pays for its costs of operation and maintenance based on relative sewage flows and strengths and for purchased capacity in plant and related transportation facilities based on ownership. The City accounts for its approximate 8.59% investment using the equity method in the water and sewer fund. For the year ended June 30, 2002, the City recognized a loss of $1,054. The City has financed its share of construction costs through the issuance of revenue bonds, development fees and grants. The bonds are collateralized by a pledge of water revenues and are reflected in the financial statements of the water and sewer fund. The joint venture itself has not issued any debt. Summary financial information of the joint venture as of and for the fiscal year ended June 30, 2002, (unaudited) is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets Liabilities Net assets $ 44,595 398,881 443,476 32,320 $ 411,156 Total revenues Total expenses Increase in net assets $ 82,614 (43,727) $ 38,887 66 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Calculation of the City’s Equity: City’s share of SROG equity (Total equity of $411,156 less unrealized gain of $1,101 less assets not owned by the City of $103,009 multiplied by 8.59 %) Net capitalized interest on the City’s records City contributions not yet received by SROG Total City equity Change in the City’s Equity: Capital contributed to the joint venture Net loss on joint venture Net increase in equity $ 26,375 $ 1,348 2,082 29,805 $ $ 2,649 (1,054) 1,595 Copies of separate financial statements of the joint venture can be obtained from the AMWUA office, 4041 North Central Avenue, Phoenix, Arizona 85012. XIII. Jointly governed organizations The Regional Public Transit Authority (RPTA) is a voluntary association of local governments, including Glendale, Phoenix, Mesa, Tempe, Scottsdale, and Maricopa County. Its purpose is to ensure that a viable public transportation system is provided as an alternative for regional mobility and to ease the traffic congestion and air pollution caused by over-reliance on the single occupant vehicle. The Board of Directors consists of the mayors of those cities and a member of the County Board of Supervisors. Arizona Municipal Water Users Association (AMWUA) is a nonprofit corporation established and funded by cities in Maricopa County for the development of an urban water policy and to represent the cities' interests before the Arizona legislature. In addition, AMWUA contracts with the cities jointly using the 91st Avenue Waste Water Treatment Plant to perform certain accounting, administrative and support services. XIV. Related party transaction Included in the special assessment debt service fund deferred receivables at June 30, 2002 is $11 owed by the City's governmental funds. XV. Fund balance/net assets reservation and designation The following is a list of reserves and designations with an explanation for each by fund type. General Fund Type Reserved for Inventory Amount available only for expenditure (i.e., consumption of existing supplies inventories that have already been purchased.) Reserved for Capital Leases The City periodically enters into capital leases. In governmental Funds, revenue is recognized when the proceeds are received. However, the unspent portion of the proceeds is restricted to the capital items identified in the lease agreement. 67 $ 346 2,126 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Reserved for Developer Agreement Certain assets have been set aside to assure future payments, if needed, in accordance with the terms of an economic development agreement with a major developer. Reserved for Cable Equipment Amount to be used only for capital expenditures by the City’s cable television station as required by agreement with cable system providers. Reserved for “From the Heart” Program Certain donations made to the City are required by ordinance to benefit Glendale residents through providing grants to non-profit social service organizations. Reserved for Arbitrage Rebate Payable The City sets aside money to fund future year arbitrage rebate liability as determined by the Internal Revenue Code. $ 5,899 164 75 3 Reserved for Court Security Security surcharges collected by the City Court are required by ordinance to be spent solely on court security. 191 Reserved for Court Time Payment Court Time Payment fees are used by the City Court to improve, maintain and enhance the ability to collect and manage monies assessed or received by the court, to improve court automation and to improve case processing or the administration of justice. 93 Reserved for Garden for Visually Impaired A donation was made to the City for the purpose of establishing a tactile garden for the visually impaired. 304 Reserved for Acquisition of Artwork Acquisition of artwork by the City’s Arts Commission is provided through a surcharge on eligible capital projects as directed by the City Council. 956 Reserved for Arts Preservation Preservation and maintenance of artwork by the City’s Arts Commission is provided through a surcharge on eligible capital projects as directed by the City Council. Reserved for Vehicle/Equipment Replacement For future scheduled replacement of existing equipment and vehicles. 50 7,791 Total Reserved for General Fund type $ 17,998 Designated for Computer Replacement For future scheduled replacement of existing personal computers. $ 4,033 Designated for Library Activities A minor portion of future operating expenditures of the library has been authorized through the City budget to be paid from net revenues collected through library activities. 68 310 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Designated for Cable Television Station Amount to be used only for expenditure by the City’s cable television station from net revenues collected by Cable from special activities. $ 38 Designated for Local Improvement Districts Administration Portion of City special assessment bond proceeds identified exclusively for future costs of administering and accounting for existing improvement districts. 143 Designated for Equipment Management For maintenance of City equipment. 102 Designated for Telephone For payment of future telephone charges and maintenance Total Designated for General Fund Type 89 $ 4,715 Special Revenue Fund Type Reserved for Inventory Amount available only for expenditure (i.e., consumption of existing supplies inventories that have already been purchased). $ 129 Reserved for Capital Leases The City periodically enters into capital leases. In governmental funds, revenue is recognized when the proceeds are received. However, the unspent portions of the proceeds are restricted to the capital items identified in the lease agreement. 46 Reserved for Drug Enforcement Reserved by agreement with state and federal authorities for use in furthering the drug enforcement effort. Revenues for this reserve are received through the public courts’ prosecution of drug offenses. State Federal Total reserved for Drug Enforcement 177 130 307 Reserved for Development Impact Fees The development impact fees are covered by Chapter 28, Article VI of the Municipal Code. Development impact fees are used exclusively to provide the necessary public facilities and services to development. Residential development impact fees may be spent only in the district (residential development district, not political district) in which they were collected. This reserve is categorized as follows: Parks and Recreation: City Wide Parks City Wide Recreation Facilities City Wide Open Space & Trails District No. 1 District No. 2 District No. 3 Library: Buildings 69 107 58 20 575 1,393 1,418 2,478 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Books Library Fire protection facilities Police facilities Transportation General government Total reserved for Development Impact fees $ Reserved for Police and Fire Activities In accordance with a voter initiative, beginning April 1994 the City collected an additional separate sales tax for Police and Fire activities. Police Fire Total reserved for Police and Fire activities 642 519 784 976 2,485 1,496 12,951 595 346 941 Total Reserved for Special Revenue Fund type $ 14,374 Designated for Home Program For community development block grant home program activities. $ Designated for Pool/Park Repair For repair of area schools’ and City recreational facilities. The City contributes to maintenance of area school’s facilities in which the City has no equity interest. Total Designated for Special Revenue Fund Type 33 549 $ 582 Debt Service Fund Type Reserved for Debt Service Certain assets have been reserved for future payment of debt service based upon the requirements of the various bond ordinances. $ 9,500 Reserved for Arbitrage Rebate Certain assets have been reserved for future rebate to the U.S. Treasury based upon the requirements of the 1986 Tax Reform Act. Total reserved for Debt Service Fund type 388 $ 9,888 Capital Projects Fund Type Reserved for Capital Projects Certain assets have been reserved for future flood control storm drain construction. $ 98 Total reserved for Capital Projects Fund Type $ 98 70 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Designated for Street G.O. Bond projects Accounts for the construction of street lights, traffic signals, street landscaping, streets and parking funded by authorization approved by voters on March 10, 1987, and November 2, 1999. $ 6,556 Designated for HURF bond projects Accounts for the construction of streets and sidewalks. Funding is provided through bonds issued under an authorization approved by voters on March 10, 1987. 4,383 Designated for Transit projects Accounts for G.O. bond funds used to plan, acquire, construct and expand transit services, passenger amenities and park-and-ride facilities; replacement of transit buses, cars and computer equipment; transit administrative facilities upgrades and renovations; and acquiring land as necessary for such facilities and purposes. Funding is provided under an authorization approved by voters on November 2, 1999. 174 Designated for Government Facilities Accounts for G.O. bond funds used to plan and construct a new public works operations center; housing, streets and park maintenance; transit, utilities, a tourism visitor center and similar projects. Funding is provided under an authorization approved by voters on November 2, 1999. 144 Designated for Economic Development Accounts for G.O. bond funds used to promote new private sector job creation through development and redevelopment in the City. Funding is provided under an authorization approved by voters on November 2, 1999. 1,073 Designated for Open Space/Trails Accounts for G.O. bond funds used to plan and acquire land and interests for the preservation of open space; and planning, acquiring and constructing multi-use trails and linear parks. Funding is provided under an authorization approved by voters on November 2, 1999. 477 Designated for Arena Project Accounts for bond funds used to plan, acquire land and construct a 17,500 seat multipurpose recreational facility. Total Designated for Capital Projects Fund Type 19,851 $ 32,658 Enterprise Fund Type Reserved for Revenue Bond Retirement/Replacement and Extension Two percent of net water revenues must, by bond ordinance, be reserved for the replacement and extension of the City’s water distribution system, or for the retirement of water revenue bonds. The reservation is only required to the extent that the reserve equals two percent of the value of net fixed assets of the Water and Sewer Fund. 71 $ 6,352 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) The City is also required by ordinance to have accumulated sufficient funds to pay all principal and interest due on the following July 1 and January 1 payment dates. Since the July 1 payment is already accrued as a current liability at yearend, only the January 1 payment is included in the reserve. Finally, the City’s bond ordinances require an additional reserve for any Water and Sewer Bond debt that is not insured by a surety bond. This reserve must be maintained at a balance equal to the highest principal and interest coming due in any twelve-month period. As of June 30, 2002, only the loan with the State Revolving Fund (authorized by revenue bond election in 1961) was not covered by a surety bond. Total reserved for Enterprise Fund Type $ 2,477 979 $ 9,808 Permanent Fund Type Reserved for Cemetery Perpetual Care Revenues from the sale of cemetery lots and markers are reserved by ordinance for future cemetery maintenance. $ 4,100 Total reserved for Permanent Fund type $ 4,100 XVI. Employee retirement systems and pension plans A. Plan descriptions The City contributes to the three retirement 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 ARS 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 162 local boards according to the provisions of ARS Title 38, Chapter 5, Article 4. PSPRS is agent for the eligible Glendale Fire and Glendale Police personnel. 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 administered by The Fund Manager of PSPRS according to the provisions of ARS Title 38, Chapter 5, Article 3. 72 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) B. Financial reports Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by writing or calling the applicable plan. ASRS 3300 North Central Avenue P.O. Box 33910 Phoenix, Arizona 85067-3910 PSPRS or EORP 1020 East Missouri Avenue Phoenix, Arizona 85014 (602) 240-2000 or (800) 621-3778 (602) 255-5575 C. Funding policy The Arizona State Legislature establishes and may amend contribution rates for active plan members and the City. Cost Sharing Plans. For the year ended June 30, 2002, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 2.49% (2% retirement and 0.49% long-term disability) of the members’ annual covered payroll. The City’s contributions from employer and employees to ASRS for the years ended June 30, 2002, 2001 and 2000 were $2,800, $2,700 and $2,500, respectively, which were equal to the required contributions for the year. In addition, active EORP members were required by statute to contribute 7.0% of the members’ annual covered payroll. The City was required to remit contributions of 6.97% of the members’ annual covered payroll, as determined by actuarial valuation. The City’s contributions from employer and employees to EORP for the years ended June 30, 2002, 2001 and 2000 were $20, $24 and $25, respectively, which were equal to the required contributions for the year. Agent Plans. For the year ended June 30, 2002, PSPRS members were required by statute to contribute 7.65% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 2% and 10.15% for Fire and Police, respectively. Annual Pension Cost (APC). The City’s pension cost for Police and for Fire for the year ended June 30, 2002, the date of the most recent actuarial valuation, and related information follow. Fire Contribution rates: City Plan members Annual pension cost Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at 73 Police 2.00% 7.65% 10.15% 7.65% $337 $1,800 Entry Age Entry Age 9.00% 6.5% - 9.5% 5.5% 9.00% 6.5% - 9.5% 5.5% CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Amortization method Level % open Remaining amortization period Asset Valuation method 20 years Smoothed market value Level % open 20 years Smoothed market value D. Three year trend information for PSPRS Information for the agent plan for PSPRS for Glendale Fire and Police as of the most recent actuarial valuations for June 30, 2002, follows. Contributions Required and Contributions Made Year Ended June 30 APC Percentage of APC Contributed Net Pension Obligation Police 2002 2001 2000 $1,764 $1,782 $1,244 100.0% 100.0% 100.0% $ $ $ - Fire 2002 2001 2000 $ 337 $ 373 $ 399 100.0% 100.0% 100.0% $ $ $ - Includes insurance premium tax, where applicable. E. Required supplementary information Analysis of funding progress for the agent plan as of the most recent actuarial valuation, June 30, 2002, follows. Valuation Date June 30 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) Annual Covered Payroll Funded Ratio Unfunded Liability as Percentage of Covered Payroll Police 2002 2001 2000 $ $ $ 69,747 68,112 61,085 $ $ $ 71,892 61,910 61,049 $ $ $ 2,145 (6,202) (36) 74 97.0% 110.0% 100.1% $ $ $ 17,147 16,580 14,933 12.5% -% -% CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) Valuation Date June 30 Actuarial Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) Funded Ratio Annual Covered Payroll Unfunded Liability as Percentage of Covered Payroll Fire 2002 2001 2000 $ $ $ 54,913 54,775 49,286 $ $ $ 44,743 38,663 36,357 $ (10,170) $ (16,112) $ (12,929) 122.7% 141.7% 135.6% $ $ $ 9,468 9,106 8,832 -% -% -% XVII. Other postemployment benefits Other than the pension benefits through the Arizona State Retirement System or the Arizona Public Safety Personnel Retirement System, the City does not provide postemployment benefits. However, the City does allow all of its retired employees to participate in the health care and life insurance plan provided to active employees. The plan provides health, dental, and/or life insurance to participants. The retired employees pay the entire cost of their participation in the plan. The City makes no contribution to the plan for former employees. Since the number of retirees is small, and their portion of the premium cost is paid to providers at the same time as the City’s active employee portion, the City has chosen to account for monies received from retirees, but not yet paid out, as a part of employee benefits fund liability. XVIII. Contingent liabilities and commitments The City is subject to claims and litigation, which arise in the ordinary course of its operations. In the opinion of the City Attorney, the resolution of such claims and litigation will have no material adverse effect on the financial position or the future operations of the City. XIX. Subsequent events On July 1, 2002, the City issued $5,055 of Subordinate Excise Tax Revenue Bonds (the 2002 MPC Bonds) under the Arizona Municipal Financing Program of 1992 to finance a part of the cost of constructing, equipping, and furnishing a multipurpose arena complex. The bonds mature on various dates starting 2029 through 2033 with various interest rates of 5.0% to 5.375%. The principal and interest on the bonds are payable solely from and are secured by a subordinate and junior pledge of the City’s Unrestricted Excise Taxes. The bonds do not constitute a general obligation debt of the City. On August 23, 2002, the City entered into an agreement with the Water Infrastructure Finance Authority amending the current loan amount for the purpose of designing and constructing a solids handling facility at the Cholla Water Treatment Plant from $9,000 to $15,400. The loan is scheduled to be paid in annual installments over 20 years with an interest rate of 4.4%. Principal and interest are payable from the Water and Sewer fund. On October 25, 2002 the City notified the Bond Registrar Agent to call special assessment District 57 and 59 Bonds on January 1, 2003. The amount of District 57 Bonds called was $2,385 for years 2007 through 2010 and District 59 bonds in the amount of $905 for years 2008 and 2009. 75 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2002 (amounts expressed in thousands) On November 15, 2002, the City financed the Northern Crossing land acquisition and demolition costs in the amount of $14,500. The City will be reimbursed for the land acquisition and demolition costs over a maximum five-year period from the development agreement entered into by the City on October 30, 2001. Subsequent to June 30, 2002 the City received notice from the Arizona State Treasurer’s Office that the issuer of a portion of the investments held by the State of Arizona Local Government Investment Pool (LGIP) had defaulted on the December 1, 2002 interest payment due on securities held by LGIP. This default has not yet been remedied. The securities in question comprise approximately 3.2% of the LGIP’s investment portfolio and have been transferred by LGIP to a separate pool due to the default. On December 4, 2002 the City adjusted downward the fair market value of its LGIP investment on its records by $3,554 to $106,165 to recognize the impact of the default and the transfer of the investment by LGIP. On December 13, 2002 the City entered into a financing arrangement with Bank of America to draw down monies to fund a multipurpose arena complex up to $65,000 MPC Subordinate Excise Tax Revenue Bonds Series 2002C and $55,000 of MPC Subordinate Excise Tax Revenue Bond Series 2002D to fund certain public infrastructure. The City drew down on December 13, 2002 $7,265 of Series 2002C bonds and $3,745 series 2002D bonds respectively. The City intends to fund the draw downs with permanent financing in the near future. On August 30, 2002 the Mayor and Council adopted a Development agreement with the Arizona Cardinals football team to develop a multi-purpose facility and related parking. In addition, the Mayor and Council adopted Development Agreements with the Arizona Tourism and Sports Authority for the development of a multi-purpose facility. 76 Required Supplementary Information [back of card-stock divider] City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investments Proceeds from disposal of assets Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public safety Public works Community services Contingencies Debt service: Principal Interest Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 38,487 $ 38,487 Actual Amounts (budgetary basis) $ 38,662 Variance with Final Budget Positive (Negative) $ 175 46,000 5,900 48,160 11,122 2,484 2,623 35 2,381 118,705 6,618 (12,600) 151,210 46,000 5,900 48,160 11,122 2,484 2,623 35 2,381 118,705 6,618 (12,702) 151,108 44,883 5,648 46,978 11,116 2,859 1,173 82 1,422 114,161 6,974 (10,061) 149,736 (1,117) (252) (1,182) (6) 375 (1,450) 47 (959) (4,544) 356 2,641 (1,372) 27,489 44,246 21,334 20,805 10,705 29,320 44,422 21,239 20,963 5,765 26,411 43,800 20,149 20,277 - 2,909 622 1,090 686 5,765 741 201 14,709 140,230 441 194 15,527 137,871 5,287 659 6,903 123,486 (4,846) (465) 8,624 14,385 10,980 $ 77 13,237 $ 26,250 $ 13,013 City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 2 of 2 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Interest earned on restricted investments not available for appropriation Internal charges for services provided Proceeds from disposal of assets Less: Transfers in Add: Transfers out Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison statement Capital outlay funded by capital lease Change in compensated absences liability Change in prepaid assets or inventory Indirect cost allocation Internal charges for services provided Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 78 $ 149,736 (38,662) 4 (9,724) (82) (6,974) 10,061 $ 104,359 $ 123,486 143 258 15 (6,618) (9,717) $ 107,567 Combining Statements [back of card-stock divider] NON-MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for revenues from specific taxes or other earmarked revenue sources, which by law are designated to finance particular functions or activities of government and which, therefore, cannot be diverted to other uses. Community Development Block Grants Fund This fund accounts for a series of ongoing entitlements received directly from the U. S. Department of Housing and Urban Development (HUD). This fund also includes the HUD Rental Rehabilitation and HOME programs. Highway Users Gas Tax Fund This fund accounts for capital outlay and maintenance of municipal streets and highways, as mandated by the Arizona Revised Statutes. Financing for this fund is provided by state-shared fuel taxes. Development Impact Fees Fund This fund accounts for fees covered by Chapter 28, Article VI of the Municipal Code. The fees are used exclusively to provide the necessary public facilities and services for development. Residential development impact fees may be spent only in the district (residential development district, not political district) in which they are collected. Transportation Fund This fund accounts for the City’s public transit program including activities funded by Federal grants and distributions received from the Arizona State Lottery. Additionally, on November 6, 2001, Glendale voters authorized a new half-cent sales tax to pay for transportation projects and programs for all modes of transportation. Other Special Revenue Fund This fund accounts for various activities, including both the airport and civic center. Neither is considered to be an enterprise fund for financial reporting purposes and the City Council’s present intent is not to have user fees cover the total costs of providing services. · · · · Municipal airport and civic center operations Miscellaneous grants received from Federal, State or local governments Recreation programs and site maintenance Police and fire activities funded by a one percent sales tax levied directly by voter initiative Debt Service Funds Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Highway Users Debt Service Fund This fund accumulates monies for payment of all street and highway revenue bonds of the City. Highway user fuel taxes are transferred from a special revenue fund to fund this debt. Municipal Property Corporation Debt Service Fund This fund accounts for building lease payments received from the general fund and subsequently paid as debt service to Municipal Property Corporation bondholders. 79 Capital Projects Funds Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Streets Construction Fund This fund accounts for the construction of streets, sidewalks, streetlights, traffic signals, and street landscaping funded through G.O. and revenue bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Fire and Police Construction Fund This fund accounts for the construction of fire and police department facilities. Funding is provided through G.O. bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Parks Bond Construction Fund This fund accounts for the construction of parks and recreation improvements. Funding is provided through bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999. Other Construction Fund This fund accounts for the construction of various City projects. Funding is provided through G.O. bonds issued under authorizations approved by voters on March 10, 1987, and November 2, 1999 and the Federal Aviation Administration · · · · · · Governmental, airport, library, and flood control facilities Transit projects Economic development Open Space/Trails Building lease payments received from the general fund and subsequently paid as debt service to Municipal Property Corporation bondholders Retention basins Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting City’s programs. Perpetual Care Permanent Fund This fund is used to account for the revenues received by the City from the sale of cemetery lots and other related services. 80 81 1 of 2 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2002 (amounts expressed in thousands) Special Revenue Funds ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Accrued interest Due from other governments Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets LIABILITIES AND FUND BALANCES: Liabilities: Accounts payable Compensated absences - current Accrued expenditures/expenses Due to other funds Deposits Matured interest payable Deferred revenue Matured bonds payable Total liabilities Fund balances: Reserved Unreserved: Designated Undesignated Total fund balances Total liabilities and fund balances Community Development Block Grants $ - $ 29 1,014 2,737 3,780 $ $ Highway Users Gas Tax 451 7 552 2,737 3,747 $ - $ 12 1,220 129 46 1,407 $ 699 127 30 321 7 19 1,203 Development Impact Fees $ 13,314 $ 13,314 $ 363 363 Other Special Revenue Fund Transportation $ 6,371 $ 1,343 5 7,719 $ 54 34 10 98 $ 1,992 $ 271 1 606 473 3,343 $ 233 51 1 10 887 1,182 - 175 12,951 - 1,248 33 33 3,780 29 204 1,407 12,951 13,314 7,621 7,621 7,719 549 364 2,161 3,343 $ 82 $ $ $ 2 of 2 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2002 (amounts expressed in thousands) Debt Service Funds Municipal Property Corporation Highway Users $ 4,958 $ 4,958 $ $ 1 615 4,280 4,896 $ 19 $ 1,141 1,160 $ 257 880 1,137 Streets Construction Capital Project Funds Fire and Parks Police Bond Construction Construction $ 11,515 $ 1,816 $ 41 11,556 $ 11 1,827 $ 429 43 145 617 $ 1,474 1,474 $ 4,169 $ 5 4,174 $ 1,169 144 1,313 Permanent Fund Cemetery Perpetual Care Other Construction $ 24,101 $ 13 179 98 24,391 $ 358 4 152 514 $ 4,100 $ 108 4,208 $ 108 108 62 23 - - -- 98 4,100 62 4,958 23 1,160 10,939 10,939 11,556 353 353 1,827 2,861 2,861 4,174 21,719 2,060 23,877 24,391 4,100 4,208 $ $ $ $ 83 $ $ Total Non-major Governmental Funds $ 72,355 $ 1,763 71 3,024 227 1,660 2,737 81,837 $ $ 5,231 219 222 873 17 872 4,058 5,160 16,652 18,657 33,240 13,288 65,185 81,837 City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed is thousands) 1 of 2 Special Revenue Funds Community Development Block Grants REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Investments Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 2,800 111 2,911 $ $ 4,993 512 5,505 Other Special Revenue Fund Transportation $ 7,693 1,977 129 41 42 9,882 $ 3,239 2,512 995 33 753 7,532 11,493 - - 3,776 - 681 5,223 16 1,799 252 5 2,971 44 18 2,723 14,278 3,717 3,717 3,776 19 5 386 8,386 1,788 6,106 (854) 1,403 1,403 691 (1) 690 7,509 (164) (60) 2 2 Net change in fund balances (58) $ 13,965 3 24 13,992 Development Impact Fees 2,971 - OTHER FINANCING SOURCES (USES) Proceeds from bonds sold Proceeds from loans Transfers in Transfers out Total other financing sources and uses Fund balances, July 1 Fund balances, June 30 Highway Users Gas Tax (286) 6,160 (5,894) 266 91 33 (20) $ 84 (40) (40) 224 204 1,748 $ 11,203 12,951 $ 112 7,621 $ 2,325 2,161 City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed is thousands) Debt Service Funds Highway Users $ - Municipal Property Corporation $ $ 355 355 $ 108 108 $ 114 6 120 Permanent Fund Cemetery Perpetual Care Other Construction $ 22 247 75 344 $ 148 371 519 Total Nonmajor Governmental Funds $ 10,932 5,015 21,501 1,124 1,395 1,307 41,274 4 1 3 - 14 - 270 1,702 - - 951 5,223 16 7,291 3,223 11,493 13 4,280 1,230 5,514 880 515 1,396 6,785 6,788 3,494 3,494 632 41 4,911 5,598 9,574 11,546 - 5,855 1,809 31,590 67,464 (5,514) (1,390) (6,433) (3,386) (5,478) (11,202) 519 (26,190) 5,456 5,456 1,395 1,395 2,097 (42) 2,055 2,621 200 (124) 2,697 31,261 53 (3) 31,311 - 35,979 200 15,160 (6,104) 45,235 5 (4,378) (2,781) 20,109 (58) $ 6 6 Streets Construction Capital Projects Fire and Parks Police Bond Construction Construction 2 of 2 120 62 $ 18 23 $ 15,317 10,939 (3,386) $ 3,739 353 $ 85 5,642 2,861 $ 3,768 23,877 519 $ 3,581 4,100 19,045 $ 46,140 65,185 City of Glendale, Arizona Combining Statement of Net Assets Nonmajor Proprietary Funds - Business-type Activities June 30, 2002 (amounts expressed in thousands) Sanitation ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for doubtful accounts Due from other governments Inventories and prepaid items Total current assets $ 1,018 Housing $ 1,444 (23) 2,439 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Total noncurrent assets Total assets 553 Total $ 19 (2) 65 12 647 508 1,463 (25) 65 12 3,086 1 8,821 (5,046) 3,775 4,283 6,722 1,571 509 10,464 (4,256) 6,208 6,209 6,856 19,285 (9,302) 9,983 10,492 13,578 LIABILITIES Current liabilities: Accounts payable Compensated absences Accrued expenses Due to other funds Due to other government Deposits Unearned rent Current portion of long-term debt: Capital lease payable Interest payable Total current liabilities 108 198 60 68 - 18 8 62 15 35 1 126 206 60 62 15 103 1 888 24 1,346 139 888 24 1,485 Noncurrent liabilities: Compensated absences Other long-term debt Capital lease obligations Total noncurrent liabilities Total liabilities 71 2,560 2,631 3,977 74 1 75 214 145 1 2,560 2,706 4,191 327 6,208 6,535 2,418 2,745 434 6,642 434 2,418 9,387 NET ASSETS Invested in capital assets, net of related debt Restricted for: Other purposes Unrestricted Total net assets $ 86 $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Nonmajor Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Sanitation Operating revenues: Intergovernmental Container service Curb service Other fees Total operating revenues $ Operating expenses: Housing Sanitation Administrative and general Depreciation Total operating expenses Operating income (loss) 4,499 7,309 11,808 Housing $ 9,277 1,200 781 11,258 550 6,483 422 6,905 Totals $ 7,157 367 7,524 (619) 6,483 4,499 7,309 422 18,713 7,157 9,277 1,200 1,148 18,782 (69) Nonoperating revenues (expenses): Impact fees Investments Interest expense Gain (loss) on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 97 53 (185) 22 (13) 307 307 97 53 (185) 22 307 294 Income before contributions and transfers 537 (312) 225 - 390 390 537 78 615 2,208 2,208 2,745 6,564 6,564 6,642 2,208 6,564 8,772 9,387 Transfers in Change in net assets Total net assets - beginning Change in accounting principle Total net assets - beginning, restated Total net assets - ending $ 87 $ $ City of Glendale, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 1 of 2 Sanitation Cash flows from operating activities: Cash received from customers Cash received from federal government Cash paid to suppliers: Internal city departments External vendors Cash paid to employees for services Net cash provided by (used in) operating activities $ 11,672 - $ (5,921) (1,361) (3,226) 1,164 Cash flows used for noncapital financing activities: Received from other programs Paid to other programs Paid to other projects Transfers in Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Proceeds from capital leases Principal payments on obligations Acquisition of capital assets and rights Impact fees Interest payments on obligations Capital grant proceeds Net cash used for capital and related financing activities 24 (135) (10) 395 24 (135) (10) 395 - 274 274 (307) 307 1,737 1,526 1,020 (857) (1,842) 97 (161) 307 - (1,436) - (211) 88 $ 11,937 5,887 - 61 61 $ 265 5,887 (5,921) (7,408) (4,338) 157 (1,436) Net decrease in cash during fiscal year Total (6,047) (1,112) (1,007) 1,020 (857) (1,535) 97 (161) - Noncash investing, capital, and financing activities Interest received from investments Net cash provided by investing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 Housing 61 61 (733) $ 1,287 554 (944) $ 3,024 2,080 City of Glendale, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 2 of 2 Sanitation Reconciliation of operating income to net cash provided by operating activities: Operating income Adjustments to reconcile operating income to net cash provided by operations: Depreciation Changes in assets and liabilities: Accounts receivable Due from other governments Inventories and prepaid items Accounts payable Accrued expenses Deposits Unearned rent Due to other funds Compensated absences Net cash provided by (used in) operating activities Reconciliation of balance sheet cash and investments to the statement of cash flows: Per combined balance sheet: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents Non-cash transactions affecting financial position: Non-cash loss on asset disposal $ 550 Housing $ 781 Total (619) $ 367 (69) 1,148 (156) (32) (1) 20 2 1,164 (2) 238 (10) (9) 3 (2) (991) 18 $ (1,007) $ $ $ 553 1 554 $ $ 1,018 508 1,526 $ 1,571 509 2,080 $ 22 $ - $ 22 $ $ 89 (158) 238 (10) (41) (1) 23 (2) (991) 20 157 City of Glendale, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2002 (amounts expressed in thousands) Risk Management ASSETS Current assets: Equity in pooled cash and investments Accounts receivable, net Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments 3,112 337 3,449 Workers' Compensation $ 6,492 6,492 Employee Benefits $ 3,603 46 3,649 Totals $ 13,207 46 337 13,590 - 15 16 31 3,449 6,507 3,665 13,621 90 689 779 100 618 718 804 68 1,448 2,320 994 68 2,755 3,817 Noncurrent liabilities: Deferred revenue Estimated claims payable Total noncurrent liabilities Total liabilities 955 955 1,734 1,250 1,250 1,968 15 15 2,335 15 2,205 2,220 6,037 NET ASSETS Unrestricted 1,715 4,539 1,330 7,584 Total assets LIABILITIES Current liabilities: Accounts payable Accrued expenses Estimated claims payable Total current liabilities Total net assets $ 1,715 90 $ 4,539 $ 1,330 $ 7,584 City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Internal Service Funds For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Operating revenues: Self-insurance premiums Risk Management Workers' Compensation $ $ Operating expenses: Insurance claims and premiums 1,800 1,400 Employee Benefits $ 12,370 Totals $ 15,570 1,500 943 12,127 14,570 Operating income 300 457 243 1,000 Nonoperating revenues: Investments 110 238 92 440 Change in net assets 410 695 335 1,440 1,305 1,715 3,844 4,539 995 1,330 6,144 7,584 Net assets - beginning Net assets - ending $ $ 91 $ $ City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For fiscal year ended June 30, 2002 (amounts expressed in thousands) Risk Management Cash flows from operating activities: Cash received from customers Cash paid for insurance and in settlement of claims $ 1,800 Workers' Compensation $ (1,677) 1,400 Employee Benefits $ 12,381 (1,067) Total $ 15,581 (11,292) (14,036) Net cash provided by operating activities 123 333 1,089 1,545 Cash flows from investing activities: Interest received 109 238 92 439 Net increase in cash during fiscal year 232 571 1,181 1,984 Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 Reconciliation of operating income to net cash provided by operating activities: Operating income Adjustments to reconcile operating income to net cash provided by operations: Change in accounts receivable Change in inventories and prepaid items Change in accounts payable Change in accrued expenses Change in deposits payable Change in claims payable Change in deferred revenue Net cash provided by operating activities Reconciliation of balance sheet cash and investments to the statement of cash flows: Per combined balance sheet: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents $ 2,880 3,112 $ 5,936 6,507 $ 2,438 3,619 $ 11,254 13,238 $ 300 $ 457 $ 243 $ 1,000 - $ $ $ 92 (44) (62) (71) 123 3,112 3,112 - $ $ $ 81 (205) 333 6,492 15 6,507 $ $ $ (5) (5) 720 (335) (83) 534 15 1,089 (44) 739 (335) (83) 258 15 1,545 3,603 16 3,619 $ $ $ 13,207 31 13,238 Other Supplementary Information [back of card-stock divider] City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final - $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) - $ 95 $ 95 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Add: Transfers in Amounts available for appropriation 4,728 4,728 4,728 4,728 4,728 4,728 2,800 111 2,911 2 3,008 (1,928) 111 (1,817) 2 (1,720) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital outlay Total charges to appropriations 4,728 4,728 4,726 2 4,728 2,968 2,968 1,758 2 1,760 Budgetary fund balance, June 30, 2002 $ - $ - $ 40 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Transfers in Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in compensated absences liability Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 93 $ 40 $ 3,008 (95) (2) $ 2,911 $ 2,968 3 $ 2,971 City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Intergovernmental Local Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Street maintenance Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final - $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) - $ 287 $ 287 14,000 5 14,005 8,147 (6,222) 15,930 14,000 5 14,005 8,202 (6,222) 15,985 13,579 24 13,603 6,160 (5,894) 14,156 (421) (5) 24 (402) (2,042) 328 (1,829) 12,692 3,176 12,535 3,388 11,466 2,337 1,069 1,051 44 18 15,930 44 18 15,985 44 18 13,865 2,120 - $ - $ 291 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Grant - Funded City projects administered by another entity and only recognized on City's GAAP records Interest earned on restricted investments not available for appropriation Less: Transfers in Add: Transfers out Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in compensated absences liability Grant - Funded City projects administered by another entity and only recognized on City's GAAP records Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 94 $ 291 $ 14,156 (287) 386 3 (6,160) 5,894 $ 13,992 $ 13,865 27 386 $ 14,278 City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 8,943 $ 8,943 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 11,203 $ 2,260 RESOURCES (INFLOWS): Licenses and permits Investments Bond proceeds Total revenues Less: Transfers out Amounts available for appropriation 6,126 490 7,000 13,616 22,559 6,125 490 6,615 15,558 4,993 512 5,505 (40) 16,668 (1,132) 22 (1,110) (40) 1,110 CHARGES TO APPROPRIATIONS (OUTFLOWS): Contingencies Capital outlay Total charges to appropriations 16,249 16,249 3 15,116 15,119 3,717 3,717 3 11,399 11,402 Budgetary fund balance, June 30, 2002 $ 6,310 $ 439 $ 12,951 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Add: Transfers out Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 95 $ 12,512 $ 16,668 (11,203) 40 $ 5,505 $ 3,717 $ 3,717 City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Proceeds of bonds sold Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final - $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) - $ 135 $ 135 2,552 126 1,496 214 4,388 1,581 (1,201) 4,768 7,528 2,552 126 1,496 214 11,916 1,581 (1,201) 12,296 7,693 1,977 129 41 42 9,882 1,403 11,420 165 (575) 3 41 (1,454) (214) (2,034) (178) 1,201 (876) 4,768 4,768 4,583 239 4,822 3,765 3,765 818 239 1,057 - $ 7,474 $ 7,655 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Transfers in Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in compensated absences liability Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 96 $ 181 $ 11,420 (135) (1,403) $ 9,882 $ 3,765 11 $ 3,776 City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 1,736 $ 1,736 $ 2,392 3,369 523 7 5,929 9,828 3,038 (1,600) 13,002 3,368 523 7 5,929 9,827 3,058 (1,600) 13,021 3,239 2,510 995 33 753 7,530 691 (1) 10,612 707 6,463 107 1,953 283 692 6,226 107 1,949 293 678 5,241 16 1,800 253 620 2,727 620 2,971 5 384 19 5 12,884 19 5 12,882 19 5 8,401 118 $ 139 $ 2,211 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Revenue recognized on a GAAP basis for "on behalf" grant Less: Transfers in Add: Transfers out Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in compensated absences liability Revenue recognized on a GAAP basis for "on behalf" grant Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 97 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 656 (129) 1,987 995 26 (5,176) (2,297) (2,367) 1,599 (2,409) 14 985 91 149 40 (5) 620 2,587 4,481 $ 2,072 $ 10,612 (2,392) 2 (691) 1 $ 7,532 $ 8,401 (17) 2 $ 8,386 City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Taxes Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 4,186 $ 4,186 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 3,515 $ (671) 12,993 12,993 17,179 12,993 12,993 17,179 12,864 12,864 16,379 (129) (129) (800) 10 10 51 (41) 8,058 2,262 10,330 8,058 2,262 10,330 8,058 2,389 10,498 (127) (168) 6,849 $ 6,849 $ 5,881 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Net effect of other financing sources (uses) on interest expenditures Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 98 $ (968) $ 16,379 (3,515) $ 12,864 $ 10,498 51 $ 10,549 City of Glendale, Arizona Budgetary Comparison Schedule Special Assessment Debt Service Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Special assessments Investments Miscellaneous Total revenues Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 3,870 $ 3,870 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 4,053 $ 183 1,060 1,050 2,110 412 6,392 1,060 1,050 2,110 412 6,392 844 1,003 1,847 420 6,320 15 15 7 8 1,374 1,017 2,406 1,374 1,017 2,406 1,374 1,017 2,398 8 3,986 $ 3,986 $ 3,922 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Transfers in Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 99 844 (57) (1,050) (263) 8 (72) $ (64) $ 6,320 (4,053) (420) $ 1,847 $ 2,398 $ 2,398 City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 10 $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 10 $ 120 $ 110 5,810 5,820 5,810 5,820 5,456 5,576 10 10 4 6 4,580 1,230 5,820 4,580 1,230 5,820 4,280 1,230 5,514 300 306 - $ - $ 62 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Transfers in Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 100 (354) (244) $ 62 $ 5,576 (120) (5,456) $ - $ 5,514 $ 5,514 City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Investments Total revenues Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 95 $ 95 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 18 $ (77) 20 20 1,395 1,510 20 20 1,395 1,510 6 6 1,395 1,419 15 15 1 14 880 515 1,410 880 515 1,410 880 515 1,396 14 100 $ 100 $ 23 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Transfers in Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 101 (14) (14) (91) $ $ (77) 1,419 (18) (1,395) $ 6 $ 1,396 $ 1,396 City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 7,396 $ 7,396 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 15,317 $ 7,921 RESOURCES (INFLOWS): Investments Proceeds of bonds sold Total revenues Less: Transfers out Amounts available for appropriation 400 6,380 6,780 14,176 400 6,380 6,780 14,176 355 2,097 2,452 (42) 17,727 (45) (4,283) (4,328) (42) 3,551 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Contingencies Capital outlay Total charges to appropriations 12,215 12,215 9 12,272 12,281 3 6,785 6,788 (3) 9 5,487 5,493 Budgetary fund balance, June 30, 2002 $ 1,961 $ 1,895 $ 10,939 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Bond proceeds Add: Transfers out Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 102 $ 9,044 $ 17,727 (15,317) (2,097) 42 $ 355 $ 6,788 $ 6,788 City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 3,720 $ 3,720 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 3,739 $ 19 RESOURCES (INFLOWS): Investments Proceeds of bonds sold Total revenues Amounts available for appropriation 185 3,800 3,985 7,705 185 3,800 3,985 7,705 108 108 3,847 (77) (3,800) (3,877) (3,858) CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Total charges to appropriations 6,700 6,700 6,700 6,700 3,494 3,494 3,206 3,206 Budgetary fund balance, June 30, 2002 $ 1,005 $ 1,005 $ 353 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 103 $ $ (652) 3,847 (3,739) $ 108 $ 3,494 $ 3,494 City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Investments Miscellaneous Proceeds from bonds sold Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ Final 5,758 $ 5,758 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 5,643 $ (115) 440 17,600 18,040 23,798 440 17,600 18,040 23,798 114 5 2,621 2,740 (124) 8,259 (326) 5 (14,979) (15,300) (124) (15,539) 22,119 22,978 14 4,711 (14) 18,267 22,119 22,978 632 41 5,398 (632) (41) 17,580 1,679 $ 820 $ 2,861 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Bonds proceeds Add: Transfers out Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Capital outlay - Paseo Racquet Club purchase Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 104 $ 2,041 $ 8,259 (5,643) (2,621) 124 $ 119 $ 5,398 200 $ 5,598 City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 2,758 $ 2,758 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 3,670 $ 912 RESOURCES (INFLOWS): Intergovernmental Investments Miscellaneous Proceeds of bonds sold Total revenues Transfers in Transfers out Amounts available for appropriation 722 3,613 11,200 15,535 1,600 19,893 722 3,613 17,400 21,735 1,627 26,120 247 75 28 31,261 31,611 53 (3) 35,331 247 (647) (3,585) 13,861 9,876 (1,574) (3) 9,211 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Community services Capital outlay Total charges to appropriations 18,463 18,463 20,978 20,978 270 1,708 9,574 11,552 (270) (1,708) 11,404 9,426 Budgetary fund balance, June 30, 2002 $ 1,430 $ 5,142 $ 23,779 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Expenditures funded by permit revenue Less: Transfers in Add: Transfers out Bonds proceeds Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Expenditures funded by permit revenue Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 105 $ 18,637 $ 35,331 (3,670) (6) (53) 3 (31,261) $ 344 $ 11,552 (6) $ 11,546 City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Permanent Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 265 $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 265 $ 3,581 $ 3,316 RESOURCES (INFLOWS): Investments Miscellaneous Total revenues Amounts available for appropriation 265 265 148 371 519 4,100 148 371 519 3,835 CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Total charges to appropriations (1) 265 265 265 265 - 265 265 Budgetary fund balance, June 30, 2002 $ - $ - $ 4,100 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds $ 4,100 $ 4,100 (3,581) $ 519 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ - Total expenditures as reported in the combining statement of revenues, expenditures, and changes in fund balances - governmental funds $ - (1) Monies may be withdrawn from the cemetery perpetual care fund when a finding is made that the cemetery may be expanded by acquiring adjacent real property, and the projected revenues related to such expansion exceed the costs of operating and maintaining such property as a part of the cemetery. Authorization of expansion shall be adopted by ordinance. 106 107 City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Intergovernmental Charges for services: Metered water sales Sewer service charges Impact fees Other fees Investments Miscellaneous Proceeds from bonds sold Proceeds from loan Total revenues Less: Transfers out Amounts available for appropriation 24,968 $ 246 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Water Sewer Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 Final $ 24,968 Actual Amounts (budgetary basis) $ 246 30,867 Variance with Final Budget Positive (Negative) $ 51 5,899 (195) 25,669 19,701 9,778 1,422 1,532 15,000 73,348 (4,540) 93,776 25,668 19,701 9,778 1,422 1,532 15,000 73,347 (4,540) 93,775 26,769 18,281 3,503 1,019 903 2 2,276 52,804 (4,688) 78,983 1,101 (1,420) (6,275) (403) (629) 2 (15,000) 2,276 (20,543) (148) (14,792) 5,615 12,103 9,556 2,000 36,818 5,576 11,947 9,506 2,348 36,656 5,081 10,621 7,480 17,539 495 1,326 2,026 2,348 19,117 9,620 3,170 78,882 9,620 3,170 78,823 10,658 3,374 54,753 (1,038) (204) 24,070 14,894 $ 108 14,952 $ 24,230 $ 9,278 City of Glendale Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) 2 of 2 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Interest earned on restricted assets not available for appropriation Loan proceeds Proceeds from equipment disposals Add: Transfers out Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule schedule Amortization of capitalized bond issuance expense Capital outlay expenditure Change in compensated absences liability Change in prepaid assets or inventory Depreciation expense Principal payments on long-term obligations Interest expense Indirect cost allocation Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets 109 $ 78,983 (30,867) 23 (2,276) (2) 4,688 $ 50,549 $ 54,753 (31) (17,539) (87) (15) 8,104 (10,658) (220) 4,540 $ 38,847 City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Charges for services: Landfill user fees Other fees Miscellaneous Investments Impact fees Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Contingencies Landfill Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ 15,281 Final $ 15,281 Actual Amounts (budgetary basis) $ 16,901 Variance with Final Budget Positive (Negative) $ 1,620 6,194 2,638 458 9,290 (878) 23,693 6,194 2,638 458 9,290 (878) 23,693 8,441 1,169 116 622 151 10,499 (892) 26,508 2,247 (1,469) 116 164 151 1,209 (14) 2,815 2,000 5,574 4,538 2,000 6,179 4,539 4,565 2,072 2,000 1,614 2,467 2,434 759 15,305 1,828 759 15,305 1,453 799 8,889 375 (40) 6,416 8,388 $ 8,388 $ 17,619 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Interest earned on restricted investments not available for appropriation Proceeds from disposal of capital assets Transfers out Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Capital outlay expenditures Change in compensated absences liability Change in estimated landfill post-closure liability Depreciation expense Principal payments on long-term obligations Interest expense Indirect cost allocation Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets 110 $ 9,231 $ 26,508 (16,901) 37 (116) 892 $ 10,420 $ 8,889 (2,072) (32) (6,211) 1,089 (1,453) 140 878 $ 1,228 City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Impact fees Investments Miscellaneous Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Public works Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2002 $ 1,911 Final $ 1,911 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 1,963 $ 52 4,291 7,474 11,765 (1,200) 12,476 4,291 7,474 11,765 (1,200) 12,476 4,499 7,309 96 33 76 12,013 (1,200) 12,776 10,090 10 10,377 10 9,266 - 1,111 10 1,435 287 11,822 1,148 287 11,822 857 161 10,284 291 126 1,538 654 $ 654 $ 2,492 208 (165) 96 33 76 248 300 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the schedule of operations - budget and actual $ The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Interest earned on restricted assets not available for appropriation Proceeds from disposal of capital assets Add: Transfers out Total revenues as reported on the combining statement of revenues, expenses, and changes in fund net assets- nonmajor proprietary funds $ Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the schedule of operations - budget and actual Depreciation expense Interest expense Change in compensated absences liability Capital lease financed expense Principal payments on long-term obligations Indirect cost allocation Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets - nonmajor propietary funds 111 1,838 12,776 (1,963) 21 (76) 1,200 11,958 $ 10,284 781 23 2 9 (856) 1,200 $ 11,443 City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ RESOURCES (INFLOWS): Intergovernmental Miscellaneous Investments Total revenues Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2002 $ - Final $ - $ 366 7,935 7,935 390 16,260 7,935 7,935 390 8,325 6,790 422 7,212 390 7,968 7,904 421 8,325 7,904 421 8,325 7,139 307 7,446 7,935 $ - $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Less: Transfers in Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets - nonmajor proprietary funds Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in compensated absences liability Depreciation expense Capital outlay Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets - nonmajor proprietary funds 112 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 522 $ 366 6,790 422 (7,935) (723) (357) 765 114 879 $ 522 $ 7,968 (366) (390) $ 7,212 $ 7,446 18 367 (307) $ 7,524 City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 3,007 $ 3,007 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 2,728 $ (279) RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 1,800 150 1,950 4,957 1,800 150 1,950 4,957 1,800 110 1,910 4,638 (40) (40) (319) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Contingencies Total charges to appropriations 1,600 250 1,850 1,600 250 1,850 1,616 1,616 (16) 250 234 Budgetary fund balance, June 30, 2002 $ 3,107 $ 3,107 $ 3,022 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expense Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Total revenues as reported on the combining statement of revenues, expenses, and changes in fund net assets Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in estimated claims payable Change in prepaid assets or inventory Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets 113 $ $ (85) 4,638 (2,728) $ 1,910 $ 1,616 (71) (45) 1,500 $ City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 5,538 $ 5,538 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 5,917 $ 379 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 1,400 250 1,650 7,188 1,400 250 1,650 7,188 1,400 238 1,638 7,555 (12) (12) 367 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 1,075 1,075 1,075 1,075 1,148 1,148 (73) (73) Budgetary fund balance, June 30, 2002 $ 6,113 $ 6,113 $ 6,407 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenses Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in estimated claims payable Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets 114 $ 294 $ 7,555 (5,917) $ 1,638 $ 1,148 (205) $ 943 City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2001 $ Final 2,927 $ 2,927 $ 1,909 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Less: Transfers out Amounts available for appropriation 11,128 11,128 (750) 13,305 11,128 11,128 (750) 13,305 12,370 92 12,462 14,371 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 11,223 11,223 11,223 11,223 11,593 11,593 Budgetary fund balance, June 30, 2002 $ 2,082 $ 2,082 $ 2,778 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Change in estimated claims payable liability Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets 115 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ (1,018) 1,242 92 1,334 750 1,066 (370) (370) $ 696 $ 14,371 (1,909) $ 12,462 $ 11,593 534 $ 12,127 City of Glendale, Arizona Supplementary Information For the fiscal year ended June 30, 2002 1 of 2 (Rounded to nearest dollar) Supplementary Information - Federal Financial Data Schedule (PHA: AZ003) The following is the schedule of Federal Financial Data as required by the United States Department of Housing and Urban Development under the Uniform Financial Reporting Standards Rule implementing requirements of 24 CFR, Part 5, Subpart H. Low Rent Public Housing 14.850a Line Item # Account Description ASSETS: Current Assets: Cash: 111 Cash - unrestricted 100 Total cash 122 125 126 126 120 418,872 418,872 Accounts receivables: Accounts receivable - HUD other projects Accounts receivable - miscellaneous Accounts receivable- tenants - dwelling rents Allowance for doubtful accounts - dwelling rents Total receivables, net of allowances for doubtful accounts 1,668 2,597 (1,781) 2,484 Current investments 132 Investments - restricted 143 Inventories 143.1 Allowance for obsolete inventories 144 Interprogram - due from 150 Total Current Assets 161 162 163 164 165 166 167 160 180 190 Non-Current Assets Fixed Assets: Land Buildings Furniture, equipment & machinery - dwellings Furniture, equipment & machinery - administration Leasehold improvements Accumulated depreciation Construction in progress Total fixed assets, net of accumulated depreciation Total Non-Current Assets Total Assets 312 322 333 341 345 347 310 LIABILITIES AND EQUITY/NET ASSETS: LIABILITIES: Current Liabilities Accounts payable <= 90 days Accrued compensated absences - current portion Accounts payable - other government Tenant security deposits Other current liabilities Interprogram - due to Total Current Liabilities 11,850 2,337 435,543 135,533 7,487,368 357,078 103,381 1,781,777 (4,149,658) 5,715,479 5,715,479 6,151,022 Non Current Liabilities 353 Noncurrent liabilities- other 354 Accrued Compensated Absences - non current 350 Total Noncurrent Liabilities 300 Total Liabilities EQUITY/NET ASSETS: 508 Invested in capital assets, net of related debt 511 Total reserved fund balance 512 Undesignated fund balance/retained earnings 513 Total Equity/Net Assets 600 Total Liabilities and Equity/Net Assets Public and Indian Housing Drug Elimination Program Public Housing Capital Fund Program - 133,821 133,821 - - 64,890 14,749 79,639 - - 1,419 214,879 - - 69,933 69,933 69,933 69,933 125,048 113,406 (105,779) 132,675 132,675 347,554 8,753 (950) 281,368 289,171 289,171 289,171 Total 552,693 552,693 64,890 16,417 2,597 (1,781) 82,123 1,419 11,850 2,337 650,422 135,533 7,612,416 479,237 103,381 1,781,777 (4,256,387) 351,301 6,207,258 6,207,258 6,857,680 11,038 3,967 14,662 34,685 17,941 82,293 - 6,853 4,297 45,276 2,337 58,763 - 17,891 8,264 14,662 34,685 63,217 2,337 141,056 35,699 35,699 117,992 - 1,419 38,674 40,093 98,856 - 1,419 74,373 75,792 216,848 5,715,479 317,551 6,033,030 6,151,022 69,933 69,933 69,933 132,675 116,023 248,698 347,554 289,171 289,171 289,171 6,207,258 433,574 6,640,832 6,857,680 Note: Programs with zero current year activity and zero ending position are not shown in this statement. 116 Section 8 Rental Voucher Program 2 of 2 City of Glendale, Arizona Supplementary Information For the fiscal year ended June 30, 2002 (Rounded to nearest dollar) (Continued) Supplementary Information - Federal Financial Data Schedule (PHA: AZ003) Low Rent Public Housing 14.850a Line Item # Account Description 703 704 705 706 706.1 715 700 911 914 915 916 931 932 933 938 941 942 943 945 961 963 964 969 970 973 974 900 REVENUE: Net tenant rental revenue Tenant revenue - other Total tenant revenue HUD PHA operating grants Capital Grants Other revenue Total Revenue EXPENDITURES: Administrative salaries Compensated absences Employee benefit contributions- administrative Other operating- administrative Water Electricity Gas Other utilities expense Ordinary maintenance and operations - labor Ordinary maintenance and operations - materials & other Ordinary maintenance and operations - contract costs Employee benefit contributions- ordinary maintenance Insurance premiums Payments in lieu of taxes Bad debt - tenant rents Total operating expenditures Excess operating revenue over expenditures Housing assistance payments Depreciation expense Total Expenditures Operating transfers from/to component unit Total other financing sources (Uses) Excess (deficiency) of total revenues over (under) total expenditures 1102 1103 1104 1113 MEMO ACCOUNT INFORMATION Debt principal payments- enterprise funds Beginning equity Total Prior period adjustments, equity transfers and correction of errors Maximum annual contributions commitment (Per ACC) Prorata maximum annual contributions applicable to a period of less than twelve months Contingency Reserve Total Annual Contributions Available Unit months available Number of unit months leased Total - - - 241,660 13,096 254,756 331,147 11,216 597,119 40,842 40,842 6,114,832 36,795 265,788 155,807 6,270,639 302,583 6,482,774 306,630 167,023 7,211,183 285,618 8,436 60,552 46,243 52,050 17,174 991 23,718 169,868 31,867 159,554 37,802 26,646 14,662 321 935,502 (338,383) 40,842 451,378 9,139 100,695 54,107 6,848 16,128 638,295 5,632,344 36,795 36,795 265,788 736,996 17,575 161,247 137,145 52,050 17,174 991 23,718 176,716 31,867 159,554 37,802 42,774 14,662 321 1,610,592 5,600,591 - 5,546,677 14,841 6,199,813 950 37,745 5,546,677 366,881 7,524,150 40,842 70,826 264,838 390,000 390,000 77,033 263,753 6,068,750 - 29,091 - 34,613 143,259 83,538 24,333 - 298,366 6,265,433 83,538 1,860 1,820 - 5,767,305 1,682,770 7,533,613 12,672 12,058 - 5,767,305 1,682,770 7,533,613 14,532 13,878 390,000 390,000 (299,473) Note: Programs with zero current year activity and zero ending position are not shown in this statement 117 Public Housing Capital Fund Program Section 8 Rental Voucher Program 241,660 13,096 254,756 351,090 1,286,592 1004 1010 1000 1114 1115 1116 1120 1121 Public and Indian Housing Drug Elimination Program City of Glendale, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Function and Activity(1) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Function and Activity General government Public safety Public works Community services Community environment Street maintenance Cemetery Total governmental funds capital assets Land $ 21,745 404 6,442 22,249 1,033 733 100 $ 52,706 1 of 2 Buildings $ 16,039 19,081 13,659 19,379 $ 68,158 Improvements Other Than Buildings $ 1,580 9,383 3,429 32,469 2,873 4,501 $ 54,235 (1) This schedule presents only the capital asset balances related to governmental funds. 118 Machinery and Equipment $ $ 1,378 4,521 355 1,365 445 8,064 City of Glendale, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Function and Activity(1) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Computer Equipment $ $ 830 20 9 65 8 932 Software $ $ 96 338 434 Automotive Equipment $ 10,101 5,486 715 1,971 13 3,234 $ 21,520 Construction in Process $ 1,270 704 722 4,827 9,850 $ 17,373 119 2 of 2 Other $ 113 1,329 11,577 $ 13,019 Total $ 53,152 39,937 25,331 83,654 3,919 30,348 100 $ 236,441 City of Glendale, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule of Changes By Function and Activity(1) For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Function and Activity General government Public safety Public works Community services Community environment Street maintenance Cemetery Total governmental funds capital assets Governmental Funds Capital Assets July 1, 2001 $ 43,264 36,309 25,473 80,904 3,928 9,145 100 $ 199,123 Additions $ $ 12,785 5,302 431 5,797 26,753 51,068 Deductions $ $ 2,897 1,674 573 3,047 9 5,550 13,750 (1)This schedule presents only the capital asset balances related to governmental funds. 120 Governmental Funds Capital Assets June 30, 2002 $ $ 53,152 39,937 25,331 83,654 3,919 30,348 100 236,441 Statistical Section [back of card-stock divider] City of Glendale, Arizona General Governmental Expenditures by Function Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1992-93 General Government $ 7,659 Public Safety $ 21,818 Public Works $ 6,274 Table 1 (1) Community Services Community Environment Street Maintenance Community Housing (2) $ $ $ $ 10,945 1,562 6,106 4,879 Miscellaneous and Contingency $ 1,501 Capital Outlay $ 22,980 Debt Service $ 16,572 Total $ 100,296 121 1993-94 7,780 23,358 6,752 11,138 1,236 6,315 4,776 288 28,977 15,742 106,362 1994-95 10,187 26,686 7,400 12,596 1,447 7,153 4,603 195 27,160 17,659 115,086 1995-96 11,449 30,006 7,858 13,917 1,615 7,676 4,763 241 31,094 20,559 129,178 1996-97 13,287 34,318 9,114 15,522 1,883 8,600 4,887 466 41,520 18,330 147,927 1997-98 14,666 36,847 9,797 16,697 2,991 9,109 5,064 127 37,130 19,205 151,633 1998-99 15,340 37,912 10,456 18,514 2,508 9,516 5,312 22 42,363 20,539 162,482 1999-00 17,122 41,155 11,884 21,332 2,052 9,541 5,645 458 42,177 32,997 184,363 2000-01 21,583 43,741 12,688 22,832 2,379 10,320 6,201 475 37,028 23,106 180,353 2001-02 20,064 49,126 11,364 27,502 3,223 11,493 - 71 38,636 26,499 187,978 Notes: (1) Includes all Governmental Fund Types (2) In fiscal year 2001-02, the City reclassified the Housing function to be accounted for within a proprietary fund. This function will be eliminated from the table prospectively. City of Glendale, Arizona General Governmental Revenues by Source (1) Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1992-93 Taxes and Special Assessments Licenses and Permits $ $ 27,667 4,354 Table 2 Intergovernmental $ 41,975 Local $ 4,777 Charges for Services Fines and Forfeitures $ $ 2,139 Investments 1,304 $ 1,546 Miscellaneous $ Total 1,103 $ 84,865 122 1993-94 35,080 5,132 41,892 16,487 2,370 1,362 1,389 1,790 105,502 1994-95 40,934 5,131 44,780 15,038 2,629 1,516 3,254 1,764 115,046 1995-96 44,313 5,739 48,219 15,941 3,425 2,029 3,706 1,757 125,129 1996-97 47,892 6,691 55,558 23,131 3,813 2,701 4,556 2,943 147,285 1997-98 51,253 9,197 61,845 12,355 4,735 2,646 5,185 1,971 149,187 1998-99 54,355 7,902 66,609 10,904 4,737 2,951 5,017 1,770 154,245 1999-00 57,681 8,280 70,269 11,020 4,861 2,413 4,533 1,905 160,962 2000-01 60,911 9,897 72,216 6,417 5,347 2,381 8,303 3,686 169,158 10,663 68,479 - 2,516 2,859 2,572 2,728 160,343 2001-02 (3) 70,526 (2) Notes: (1) Includes all Governmental Fund Types (2) In accordance with implementation of GASB Statement 34, the City no longer recognizes certain developer contributions of infrastructure as revenue. (3) In fiscal year 2001-02, the City reclassified the Housing function to be accounted for within a proprietary fund. This function will be eliminated from the table prospectively. City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Total Tax Levy Fiscal Year 1992-93 $ 9,460 Current Tax Collections $ Table 3 Percent of Current Tax Collections 8,923 94.32 % Delinquent Tax Collections Total Tax Collections $ $ 361 9,284 Ratio of Total Tax Collections to Total Tax Levy 98.13 % Outstanding Delinquent Taxes $ Ratio of Delinquent to Total Tax Levy 556 5.88 % 123 1993-94 9,420 9,092 96.51 352 9,444 100.25 379 4.02 1994-95 9,718 9,412 96.85 238 9,650 99.30 335 3.45 1995-96 10,506 10,241 97.48 254 10,496 99.90 294 2.80 1996-97 10,761 10,448 97.09 211 10,659 99.05 292 2.71 1997-98 12,051 11,661 96.76 245 11,906 98.79 342 2.84 1998-99 12,131 11,764 96.98 312 12,076 99.55 327 2.69 1999-00 12,978 12,507 96.37 288 12,795 98.59 376 2.89 2000-01 14,227 13,833 97.23 339 14,172 99.62 397 2.79 2001-02 16,136 15,529 96.24 291 15,820 98.04 556 3.45 City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Secured Personal Table 4 Utilities Rails and Wires 124 Fiscal Year Real Estate Improvements 1992-93 $ 168,538 $ 278,213 1993-94 163,208 277,881 10,279 31,758 28,359 1994-95 160,082 302,623 1,951 31,215 1995-96 161,175 358,969 2,045 1996-97 191,755 401,560 1997-98 206,083 1998-99 $ 7,783 Unsecured Personal $ 33,990 $ 26,405 Gross Valuation (1) $ 514,929 Less: Exemptions (1) $ Net Assessed Value (1) Estimated Actual Value 807 $ 514,122 511,485 838 510,647 4,136,637 30,192 526,063 796 525,267 4,321,468 25,714 31,092 578,995 815 578,180 4,809,344 2,564 23,711 46,017 665,607 65,363 600,245 5,022,245 475,031 2,688 29,718 46,299 759,819 62,626 697,193 5,824,504 215,309 485,708 2,974 29,627 44,837 778,455 61,065 717,390 5,931,081 1999-00 223,785 548,672 2,748 30,259 45,209 850,673 62,981 787,692 6,526,885 2000-01 233,712 619,842 2,609 39,388 46,580 942,131 65,229 876,903 7,288,261 2001-02 253,580 686,608 2,609 43,470 51,547 1,037,814 83,695 954,119 8,010,100 Notes: Source: Maricopa County Assessor's Office (1) Fiscal year 1996-97 gross valuation and exemptions increased due to a change in methodology by Maricopa County. Beginning that year, items such as churches and universities were included in both the gross valuation and the exemption amounts. The net effect of this change to the assessed value is zero. $ 4,138,652 City of Glendale, Arizona Property Tax Rates - Direct and Overlapping Governments Per $100 Assessed Valuation Last Ten Fiscal Years City of Glendale Fiscal Year 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 $ 1.98 1.98 1.98 1.93 1.88 1.83 1.78 1.73 1.72 1.72 Glendale Elementary District Glendale High School District $ $ 6.00 6.26 7.19 7.93 7.07 7.45 7.98 7.71 7.19 6.89 3.47 4.00 3.82 4.20 4.12 3.89 3.95 3.85 3.56 3.46 Peoria Unified School District $ 7.93 7.76 8.30 8.51 8.78 9.47 9.98 9.70 9.49 8.72 Table 5 Deer Valley Unified School District $ 9.57 9.92 10.27 9.42 10.22 9.73 9.81 9.17 8.06 8.11 125 Total Within Following Districts: Glendale Elementary and High School Districts 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 $ 15.10 15.88 16.68 17.96 16.44 16.62 17.15 16.72 15.81 15.36 Peoria Unified School District $ 13.56 13.38 13.97 14.34 14.03 14.75 15.20 14.86 14.55 13.73 Deer Valley Unified School District $ 15.20 15.54 15.94 15.25 15.47 15.01 15.03 14.33 13.12 13.12 Source: Maricopa County 2001 Tax Rates Note: The City rounds the rates to two digits from the four presented by the county. State $ 0.47 0.47 0.47 0.47 0.00 0.00 0.00 0.00 0.00 0.00 Maricopa County/ Education Equalization $ 1.75 1.77 1.77 1.83 1.79 1.79 1.81 1.82 1.79 1.77 Community College District $ 0.85 0.85 0.90 1.11 1.05 1.13 1.11 1.13 1.12 1.11 Flood Control District $ 0.39 0.36 0.36 0.33 0.34 0.34 0.33 0.29 0.25 0.23 Central Arizona Water Conservation District $ 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.13 0.13 County Library District $ 0.04 0.04 0.04 0.01 0.04 0.04 0.04 0.04 0.04 0.04 Fire District Assistance $ 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 City of Glendale, Arizona Principal Property Taxpayers June 30, 2002 (amounts expressed in thousands) Table 6 Taxpayer Arizona Public Service US West / Qwest Honeywell Inc. New River Associates Southwest Gas Corning Gilbert Inc. KB Toys Chase Commercial Mtg. May Department Stores JC Penney Co. 51 Bell Limited Partnership Burlington Northern Santa Fe DESC Ramainderman LLD VHS of Arrowhead Inc. Condev West Inc. Sanderson Ford Type of Property Gas & Electric Natural Resources Industrial Park Shopping Center Gas & Electric Industrial Park Warehouse Shopping Center Shopping Center Shopping Center Warehouse Railroad Shopping Center Medical Building Shopping Center Auto Sales Total principal taxpayers Other taxpayers Total secondary assessed valuation Assessed Valuation $ Percentage of Total Secondary Assessed Valuation 15,145 13,251 11,346 10,822 5,136 4,349 4,080 3,581 3,134 3,050 3,045 3,043 3,040 2,982 2,822 2,688 1.59 % 1.39 1.19 1.13 0.54 0.45 0.43 0.37 0.33 0.32 0.32 0.32 0.32 0.31 0.30 0.28 91,514 9.59 862,605 90.41 $ 954,119 Source: Maricopa County Treasurer's Office Notes: (1) The Salt River Project Agriculture Improvement and Power District assessed valuation is not reflected in the total assessed valuation of the City of Glendale. The Project is subject to "voluntary contribution" in lieu of ad valorem taxation. 126 100.00 % City of Glendale, Arizona Special Assessment Billings and Collections Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1992-93 Special Assessment Billing $ 407 Table 7 Special Assessment Collected (1) $ 611 1993-94 410 769 1994-95 844 1,233 1995-96 837 900 1996-97 801 1,431 1997-98 706 1,616 1998-99 740 921 1999-00 782 790 2000-01 827 1,078 2001-02 825 844 Notes: (1) Includes prepayments and billings that assessees paid before assessment went to bond. 127 City of Glendale, Arizona Computation of Legal Debt Margins June 30, 2002 (amounts expressed in thousands) Table 8 Assessed value, August 2001 $ 954,119 Debt limit: 6% of assessed value $ 57,247 $ 30,167 27,080 $ 190,824 $ 43,972 146,852 Amount of 6% type debt applicable to debt limit:(1) 1993 Refunding 1993 Refunding water/sewer 1996 Library 1996 Maintenance 1996 Public safety 1996 Streets 1998 Library 1998 Public safety 1998 Streets 2000 Economic development 2000 Governmental facilities 2000 Landfill 2000 Public safety 2000 Streets and parking 2000 Streets and traffic signals 2000 Transit 2002 Streets, traffic and parking 2002 Streets Total amount of 6% type debt applicable to debt limit Less amount available in Debt Service Fund and Water & Sewer Fund: Water & Sewer Fund Debt Service Fund Total amount available Total debt applicable to debt limit 6% type debt--legal debt margin $ 6,230 65 25 16 16 68 4,356 1,742 1,162 913 831 1,333 548 3,922 1,689 169 2,080 11,225 $ 36,390 45 6,178 6,223 Debt limit: 20% of assessed value Amount of 20% type debt applicable to debt limit:(1) 1993 Refunding 1993 Refunding water/sewer 1996 Flood control 1996 Parks 1998 Parks 1999 Refunding 1999 Refunding water/sewer 2000 Flood control 2000 Open space/trails 2000 Parks 2002 Refunding 2002 Flood control 2002 Parks 2002 Water feature 2002 Multipurpose Recreational Facility Total amount of 20% type debt applicable to debt limit Less amount available in Debt Service Fund and Water & Sewer Fund: 1993 Refunding and refunding water and sewer Debt Service Fund Total amount available Total debt applicable to debt limit 20% type debt--legal debt margin 6,360 3,920 310 575 1,725 370 2,180 5,625 450 5,300 4,545 3,000 2,600 2,430 14,355 $ 53,745 6,995 2,778 9,773 Notes: (1) Includes the July 1, 2002, debt service payment. 6% General Obligation bonds are permitted by State law to be issued for general municipal purposes. 20% General Obligation bonds are restricted to use for water and sewer utilities, parks, open space areas, lights and recreational purposes. 128 City of Glendale, Arizona Ratio of General Obligation Bonded Debt to Assessed Value and Net Direct Bonded Debt Per Capita Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 Population (1) Assessed Value (2) Gross Bonded Debt (3) Debt Service Monies Available 159 164 173 186 192 197 207 213 224 228 $ 514,122 510,647 525,267 578,180 600,245 697,193 717,390 787,692 876,903 954,119 $ 84,795 78,545 71,855 74,815 67,160 70,800 62,575 74,830 64,690 90,135 $ 6,250 6,690 7,040 9,382 9,998 10,892 11,611 12,416 13,241 15,955 129 Notes: (1) Source: Table 9 Maricopa Association of Governments through 1995, City of Glendale Planning Department 1995-96 to present (2) Source: Maricopa County Assessor's Office (3) Includes all bonded general obligation debt, which includes landfill debt of $1,460 for 1999-00, and $1,333 for 2000-01 and $1,186 for 2001-02. Debt Payable from Enterprise Revenues Net Direct Bonded Debt $ 23,725 22,440 19,690 16,750 14,000 11,835 10,000 9,635 7,498 5,156 $ 54,820 49,415 45,125 48,683 43,162 48,073 40,964 52,779 43,951 69,024 Direct Bonded Debt to Assessed Value 10.66 % 9.68 8.59 8.42 7.19 6.90 5.71 6.70 5.01 7.23 Net Direct Bonded Debt per Capita $ 0.34377 0.30058 0.26132 0.26103 0.22526 0.24437 0.19775 0.24752 0.19660 0.30325 City of Glendale, Arizona Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1992-93 Principal $ 8,340 $ Table 10 Interest Total Debt Service Total General Expenditures 8,231 $ 16,571 $ 100,296 Ratio of Debt Service to Total Expenditures 16.52 % 1993-94 8,146 7,597 15,743 106,364 14.80 1994-95 9,570 7,198 16,768 115,087 14.57 1995-96 9,921 6,797 16,718 129,309 12.93 1996-97 11,015 6,820 17,835 147,927 12.06 1997-98 11,643 6,099 17,742 151,633 11.70 1998-99 12,970 5,996 18,966 162,482 11.67 1999-00 26,490 5,283 31,773 184,363 17.23 2000-01 14,650 5,769 20,419 180,353 11.32 2001-02 14,592 5,203 19,795 187,978 10.53 Note: Principal and Interest expenditures for 1999-00 include a current refunding transaction. 130 City of Glendale, Arizona Computation of Net Direct and Overlapping General Obligation Bonded Debt June 30, 2002 (amounts expressed in thousands) Jurisdiction Peoria Unified School District No. 11 Table 11 Net Debt Outstanding $ 192,054 Glendale Elementary School District No. 40 Percentage Applicable to Glendale 26.9893 % Amount Applicable to Glendale $ 51,834 17,700 99.0630 17,534 186,475 30.0998 56,129 Alhambra Elementary School District No. 68 35,620 18.6989 6,661 Glendale Union High School District No. 205 68,290 20.8337 14,227 Maricopa County 39,515 4.1641 1,645 Maricopa County Community College District 284,815 4.1641 11,860 Phoenix Union High School District No. 210 189,090 1.6128 3,050 Pendergast Elementary School District No. 92 19,435 11.0093 2,140 Tolleson Union High School District No. 214 37,400 4.6751 1,748 136,670 2.9488 4,030 6,025 0.2661 16 Agua Fria Union High School District No. 216 29,520 0.1243 37 Litchfield Elementary School District No. 79 23,385 0.1995 47 2,085 0.1616 3 Deer Valley Unified School District No. 97 Washington Elementary School District No. 6 Dysart Unified School District No. 89 Cartwright Elementary School District No. 83 Total Overlapping Debt 1,268,079 170,961 69,024 69,024 $ 1,337,103 $ 239,985 City of Glendale Debt Total Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness 131 City of Glendale, Arizona Water and Sewer Revenue Bond Coverage Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1992-93 Gross Revenue (1) $ 30,322 Operating and Maintenance Expenses (2) $ 14,508 Table 12 Net Revenue Available for Debt Service $ 15,814 Revenue Bond Debt Service Requirements Interest (3) Total Principal (3) $ 3,315 $ 3,304 $ Coverage 6,619 2.39 132 1993-94 36,724 13,697 23,027 4,650 1,852 6,502 3.54 1994-95 37,898 15,509 22,389 4,705 1,828 6,533 3.43 1995-96 42,265 18,231 24,034 4,905 1,574 6,479 3.71 1996-97 46,204 20,273 25,931 5,350 1,383 6,733 3.85 1997-98 50,249 21,004 29,245 5,635 1,153 6,788 4.31 1998-99 49,843 22,429 27,414 4,521 923 5,444 5.03 1999-00 49,243 24,071 25,172 3,426 753 4,179 6.02 2000-01 52,482 28,334 24,148 7,558 3,387 10,945 2.21 2001-02 50,549 27,620 22,929 8,463 3,022 11,485 2.00 Notes: (1) Operating revenues and nonoperating revenues excluding non-cash contributions, gains and losses. (2) Excluding depreciation (3) Principal and interest amounts include debt service on the note payable to the Waste Infrastructure Financing Authority of Arizona for the 96-97and 00-01 loans. The City used its 1961 Revenue Bond authorization in obtaining both loans. Therefore, this table includes the loan activity to calculate revenue bond coverage. City of Glendale, Arizona Demographic Statistics Last Ten Fiscal Years (amounts expressed in thousands) Table 13 County-Wide School Enrollment (3) County-Wide Unemployment Rate (4) County-Wide Population (4) $ 19 397 5.9 2,291 164 20 413 4.7 2,338 1994-95 173 20 419 3.9 2,356 1995-96 186 21 419 3.5 2,552 1996-97 192 22 453 3.0 2,722 1997-98 197 24 476 2.6 2,803 1998-99 207 25 503 2.7 2,879 1999-00 213 27 518 2.9 2,954 2000-01 224 28 545 2.6 3,072 2001-02 228 28 566 3.9 3,192 Fiscal Year City Population (1) 1992-93 159 1993-94 County-Wide Per Capita Income (2) Source: (1) Maricopa Association of Governments through 1994-95, City Planning Department from 1995-96 to present. (2) Arizona Department of Economic Security through 1999-00, Bureau of Economic Analysis 2000-01 to present. (3) State Department of Education (4) Arizona Department of Economic Security 1992-93 to 1999-00, Census 2000 for 2000-01 to present. 133 % City of Glendale, Arizona Property Value, Construction and Bank Deposits Last Ten Fiscal Years Table 14 (amounts expressed in thousands) Estimated Actual Property Value (1) Fiscal Year 1992-93 $ 4,138,652 Construction (2) Residential $ 146,054 Commercial and Industrial $ 84,936 Others $ 25,979 Bank Deposits (3) Totals $ 256,969 $ 19,250 1993-94 4,136,637 187,816 21,077 22,913 231,806 20,599 1994-95 4,321,468 185,913 34,736 31,782 252,431 20,754 1995-96 4,809,344 206,646 33,528 25,622 265,796 21,125 1996-97 5,022,246 246,524 35,947 32,053 314,524 20,998 1997-98 5,824,504 336,900 45,426 18,908 401,234 20,568 1998-99 5,931,081 260,658 40,564 31,916 333,138 25,214 1999-00 6,526,885 217,219 46,693 28,194 292,106 26,490 2000-01 7,288,261 202,341 74,479 10,903 287,723 28,380 2001-02 8,010,100 127,085 83,132 9,322 219,539 29,293 Source: (1) Maricopa County Assessor's Office (2) City of Glendale Community Development Group (3) Arizona Banker's Association (County-wide bank deposits activity) Total deposits for Quarter Ending June 30, 2002 134 City of Glendale, Arizona Miscellaneous Statistics June 30, 2002 Table 15 Date of Incorporation 1910 Form of Government Council-Manager Area 55.6 Square Miles Miles of streets 692 Building permits issued 5,428 Number of employees (full time equivalents) 1,532 Fire Protection: Number of stations Number of firefighters (excluding volunteer firefighters) Fire hydrants Seven 175 7,009 Police Protection: Number of stations Number of police officers (exclusive of police reserve) Three 335 Recreation and Culture: Number of parks Number of libraries Number of library books 89 with 1,984 acres Three 606,676 135 City of Glendale, Arizona Insurance Coverage For the Fiscal Year Ended June 30, 2002 (amounts expressed in thousands) Type of Insurance Table 16 Insuring Company Policy Limits Property/Inland Marine Travelers Ins. Co. Boiler and Machinery Real & Personal Property Fire Prevention / Service Vehicles Unlicensed mobile equipment Sublimits Earthquake & Flood per occurrence / aggregate except $5,000,000 on Flood Zone A,V,B Business Interruption Transit Miscellaneous Equipment Pollutant Clean Up and Removal Automobile Physical Damage Airport Owners' and Operators' General Liability Commercial Crime Policy Commercial General Liability (Special Events) Annual Premium $ $ 100,000 231,054 2,857 45,442 $ American Insurance Co. (Fireman's Fund) Westchester Fire Ins. Co. (ACE USA) Expiration Date 278 1/26/03 116 1/26/03 13 1/26/03 50 47 4/9/04 250 72 7/1/02 32 10/4/03 50 50 50 50 100,000 10,000 5,000 3,000 1,000 100 50 50 50 50 Actual cash value 3 20,000 National Union Fire Ins. (AIG) Public employee dishonesty Faithful performance Workers' Compensation Limit each accident/disease a) Workers' compensation b) Employer liability Deduction Amount 15,000 2,000 Hartford Casualty Ins. Co. Statutory limits 2,000 Clarendon Ins. Co. 2,000 Excess Public Entity Liability First Layer Genesis Ins. Co. 10,000 1,000 515 7/1/03 Excess Public Liability Second Layer Princeton Ins. 10,000 11,000 298 7/1/03 Excess Public Liability Third Layer Gulf Ins. 15,000 21,000 125 7/1/03 Excess Public Liability Fourth Layer Westchester Ins. Co. 15,000 36,000 78 7/1/03 Kidnap, Ransom, and Extortion National Union Fire Ins. Co. 10,000 4 5/2/04 N/A The City's insurance is administered by Risk Management and Workers' Compensation divisions. Commercial insurance coverage is obtained by competitive bidding. Funding levels for self-insurance programs are provided by independent actuarial firms. The City Council has final approval on all insurance programs. 136 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2002 Table 17 WATER RATES PER METER SIZE Commercial Monthly Base Charge Inside Outside City City $ 12.02 $ 15.63 13.15 17.10 19.84 25.79 26.53 34.50 53.02 68.93 77.65 100.95 132.69 172.50 Meter Size (inch) 3/4 1 1 1/2 2 3 4 6 Residential Monthly Base Charge Inside Outside City City $ 15.63 $ 12.02 Meter Size All Sizes Residential and 3/4 Commercial Meter Size Gallons per Month 0 - 3,000 4,000 - 15,000 16,000 - 30,000 over 31,000 (1) Inside City -$ 1.27 1.51 1.81 All Year Outside City Commercial 1 inch Meter Size and Greater (1) All Year Inside Outside City City -$ 1.65 1.97 2.36 $ 1.22 1.22 1.22 1.22 $ 1.58 1.58 1.58 1.58 Summer Excess Rate Inside Outside City City $ 1.81 1.81 1.81 1.81 Per 1,000 gallons SEWER SERVICE RATES Type of Service Inside City Single Family Dwelling Unit Office Building Apartment - Average 5 units Apartment - Average 35 units Retail/Wholesale $ 20.47 39.21 74.35 330.66 35.84 (1) Per 1,000 gallons SOURCE: City of Glendale Finance Department 137 Outside City 30.56 N/A 50.00 267.03 N/A $ 2.36 2.36 2.36 2.36 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2002 Table 18 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS Fiscal Year Ending June 30 Residential 1995 1996 1997 1998 1999 2000 2001 2002 41,317 43,230 45,421 47,363 49,556 50,324 51,169 52,736 (3) Commercial (1) (2) Total 3,789 3,964 4,165 4,343 4,544 4,590 4,649 5,197 (1) Total meters in the system being read monthly. Slightly lower figure for active accounts due to vacant properties. (2) Includes multi-family housing facilities. (3) As of April 3, 2000. 45,106 47,194 49,586 51,706 54,100 54,914 55,818 57,933 SOURCE: City of Glendale Finance Department WATER DELIVERIES Acre Feet Calendar Year 1995 1996 1997 1998 1999 2000 2001 (1) Residential (1) 27,361 29,458 31,294 30,477 32,779 35,135 34,667 Commercial 5,616 6,202 4,562 4,491 4,739 9,413 8,865 Other Total 8,998 9,081 8,667 6,344 8,942 893 722 41,975 44,741 44,523 41,312 46,460 45,441 44,254 Residential includes both single and multi-family housing. SOURCE: Annual Report of Arizona Department of Water Resources. SEWERAGE ACCOUNTS BILLED AND SEWAGE TREATED Fiscal Year No. of Sewer Accounts Billed Multi-City Plant (MGD) Actual Arrowhead (MGD) (1) 1995 1996 1997 1998 1999 2000 2001 41,498 44,090 45,813 47,064 49,021 50,564 52,688 10.0 11.0 12.3 10.4 10.9 11.7 11.4 1.1 1.6 1.9 2.2 2.7 2.8 2.8 (1) Estimated (2) Peak Day is based on 150% of the Multi-City Plant Use. (3) Began operations in 2000 SOURCE: City of Glendale Finance and Utilities Departments 138 West (3) (MGD) 4.3 4.3 Peak (MGD) (2) 15.0 16.5 18.5 15.6 16.4 17.6 17.1 [face of card-stock divider] City of Glendale Finance Department 5850 West Glendale Avenue Glendale, Arizona 85301 (623) 930-2480