City of Glendale, Arizona Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2003 This page left blank intentionally. GLEND LE City of Glendale, Arizona Comprehensive Annual Financial Report Fiscal Year 2002-03, Ended June 30, 2003 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 Pam Kavanaugh - Assistant City Manager Tim Ernster Deputy City Manager - Community Development Kenneth A. Reedy Deputy City Manager - Public Works Chris Zapata Deputy City Manager - Community Services Prepared by the Finance Department Arthur R. Lynch Chief Financial Officer i This page left blank intentionally. ii City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ INTRODUCTORY SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2003 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 .........................................................................6 Mayor and City Council..................................................................................................................7 Glendale Council District Boundaries.............................................................................................8 Organizational Chart .......................................................................................................................9 II. FINANCIAL SECTION Report of Independent Accountants.................................................................................................11 A. MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A).............................................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 (other than MD&A): Budgetary Comparison Schedule – General Fund.....................................................................77 Budgetary Comparison Schedule – Transportation Fund ..........................................................79 Notes to Required Supplementary Information .........................................................................80 iii 12/7/03 9:42 PM N:\FINANCE\03_audit\Cafr 03\I. Introductory Section\I-020. Table of Contents 03.doc City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2003 TABLE OF CONTENTS Page C. COMBINING STATEMENTS Non-Major Governmental Funds Combining Balance Sheet..........................................................................................................84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances..................86 Non-Major Proprietary Funds – Business-type activities Combining Statement of Net Assets..........................................................................................88 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets.....................89 Combining Statement of Cash Flows ........................................................................................90 Internal Service Funds Combining Statement of Net Assets..........................................................................................92 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets.....................93 Combining Statement of Cash Flows ........................................................................................94 D. OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules – Other Funds Community Development Block Grants Fund.......................................................................95 Highway Users Gas Tax Fund ...............................................................................................96 Development Impact Fees Fund.............................................................................................97 Other Special Revenue Fund..................................................................................................98 General Obligation Debt Service Fund ..................................................................................99 Special Assessment Debt Service Fund ...............................................................................100 Highway User Debt Service Fund........................................................................................101 Municipal Property Corporation Debt Service Fund ...........................................................102 Arena Construction Fund .....................................................................................................103 Streets Construction Fund....................................................................................................104 Fire and Police Construction Fund.......................................................................................105 Parks Bond Construction Fund ............................................................................................106 Other Construction Fund......................................................................................................107 Cemetery Perpetual Care Permanent Fund ..........................................................................108 Water and Sewer Fund.........................................................................................................109 Landfill Fund .......................................................................................................................111 Sanitation Fund ....................................................................................................................112 Housing Fund.......................................................................................................................113 Risk Management Fund .......................................................................................................114 Workers’ Compensation Fund .............................................................................................115 Employee Benefits Fund......................................................................................................116 Federal Financial Data Schedule .............................................................................................118 Capital Assets Used in the Operation of Governmental Funds Schedule by Function and Activity ......................................................................................122 Schedule of Changes by Function and Activity ...................................................................124 iv 12/7/03 9:42 PM N:\FINANCE\03_audit\Cafr 03\I. Introductory Section\I-020. Table of Contents 03.doc City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2003 TABLE OF CONTENTS III. STATISTICAL SECTION Table Page General Governmental Expenditures by Function ............................................................. 1.............125 General Governmental Revenues by Source ...................................................................... 2.............126 Property Tax Levies and Collections ................................................................................. 3.............127 Assessed and Estimated Actual Value of Taxable Property............................................... 4.............128 Property Tax Rates – Direct and Overlapping Governments ............................................. 5.............129 Principal Property Taxpayers ............................................................................................. 6.............130 Special Assessment Billings and Collections..................................................................... 7.............131 Computation of Legal Debt Margins.................................................................................. 8.............132 Ratio of General Obligation Bonded Debt to Assessed Value and Net Direct Bonded Debt Per Capita ...................................................................................... 9.............133 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures .......................................................................................... 10.............134 Computation of Net Direct and Overlapping General Obligation Bonded Debt.............. 11.............135 Water and Sewer Revenue Bond Coverage...................................................................... 12.............136 Demographic Statistics..................................................................................................... 13.............137 Property Value, Construction and Bank Deposits ............................................................ 14.............138 Miscellaneous Statistics ................................................................................................... 15.............139 Insurance Coverage .......................................................................................................... 16.............140 Miscellaneous Water and Sewer Rate Statistics............................................................... 17.............141 Miscellaneous Water and Sewer Statistics ....................................................................... 18.............142 Government-wide Expenses by Function......................................................................... 19.............143 Government-wide Revenues ............................................................................................ 20.............144 v 12/7/03 9:42 PM N:\FINANCE\03_audit\Cafr 03\I. Introductory Section\I-020. Table of Contents 03.doc This page left blank intentionally. vi 1 2 3 4 5 Glendale, Arizona And Neighboring Communities 6 City Officials ELAINE M. SCRUGGS Mayor JOYCE V. CLARK Councilmember Yucca District DAVID M. GOULET Councilmember Ocotillo District THOMAS R. EGGLESTON Vice Mayor/ Councilmember Barrel District STEVE E. FRATE Councilmember Sahuaro District MANUEL D. MARTINEZ Councilmember Cholla District H. PHILIP LIEBERMAN Councilmember Cactus District 7 ED BEASLEY City Manager Glendale Council District Boundaries Pinnacle Peak Rd. Deer Valley Rd. CHOLLA Beardsley Rd. N Greenway Rd. Loop 1 01 ue en Av Bell Rd. SAHUARO d an Gr Union Hills Dr. Thunderbird Rd. Cactus Rd. BARREL Peoria Ave. Olive Ave. Glendale Ave. OCOTILLO YUCCA 43rd Ave. 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. 83rd Ave. Bethany Home Rd. CACTUS Northern Ave. ORGANIZATION CHART Citizens of Glendale Organizational Reporting Structure September, 2003 Mayor & Council Boards & Commissions CIty Clerk Pam Hanna City Manager Ed Beasley City Court Judge Elizabeth Finn City Attorney Rick Flaaen Police Randy Henderlite Assistant City Manager Pam Kavanaugh Fire Mark Burdick Finance Art Lynch Deputy City Manager Community Services Chris Zapata Deputy City Manager Community Development Tim Ernster Deputy City Manager Public Works Ken Reedy 9 *Tax & License *Billing Services *Materials Mgt. *Warehouse *Customer Relations *Regulatory & Communications *Revenue Recovery *Accounting Library Rodeane Widom Planning Jon Froke Utilities Roger Bailey Community Partnerships Erik Strunk Building Safety Deborah Mazoyer Field Operations Mike Hoyt Community Housing & Revitalization Gloria Santiago-Espino Transportation Jim Book Environmental Resources Doug Kukino Parks & Recreation Warren Smith Engineering & Capital Projects Larry Broyles Economic Development Jim Colson Code Compliance Dan Gunn Mayor's Office Steven Methvin Information Technology & GIS Chuck Murphy Council/Manager Relations Cathy Gorham Civic Center Bobbye Hamilton Direct reporting structures for departments & divisions are designated by color: Report to Council Budget Sherry Schurhammer Report to City Manager Report to Report to Assistant CIty Deputy City Manager Managers Intergovernmental Programs Miryam Gutier *Agenda *Council Office *Strategic Initiatives Marketing & Communications Julie Frisoni Human Resources LaVerne Parker-Diggs City Auditor Candace MacLeod Community Action Program Norma Alvarez *Tourism *Special Events *Public Information *Cable Station This page left blank intentionally. 10 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. 11 12 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ MANAGEMENT’S DISCUSSION & ANALYSIS (Required Supplementary Information) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (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, 2003. 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 the Management’s Discussion and Analysis, provide these significant key financial highlights for 2002-03 as follows. • The City’s total net assets increased $75,447 or 9.29%. The governmental net assets increased by $60,855 or 13.25% and the business-type net assets increased by $14,592 or 4.13%. A $327,446 prior period adjustment increased the governmental net assets by the addition of infrastructure as required by Governmental Accounting Standards Board Statement (GASBS) 34. • General revenues from governmental activities increased $32,287 or 26.15%, and were 74.72% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions increased $8,894 or 20.30%. • The business-type activities revenue increased by $2,629 or 3.15%. • The total cost of all City programs increased by $18,603 or 9.27%. • A major governmental fund, the general fund, had $109,302 in revenues, which is an increase of $4,943 or 4.74% from the prior year. The primary sources of revenue in general fund are local taxes and intergovernmental taxes. The total expenditures of the general fund were $103,970, which is a decrease of $3,597 or 3.34% from the prior year. The fund balance increased $23,925 or 95.25%. This increase was largely from $14.5 of loan proceeds used to finance City acquisition of property for the Northern Crossing retail redevelopment project, which is under construction. The developer then issued a long-term note for $14.5 to acquire the City property. The remainder of the fund balance increase resulted from increased tax and intergovernmental revenue, combined with planned expenditure reductions in general government. • The City issued $66,400 in general obligation bonds to fund the construction of public improvements. In addition, its municipal property corporation issued $155,200 in excise tax revenue bonds, related to the arena project. 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) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements 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 13 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 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 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 governmentwide 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 16 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 11 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major 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 of the City. Data from the other two 14 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major 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 and transportation special revenue fund. Other information. The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the notes to the RSI. 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 $887,999 as of June 30, 2003. 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 City’s financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. 15 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Net Assets The following table reflects the condensed Statement of Net Assets compared to prior year. Condensed Statement of Net Assets As of June 30, 2003, and 2002 (in thousands) Governmental Activities 2003 2002* Current and other assets Capital assets Total assets $ 335,020 628,443 963,463 $ Total Primary Government Business-type Activities 2003 2002 170,321 489,043 659,364 $ 111,521 371,792 483,313 $ 101,107 355,271 456,378 2003 $ 446,541 1,000,235 1,446,776 2002* $ 271,428 844,314 1,115,742 Current liabilities Long-term liabilities Total liabilities 88,803 354,664 443,467 42,136 158,087 200,223 22,960 92,350 115,310 6,784 96,183 102,967 111,763 447,014 558,777 48,920 254,270 303,190 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 259,802 127,393 132,801 519,996 358,706 91,203 9,232 459,141 275,204 10,235 82,564 368,003 269,007 20,092 64,312 353,411 535,006 137,628 215,365 887,999 627,713 111,295 73,544 812,552 $ $ $ $ $ $ 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. The same situation held true for the prior fiscal year. *Amounts do not agree to prior year due to a prior period adjustment for the addition of infrastructure. 16 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2003, were $295,917. The total cost of all programs and services was $220,470. The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2003, and 2002. Changes in Net Assets (in thousands) Governmental Activities 2003 2002* Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues $ General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Impact fees Investment earnings, unrestricted 25,898 22,522 4,294 52,714 $ 18,591 22,640 2,589 43,820 16,739 63,832 17,113 16,459 52,580 16,862 23,288 8,619 (1,602) 22,822 7,219 1,397 Total Primary Government 2003 2002* Business-type Activities 2003 2002 $ 73,144 7,091 520 80,755 $ - 67,908 6,592 673 75,173 $ - (123) 99,042 29,613 4,814 133,469 $ 86,499 29,232 3,262 118,993 16,739 63,832 17,113 16,459 52,580 16,862 3,751 1,215 23,288 8,619 (1,725) 22,822 7,219 3,751 2,612 Gain (loss) on disposal of capital assets Gain (loss) on joint venture Miscellaneous Capital contributions Total revenues 445 299 27,042 208,489 (345) 289 6,205 167,308 (725) (1,011) 7,241 86,137 (168) (1,054) 4,591 83,508 (280) (1,011) 299 34,283 294,626 (513) (1,054) 289 10,796 250,816 Expenses: General government Public safety Public works Community services Community environment Street maintenance Other Interest on long-term debt Water and sewer Landfill Sanitation Housing Total expenses 20,209 52,625 11,411 32,210 3,433 20,308 148 7,223 147,567 22,490 53,779 12,766 30,919 3,414 12,534 19 5,864 141,785 43,442 7,784 12,353 8,033 71,612 39,909 1,189 10,180 7,513 58,791 20,209 52,625 11,411 32,210 3,433 20,308 148 7,223 43,442 7,784 12,353 8,033 219,179 22,490 53,779 12,766 30,919 3,414 12,534 19 5,864 39,909 1,189 10,180 7,513 200,576 60,922 25,523 14,525 24,717 75,447 50,240 Excess before transfers Transfers in (out) (67) Increase in net assets Net assets, beginning Restatement (See Note I.T) Net assets, ending $ 67 228 - - 60,855 25,295 (228) 14,592 24,945 75,447 50,240 459,141 519,996 106,400 327,446 459,141 353,411 368,003 328,466 353,411 812,552 887,999 434,866 327,446 812,552 $ $ $ $ $ *For 2001-02 the franchise, license, and impact fees are reclassified and reported as Charges for Services instead of General Revenues, to be consistent with current year treatment. 17 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) expenses Expenses and Program Revenues - Governmental Activities program revenues 60,000 50,000 40,000 30,000 20,000 10,000 General government Public safety Public works Community services Community environment Expenses and Program Revenues - Business-type Activities Street maintenance Other Interest on longterm debt expenses program revenues 60,000 50,000 40,000 30,000 20,000 10,000 Water and sewer Landfill Sanitation Housing 18 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Revenue Sources Fiscal Year 2002-03 Gain (loss) on disposal of capital assets 0.09% Gain (loss) on joint venture 0.34% Miscellaneous 0.10% Capital contributions 11.40% Investment earnings, unrestricted 0.57% Charges for services 32.94% Auto in-lieu taxes 2.87% Urban revenue sharing (state shared income tax) 7.75% Operating grants and contributions 9.85% Capital grants and contributions 1.60% State shared sales tax 5.69% Sales taxes 21.23% Property taxes 5.57% Functional Expenses Fiscal Year 2002-03 Housing 3.67% General government 9.22% Sanitation 5.64% Landfill 3.55% Public safety 24.01% Water and sewer 19.82% Interest on long-term debt 3.30% Other 0.07% Street maintenance 9.27% Public works 5.21% Community environment 1.57% Community services 14.70% 19 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 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. 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 $232,374, an increase of $132,269 or 132.13% in comparison with the prior year. • Unreserved undesignated fund balance, which is available for spending at the City’s discretion within a fund was $159,581, an increase of $143,889 or 916.96% from the prior year. This increase resulted primarily through issuance of long-term debt for the arena project. • The City also had $21,951 in unreserved, designated fund balance, which represents self-imposed limitations on the use of otherwise available expendable financial resources in governmental funds as discussed in Note XVI. • 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 $ 17,315 18,644 10,246 98 4,539 $ 50,842 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 $31,727, while total fund balance reached $49,042. 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 30.52% of total general fund expenditures, while total fund balance represents 47.17% of that same amount. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Net assets of the enterprise funds and the internal service funds increased $13,886 or 3.85%, respectively. The enterprise funds total net assets were 2.78% restricted and 22.55% unrestricted. Internal service funds were 100.0% unrestricted. 20 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 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 default of the issuer of a portion of the investments held by the State of Arizona Local Government Investment Pool (LGIP). The securities in question comprised approximately 3.2% of the LGIP’s investment portfolio and were transferred by LGIP to a separate pool due to the default. • General fund revenues exceeded the final amended budget by $13,020 or 10.0%, due to the Northern Crossing loan proceeds. • General fund expenditures were less than the final amended budget by $21,778 or 16.11%. This positive variance resulted from $11,046 in left over contingencies appropriation at fiscal year-end along with expenditure reductions in general government. Capital Asset and Debt Administration Capital Assets. The City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2003, for its governmental type activities was $628,443 and for the business type activities was $371,792. 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: • Construction of the Gateway Public Safety Center, $4,810; • Expansion of the Glendale Municipal Airport runway, $1,848; • New Adult Center at a current year cost of $4,292; • The City invested an additional $8,215 on enhancements at the Cholla Water Treatment Plant; • Modifications were made to the West Area Water Reclamation Facility totaling $4,041. The following table is a summary of capital assets reflected in the June 30, 2003, as compared to last year financial statements. 21 12/8/03 9:05 AM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 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-flood/storm drains 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 2003 2002* 136,486 $ 17,373 42,679 52,706 1,166 938 42,739 44,990 21,080 320,097 12,031 4,159 25,636 13,636 503 341 7,890 628,443 $ 19,934 303,221 11,364 4,297 20,645 5,172 458 356 7,589 489,043 $ $ Business-type Activities 2003 2002 34,788 $ 23,798 9,477 5,625 9,844 10,128 5,296 62,733 68,537 58,940 85,607 22,235 3,884 4,583 145 5,723 371,792 $ 5,332 - $ 59,260 66,819 61,496 87,286 21,255 3,986 3,935 160 6,191 355,271 $ Total Primary Government 2003 2002* 171,274 $ 41,171 52,156 58,331 1,166 938 52,583 55,118 26,376 320,097 12,031 4,159 25,636 62,733 68,537 58,940 85,607 22,235 3,884 18,219 648 341 13,613 1,000,235 $ 25,266 303,221 11,364 4,297 20,645 59,260 66,819 61,496 87,286 21,255 3,986 9,107 618 356 13,780 844,314 *Amounts do not agree to prior year due to a prior period adjustment for the addition of infrastructure. 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 $460,904, compared to the $229,099 last year, a 101.18% net increase. Of this amount, $146,135 comprises debt backed by the full faith and credit of the City and $12,036 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 obligation Water and sewer revenue bonds Notes payable Total $ $ Governmental Activities 2003 2002 127,104 $ 82,637 12,036 16,247 20,030 24,310 170,590 14,971 20,193 364,924 $ 11,215 4,498 4,340 143,247 $ $ Business-type Activities 2003 2002 19,031 $ 7,498 - 12,838 49,280 14,831 95,980 $ 15,291 56,705 6,358 85,852 $ $ Total Primary Government 2003 2002 146,135 $ 90,135 12,036 16,247 20,030 24,310 170,590 27,809 49,280 35,024 460,904 $ The City’s total long-term debt increased by $231,805 from the prior year. The key factor in this increase was a $155,200 municipal property corporation bond issue for the arena project. 22 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc 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, 2003 (amounts expressed in thousands) The City maintains an “AA” rating from Standard & Poor’s and an “Aa2” rating from Moody’s for general obligation debt. The highway user revenue bonds have been rated “Aa3” by Moody’s and “A+” by Standard & 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, 2003, was $11,553 and $116,974, respectively. Additional information on long-term debt can be found in Note IX of the financial statements. Economic Factors and Next Year’s Budgets and Rates The adopted fiscal year 2003-04 budget is $593,000 (down 6.61% from 2002-03), including a $237,000 operating budget (an increase of 4.41% from 2003) and $293,630 in capital outlay (down 16.14% from 2003). The fiscal year 2003-04 budget includes $14,270 contingency appropriation to cover emergency expenses or revenue shortages. • Fiscal year 2002-03 saw the national, state and regional economies struggle to recover from the effects of an ongoing recession. • 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 2003 was 6.5%, which is an increase from a rate of 5.6% a year ago. This compares unfavorably to the state’s average unemployment rate of 6.2% and the national average rate of 6.1%. 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 12/7/03 9:33 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-A. MD & A\II-A. MD&A 03.doc This page left blank intentionally. 24 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. City of Glendale, Arizona Statement of Net Assets June 30, 2003 (amounts expressed in thousands) Governmental Activities ASSETS Equity in pooled cash and investments Receivables (net of allowance for uncollectibles) Property taxes Accounts Accrued interest Intergovernmental receivable Internal balances Inventories and prepaid items Restricted cash and investments Capital assets: Non-depreciable Depreciable (net) Deferred receivable Water storage right (net) Equity in joint venture Total assets $ $ 772 8,608 793 6,634 540 3,841 105,758 LIABILITIES Vouchers payable Accounts payable Retainage payable Accrued expenses Accrued interest payable Intergovernmental payable Deposits Unearned rent Deferred revenue Noncurrent liabilities: Due within one year Due in more than one year 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 177,054 Primary Government Business-type Activities $ 52,717 Total $ 8,334 93 412 (540) 452 11,010 229,771 772 16,942 886 7,046 4,293 116,768 180,331 448,112 31,020 963,463 44,265 327,527 6,561 32,482 483,313 224,596 775,639 31,020 6,561 32,482 1,446,776 17,408 11,796 1,296 4,230 94 625 23,139 2,895 92 1,104 1,499 1,735 227 641 4 - 20,303 11,888 2,400 1,499 5,965 321 1,266 4 23,139 30,215 354,664 443,467 14,763 92,350 115,310 44,978 447,014 558,777 259,802 275,204 535,006 54,412 25,412 4,674 42,895 132,801 519,996 55 2,268 6,576 1,336 82,564 368,003 54,467 27,680 6,576 4,674 44,231 215,365 887,999 $ $ The notes to the financial statements are an integral part of this statement. 25 12/7/2003 3:17 PM N/\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B020. Stmt of Net Assets 03.xls City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2003 (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 $ $ 20,209 52,625 11,411 32,210 3,433 20,308 148 7,223 147,567 43,442 7,784 12,353 8,033 71,612 219,179 $ $ 10,029 1,897 526 13,439 7 25,898 52,088 8,644 11,918 494 73,144 99,042 Program Revenues Operating Grants and Contributions $ $ 175 2,476 110 1,025 3,391 15,345 22,522 124 4 6,963 7,091 29,613 Capital Grants and Contributions $ $ 28 12 2,537 1,558 159 4,294 262 6 5 247 520 4,814 General revenues: Taxes: Property taxes levied for: General purposes Debt service Sales taxes Unrestricted state shared sales tax Unrestricted urban revenue sharing (state shared income tax) Auto in-lieu taxes 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, restated (See note I.T) Net assets - ending The notes to the financial statements are an integral part of this statement. 26 11/1/2003 7:51 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B030. Stmt of Activities 03 City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 2 of 2 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ $ (10,005) (48,224) (10,763) (15,209) (42) (3,398) 11 (7,223) (94,853) $ - $ (10,005) (48,224) (10,763) (15,209) (42) (3,398) 11 (7,223) (94,853) (94,853) 9,032 870 (430) (329) 9,143 9,143 9,032 870 (430) (329) 9,143 (85,710) 3,353 13,386 63,832 17,113 23,288 8,619 (1,602) 445 299 27,042 (67) 155,708 60,855 459,141 519,996 (123) (725) (1,011) 7,241 67 5,449 14,592 353,411 368,003 3,353 13,386 63,832 17,113 23,288 8,619 (1,725) (280) (1,011) 299 34,283 161,157 75,447 812,552 887,999 $ $ 27 11/1/2003 7:51 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B030. Stmt of Activities 03 City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2003 (amounts expressed in thousands) General ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Property taxes Accounts Accrued interest Due from other Funds Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets $ 28 LIABILITIES AND FUND BALANCE Liabilities: Vouchers payable Accounts payable Retainage payable Compensated absences - current Intergovernmental payable Due to other Funds Deposits Matured interest payable Deferred revenue Matured bonds payable Total liabilities Fund Balances: Reserved (Note XVI) Unreserved: Designated (Note XVI): General fund Special revenue funds Capital project funds Undesignated, reported in General fund Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances $ 48,247 Major Funds General Obligation Debt Service Transportation $ 16,326 $ 17,543 Special Assessment Debt Service $ 813 Other Non-major Governmental Funds Arena Project $ 3,438 $ 77,706 Total Governmental Funds $ 164,073 155 6,313 636 1,799 2,186 330 889 10,754 71,309 1,536 656 18,518 617 18,160 17,374 18,187 213 9 92,177 95,837 546 148 3,793 277 12,542 2,892 97,904 772 8,608 793 1,799 6,635 607 105,608 31,020 319,915 6,769 2,269 581 93 464 12,091 22,267 664 10 10 684 2,179 387 10,061 12,627 361 17,374 17,735 311 9,476 1,149 2 10,938 9,105 10 146 74 1 1,795 161 1,628 4,620 5,750 23,290 16,849 11,755 1,295 667 94 1,795 625 4,168 34,482 15,811 87,541 17,315 - 5,533 452 - 27,542 50,842 3,930 - - - - - 609 17,412 3,930 609 17,412 27,797 49,042 71,309 17,834 17,834 18,518 5,533 18,160 452 18,187 84,899 84,899 95,837 5,110 23,941 74,614 97,904 27,797 22,944 108,840 232,374 319,915 $ $ $ $ $ $ The notes to the financial statements are an integral part of this statement. 12/7/2003 3:23 PM N:\Finance\03_audit\Cafr 03\II.Financial Section\II-B. Basic Financial Statements\II-B050. Balance Sheet - Governmental Funds 03.xls City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2003 (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 $ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental capital assets Less accumulated depreciation $ 232,374 816,393 (187,950) 628,443 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 3,500 Internal service funds are used by management to change 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. 6,091 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 (313,948) (35,165) (8,871) (3,426) (291) (361,701) Unmatured interest payable (62) Deferred revenue that is measurable but not yet available for governmental fund activities is recognized as revenue for governmental-wide activities. Net assets of governmental activities 11,351 $ 519,996 The notes to the financial statements are an integral part of this statement. 29 12/7/2003 3:30 PM N:\Finance\03_audit\Cafr 03\II.Financial Section\II-B. Basic Financial Statements\II-B060. Rec of the Bal Sheet of Govt Fds to Stmt of Net Assets 03.xls City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) General REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment income (loss) Miscellaneous Total revenues $ 30 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 OTHER FINANCING SOURCES (USES) Long-term debt issued Loan proceeds Proceeds from equipment disposal Capital lease proceeds Other uses: Transfers in Transfers out Total other financing sources and uses $ $ 16,788 1,883 170 297 2 19,140 $ 13,589 159 13,748 Special Assessment Debt Service $ 1,625 1,625 Arena Project $ 1,067 38 (90) 1,015 Other Non-Major Governmental Funds $ 3,378 7,627 22,840 1,018 606 1,354 36,823 Total Governmental Funds $ 82,458 16,771 73,836 3,313 3,246 (805) 2,834 181,653 16,340 44,396 10,097 19,569 - 6,841 - 33 39 2,860 81 - 1,121 5,094 21 1,981 3,282 9,994 8 20,321 49,571 10,118 28,391 3,282 9,994 80 1,407 519 11,642 103,970 2,984 9,825 10,061 4,002 14,096 4,211 847 5,097 189 85,141 88,271 6,001 2,598 42,446 72,546 21,680 8,155 142,213 293,805 5,332 9,315 (348) (3,472) (87,256) (35,723) (112,152) 14,500 2,801 7,978 1 - - - 152,304 - 63,616 3,288 215,920 14,500 2,802 11,266 - 2 2 152,304 11,413 (5,693) 72,624 12,851 (12,918) 244,421 (348) (3,470) 65,048 36,901 132,269 3,922 452 19,851 84,899 37,713 74,614 536 (7,222) 18,593 Net change in fund balances Fund balances, July 1 Fund balances, June 30 47,078 8,077 49,113 2,087 3,246 (1,777) 1,478 109,302 Transportation Major Funds General Obligation Debt Service 900 (3) 898 23,925 10,213 25,117 49,042 7,621 17,834 $ $ 5,881 5,533 $ $ $ $ 100,105 232,374 The notes to the financial statements are an integral part of this statement. 12/8/2003 8:25 AM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B070. Stmt of Rev, Exp, and Chgs in Fund Bal - Governmental Fd 03.xls City of Glendale, Arizona Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2003 (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 $ 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 of $142,215 exceeded depreciation of $18,964 for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Gain on sales 132,269 123,251 $ 27,042 (2,803) 445 24,684 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. 241 The issuance of long-term debt of ($238,546) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt of $21,680 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 of $2,744, premiums of ($3,141), 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 differences in the treatment of long-term debt and related items. (217,263) 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. (1,300) The net revenue of certain activities of internal service funds is reported with governmental activities. (1,014) 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 (13) $ 60,855 The notes to the financial statements are an integral part of this statement. 31 12/7/2003 3:36 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B080. Rec of the Stmt of Rev, Exp, Chgs in Fd Bal of Govt Fds to Stmt of Activities 03.xls City of Glendale, Arizona Statement of Net Assets Proprietary Funds June 30, 2003 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Accrued interest Intergovernment receivable 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 Long-term investments Total noncurrent assets Total assets LIABILITIES Current liabilities: Vouchers payable Accounts payable Retainage payable Compensated absences Accrued expenses Due to other funds Intergovernment payable Deposits Unearned rent Estimated claims payable Current portion of long-term debt: General obligation bonds Unamortized premium on debt issuance Revenue bonds payable Capital lease payable Other long-term debt Interest payable Total current liabilities 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 NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital projects Debt service Revenue bond retirement, replacement and extension Other purposes Unrestricted Total net assets $ 33,744 $ 6,578 (190) 93 65 447 40,737 $ 479 (3) 18,286 10,726 1,163 $ 1,493 (23) 347 5 2,985 182 441,373 (96,375) 344,998 6,561 32,482 394,767 435,504 $ 17,810 Total $ 8,550 (216) 93 412 452 62,008 73 20,913 (4,281) 16,632 16,814 35,100 52,717 Governmental Activities Internal Service Funds 270 13,249 10,981 19,901 (9,739) 10,162 29 10,264 13,249 12,979 151 482,187 (110,395) 371,792 6,561 32,482 29 421,845 483,853 151 13,400 2,654 61 1,104 669 1,499 171 451 - 183 130 84 - 58 31 195 4 56 106 4 - 2,895 92 1,104 994 1,499 4 227 641 4 - 560 42 5,194 2,020 9 7,810 26 1,365 1,632 19,471 154 1,402 87 2,040 983 16 1,453 2,174 9 7,810 2,411 1,365 1,735 22,964 5,796 289 15,825 541 41,470 13,525 83 71,733 91,204 41 1,033 7,997 9,003 18,074 20,114 167 29 2,347 2,543 3,996 497 16,858 541 41,470 29 13,525 10,427 9,003 92,350 115,314 7 1,506 1,513 7,309 262,324 6,047 6,833 275,204 - 55 2,268 6,576 667 72,410 344,300 8,939 14,986 680 1,740 9,253 55 2,268 6,576 1,347 83,089 368,539 6,091 6,091 $ Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds Net assets of business-type activities $ $ $ (536) 368,003 The notes to the financial statements are an integral part of this statement. 32 12/7/2003 3:50 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\ II-B090. Stmt of Net Assets - Proprietary Funds 03.xls City of Glendale, Arizona Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds Fiscal Year for the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds 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 $ 151 26,320 19,316 1,145 46,932 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) 12,654 8,325 9,691 9,283 39,953 6,979 Nonoperating revenues (expenses): Impact fees Investment income (loss) Interest expense Net loss from joint venture Bond issuance cost Gain (loss) on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 5,334 (344) (2,986) (1,011) (1) (993) (1) Income before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets 6,978 7,241 (323) 13,896 Total net assets - beginning Total net assets - ending $ 330,404 344,300 $ 6,769 1,653 10 8,432 $ 5,510 537 1,138 7,185 1,247 1,617 1,617 13,369 14,986 $ 7,598 11,217 1,257 20,072 (816) 209 438 (501) 224 370 $ 6,963 4,547 7,254 492 19,256 Totals $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities 7,114 26,320 19,316 4,547 7,254 6,769 1,653 1,647 74,620 Governmental ActivitiesInternal Service Funds $ 12,654 8,325 5,510 7,598 537 11,217 9,691 11,678 67,210 7,410 16,178 16,178 17,980 17,980 (1,802) 116 14 (129) 44 247 292 5,659 108 (3,616) (1,011) (1) (725) 247 661 309 309 (524) 390 (134) 8,071 7,241 390 (323) 15,379 (1,493) (1,493) 9,387 9,253 $ $ 7,584 6,091 (787) 14,592 The notes to the financial statements are an integral part of this statement. 33 12/7/2003 3:54 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B100. Stmt of Rev, Exp, and Chgs in Fund Net Assets - Proprietary Funds 03.xls City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 1 of 2 Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds 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 (used for) operating activities $ Cash flows used for noncapital financing activities: Transfers in Transfers out Net cash provided by or used for noncapital financing activities Cash flows from capital and related financing activities: Proceeds from loans and bonds 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 flows from investing activities: Interest received from investments Net cash provided by investing activities $ $ 12,267 6,681 $ 68,725 6,681 $ 16,218 - (1,509) (2,647) (7,045) (7,662) (15,683) (21,721) (10,223) 18,823 (1,615) 3,100 (4,223) 18 (16,061) 21,941 (323) - 409 - 409 (323) - (323) - 409 86 - (16,635) (417) 23,386 (10,736) (23,012) 5,334 (2,776) - (2,456) (1,050) 209 (660) - 775 (893) (1,392) 116 (138) 247 23,386 775 (14,085) (25,454) 5,659 (3,574) 247 - (7,804) (3,957) (1,285) (13,046) - 10,395 $ 8,871 - Totals (7,129) (11,412) (301) (301) Net increase (decrease) in cash and cash equivalents during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 47,587 - Governmental Activities Internal Service Funds 34,075 44,470 $ 440 440 14 14 (417) (844) 18,409 17,992 $ 2,080 1,236 153 153 309 309 9,134 $ 54,564 63,698 (108) $ 13,238 13,130 The notes to the financial statements are an integral part of this statement. 34 12/7/2003 7:35 PM N:\Finance\II. Financial Section\II-B. Basic Financial Statements\II-B110. Statement of Cash Flows - Proprietary Funds 03.xls City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 2 of 2 Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds Reconciliation of operating income (loss) to net cash provided by (used for) 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 Intergovernmental receivable 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 $ 6,979 $ 9,283 $ $ $ 18,823 33,744 10,726 44,470 7,241 (1,011) (993) $ 1,138 527 7 27 72 1,846 52 30 - $ 1,247 $ $ $ - 537 3,100 17,810 182 17,992 224 (537) $ 1,257 481 (184) (73) (45) (1) - $ (816) Totals $ $ $ 18 1,163 73 1,236 44 - $ 11,678 (32) (282) 7 (37) (38) (58) 3 3 11 - $ 7,410 Governmental Activities Internal Service Funds - 976 (275) 34 (149) 1,735 (58) 10 3 40 - $ $ $ $ 537 21,941 52,717 10,981 63,698 7,241 (1,011) (725) (537) (1,802) 46 68 (418) (42) (9) 1,740 $ $ $ $ (417) 12,979 151 13,130 - 35 12/7/2003 7:35 PM N:\Finance\II. Financial Section\II-B. Basic Financial Statements\II-B110. Statement of Cash Flows - Proprietary Funds 03.xls CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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 Note Page Summary of Significant Accounting Policies.............................................................................I ............................. 37 Compliance – Excess of Expenditure Over Appropriations ..................................................... II ............................. 46 Deposits and Investments ........................................................................................................ III ............................. 46 Capital Assets ..........................................................................................................................IV ............................. 48 Construction and Other Significant Commitments................................................................... V ............................. 50 Self-Insurance Funds ...............................................................................................................VI ............................. 51 Leases .....................................................................................................................................VII ............................. 52 Short-Term Debt................................................................................................................... VIII ............................. 54 Long-Term Debt ......................................................................................................................IX ............................. 54 Landfill Obligations.................................................................................................................. X ............................. 63 Interfund Transactions.............................................................................................................XI ............................. 64 Encumbrances.........................................................................................................................XII ............................. 66 Equity in Joint Venture......................................................................................................... XIII ............................. 66 Jointly Governed Organizations ........................................................................................... XIV ............................. 67 Related Party Transaction...................................................................................................... XV ............................. 67 Fund Balance/Net Assets Reservation, Designation, and Restriction................................... XVI ............................. 67 Employee Retirement Systems and Pension Plans ..............................................................XVII ............................. 72 Other Post-Employment Benefits ...................................................................................... XVIII ............................. 74 Contingent Liabilities and Commitments ............................................................................. XIX ............................. 74 Subsequent Events................................................................................................................. XX ............................. 75 36 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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 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 units, 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 discretely presented 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 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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 transportation 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. 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 arena project fund was established to account for bond proceeds received and expenses paid related to the construction of the Coyotes Arena. The City reports the following major proprietary funds: The water and sewer fund accounts for operations, maintenance and construction projects of the Cityowned 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 Citywide 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 private-sector guidance for their businesstype 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 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, 38 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) rather than upon the determination of net income. The following governmental funds are presented in the accompanying 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. 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, Highway User Gas Tax Revenues and Unrestricted Excise Tax Revenues as well as debt 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). 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 self-insurance provided by one City department to other City departments on a cost-reimbursement basis. Fiduciary funds: The City has none. E. Measurement focus and basis of accounting The citywide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund 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 39 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 30 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 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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, 2003, the postage portion of the general fund supplies inventory was $40. 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 $3,616. Of this amount, $51 was included as part of the cost of capital assets under construction in connection with water and sewer projects. 41 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Property, plant, and equipment is depreciated using the straight line method over the following estimated useful lives: Assets Buildings Improvements other than buildings Infrastructure Machinery and equipment Automotive equipment Software Computer equipment Useful Life (Years) 30 10-20 10-100 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 (SRPMIC) 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, 2003, is $2,457. 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, 2003, the City has capitalized payment of $4,104 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 30 days of year end), to pay liabilities of the current period. Remaining collectible taxes are accrued and reflected as deferred revenue. 42 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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, 2002 August 19, 2002 October 1, 2002 March 1, 2003 November 1, 2002 May 1, 2003 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, 2003, is as follows: Fund General fund General obligation debt service fund Total Rate $ 0.35 1.37 $ 1.72 N. Compensated absences Vacation time is accumulated up to a maximum of six workweeks. 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 thirty days following the year ended June 30, 2003, 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 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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 citywide financial statements, and proprietary fund types in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method, 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 financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 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 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 44 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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 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 2002-03 was $4,284. In November 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. T. Change in accounting principle – Cumulative effect of adding capitalized infrastructure The implementation of Governmental Accounting Standards Board Statement 34 - “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments,” capitalizing major infrastructure assets caused the prior year net assets to be restated. Major general infrastructure assets acquired, significantly improved, or reconstructed in fiscal years ending after June 30, 1980, through June 30, 2001, have been capitalized. The net effect of this change is shown as an adjustment to beginning net assets for governmental activities only as of July 1, 2002. 45 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Governmental activities: Net assets beginning July 1, 2002 Capitalization of infrastructure assets Accumulated depreciation of infrastructure assets Net assets beginning July 1, 2002 - restated II. $ 131,695 422,978 (95,532) $ 459,141 Compliance - Excess of expenditure over appropriations For the year ended June 30, 2003, expenditures exceeded appropriations in the Municipal Property Corporation Debt Service Fund, Fire and Police Construction Fund and the Risk Management Fund (the legal level of budgetary control) by $1,019, $2,137 and $103, respectively. These over-expenditures were funded by available fund balance in each of the respective funds, in addition to bond proceeds in the MPC Debt Service and Fire and Police Construction funds. 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 $44,338. The bank ledger balances were $44,305, of which $277 was insured by the Federal Depository Insurance Corporation (FDIC), $76,755 was collateralized by the bank’s agent in the City’s name. The difference between the carrying amount and the bank balance represents outstanding transactions that had not cleared the bank as of June 30, 2003. At year-end, the carrying amount of the City’s cash with fiscal agents totaled $892. 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, $667 was held in an escrow account maintained by the Arizona State Treasurer and is not subject to credit risk categorization. Investments State Statutes and the City’s investment policy authorize the City to invest 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. 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. 46 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Fair Value Credit risk category 1 Commercial paper 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 Dreyfus cash Bank One money market 2,046 11,292 52,546 129,823 449 1,033 6,208 97,522 390 Total investments $ 301,309 The remainder of this page left blank intentionally. 47 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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, 2003, is as follows: Balances June 30, 2002* Governmental activities Non-depreciable assets: Construction in progress Land Artwork Total non-depreciable assets $ Depreciable assets: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total depreciable assets at historical cost Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure - streets Infrastructure - parks Infrastructure - flood/storm drains Infrastructure - airport Machinery and equipment Computer equipment Software Automotive equipment Total accumulated depreciation Total depreciable assets, net Governmental activities capital assets, net $ 17,373 52,706 938 71,017 Additions / Transfers In $ 146,443 3,045 228 149,716 68,158 54,235 385,744 18,560 22,682 8,073 8,064 932 434 21,520 588,402 3,781 26,388 1,307 5,293 126 9,401 314 61 2,419 49,090 (23,168) (34,301) (82,523) (7,196) (2,037) (3,776) (2,892) (474) (78) (13,931) (170,376) (2,251) (2,635) (9,512) (640) (302) (264) (921) (272) (76) (2,091) (18,964) 418,026 30,126 489,043 $ 179,842 Disposals / Transfers Out $ (27,330) (13,072) (40,402) Balances June 30, 2003 $ (195) (67) (1,168) (1,430) 68,158 58,016 412,132 19,867 27,975 8,199 17,270 1,179 495 22,771 636,062 - (25,419) (36,936) (92,035) (7,836) (2,339) (4,040) (3,634) (676) (154) (14,881) (187,950) 179 70 1,141 1,390 (40) $ (40,442) 136,486 42,679 1,166 180,331 448,112 $ 628,443 *As restated 48 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Balances June 30, 2002 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 $ 21,868 15 1,564 351 5,625 29,423 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 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 Total depreciable assets, net Business-type activities capital assets, net $ Additions / Transfer In $ $ 18,806 1 88 200 3,852 22,947 Disposals / Transfer Out $ (8,021) (15) (69) (8,105) Balances June 30, 2003 $ $ 32,653 1 1,652 482 9,477 44,265 13,328 7,097 78,084 93,719 90,582 89,976 25,948 5,187 6,822 875 15,489 427,107 192 179 4,776 5,896 14 408 1,702 1,510 61 1,117 15,855 (2,456) (66) (2) (2,516) (5,040) 13,520 7,276 82,860 97,159 90,596 90,384 27,650 5,187 8,266 934 14,090 437,922 (3,200) (1,765) (18,824) (26,900) (29,086) (2,690) (4,693) (1,201) (2,887) (715) (9,298) (101,259) (476) (215) (1,303) (1,799) (2,570) (2,087) (722) (102) (816) (76) (1,376) (11,542) 77 20 2 2,307 2,406 (3,676) (1,980) (20,127) (28,622) (31,656) (4,777) (5,415) (1,303) (3,683) (789) (8,367) (110,395) 325,848 4,313 (2,634) 327,527 355,271 $ 27,260 $ (10,739) $ 371,792 49 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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 $ 2,088 2,147 1,021 10,066 3,495 147 $ 18,964 Business-type activities: Water and sewer Landfill Sanitation Housing Total depreciation expense $ 9,216 1,138 846 342 $ 11,542 Effective with these financial statements, the City has implemented infrastructure reporting requirements of GASB Statement 34, not including retroactive infrastructure. The City capitalized retroactive infrastructure during the transition year June 30, 2003, in the amount of $422,978 less accumulated depreciation of $95,532. 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 $4,800 plus closing costs through fiscal year 2003 with a purchase commitment of $2,200 plus closing costs in fiscal year 2004. Payment will be funded from each fiscal year revenues out of the general 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 development schedule. As of June 30, 2003, the City has issued $28,010 in General Obligation Bonds and has paid $6,470 in land acquisition and other related costs. The City has also issued $152,304 in MPC bonds and has paid $85,141 in additional capital outlay through fiscal year 2003. On September 3, 2002, the City of Glendale and a private developer entered into a development agreement for the purpose of acquiring and developing a facility to accommodate professional football, civic, cultural and other sporting events within the city boundaries. The City committed to forming a community facilities 50 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) district (CFD) in which approximately $35,000 in CFD bonds would be issued. The CFD would be solely responsible for the repayment of CFD bonds. 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 selfinsured through June 30, 1998, for tort liability loss. Effective July 1, 1998, the City purchased excess public entity liability insurance with $1 million of self-insurance 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 $500 for each workers’ compensation claim and purchases commercial insurance for claims in excess of $500. 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. 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. 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. 51 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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 $6,700 as of June 30, 2003. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2003 2002 Unpaid claims, beginning of fiscal year Current year claims and changes in estimate Claims payments $ Balance at fiscal year end $ 1,644 $ 3,208 (2,534) 2,318 1,715 $ 680 (751) $ 1,644 Employee Benefits 2003 2002 Workers' Compensation 2003 2002 1,868 $ 2,060 (1,425) $ 2,503 2,073 $ 559 (764) $ 1,868 1,448 $ 11,653 (11,222) $ 1,879 914 11,379 (10,845) $ 1,448 VII. 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, 2003, is as follows: 52 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Capital Leases Year Ending June 30 2004 2005 2006 2007 2008 2009-2013 2014-2018 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments $ $ 3,709 4,383 4,023 3,506 3,075 15,648 965 35,309 (7,501) 27,808 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 $ $ $ 98 2,975 197 5,164 8,434 (2,568) 5,866 $ 3,036 5,108 6,807 2,498 17,449 (3,883) 13,566 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 2002-03 were $53. 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 2002-03 were $146. C. Operating lease revenue The City also leases various City-owned properties and buildings under cancelable and non-cancelable long-term lease agreements through fiscal year 2007 and beyond. The carrying value of leased assets is $9,386 (cost of $9,934 less accumulated depreciation of $548). The leased properties and buildings are 53 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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. Scheduled minimum revenues for non-cancelable leases for succeeding fiscal years ending June 30 are as follows: Fiscal Year 2004 2005 2006 2007 Beyond 2008 Total Total Revenues $ 656 534 498 392 33 $ 2,113 VIII. Short-term debt The City issued Subordinate Municipal Property Corporation (MPC) debt to finance the construction of multiple projects throughout the City in the enterprise and capital projects funds prior to the issuance of related MPC and general obligation bonds. The capital project funds: arena, fire and police, streets, parks, and other construction, participated in the financing in addition to the water and sewer fund. Short-term debt activity for the year ended June 30, 2003, was as follows: Beginning Balance MPC Series 2002 C MPC Series 2002 D IX. $ - Additions $ 45,662 5,925 Ending Balance Deletions (45,662) (5,925) $ - 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. 54 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) C. Municipal property corporation bonds (MPC) In 1982 and 2002, the MPC, a non-profit corporation, issued bonds to finance the construction of a new municipal office complex and hockey arena, respectively. On October 19, 1982, and July 31, 2002, the City entered into a lease purchase agreement with MPC, whereby the City is purchasing the constructed municipal office complex and hockey arena, respectively, 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, and February 1, 2003, respectively. 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 arena, 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. 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, 2003, 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. The remainder of this page left blank intentionally. 55 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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, 2003. June 30 2002 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 $ 82,637 Additions $ June 30, 2003 Reductions 52,525 $ (8,058) $ 127,104 Amounts Due Within One Year $ 10,061 16,247 - (4,211) 12,036 982 24,310 11,215 134,409 160,255 212,780 (4,280) (880) (17,429) 20,030 170,590 329,760 4,510 1,240 16,793 4,498 4,340 8,838 11,266 16,730 27,996 (793) (877) (1,670) 14,971 20,193 35,164 645 895 1,540 9,171 4,960 368 14,822 (13,082) 9,539 6,700 6,536 5,194 318 391 14,840 3,140 18,330 (33) (100) (13,215) 3,425 291 19,955 152 11,882 158,087 $ 259,106 $ (32,314) $ 384,879 $ 30,215 General fund typically has been used to liquidate compensated absences in prior years, since most employees engaged in governmental activities are paid from that fund. Paychecks include payment for leave taken during the current pay period. General obligation (G.O.) bond debt service fund typically has been used to liquidate arbitrage rebate in prior years, since most arbitrage liability was generated by related G.O. bond proceeds. The Paseo Racquet Club Purchase $200 note dated August 1, 2001, was liquidated during fiscal year 2002-03. 56 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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, 2003. June 30 2002 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 $ 412 56,705 6,358 15,291 249 9,511 775 8,466 1,452 1 96,183 537 40 28 25,015 $ Reductions 13,875 - $ (2,195) (147) $ (52) (7,425) (1,038) (3,228) $ Amounts Due Within One Year June 30, 2003 (14,085) $ 17,845 1,186 $ 2,020 154 609 49,280 14,831 12,838 68 7,810 1,306 2,411 9,003 1,492 29 107,113 994 14,763 $ 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 statements. 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, 2003. The remaining balance of bonds considered defeased at June 30, 2003, are as follows: Issue Refunded Water and sewer revenue bonds: Refunding series of 1983 Date Refunded December 1, 1984 Water and sewer G.O. bonds: Series 1984 May 1, 1985 Total refunded bonds Remaining Balance $ 1,550 2,225 $ 3,775 57 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2003, 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 G.O. bonds payable from secondary assessed property taxes Refunding 5.05-5.55 1993 2007 Various 4.15-4.60 1998 2008 Refunding 4.25-4.35 2000 2003 Various 5.00-5.40 2000 2015 Various 2.50-5.00 2002 2022 Various 1.50-5.00 2003 2022 Total Revenue bonds payable from highway user revenue funds Refunding 5.00 1993 Streets 5.05-5.75 1995 Streets 4.00-4.90 1996 Streets 5.00-5.37 2000 Total Amount of Original Issue Bonds Outstanding June 30, 2003 $ $ 2003 2011 2005 2010 36,125 12,000 370 20,215 40,235 52,525 16,470 4,590 9,000 8,750 7,580 7,865 340 18,559 40,235 52,525 127,104 1,495 2,360 7,850 8,325 20,030 Municipal property corporation payable from general fund lease payments Refunding 4.25-4.90 2000 2009 12,615 MPC excise tax 5.00-5.38 2003 2033 5,055 MPC excise tax 2003A 2.50-5.00 2003 2024 49,940 MPC excise tax 2003B 1.46-5.58 2003 2033 105,260 Total 10,335 5,055 49,940 105,260 170,590 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 4,540 7,355 141 12,036 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities $ 329,760 (16,793) 312,967 58 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) H. Classified in business-type activities on the government-wide financial statements: Issued Fiscal Year Ending June 30 Year Series Matures 2000 2015 G.O. bonds payable from water and sewer fund Refunding 5.05-5.55 1993 Refunding 4.35 2000 Water and sewer 1.50-5.00 2003 Total 2007 2007 2022 20,375 2,180 13,875 1,950 2,020 13,875 17,845 Revenue bonds payable from water and sewer fund Refunding 4.25-4.50 1994 Various 4.75-5.75 2000 Total 2005 2010 17,010 5,300 4,655 44,625 49,280 Purpose Interest Rate G.O. bonds payable from landfill fund Landfill 5.00-5.40 Amount of Original Issue Bonds Outstanding June 30, 2003 $ $ 1,460 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities $ 1,186 68,311 (9,984) 58,327 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, 2003, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 59,346 (47,813) 11,533 20% $ $ 197,818 (80,844) 116,974 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 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) I. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of July 1, 2003, as shown below: Authorized Amount G.O. Bonds Voter authorized October 20, 1981 Operations center $ Voter authorized March 10, 1987 Library 6,750 Issued through June 30, 2003 $ 550 Authorized but Unissued $ 6,200 9,698 8,000 1,698 Cultural facility(1) Economic development Flood control 18,215 50,500 38,860 15,088 8,345 18,215 35,412 30,515 Governmental facilities(1) 40,910 3,510 37,400 Landfill development Library Open spaces Parks and recreation Public safety 17,000 15,398 53,700 57,188 64,801 1,460 3,175 25,624 3,438 15,540 15,398 50,525 31,564 61,363 Streets and parking(1) 38,050 17,722 20,328 Voter authorized November 2, 1999 (1) (1) Transit Total G.O. bonds $ 6,935 418,005 $ 185 87,097 $ 6,750 330,908 Revenue bonds Voter authorized March 10, 1987 Streets and highway Water and sewer $ 57,770 56,000 $ 36,340 48,750 $ 21,430 7,250 Voter authorized November 2, 1999 Water and sewer(1) Total revenue bonds Total bonds 10,000 123,770 $ 541,775 85,090 $ 172,187 10,000 38,680 $ 369,588 (1) Certain General Obligation Bonds or Revenue Bonds can be issued as General Obligation Bonds, Revenue Bonds or a combination thereof. 60 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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. 1,285 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 Northern Crossing Land Lease Purchase - The $14,500 note dated November 15, 2002, is payable in nine annual installments at a variable interest rate with the final payment due on or before September 15, 2012. The interest rate assumption stays level after the 2008 fiscal year. 14,500 Hickman's Egg Ranch Purchase - The $2,200 note dated September 18, 2001, is payable in one installment due July 1, 2004, with no accrued interest. 2,200 Fraternal Order of Police Land Purchase - The $30 note dated July 9, 2002, is payable in three annual installments at an interest rate of 6.00%. The final payment is due on or before July 1, 2004. Total notes payable recorded in governmental activities Less current portion Long-term portion of notes payable recorded in governmental activities 2,000 19 $ 20,193 (895) 19,298 $ 3,140 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. Cholla Water Treatment Plant Solids Handling Facilities - The maximum available under the loan is $15,400 of which $12,003 was drawn down and recorded as a liability as of June 30, 2003. 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. 11,691 Total notes payable recorded in business-type activities Less current portion Long-term portion of notes payable recorded in business-type activities 14,831 (1,306) 13,525 $ 61 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) K. Debt service requirements Fiscal Year Ending 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Total Less interest Principal Highway User Revenue Bonds $ 5,452 2,776 2,037 1,963 1,964 1,966 1,973 222 18,353 Landfill G.O. Bonds Municipal Property Corporation Bonds Special Assessment District Bonds $ $ $ 214 215 215 216 216 138 1,214 10,916 9,949 10,067 10,402 11,018 11,583 9,852 9,698 9,791 9,807 9,858 9,912 9,970 12,339 12,393 12,448 12,505 12,561 12,613 12,669 13,313 13,371 13,427 13,484 13,542 12,738 13,675 13,735 13,796 13,845 1,141 356,418 2,833 182 187,068 $ 15,520 $ 1,032 $ 169,350 $ Various Purposes G.O. Notes Bonds Payable 1,674 1,685 1,697 1,191 491 991 1,222 1,912 1,931 1,948 1,961 16,703 $ 13,549 13,363 13,364 11,433 10,808 9,354 9,475 9,467 9,456 9,503 9,506 9,479 7,296 7,226 7,189 2,758 2,759 2,761 2,762 161,508 4,667 12,036 $ G.O. Bonds Water and Sewer Notes Revenue Payable Bonds 3,986 3,220 3,330 3,337 2,669 2,466 2,365 2,364 2,364 2,364 28,465 $ 3,324 1,270 1,275 1,267 1,263 1,264 1,256 1,251 1,251 1,259 1,260 1,249 1,236 1,226 1,213 20,864 $ 1,399 1,977 1,977 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 1,129 23,417 $ 7,751 7,772 7,002 7,023 7,044 7,040 7,038 50,670 44,465 8,272 5,039 9,892 9,200 $ 117,043 $ 20,193 $ 15,825 $ 13,525 $ 41,470 Total $ 48,265 42,227 40,964 37,961 36,602 35,931 34,310 26,043 25,922 26,010 23,714 21,769 19,631 21,920 21,924 16,335 16,393 16,451 16,504 12,669 13,313 13,371 13,427 13,484 13,542 12,738 13,675 13,735 13,796 13,845 1,141 677,612 - 271,618 $ 405,994 The following table discloses the debt service requirements as of June 30, 2003, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2004 2005 2006 2007 2008 2009-2013 2014-2018 2019-2023 2024-2028 2029-2033 Total Principal $ 28,802 23,865 23,395 21,280 20,929 82,279 61,963 40,826 43,755 58,900 $ 405,994 Interest $ 19,463 18,362 17,569 16,681 15,673 65,933 46,997 37,531 23,377 10,032 $ 271,618 Total $ 48,265 42,227 40,964 37,961 36,602 148,212 108,960 78,357 67,132 68,932 $ 677,612 62 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) L. New bonds 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 April 1, 2003, the City issued $66,400 in general obligation bonds to fund the construction of public improvements in the City. The bonds mature on various dates starting 2003 through 2018 with various interest rates of 1.5% to 5.0%. The bonds are direct and general obligations of the City and are payable as to both principal and interest from ad valorem taxes levied against all taxable property within the City subject to taxation. On May 27, 2003, the City issued $49,940 of Municipal Property Corporation (MPC) Excise Tax Revenue Bonds Series 2003A Tax Exempt and $105,260 in Series 2003B Taxable Bonds to finance the cost of constructing, equipping and furnishing a multipurpose arena complex. The bonds mature on various dates starting 2004 through 2033 with various interest rates of 1.46% to 5.58%. The principal and interest on the bonds are not a general obligation of the Corporation and City but a limited obligation of the Corporation and City payable solely from and are secured by a pledge of the City’s unrestricted excise taxes. X. 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 postclosure 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, 2003, calculated below, represents the cumulative amount reported to date based on the use of estimated capacity of the landfill. North Cell Capacity (cubic yards) Capacity used to date Percentage of capacity used South Cell 32,100 0% Total closure and post-closure costs in present dollars: as of June 30, 2003 as of June 30, 2002 22,594 15,408 68% $ 14,099 13,925 $ 13,202 13,039 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2003 $ 14,099 $ 4,199 Liability recognized as of June 30, 2003 $ - $ 9,003 63 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2002-03. The estimated costs are subject to changes due in 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 43 years. 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. XI. Interfund transactions A. Interfund receivables Interfund balances at June 30, 2003, consisted of the following (amounts in thousands): $ General Non-major governmental funds: Community development block grant fund Highway user revenue fund Other special revenue fund Capital project - other construction fund Due To 1,799 Due From $ - - Non-major enterprise funds: Housing fund Total $ 1,799 345 786 117 547 $ 4 1,799 The interfund balances at June 30, 2003, 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, 2003, are expected to be repaid within one year. 64 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) B. Interfund transfers Interfund transfers for the year ended June 30, 2003, consisted of the following: Transfers to general fund from: Transportation special revenue fund Non-major governmental funds Development impact fees special revenue fund Streets construction capital project fund Fire and police bond construction fund Other construction capital project fund Parks bond construction fund Water and sewer enterprise fund Total transfers to general fund Transfers to transportation special revenue fund from: General fund Transfers to special assessment debt service funds from: General fund Transfers to non-major governmental funds from: General fund Transfers to non-major debt service funds from: General fund Non-major governmental funds Highway users gas tax special revenue fund Total transfers to non-major debt service funds Transfers to non-major capital projects funds from: General Fund Non-major governmental funds Minor grants special revenue Total transfers to non-major capital projects funds Transfers to non-major enterprise funds from: General fund Grand total all transfers $ 3 16 3 51 135 5 323 536 900 2 3,934 1,713 5,468 7,181 283 15 298 390 $ 13,241 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 to finance various programs accounted for in other funds in accordance with budgetary authorizations. 65 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) The interfund transfers are all classified as transfers and are included in the results of operations of both governmental and proprietary funds. There were no significant transfers during fiscal year 2003 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. XII. 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, 2003, the City intended to honor $15,569 of outstanding encumbrances in the new year. XIII. Equity in joint venture The City, along with the cities of Phoenix, Mesa, Scottsdale and Tempe participates in the Sub-Regional 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, 2003, the City recognized a loss of $1,143. 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 on the joint venture as of and for the fiscal year ended June 30, 2003, (unaudited) is as follows: Assets Current assets Capital assets, net of accumulated depreciation Total assets $ Liabilities Net assets $ Total revenues Total expenses Increase in net assets $ $ 63,265 455,450 518,715 50,872 467,843 102,136 (45,449) 56,687 66 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Calculation of the City’s equity: City’s share of SROG equity (Total equity of $467,843 less unrealized gain of $1,202 less assets not owned by the City of $133,273 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 $ 28,636 $ 1,214 2,632 32,482 $ $ 3,820 (1,143) 2,677 Copies of separate financial statements of the joint venture can be obtained from the AMWUA office, 4041 North Central Avenue, Phoenix, Arizona 85012. XIV. 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 non-profit 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. XV. Related party transaction Included in the special assessment debt service fund deferred receivables at June 30, 2003, is $9 owed by the City’s governmental funds. XVI. Fund balance/net assets reservation, designation, and restriction The following is a list of reserves, designations, and restrictions 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. $ 330 3,000 67 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (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 “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 court security Security surcharges collected by the City Court are required by ordinance to be spent solely on court security. $ 6,088 52 144 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. 77 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. 290 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. 1,093 Reserved for vehicle/equipment replacement For future scheduled replacement of existing equipment and vehicles. 6,241 Total reserved for general fund type $ 17,315 Designated for computer replacement For future schedule replacement of existing personal computers. $ 2,984 Designation 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. 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. 206 7 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. 133 Designated for equipment management For maintenance of City equipment 436 Designated for telephone For payment of future telephone charges and maintenance 164 $ 3,930 Total designated for general fund type 68 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) Special Revenue 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 portions of the proceeds are restricted to the capital items identified in the lease agreement. 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 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: Citywide Parks Citywide Recreation Facilities Citywide Open Space & Trails District No. 1 District No. 2 District No. 3 Library: Buildings 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 $ 137 47 270 143 413 677 367 125 667 1,379 491 2,539 527 1,207 1,494 1,814 2,746 2,726 16,759 895 393 1,288 $ 18,644 Total reserved for special revenue fund type 69 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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 38 571 $ 609 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. $ 9,955 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. 291 $ 10,246 Total reserved for debt service fund type 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 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. $ 4,817 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. 1,473 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. 139 Designated for airport projects Accounts for grant funds used to plan, acquire, construct and expand airport runways, taxiways, aprons and certain roads within airport boundaries, as well as other improvements to airport facilities. 175 70 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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. $ 7,146 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. 913 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. 2,749 Total designated for capital projects fund type $ 17,412 Enterprise Fund Type Restricted for capital projects A prior period’s investment earnings related to several water and sewer construction projects are restricted for future use related to those projects. $ 55 Restricted for debt service 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 year-end, only the January 1 payment is included in the reserve. 313 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, 2003, only the loan with the State Revolving Fund (authorized by revenue bond election in 1961) was not covered by a surety bond. 1,955 Restricted 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. 6,576 Restricted for other purposes Deposits related to a multi-jurisdictional water project are held in an escrow account maintained by the State Treasurer, and are restricted as to use. 667 Net assets held by the Housing fund may only be used for that purpose. 680 $ 10,246 Total restricted for enterprise fund type 71 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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. $ 4,539 Total reserved for permanent fund type $ 4,539 XVII. 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. 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, 2003, 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 72 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) and employees to ASRS for the years ended June 30, 2003, 2002 and 2001 were $2,940, $2,800 and $2,700, 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, 2003, 2002 and 2001 were $20, $20 and $24, respectively, which were equal to the required contributions for the year. Agent Plans. For the year ended June 30, 2003, 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 7.69% 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 available actuarial valuation, and related information follow. Police Fire Contribution rates: City Plan members Annual pension cost 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% Level % open Level % open $ Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at Amortization method Remaining amortization period Asset Valuation method 20 years Smoothed market value 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 available actuarial valuations for June 30, 2002, follows. Contributions required and contributions made Year Ended June 30 Percentage of APC Contributed APC Police 2002 $1,764 2001 $1,782 2000 $1,244 Fire 2002 $ 337 2001 $ 373 2000 $ 399 Includes insurance premium tax, where applicable. Net Pension Obligation 100.0% 100.0% 100.0% $ $ $ - 100.0% 100.0% 100.0% $ $ $ - 73 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) E. Required supplementary information Analysis of funding progress for the agent plan as of the most recent available 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 Valuation Date June 30 $ $ $ 69,747 68,112 61,085 $ $ $ Actuarial Value of Plan Assets 71,892 61,910 61,049 $ $ $ Actuarial Accrued Liability 2,145 (6,202) (36) Funding Liability (Excess) 97.0% 110.0% 100.1% $ $ $ Funded Ratio 17,147 16,580 14,933 12.5% -% -% 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 -% -% -% XVIII. Other post-employment 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 post-employment 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. XIX. Contingent liabilities and commitments Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the city expects such amounts, if any, to be immaterial. 74 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2003 (amounts expressed in thousands) 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. XX. Subsequent events On July 22, 2003, the Mayor and City Council approved the petition from the property owner and B & B Holding, Inc., DBA Arizona Cardinals, to form a community facilities district (District) within the City limits. The District will develop and maintain the land around the stadium. The district board and officers shall be governed by members of the City. The City is not directly or indirectly liable for the public infrastructure contemplated by the general plan and the development agreement. The District is solely responsible for payment or repayment of indebtedness, liability, cost, expenses or obligation of the District. On July 8, 2003, the Mayor and Council approved revisions to Chapter 11 of the Glendale Municipal Code, which address operations of Glendale Memorial Park Cemetery. Modifications expanded uses of the fund to include improvements to the property and requires all revenues be deposited in the general fund. On July 1, 2003, the City issued $7,250 Refunding Certificates of Participation Series 16 of Subordinate Excise Tax Revenue Bonds (the 2003D MPC Bonds) under the Arizona Municipal Financing Program of 1992. The proceeds of the loan were used to redeem a portion of the 2033 maturity of the MPC Series 2003B Taxable Bonds. The bonds mature on 2033 with an interest rate of 4.7%. 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. The remainder of this page left blank intentionally. 75 12/7/2003 5:48 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B120. Notes 03.doc This page left blank intentionally. 76 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment income (loss) Proceeds from disposal of assets Loan proceeds Capital lease proceeds 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, 2003 $ Final 28,779 $ 28,779 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 26,250 $ (2,529) 46,326 6,685 49,275 11,115 2,710 14,830 75 855 2,929 134,800 (10,638) 152,941 44,936 7,589 47,391 10,333 3,116 831 102 14,500 1,414 130,212 (10,688) 148,303 47,078 8,077 49,113 10,738 3,246 (1,777) 2,801 14,500 7,978 1,478 143,232 536 (7,222) 162,796 2,142 488 1,722 405 130 (2,608) 2,699 14,500 (6,522) 64 13,020 536 3,466 14,493 20,142 47,477 18,011 20,670 10,897 21,399 46,372 17,391 20,259 11,046 18,425 44,830 16,867 19,706 - 2,974 1,542 524 553 11,046 1,414 565 18,157 137,333 1,414 565 16,717 135,163 1,407 519 11,633 113,387 7 46 5,084 21,776 15,608 $ 13,140 $ 49,409 $ 36,269 77 12/8/2003 8:19 AM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B140. Budgetary Comparison Schedule - General Fund 03.xls City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2003 (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 Loan proceeds Capital lease proceeds 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 Capital outlay funded by capital lease Change in compensated absences liability Change in prepaid assets or inventory Internal charges for services provided Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 78 $ 162,796 (26,250) 2 (8,653) (2,801) (14,500) (7,978) (536) 7,222 $ 109,302 $ 113,387 14 (799) (3) (8,629) $ 103,970 12/8/2003 8:19 AM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B140. Budgetary Comparison Schedule - General Fund 03.xls City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 7,668 Final $ 7,668 Actual Amounts (budgetary basis) $ 7,655 RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Proceeds from equipment disposal Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 17,160 6,488 135 323 24,106 900 32,674 16,558 1,469 160 300 18,487 900 27,055 16,788 1,883 170 297 2 1 19,141 900 (3) 27,693 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations 9,159 14,050 23,209 9,159 15,208 24,367 6,865 2,984 9,849 Budgetary fund balance, June 30, 2003 $ 9,465 $ 2,688 $ 17,844 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 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 schedule Change in compensated absences liability Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds Variance with Final Budget Positive (Negative) $ (13) 230 414 10 (3) 2 1 654 (3) 638 2,294 12,224 14,518 $ 15,156 $ 27,693 (7,655) (1) (900) 3 $ 19,140 $ 9,849 (24) $ 9,825 79 11/1/2003 8:03 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B150. Budgetary Comparison Schedule - Transportation Fd 03 CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2003 (amounts expressed in thousands) I. Budgetary basis 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 supplemental 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. II. Budgetary information The City utilizes the following procedures in establishing the budgetary data reflected in the financial statements. 1. 2. 3. 4. 5. 6. III. 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 estimates of the June 30th ending actual budget basis fund balances rather than the June 30th 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. 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. 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. Contingency appropriation is re-established each fiscal year based on available fund balance and balancing needs of the budget year. The unused balances of contingency appropriations are reflected in the budget basis financial statements. 80 12/7/2003 6:27 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-B. Basic Financial Statements\II-B160 Notes to Required Supplementary Information.doc City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. 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. 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. 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). 81 12/7/03 6:31 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C010. Non-major Governmental Funds 03.doc 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. • • • • • • • Flood control facilities Library Airport Transit projects Economic development Open Space/Trails Government facilities 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. Cemetery 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. 82 12/7/03 6:31 PM N:\FINANCE\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C010. Non-major Governmental Funds 03.doc This page left blank intentionally. 83 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2003 (amounts expressed in thousands) 1 of 2 Special Revenue Funds Community Development Block Grants ASSETS Equity in pooled cash and investments Receivables, net of allowance for doubtful accounts: Accounts Accrued interest Intergovernmental receivable Inventories and prepaid items Restricted cash and investments Deferred receivables Total assets LIABILITIES AND FUND BALANCES: Liabilities: Vouchers payable Accounts payable Retainage payable Compensated absences - current Intergovernmental payable 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 $ 22 $ 6 818 2,892 3,738 $ 456 3 345 2,892 3,696 $ Highway Users Gas Tax $ - $ 45 1,239 137 47 1,468 $ Other Special Revenue Fund Development Impact Fees 270 42 786 151 35 1,284 $ 17,047 $ 1 17,048 $ 264 1 24 289 $ 2,484 $ 311 2 347 42 5,896 9,082 $ 256 9 29 1 117 10 1,282 1,704 - 184 16,759 1,701 38 4 42 3,738 184 1,468 16,759 17,048 571 5,106 7,378 9,082 $ $ $ 84 11/1/2003 8:27 PM N\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C020. Combining Balance Sheet Non-Major Govt Fds 03 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2003 (amounts expressed in thousands) 2 of 2 Debt Service Funds Highway Users $ 5,018 $ 5,018 $ $ 508 4,510 5,018 Municipal Property Corporation Streets Construction Capital Project Funds Fire and Parks Police Bond Construction Construction $ 22 $ 6,451 $ 10,357 $ 6,599 6,621 $ 69 17 6,537 $ 39 10,396 $ $ $ $ 114 4,653 $ 77,706 $ 546 148 3,793 277 12,542 2,892 97,904 - 98 4,539 27,542 5,018 4,261 6,621 6,290 6,290 6,537 4,228 4,228 10,396 17,270 17,270 17,981 11,122 2,443 13,663 15,362 4,539 4,653 18,021 29,051 74,614 97,904 $ 114 114 $ - $ 1,000 547 152 1,699 4,539 - $ 589 122 711 $ 37 1,389 98 15,362 $ 4,261 $ $ 13,838 - - 6,168 6,168 $ 53 17,981 $ Total Non-major Governmental Funds 1,120 1,240 2,360 $ $ 17,928 Other Construction Cemetery Perpetual Care 102 145 247 $ - $ Permanent Fund $ $ 9,105 10 146 74 1 1,795 161 1,628 4,620 5,750 23,290 85 11/1/2003 8:27 PM N\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C020. Combining Balance Sheet Non-Major Govt Fds 03 City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-major Governmental Funds For the Fiscal Year Ended June 30, 2003 (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 $ 3,017 214 3,231 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 OTHER FINANCING SOURCES (USES) Long-term debt issued Capital lease proceeds Transfers in Transfers out Total other financing sources and uses Excess (deficiency) of revenues and other sources over Net change in fund balances Fund balances, July 1 Fund balances, June 30 86 $ 14,183 1 7 14,191 Other Special Revenue Fund Development Impact Fees $ 7,627 372 7,999 $ 3,378 3,332 1,018 19 782 8,529 2,994 - 9,994 - - 647 5,071 21 1,979 288 - 228 3,222 46 14 1,756 11,810 4,175 4,175 20 3 1,024 9,053 9 2,381 3,824 - 3,067 - - (5,468) (2,401) 9 (20) 33 42 $ Highway Users Gas Tax $ 204 184 (524) 4,889 867 (16) (16) (15) 5,741 3,808 $ 12,951 16,759 5,217 $ 2,161 7,378 12/7/2003 6:39 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II. Combining Statements\II-C030. Comb Stmt of Rev, Exp, and Chgs in Fd Bal Non-Major Govt Fds 03.xls City of Glendale, Arizona Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-major Governmental Funds For the Fiscal Year Ended June 30, 2003 (amounts expressed is thousands) Debt Service Funds Highway Users $ - Municipal Property Corporation Streets Construction Capital Projects Funds Fire and Parks Police Bond Construction Construction $ $ $ 355 (91) 264 66 66 $ 27 73 1 101 Permanent Fund Other Construction $ 1,926 25 1,951 Total Non-major Governmental Funds Cemetery Perpetual Care $ 110 350 460 $ 3,378 7,627 22,840 1,018 606 1,354 36,823 3 2 6 3 52 23 - 365 2 - 51 - - 1,121 5,094 21 1,981 3,282 9,994 8 4,510 1,017 5,530 1,240 1,510 2,752 6,174 6,183 34 14,388 14,497 185 17 6,882 7,451 3 7,798 7,852 21 21 6,001 2,598 42,446 72,546 (5,530) (2,721) (5,919) (14,431) (7,350) (5,901) 439 (35,723) 5,468 5,246 1,713 1,273 - 15,069 3,288 - 21,749 15 15,390 283 - 63,616 3,288 11,413 5,468 6,959 (3) 1,270 (51) 18,306 (5) 21,759 (135) 15,538 - (5,693) 72,624 4,238 (4,649) 3,875 14,409 9,637 (62) $ 31 31 2 of 2 62 - $ 23 4,261 $ 10,939 6,290 $ 353 4,228 $ 2,861 17,270 $ 4,026 13,663 439 $ 4,100 4,539 36,901 $ 37,713 74,614 87 12/7/2003 6:39 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II. Combining Statements\II-C030. Comb Stmt of Rev, Exp, and Chgs in Fd Bal Non-Major Govt Fds 03.xls City of Glendale, Arizona Combining Statement of Net Assets Non-major Proprietary Funds - Business-type Activities June 30, 2003 (amounts expressed in thousands) Sanitation ASSETS Current assets: Equity in pooled cash and investments Receivables: Accounts Allowance for uncollectibles Intergovernmental receivable Inventories and prepaid items Total current assets $ 629 Housing $ 1,492 (22) 2,099 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Long-term investments Total noncurrent assets Total assets Total 534 $ 1 (1) 347 5 886 73 1,493 (23) 347 5 2,985 - 9,257 (5,140) 4,117 4,190 6,289 1,163 73 10,644 (4,599) 6,045 29 6,074 6,960 19,901 (9,739) 10,162 29 10,264 13,249 LIABILITIES Current liabilities: Vouchers payable Accounts payable Compensated absences Due to other funds Intergovernmental payable Deposits Unearned rent Current portion of long-term debt: Capital lease payable Interest payable Total current liabilities 58 185 22 72 - 31 10 4 34 34 4 58 31 195 4 56 106 4 983 16 1,336 117 983 16 1,453 Noncurrent liabilities: Compensated absences Other long-term debt Capital lease obligations Total noncurrent liabilities Total liabilities 78 2,347 2,425 3,761 89 29 118 235 167 29 2,347 2,543 3,996 788 6,045 6,833 1,740 2,528 680 6,725 680 1,740 9,253 NET ASSETS Invested in capital assets, net of related debt Restricted for: Other purposes Unrestricted Total net assets $ $ $ 88 11/2/2003 3:23 PM N:\Finance\03_audit\Carf 03\II. Financial Section\II. Combining Statements\II-C050. Comb Stmt of Net Assets - Non-Major Prop Fds 03 City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Non-major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Business-type Activities Enterprise Funds Sanitation Operating revenues: Intergovernmental Container service Curb service Other fees Total operating revenues $ Operating expenses: Housing Sanitation Depreciation Total operating expenses Operating income (loss) 4,547 7,254 11,801 Housing $ 11,217 846 12,063 (262) 6,963 492 7,455 Totals $ 7,598 411 8,009 (554) 6,963 4,547 7,254 492 19,256 7,598 11,217 1,257 20,072 (816) Nonoperating revenues (expenses): Impact fees Investments Interest expense Gain (loss) on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 116 14 (129) 44 45 247 247 116 14 (129) 44 247 292 Income before contributions and transfers (217) (307) (524) 390 390 83 (134) Transfers in - Change in net assets Total net assets - beginning Total net assets - ending (217) $ 2,745 2,528 $ 6,642 6,725 $ 9,387 9,253 89 12/7/2003 6:44 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C060. Comb Stmt of Rev, Exp, and Chgs in Fd Net Assets - Non-Major Prop Fds 03.xls City of Glendale, Arizona Combining Statement of Cash Flows Non-major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2003 (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 $ $ (7,045) (1,260) (3,007) 445 Cash flows used for noncapital financing activities: 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 Noncash investing, capital, and financing activities Interest received from investments Net cash provided by investing activities 510 6,681 $ 12,267 6,681 (7,045) (7,662) (4,223) 18 - 409 409 - 409 409 775 (893) (1,143) 116 (138) - (249) 247 775 (893) (1,392) 116 (138) 247 (1,283) (2) (1,285) - (824) $ Total (6,402) (1,216) (427) 14 14 Net decrease in cash during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 11,757 - Housing 1,526 702 14 14 (20) $ 554 534 (844) $ 2,080 1,236 90 12/7/2003 6:53 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C070. Comb Stmt of Cash Flows - Non-Major Prop Fds 03.xls City of Glendale, Arizona Combining Statement of Cash Flows Non-major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 2 of 2 Sanitation Reconciliation of operating loss to net cash provided by (used by) operating activities: Operating loss Adjustments to reconcile operating income to net cash provided by operations: Depreciation Changes in assets and liabilities: Accounts receivable Intergovernmental receivable Inventories and prepaid items Accounts payable Accrued expenses Deposits Other long-term debt Unearned rent Due to other funds Compensated absences Net cash provided by (used in) operating activities $ (262) Housing $ Total (554) $ (816) 846 411 1,257 $ (49) (50) (38) 4 (6) 445 $ 17 (282) 7 13 (1) 3 (58) 17 (427) 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 $ 629 73 702 $ 534 534 $ 1,163 73 1,236 Noncash transactions affecting financial position: Noncash loss on asset disposal $ 44 $ - $ 44 $ (32) (282) 7 (37) (38) 3 3 (58) 11 18 91 12/7/2003 6:53 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C070. Comb Stmt of Cash Flows - Non-Major Prop Fds 03.xls City of Glendale, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2003 (amounts expressed in thousands) Risk Management ASSETS Current assets: Equity in pooled cash and investments Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments 1,685 231 1,916 Workers' Compensation $ 7,021 7,021 Employee Benefits $ 4,273 39 4,312 Totals $ 12,979 270 13,249 - 135 16 151 Total assets 1,916 7,156 4,328 13,400 LIABILITIES Current liabilities: Vouchers payable Accounts payable Estimated claims payable Total current liabilities 19 2,103 2,122 1,212 1,212 541 42 1,879 2,462 560 42 5,194 5,796 Noncurrent liabilities: Deferred revenue Estimated claims payable Total noncurrent liabilities Total liabilities 215 215 2,337 1,291 1,291 2,503 7 7 2,469 7 1,506 1,513 7,309 4,653 1,859 6,091 NET ASSETS Unrestricted Total net assets (421) $ (421) $ 4,653 $ 1,859 $ 6,091 92 11/1/2003 8:33 PM N:\Finance\03_audit\Cafr 03\II. Financial SectionII-C. Combining Statements\II-C090. Comb Stmt of Net Assets - Internal Svc Fds 03 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, 2003 (amounts expressed in thousands) Risk Management Operating revenues: Self-insurance premiums $ Operating expenses: Insurance claims and premiums $ 3,984 Operating income (loss) $ $ 12,978 439 171 90 (2,136) 114 529 1,715 (421) 4,539 4,653 1,330 1,859 $ Totals $ 12,539 (57) 48 Change in net assets 1,400 Employee Benefits 1,457 (2,184) Nonoperating revenues: Investments Net assets - beginning Net assets - ending 1,800 Workers' Compensation $ 16,178 17,980 (1,802) 309 (1,493) $ 7,584 6,091 93 11/1/2003 8:34 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C100. Comb Stmt of Rev, Exp, and Chgs in Fd Net Assets -Internal Svc Fds 03 City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Cash flows from operating activities: Cash received from customers Cash paid for insurance and in settlement of claims Risk Management Workers' Compensation $ $ Net cash provided by operating activities Cash flows from investing activities: Interest received 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 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 $ 580 (417) 171 90 309 649 670 (108) $ $ (2,184) $ 107 (72) 674 (1,475) 1,685 1,685 6,507 7,156 (57) (12,438) 16,218 478 3,112 1,685 $ 13,018 (1,475) $ $ $ (922) (1,427) $ 1,400 Total (3,275) 48 Net increase in cash during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 1,800 Employee Benefits $ 3,619 4,289 $ 13,238 13,130 $ 439 $ (1,802) - $ $ $ (100) 635 478 7,021 135 7,156 (16,635) 46 $ $ $ (39) (246) (42) 431 (9) 580 4,273 16 4,289 46 $ $ $ 68 (418) (42) 1,740 (9) (417) 12,979 151 13,130 94 12/7/2003 6:16 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-C. Combining Statements\II-C110. Comb Stmt of Cash Flows - Internal Svc Fd03.xls City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ Actual Amounts (budgetary basis) Final - $ - $ 40 Variance with Final Budget Positive (Negative) $ 40 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation 4,635 75 4,710 4,710 4,565 145 4,710 4,710 3,017 214 3,231 3,271 (1,548) 69 (1,479) (1,439) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital outlay Total charges to appropriations 4,710 4,710 4,445 265 4,710 2,998 228 3,226 1,447 37 1,484 Budgetary fund balance, June 30, 2003 $ - $ - $ 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 Change in compensated absences liability Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 45 $ 45 $ 3,271 (40) $ 3,231 $ 3,226 (4) $ 3,222 95 11/1/2003 8:38 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D030. Community Development Block Grants Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Intergovernmental 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, 2003 Actual Amounts (budgetary basis) Final - $ - $ 291 Variance with Final Budget Positive (Negative) $ 291 14,200 14,200 5,730 (5,887) 14,043 14,089 14,089 5,730 (5,887) 13,932 14,183 7 14,190 3,067 (5,468) 12,080 11,124 2,857 10,954 2,613 10,079 1,756 875 857 46 16 14,043 46 16 13,629 46 14 11,895 2 1,734 $ - $ 303 $ 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 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 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 96 185 94 7 101 (2,663) 419 (1,852) $ $ (118) 12,080 (291) 1 (3,067) 5,468 $ 14,191 $ 11,895 (85) $ 11,810 11/1/2003 8:38 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D040. Highway Users Gas Tax Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 8,048 Final $ 8,048 Actual Amounts (budgetary basis) $ 12,951 Variance with Final Budget Positive (Negative) $ 4,903 RESOURCES (INFLOWS): Licenses and permits Investments Proceeds of bonds sold Total revenues Less: Transfers out Amounts available for appropriation 7,640 566 3,500 11,706 19,754 8,059 8,059 16,107 7,627 372 7,999 (16) 20,934 (432) 372 (60) (16) 4,827 CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Total charges to appropriations 14,265 14,265 7,963 7,963 4,175 4,175 3,788 3,788 Budgetary fund balance, June 30, 2003 $ 5,489 $ 8,144 $ 16,759 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 $ 8,615 $ 20,934 (12,951) 16 $ 7,999 $ 4,175 $ 4,175 97 11/1/2003 8:47 PM N\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D050. Development Impact Fees Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Proceeds of bonds sold 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 Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2003 $ 2,091 Final $ 2,091 Actual Amounts (budgetary basis) $ 2,211 Variance with Final Budget Positive (Negative) $ 120 3,432 4,655 14 1,811 9,912 1,602 13,605 3,340 4,721 35 5,000 1,795 14,891 1,652 18,634 3,378 3,332 1,018 19 4,889 781 13,417 867 (15) 16,480 38 (1,389) 1,018 (16) (111) (1,014) (1,474) (785) (15) (2,154) 710 6,397 107 1,893 364 600 2,873 692 6,439 107 1,866 390 600 1,598 648 5,086 21 1,980 293 1,024 44 1,353 86 (114) 97 600 574 20 4 12,968 20 4 11,716 20 3 9,075 1 2,641 637 $ 6,918 $ 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 Bond proceeds Miscellaneous 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 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 7,405 $ 487 $ 16,480 (2,211) (4,889) 1 (867) 15 $ 8,529 $ 9,075 (22) $ 9,053 98 11/1/2003 8:38 PM N:\Finance\3_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D070. Other Special Rev Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Investments Taxes Total inflows Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2003 $ 6,178 Final $ 6,178 Actual Amounts (budgetary basis) $ 5,881 13,503 13,503 19,681 13,469 13,469 19,647 159 13,589 13,748 19,629 10 2,572 33 9,862 3,751 13,623 9,862 3,751 16,185 10,061 4,002 14,096 6,058 $ 3,462 $ 5,533 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 Variance with Final Budget Positive (Negative) $ (297) 159 120 279 (18) 2,539 (199) (251) 2,089 $ 2,071 $ 19,629 (5,881) $ 13,748 $ 14,096 $ 14,096 99 11/1/2003 8:46 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D080. General Obligation Debt Svc Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Special Assessment Debt Service Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Special assessments 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, 2003 $ Actual Amounts (budgetary basis) Final 3,643 $ 3,643 $ 3,922 Variance with Final Budget Positive (Negative) $ 279 599 1,639 2,238 5,881 856 759 1,615 5,258 1,625 1,625 2 5,549 769 (759) 10 2 291 15 15 39 (24) 921 4,945 5,881 921 4,322 5,258 4,211 847 5,097 (3,290) 3,475 161 - $ - $ 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 452 $ 452 $ 5,549 (3,922) (2) $ 1,625 $ 5,097 $ 5,097 100 11/1/2003 8:46 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D090. Special Assessment Debt Svc Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 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, 2003 Actual Amounts (budgetary basis) Final - $ - $ 62 Variance with Final Budget Positive (Negative) $ 62 5,887 5,887 5,887 5,887 5,468 5,530 10 10 3 7 4,510 1,367 5,887 4,510 1,367 5,887 4,510 1,017 5,530 350 357 $ - $ - $ 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 101 - (419) (357) $ - $ 5,530 (62) (5,468) $ - $ 5,530 $ 5,530 11/1/2003 8:41 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D100. Highway User Debt Svc Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Investments Lont-term debt issued 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, 2003 $ 23 Actual Amounts (budgetary basis) Final $ 23 $ 23 6 6 1,733 1,762 268 6,070 6,338 1,733 8,094 31 5,246 5,277 1,713 7,013 15 15 2 1,240 478 1,733 1,240 478 1,733 1,240 1,510 2,752 29 $ 6,361 $ 4,261 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 Long-term debt issued 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 Variance with Final Budget Positive (Negative) $ - (237) (824) (1,061) (20) (1,081) 13 (1,032) (1,019) $ (2,100) $ 7,013 (23) (1,713) (5,246) $ 31 $ 2,752 $ 2,752 102 11/1/2003 8:42 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D110. Municipal Prop Corp Debt Svc Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Arena Construction Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 30,728 Final $ Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) 30,728 $ 19,851 $ (10,877) RESOURCES (INFLOWS): Licenses and permits Charges for services Investments Miscellaneous Long-term debt issued Proceeds from capital leases Total revenues Amounts available for appropriation 454 358 150,000 163 150,975 181,703 1239 20 9,167 142,799 153,225 183,953 1,684 38 (90) 152,304 153,936 173,787 445 18 (90) (9,167) 9,505 711 (10,166) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Interest expense General administration Community services Public safety Capital outlay Total charges to appropriations 800 172 175,732 176,704 3,254 814 142 173,794 178,004 189 2,860 617 81 85,141 88,888 (189) 394 197 61 88,653 89,116 Budgetary fund balance, June 30, 2003 $ 4,999 $ 5,949 $ 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 Long-term debt issued Expenditures funded by permit revenue 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 103 84,899 $ 78,950 $ 173,787 (19,851) (152,304) (617) $ 1,015 $ 88,888 (617) $ 88,271 City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 11,664 Actual Amounts (budgetary basis) Final $ 11,664 $ 10,939 Variance with Final Budget Positive (Negative) $ (725) RESOURCES (INFLOWS): Intergovernmental Investments Long-term debt issued Total revenues Less: Transfers out Amounts available for appropriation 950 7,841 8,791 20,455 209 1,250 1,459 13,123 355 (91) 1,273 1,537 (3) 12,473 355 (300) 23 78 (3) (650) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Miscellaneous Capital outlay Total charges to appropriations 12,997 12,997 13,123 13,123 6 3 6,174 6,183 (6) (3) 6,949 6,940 Budgetary fund balance, June 30, 2003 $ 7,458 $ - $ 6,290 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: Long-term debt issued 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 $ 6,290 $ 12,473 (10,939) (1,273) 3 $ 264 $ 6,183 $ 6,183 104 11/1/2003 8:42 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D120. Streets Construction Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 5,647 Final $ 5,647 Actual Amounts (budgetary basis) $ 353 Variance with Final Budget Positive (Negative) $ (5,294) RESOURCES (INFLOWS): Investments Capital lease proceeds Long-term debt issued Total revenues Less: Transfers out Amounts available for appropriation 282 2,400 2,682 8,329 282 18,058 18,340 23,987 66 3,288 15,069 18,423 (51) 18,725 (216) 3,288 (2,989) 83 (51) (5,262) CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Capital outlay Interest expense Total charges to appropriations 7,200 7,200 12,360 12,360 52 23 14,388 34 14,497 (52) (23) (2,028) (34) (2,137) Budgetary fund balance, June 30, 2003 $ 1,129 $ 11,627 $ 4,228 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 Less: Capital lease proceeds Long-term debt issued Transfers out 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 $ (7,399) $ 18,725 (3,288) (15,069) 51 (353) $ 66 $ 14,497 $ 14,497 105 11/1/2003 8:45 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D130. Fire and Police Construction Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Intergovernmental Investments Miscellaneous Long-term debt issued Total revenues Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2003 $ 13,826 Final $ 13,826 Actual Amounts (budgetary basis) $ 2,861 Variance with Final Budget Positive (Negative) $ (10,965) 691 9,385 10,076 23,902 417 21,360 21,777 35,603 27 73 1 21,749 21,850 15 (5) 24,721 27 (344) 1 389 73 15 (5) (10,882) 23,863 21,987 365 2 6,882 (365) (2) 15,105 23,863 21,987 185 17 7,451 (185) (17) 14,536 39 $ 13,616 $ 17,270 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 Long-term debt issued 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 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 106 $ 3,654 $ 24,721 (2,861) (21,749) (15) 5 $ 101 $ 7,451 $ 7,451 11/1/2003 8:43 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D140. Parks Bond Construction Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 5,434 Actual Amounts (budgetary basis) Final $ 5,434 $ 3,928 RESOURCES (INFLOWS): Intergovernmental Investments Payment to refunded bonds escrow agent Long-term debt issued Proceeds from lease Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 5,371 1,020 12,595 18,986 283 24,703 1,000 392 15,115 16,507 283 22,224 1,926 25 15,390 17,341 283 (135) 21,417 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Capital outlay Interest Total charges to appropriations 24,323 24,323 22,104 22,104 51 7,798 3 7,852 Budgetary fund balance, June 30, 2003 $ 380 $ 120 $ 13,565 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 Add: Transfers out Long-term debt issued 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 107 Variance with Final Budget Positive (Negative) $ (1,506) 926 (367) 275 834 (135) (807) (51) 14,306 (3) 14,252 $ 13,445 $ 21,417 (3,928) (283) 135 (15,390) $ 1,951 $ 7,852 $ 7,852 11/1/2003 8:47 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D150. Other Construction Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Permanent Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ Final 265 $ 265 Actual Amounts (budgetary basis) $ 4,100 RESOURCES (INFLOWS): Investments Miscellaneous Total revenues Amounts available for appropriation 265 593 593 858 110 350 460 4,560 CHARGES TO APPROPRIATIONS (OUTFLOWS): Capital outlay Total charges to appropriations (1) 265 265 265 265 21 21 Budgetary fund balance, June 30, 2003 $ - $ 593 $ 4,539 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 Variance with Final Budget Positive (Negative) $ 3,835 110 (243) (133) 3,702 244 244 $ 3,946 $ 4,560 (4,100) $ 460 Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 21 Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds $ 21 (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. 108 11/2/2003 4:23 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D160. Cemetery Perpetual Care Perm Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 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 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Water Sewer Bond issuance cost Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2003 $ 23,516 Actual Amounts (budgetary basis) Final $ 23,516 $ 24,230 Variance with Final Budget Positive (Negative) $ 292 - 28,265 19,438 6,120 605 797 38,600 11,669 105,786 129,302 27,100 19,544 5,429 787 305 13,875 6,919 73,959 97,475 26,320 19,316 5,334 1,138 (335) 6 14,127 9,511 75,568 (323) 99,475 (780) (228) (95) 351 (640) 6 252 2,592 1,609 (323) 2,000 9,881 12,757 9,065 2,000 61,048 9,881 12,740 9,047 4,978 48,276 9,631 12,171 8,809 63 22,685 250 569 238 (63) 4,978 25,591 9,830 2,723 107,304 9,830 2,723 97,475 11,162 3,073 67,594 (1,332) (350) 29,881 21,998 $ - 151 714 $ 31,881 151 $ 31,881 11/1/2003 8:39 PM 109 N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D170. Water and Sewer Fd 03 City of Glendale Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) 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 Bond proceeds Loan proceeds 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 Amortization of capitalized bond issuance expense Capital outlay expenditure Change in compensated absences liability Change in prepaid assets or inventory Amortization and depreciation expense Bond issuance costs Principal payments on long-term obligations Interest expense Capital lease financed expense Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets, excluding loss from joint venture and disposal of assets 2 of 2 $ 99,475 (24,230) (8) (14,127) (9,511) 323 $ 51,922 $ 67,594 (35) (22,685) 30 28 9,283 (62) (11,162) (52) 1 $ 42,940 110 11/1/2003 8:39 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D170. Water and Sewer Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Charges for services: Landfill user fees Recycling fees Other fees Proceeds from equipment disposal Investments Impact fees Total revenues 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, 2003 $ 15,692 Final $ 15,692 Actual Amounts (budgetary basis) $ 17,619 Variance with Final Budget Positive (Negative) $ 1,927 6,051 1,155 56 495 138 7,895 23,587 6,863 1,500 26 481 233 9,103 24,795 6,769 1,653 10 354 435 209 9,430 27,049 (94) 153 (16) 354 (46) (24) 327 2,254 2,000 6,226 150 383 6,226 3,344 5,266 822 383 960 2,522 1,564 817 10,757 2,471 817 13,241 2,275 614 8,977 196 203 4,264 12,830 $ 11,554 $ 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 Total revenues as reported on the statement of revenues, expenses, and changes in fund net assets, excluding gain on disposal of 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 Capital lease financed expense Depreciation expense Principal payments on long-term obligations Interest expense Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets 18,072 $ 6,518 $ 27,049 (17,619) 3 (354) $ 9,079 $ 8,977 (822) 1 537 243 1,138 (2,275) (113) $ 7,686 111 11/1/2003 8:49 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D180. Landfill Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Impact fees Investments Miscellaneous Proceeds from lease Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Sanitation Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2003 $ 2,072 Final $ 2,072 Actual Amounts (budgetary basis) $ 2,492 Variance with Final Budget Positive (Negative) $ 420 4,571 7,303 131 40 825 12,870 14,942 4,714 7,573 251 7 775 13,320 15,392 4,547 7,255 116 9 72 774 12,773 15,265 (167) (318) (135) 2 72 (1) (547) (127) 11,725 835 11,725 835 11,187 800 538 35 1,146 117 13,823 1,146 117 13,823 892 136 13,015 254 (19) 808 1,119 $ 1,569 $ 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 assets not available for appropriation Proceeds from disposal of capital assets Capital lease proceeds Total revenues as reported on the combining statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds, excluding gain on disposal of goods Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Depreciation expense Interest expense Change in compensated absences liability Capital lease financed expense Principal payments on long-term obligations Capital outlay Total expenses as reported in the combining statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds 2,250 $ 681 $ 15,265 (2,492) 5 (73) (774) $ 11,931 $ 13,015 846 (7) (6) 36 (892) (800) $ 12,192 112 11/1/2003 8:39 PM N:\Finance\03_audit\Cafr 03\II. Finance Section\II-D10. Supplemental Information\II-D190 Sanitation Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ Actual Amounts (budgetary basis) Final - $ - $ 522 Variance with Final Budget Positive (Negative) $ 522 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Investments Total revenues Add: Transfers in Amounts available for appropriation 7,592 375 7,967 390 8,357 7,275 390 7,665 390 8,055 7,702 390 8,614 (65) 492 (390) 37 559 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations 7,975 382 8,357 7,673 382 8,055 7,582 249 7,831 91 133 224 Budgetary fund balance, June 30, 2003 $ - $ - 7,210 492 $ 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 - non-major 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 - non-major proprietary funds 783 $ 783 $ 8,614 (522) (390) $ 7,702 $ 7,831 16 411 (249) $ 8,009 113 11/1/2003 11:52 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D200. Housing Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 3,048 Final $ 3,048 Actual Amounts (budgetary basis) $ 3,022 Variance with Final Budget Positive (Negative) $ (26) RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 1,800 150 1,950 4,998 1,800 50 1,850 4,898 1,800 48 1,848 4,870 (2) (2) (28) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Contingencies Total charges to appropriations 1,600 500 2,100 3,100 3,100 3,203 3,203 (103) (103) Budgetary fund balance, June 30, 2003 $ 2,898 $ 1,798 $ 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 1,667 $ $ (131) 4,870 (3,022) $ 1,848 $ 3,203 674 107 3,984 $ 114 11/1/2003 8:43 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D210. Risk Mgmt Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 6,364 Final $ 6,364 Actual Amounts (budgetary basis) $ 6,407 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 1,400 300 1,700 8,064 1,400 176 1,576 7,940 1,400 171 1,571 7,978 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 1,075 1,075 1,075 1,075 822 822 Budgetary fund balance, June 30, 2003 $ 6,989 $ 6,865 $ 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 7,156 Variance with Final Budget Positive (Negative) $ 43 (5) (5) 38 253 253 $ 291 $ 7,978 (6,407) $ 1,571 $ 822 635 $ 1,457 115 11/1/2003 8:44 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D220. Workers Comp Fd 03 City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2002 $ 1,216 Final $ 1,216 Actual Amounts (budgetary basis) $ 2,778 Variance with Final Budget Positive (Negative) $ 1,562 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 12,252 12,252 13,468 11,928 11,928 13,144 12,979 90 13,069 15,847 1,051 90 1,141 2,703 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 12,577 12,577 12,577 12,577 12,109 12,109 468 468 Budgetary fund balance, June 30, 2003 $ 891 $ 567 $ 3,738 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 Miscellaneous 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 $ 3,171 $ 15,847 (2,778) (1) $ 13,068 $ 12,109 430 $ 12,539 116 11/1/2003 8:40 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D230. Employee Benefits Fd 03 This page left blank intentionally. 117 City of Glendale, Arizona Supplementary Information For the Fiscal Year Ended June 30, 2003 (Rounded to nearest dollar) 1 of 4 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. Line Item No. 111 100 118 121 122 126 126.1 126.2 120 132 143 143.1 144 150 161 162 163 164 165 166 167 160 180 190 Low Rent Public Housing Account Description ASSETS: Current assets: Cash: Cash - unrestricted Total cash $ Accounts receivables: Accounts receivable - PHA projects Accounts receivable - HUD other projects Accounts receivable - tenants - dwelling rents Allowance for doubtful accounts - dwelling rents Allowance for doubtful accounts - other Total receivables, net of allowances for doubtful accounts 503,925 503,925 $ 1,112 (528) 584 Current investments Investments - restricted Inventories Allowance for obsolete inventories Interprogram - due from Total current assets 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 Public and Indian Housing Drug Elimination Program 4,500 109,131 618,140 $ 135,533 7,487,368 357,077 105,589 1,781,777 (4,473,010) 5,394,334 5,394,334 6,012,474 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 30,197 30,197 $ Total - - - 7,984 7,984 170,120 156,489 326,609 12,403 12,403 - - 7,984 28,732 385,538 12,403 - 7,984 125,048 113,405 (120,619) 117,834 117,834 503,372 17,763 19,149 (4,880) 484,762 516,794 516,794 529,197 16,527 (87) 16,440 16,440 16,440 $ $ $ $ $ 534,122 534,122 170,120 176,876 1,112 (528) 347,580 28,732 4,500 109,131 1,024,065 135,533 7,612,416 374,840 254,670 1,781,777 (4,598,596) 484,762 6,045,402 6,045,402 $ 7,069,467 11/1/2003 8:48 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D240. Federal Financial Data Schedule 03\II-D240 City of Glendale, Arizona Supplementary Information For the Fiscal Year Ended June 30, 2003 (Rounded to nearest dollar) 2 of 4 (Continued) Supplementary Information - Federal Financial Data Schedule (PHA: AZ003) Line Item No. 312 322 332 333 341 342 347 310 Low Rent Public Housing Account Description LIABILITIES AND EQUITY/NET ASSETS: LIABILITIES: Current liabilities Accounts payable <= 90 days Accrued compensated absences - current portion Accounts payable - PHA projects Accounts payable - other government Tenant security deposits Deferred revenues Interprogram - due to Total current liabilities Public and Indian Housing Drug Elimination Program $ 18,153 4,758 35,208 33,603 4,470 96,192 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ 7,984 7,984 Public Housing Capital Fund Program Housing Choice Vouchers $ 12,657 5,155 1,182 1,496 88,744 109,234 $ 12,403 12,403 Total $ 30,810 9,913 1,182 36,704 33,603 4,470 109,131 225,813 119 353 354 350 300 Noncurrent liabilities Noncurrent liabilities- other Accrued compensated absences - noncurrent Total noncurrent liabilities Total liabilities 42,826 42,826 139,018 - - 7,984 28,732 46,395 75,127 184,361 12,403 28,732 89,221 117,953 343,766 508 508.1 511 511.1 512.1 513 600 EQUITY/NET ASSETS: Total contributed capital Invested in capital assets, net of related debt Total reserved fund balance Restricted net assets Unrestricted net assets Total equity/net assets Total liabilities and equity/net assets 5,394,334 479,122 5,873,456 6,012,474 16,440 16,440 16,440 - 7,984 117,834 201,177 319,011 503,372 516,794 516,794 529,197 6,045,402 680,299 6,725,701 7,069,467 $ $ $ $ $ $ $ 11/1/2003 8:48 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D240. Federal Financial Data Schedule 03\II-D240 City of Glendale, Arizona Supplementary Information For the Fiscal Year Ended June 30, 2003 (Rounded to nearest dollar) 3 of 4 (Continued) Supplementary Information - Federal Financial Data Schedule (PHA: AZ003) Line Item No. 703 704 705 706 706.1 715 720 700 120 911 912 914 915 916 924 931 932 933 938 941 942 943 945 952 961 962 963 964 969 970 973 974 900 1004 1010 1000 Public and Indian Housing Drug Elimination Program Low Rent Public Housing Account Description REVENUE: Net tenant rental revenue Tenant revenue - other Total tenant revenue $ HUD PHA operating grants Capital grants Other revenue Investment income - restricted Total revenue EXPENDITURES: Administrative salaries Auditing fees Compensated absences Employee benefit contributions - administrative Other operating - administrative Tenant services - other 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 Protective services - other contract costs Insurance premiums Other general expenses Payments in lieu of taxes Bad debt - tenant rents Total operating expenditures Excess operating revenue over expenditures Housing assistance payments Depreciation expense Total expenditures 275,472 14,231 289,703 $ $ - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ - $ Total - $ 275,472 14,231 289,703 400,418 480 690,601 16,215 16,215 - 79,006 79,006 6,460,289 206,411 6,666,700 23,682 230,705 254,387 6,963,395 246,920 206,891 7,706,909 353,783 1,000 7,918 74,402 45,898 45,883 14,465 850 30,937 163,091 37,495 73,549 33,117 360 15,848 18,334 (108) 916,822 (226,221) 16,215 - 11,340 67,666 79,006 - 479,320 2,250 8,578 112,748 84,004 7,680 13,376 15,645 723,601 5,943,099 22,388 1,294 23,682 230,705 833,103 3,250 16,496 187,150 163,630 67,666 45,883 14,465 850 30,937 163,091 46,469 73,549 33,117 360 29,224 15,645 18,334 (108) 1,743,111 5,963,798 87 87 - 79,006 5,854,911 14,841 6,593,353 3,930 27,612 5,854,911 342,211 7,940,233 16,128 - - 73,347 226,775 390,000 390,000 156,676 323,353 1,240,175 OTHER FINANCING SOURCES (USES) Operating transfers from/to component unit Total other financing sources (Uses) Excess (deficiency) of total revenues over (under) total expenditures Resident Opportunity and Supportive Services Section 8 Rental Voucher Program 390,000 390,000 (159,574) $ $ $ $ $ $ 11/1/2003 8:48 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D240. Federal Financial Data Schedule 03\II-D240 City of Glendale, Arizona Supplementary Information For the Fiscal Year Ended June 30, 2003 (Rounded to nearest dollar) 4 of 4 (Continued) Supplementary Information - Federal Financial Data Schedule (PHA: AZ003) Line Item No. 1102 1103 1104 1113 1114 1115 1116 1120 1121 Public and Indian Housing Drug Elimination Program Low Rent Public Housing Account Description 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, ACC program reserve Total annual contributions available Unit months available Number of unit months leased $ 6,033,030 1,858 1,839 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program 69,933 (69,621) - $ 248,698 (248,698) - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 245,664 7,004,586 913,063 7,917,649 12,672 12,357 $ Total 289,171 848 - $ 6,640,832 (71,807) 7,004,586 913,063 7,917,649 14,530 14,196 121 11/1/2003 8:48 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D240. Federal Financial Data Schedule 03\II-D240 City of Glendale, Arizona Capital Assets Used in the Operation of Governmental Funds 1 of 2 Schedule By Function and Activity(1) For the Fiscal Year Ended June 30, 2003 (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 $ $ 10,679 434 6,347 23,353 1,033 733 100 42,679 Buildings $ $ 16,039 19,081 13,659 19,379 68,158 Improvements Other Than Buildings $ $ 5,042 9,703 3,428 32,469 2,873 4,501 58,016 Machinery and Equipment $ $ 10,367 4,621 335 1,502 445 17,270 (1) This schedule presents only the capital asset balances related to governmental funds. 122 11/1/2003 8:44 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D260. Schedule by Function and Activity 03 City of Glendale, Arizona Capital Assets Used in the Operation of Governmental Funds 2 of 2 Schedule By Function and Activity(1) For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Computer Equipment $ $ 1,031 58 9 73 8 1,179 Software $ $ 77 338 80 495 Automotive Equipment $ $ 10,999 5,687 755 2,197 13 3,120 22,771 Infrastructure $ 315 27,792 31,808 408,258 $ 468,173 Construction in Process $ 98,837 8,100 1,863 15,511 12,175 $ 136,486 Other $ $ 1,166 1,166 Total $ 153,386 48,022 54,188 127,458 3,919 429,320 100 $ 816,393 11/1/2003 8:44 PM 123 N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D260. Schedule by Function and Activity 03 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, 2003 (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, 2002* $ $ 53,152 39,937 48,014 112,699 3,919 401,598 100 659,419 Additions $ $ 115,990 17,370 6,281 17,181 41,984 198,806 Deductions $ $ 15,756 9,285 107 2,422 14,262 41,832 Governmental Funds Capital Assets June 30, 2003 $ $ 153,386 48,022 54,188 127,458 3,919 429,320 100 816,393 (1) This schedule presents only the capital asset balances related to governmental funds. *As restated 124 12/7/2003 7:01 PM N:\Finance\03_audit\Cafr 03\II. Financial Section\II-D10. Supplemental Information\II-D270. Schedule of Changes by Function and Activity 03.xls City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2003 This page left blank intentionally. City of Glendale, Arizona Table 1 General Governmental Expenditures by Function (1) Last Ten Fiscal Years (amounts expressed in thousands) Miscellaneous Fiscal General Public Public Community Community Street Community and Capital Debt Year Government Safety Works Services Environment Maintenance Housing (2) Contingency Outlay Service $ $ $ $ 1993-94 $ 7,780 $ 23,358 $ 6,752 $ 11,138 1,236 6,315 4,776 288 $ 28,977 $ Total 15,742 $ 106,362 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 2002-03 20,321 49,571 10,118 28,391 3,282 9,994 - 80 142,213 29,835 293,805 125 1994-95 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. 11/1/2003 8:51 PM N:\Fiancnac\03_audit\Cafr 03\III. Statistical Section\III-010. Table 1 - GG Expenditures by Function 03 City of Glendale, Arizona General Governmental Revenues by Source (1) Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1993-94 Taxes and Special Assessments Licenses and Permits $ $ 35,080 5,132 Table 2 Intergovernmental $ Local 41,892 $ 16,487 Charges for Services Fines and Forfeitures $ $ 2,370 1,362 Investments $ 1,389 Miscellaneous $ Total 1,790 $ 105,502 126 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 2001-02 70,526 10,663 68,479 - 2,516 2,859 2,572 2,728 160,343 16,771 73,836 - 3,313 3,246 (805) 2,834 181,653 2002-03 82,458 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. 11/2/2003 2:12 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-020. Table 2 - GG Rev by Source 03.xls City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Table 3 127 Fiscal Year Total Tax Levy Current Tax Collections Percent of Current Tax Collections 1993-94 $ 9,420 $ 9,092 96.51 1994-95 9,718 9,412 1995-96 10,506 1996-97 % Delinquent Tax Collections $ Total Tax Collections 352 $ 9,444 96.85 238 9,650 10,241 97.48 254 10,761 10,448 97.09 1997-98 12,051 11,661 1998-99 12,131 1999-00 Ratio of Total Tax Collections to Total Tax Levy 100.25 % Outstanding Delinquent Taxes $ Ratio of Delinquent to Total Tax Levy 379 4.02 % 99.30 335 3.45 10,496 99.90 294 2.80 211 10,659 99.05 292 2.71 96.76 245 11,906 98.79 342 2.84 11,764 96.98 312 12,076 99.55 327 2.69 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 2002-03 16,743 16,289 97.29 440 16,729 99.92 484 2.89 11/1/2003 8:52 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-030. Table 3 - Prop Tax Levies and Collections 03 City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Table 4 128 Fiscal Real Improve- Secured Unsecured Utilities Rails and Gross Less: Net Assessed Estimated Actual Year Estate ments Personal Personal Wires Valuation (1) Exemptions (1) Value (1) Value 1993-94 $ 163,208 $ 277,881 1994-95 160,082 302,623 1,951 31,215 30,192 1995-96 161,175 358,969 2,045 25,714 1996-97 191,755 401,560 2,564 1997-98 206,083 475,031 1998-99 215,309 1999-00 $ 10,279 $ 31,758 $ 28,359 $ 511,485 $ 838 $ 510,647 $ 4,136,637 526,063 796 525,267 4,321,468 31,092 578,995 815 578,180 4,809,344 23,711 46,017 665,607 65,363 600,245 5,022,245 2,688 29,718 46,299 759,819 62,626 697,193 5,824,504 485,708 2,974 29,627 44,837 778,455 61,065 717,390 5,931,081 223,785 548,672 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 2002-03 258,224 733,234 2,383 39,629 54,189 1,087,659 98,565 989,094 8,331,442 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. 11/1/2003 8:52 PM N:Finance\03_audit\Cafr 03\III. Statistical Section\III-040. Table 4 - Assessed and Estimated Actual Value of Taxable Property 03 City of Glendale, Arizona Property Tax Rates - Direct and Overlapping Governments Per $100 Assessed Valuation Last Ten Fiscal Years City of Glendale Fiscal Year 129 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 $ 1.98 1.98 1.93 1.88 1.83 1.78 1.73 1.72 1.72 1.72 Glendale Elementary District Glendale High School District $ $ 6.26 7.19 7.93 7.07 7.45 7.98 7.71 7.19 6.89 6.87 4.00 3.82 4.20 4.12 3.89 3.95 3.85 3.56 3.46 3.63 Peoria Unified School District $ 7.76 8.30 8.51 8.78 9.47 9.98 9.70 9.49 8.72 8.69 Table 5 Deer Valley Unified School District $ 9.92 10.27 9.42 10.22 9.73 9.81 9.17 8.06 8.11 7.59 State $ 0.47 0.47 0.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Maricopa County/ Education Equalization $ 1.77 1.77 1.83 1.79 1.79 1.81 1.82 1.79 1.77 1.78 Community College District $ 0.85 0.90 1.11 1.05 1.13 1.11 1.13 1.12 1.11 1.11 Flood Control District $ 0.36 0.36 0.33 0.34 0.34 0.33 0.29 0.25 0.23 0.21 Central Arizona Water Conservation District $ 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.13 0.13 0.13 County Library District $ 0.04 0.04 0.01 0.04 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 Total Within Following Districts: Glendale Elementary and High School Districts 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 $ 15.88 16.68 17.96 16.44 16.62 17.15 16.72 15.81 15.36 15.51 Peoria Unified School District $ 13.38 13.97 14.34 14.03 14.75 15.20 14.86 14.55 13.73 13.69 Deer Valley Unified School District $ 15.54 15.94 15.25 15.47 15.01 15.03 14.33 13.12 13.12 12.59 Source: Maricopa County 2001 Tax Rates Note: The City rounds the rates to two digits from the four presented by the county. 11/1/2003 8:53 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-050. Table 5 - Prop Tax Rates D & O Govt 03 City of Glendale, Arizona Principal Property Taxpayers June 30, 2003 (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. Lexington Glendale LLC May Department Stores JC Penney Co. 51 Bell Limited Partnership Burlington Northern Santa Fe DESC Ramainderman LLD VHS of Arrowhead Inc. Condev West Inc. Safeway Sanderson Ford Type of Property Gas & Electric Natural Resources Industrial Park Shopping Center Gas & Electric Industrial Park Warehouse Shopping Center Industrial Park Shopping Center Shopping Center Warehouse Railroad Shopping Center Medical Building Shopping Center Grocery Shopping 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 3,369 3,134 3,050 3,045 3,043 3,040 2,982 2,822 2,790 2,688 1.53 % 1.34 1.15 1.09 0.52 0.44 0.41 0.36 0.34 0.32 0.31 0.31 0.31 0.31 0.30 0.29 0.28 0.27 97,673 9.88 891,419 90.12 $ 989,092 100.00 % 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. 11/1/2003 8:53 PM 130 N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-060. Table 6 - Principal Prop Taxpayers 03 City of Glendale, Arizona Special Assessment Billings and Collections Last Ten Fiscal Years (amounts expressed in thousands) Table 7 Fiscal Special Assessment Special Assessment Year Billing Collected (1) 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 2002-03 752 767 Notes: (1) Includes prepayments and billings that assessees paid before assessment went to bond. 131 11/1/2003 8:54 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-070. Table 7 - Special Assessment Billings & Collections 03 City of Glendale, Arizona Computation of Legal Debt Margins June 30, 2003 (amounts expressed in thousands) Table 8 Assessed value, August 2002 $ 989,092 Debt limit: 6% of assessed value Amount of 6% type debt applicable to debt limit:(1) 1993 Refunding 1993 Refunding water/sewer 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 2003 Governmental facilities 2003 Maintenance 2003 Public safety 2003 Streets and parking Total amount of 6% type debt applicable to debt limit Less amount available in debt service fund and water & sewer fund: G.O. debt service payment 7/1/03 Debt service fund Total amount available Total debt applicable to debt limit 6% type debt--legal debt margin $ 59,346 Debt limit: 20% of assessed value Amount of 20% type debt applicable to debt limit:(1) 1993 Refunding 1993 Refunding water/sewer 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 2003 Flood control 2003 Open space/trails 2003 Parks 2003 Parks and recreation 2003 Water and sewer Total amount of 20% type debt applicable to debt limit Less amount available in debt service fund and water and sewer fund: G.O. debt service payment 7/1/03 Debt service fund Total amount available Total debt applicable to debt limit 20% type debt--legal debt margin 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. N:\Finance\03_audit\Cafr 03\III. Statistical 132 $ 5,110 20 3,684 1,474 982 790 718 1,186 502 3,520 1,509 144 2,080 11,225 2,600 5,400 14,800 1,250 $ 56,994 6,560 2,621 9,181 47,813 11,533 $ 197,818 $ 80,844 116,974 2,470 1,930 1,725 340 2,020 5,625 450 5,300 4,545 3,000 2,600 2,430 14,355 4,390 2,725 1,033 20,327 13,875 $ 89,140 5,675 2,621 8,296 12/7/2003 7:06 PM Section\III-080. Table 8 - Comp of Legal Debt Margins 03.xls 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) Table 9 Debt Debt Fiscal Year 133 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 Population (1) 164 173 186 192 197 207 213 224 228 231 Payable Net Direct Net Bonded Direct Gross Service from Direct Debt to Bonded Assessed Value (2) Bonded Debt (3) Monies Enterprise Bonded Assessed Debt per Available Revenues Debt Value Capita $ 510,647 525,267 578,180 600,245 697,193 717,390 787,692 876,903 954,119 989,092 $ 78,545 71,855 74,815 67,160 70,800 62,575 74,830 64,690 90,135 146,135 $ 6,690 7,040 9,382 9,998 10,892 11,611 12,416 13,241 15,955 17,478 $ 22,440 19,690 16,750 14,000 11,835 10,000 9,635 7,498 5,156 16,858 $ 49,415 45,125 48,683 43,162 48,073 40,964 52,779 43,951 69,024 111,799 9.68 8.59 8.42 7.19 6.90 5.71 6.70 5.01 7.23 11.30 $ 0.30058 0.26132 0.26103 0.22526 0.24437 0.19775 0.24752 0.19660 0.30325 0.48397 Notes: (1) Source: 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, $1,333 for 2000-01, $1,186 for 2001-02 and $1,032 for 2002-03. 12/7/2003 7:09 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-090. Table 9 - Ratio of GO Bonded Debt 03.xls 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 1993-94 Principal $ 8,146 $ Table 10 Interest Total Debt Service Total General Expenditures 7,597 $ 15,743 $ 106,364 Ratio of Debt Service to Total Expenditures 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 2002-03 20,022 7,376 27,398 292,622 9.36 Note: Principal and Interest expenditures for 1999-00 include a current refunding transaction. 134 11/1/2003 8:55 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-100. Table 10 - Ratio of Annual Debt Svc Exp 03 City of Glendale, Arizona Computation of Net Direct and Overlapping General Obligation Bonded Debt June 30, 2003 (amounts expressed in thousands) Table 11 Net Debt Outstanding Jurisdiction Peoria Unified School District No. 11 $ 220,454 Percentage Applicable to Glendale 26.5414 % Amount Applicable to Glendale $ 58,512 Glendale Elementary School District No. 40 22,915 98.8551 22,653 Deer Valley Unified School District No. 97 198,370 28.0201 55,583 Alhambra Elementary School District No. 68 35,360 18.7091 6,616 Glendale Union High School District No. 205 64,545 20.4157 13,177 Maricopa County 20,165 4.0442 816 Maricopa County Community College District 261,015 4.0442 10,556 Phoenix Union High School District No. 210 170,935 1.5621 2,670 Pendergast Elementary School District No. 92 22,035 10.6790 2,353 Tolleson Union High School District No. 214 34,940 4.1692 1,457 131,765 2.8359 3,737 Dysart Unified School District No. 89 21,000 0.3287 69 Agua Fria Union High School District No. 216 40,270 0.0878 35 Litchfield Elementary School District No. 79 21,890 0.1444 32 Cartwright Elementary School District No. 83 1,560 0.0415 1 Washington Elementary School District No. 6 Total Overlapping Debt City of Glendale Debt Total 1,267,219 178,267 111,800 111,800 $ 1,379,019 $ 290,067 Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness 135 11/1/2003 8:56 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-110. Table 11 - Comp of Net D & O GO Bond Debt 03 City of Glendale, Arizona Water and Sewer Revenue Bond Coverage Last Ten Fiscal Years (amounts expressed in thousands) Table 12 Fiscal Gross Operating and Maintenance Year Revenue (1) Expenses (2) 1993-94 $ 36,724 $ 13,697 $ Net Revenue Available for Debt Service 23,027 Revenue Bond Debt Service Requirements Principal (3) $ 4,650 Interest (3) $ 1,852 Total $ Coverage 6,502 3.54 136 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 2002-03 51,922 30,537 21,385 9,116 2,745 11,861 1.80 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. 11/1/2003 8:56 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-120. Table 12 - Water & Sewer Rev Bond Cov 03 City of Glendale, Arizona Demographic Statistics Last Ten Fiscal Years (amounts expressed in thousands) Table 13 Fiscal City County-Wide Per Capita County-Wide School County-Wide Unemployment Year Population (1) Income (2) County-Wide Enrollment (3) Rate (4) Population (4) 1993-94 164 $ 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 2002-03 231 29 - 5.6 3,296 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; 2002-03 data not available (4) Arizona Department of Economic Security 1992-93 to 1999-00, Census 2000 for 2000-01 to present. 137 11/1/2003 8:57 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-130. Table 13 - Demographic Stats 03 City of Glendale, Arizona Property Value, Construction and Bank Deposits Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Table 14 Construction (2) Commercial and Estimated Actual Property (1) Residential Value 1993-94 $ 4,136,637 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 2002-03 8,331,442 195,770 120,706 10,877 327,353 34,753 187,816 $ 21,077 Others $ 22,913 Totals Deposits (3) Year $ Industrial Bank $ 231,806 $ 20,599 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, 2003 138 11/1/2003 8:57 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-140. Table 14 - Prop Value Construction and Bank Deposits 03 City of Glendale, Arizona Miscellaneous Statistics June 30, 2003 Table 15 Date of Incorporation 1910 Form of Government Council-Manager Area 56.44 Square Miles Miles of streets 702 Building permits issued 6,299 Number of employees (full time equivalents) 1,615 Fire Protection: Number of stations Number of firefighters (excluding volunteer firefighters) Fire hydrants Eight 174 7,300 Police Protection: Number of stations Number of police officers (exclusive of police reserve) Three 350 Recreation and Culture: Number of parks Number of libraries Number of library books 89 with 1,984 acres Three 600,477 11/1/2003 8:58 PM 139 N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-150. Table 15 - Misc Stats 03 City of Glendale, Arizona Insurance Coverage For the Fiscal Year Ended June 30, 2003 (amounts expressed in thousands) Type of Insurance Table 16 Insuring Company 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) Deduction Amount $ $ 100,000 229,054 2,857 45,442 100,000 10,000 5,000 3,000 1,000 American Insurance Co. (Fireman's Fund) Westchester Fire Ins. Co. (ACE USA) Annual Premium Expiration Date $ 218 1/26/2004 118 1/26/2004 14 1/26/2004 50 47 4/9/2004 500 71 7/1/2003 32 10/4/2003 50 50 50 50 100 50 50 50 50 Actual cash value 5 20,000 National Union Fire Ins. (AIG) Public employee dishonesty Faithful performance Workers' Compensation Limit each accident/disease a) Workers' compensation b) Employer liability Policy Limits 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 1,000 582 7/1/2004 Excess Public Liability Second Layer Princeton Ins. 10,000 11,000 316 7/1/2004 Excess Public Liability Third Layer Gulf Ins. 10,000 21,000 127 7/1/2004 Excess Public Liability Fourth Layer Westchester Ins. Co. 20,000 31,000 134 7/1/2004 Kidnap, Ransom, and Extortion National Union Fire Ins. Co. 10,000 N/A 4 5/2/2004 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. 11/1/2003 8:58 PM 140 N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-160. Table 16 - Ins Cov 03 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2003 Table 17 WATER RATES PER METER SIZE Commercial Monthly Base Charge Inside Outside City City Meter Size (inch) 3/4 1 $ 12.02 13.15 $ 15.63 17.10 1 1/2 2 3 4 6 19.84 26.53 53.02 77.65 132.69 25.79 34.50 68.93 100.95 172.50 Residential Monthly Base Charge Inside Outside City City Meter Size All Sizes $ 12.02 $ 15.63 Residential and 3/4 Commercial Meter Size All Year Gallons per Month 0 - 3,000 4,000 - 15,000 16,000 - 30,000 over 31,000 Commercial 1 inch Meter Size and Greater (1) Inside City Outside City All Year Inside Outside City City Summer Excess Rate Inside Outside City City -$ 1.27 1.51 1.81 -$ 1.65 1.97 2.36 $ 1.22 1.22 1.22 1.22 $ 1.81 1.81 1.81 1.81 $ 1.58 1.58 1.58 1.58 $ 2.36 2.36 2.36 2.36 SEWER SERVICE RATES Inside City Type of Service Single Family Dwelling Unit Office Building Apartment - Average 5 units Apartment - Average 35 units Retail/Wholesale (1) Per 1,000 gallons SOURCE: City of Glendale Finance Department $ 20.09 37.43 63.51 332.11 39.50 Outside City $ 42.37 N/A 49.51 275.22 N/A 141 11/1/2003 8:59 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-170. Table 17 - Misc W&S Rate Stats 03 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2003 Table 18 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS (1) Fiscal Year Ending June 30 1995 1996 1997 1998 1999 2000 2001 2002 2003 Commercial (2) Total 41,317 43,230 45,421 47,363 49,556 3,789 3,964 4,165 4,343 4,544 45,106 47,194 49,586 51,706 54,100 50,324 51,169 52,736 53,654 4,590 4,649 5,197 5,431 54,914 55,818 57,933 59,085 Residential (3) (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. SOURCE: City of Glendale Finance Department WATER DELIVERIES Acre Feet Calendar Year 1995 1996 1997 1998 1999 2000 2001 2002 (1) Residential (1) 27,361 29,458 31,294 30,477 32,779 35,135 34,667 36,044 Commercial 5,616 6,202 4,562 4,491 4,739 9,413 8,865 8,865 Other Total 8,998 9,081 8,667 6,344 8,942 893 722 1,031 41,975 44,741 44,523 41,312 46,460 45,441 44,254 45,940 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 Multi-City Plant Arrowhead West (3) Peak (MGD) Actual 10.0 11.0 12.3 10.4 10.9 11.7 11.4 (MGD) (1) 1.1 1.6 1.9 2.2 2.7 2.8 2.8 (MGD) 1995 1996 1997 1998 1999 2000 2001 Accounts Billed 41,498 44,090 45,813 47,064 49,021 50,564 52,688 (MGD) (2) 15.0 16.5 18.5 15.6 16.4 17.6 17.1 2002 55,506 (4) 11.9 2.8 4.3 (1) Estimated (2) Peak Day is based on 150% of the Multi-City Plant Use. (3) Began operations in 2000 (4) As of September 12, 2003 SOURCE: City of Glendale Finance and Utilities Departments 4.3 4.3 17.9 142 12/7/2003 7:15 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-180. Table 18 - Misc W&S Stats 2 03.xls City of Glendale, Arizona Government-wide Expenses by Function Last Two Fiscal Years (1) (amounts expressed in thousands) Fiscal Year 2001-02 2002-03 General Government $ Public Safety Public Works 22,490 $ 53,779 $ 12,766 20,209 52,625 11,411 Table 19 Other Interest on long-term debt Water and sewer Landfill Sanitation Housing Total 12,534 $ 19 $ 5,864 $ 39,909 $ 1,189 $ 10,180 $ 7,513 $ 200,576 20,308 148 7,223 43,442 7,784 12,353 8,033 219,179 Community Services Community Environment Street Maintenance $ $ $ 30,919 32,210 3,414 3,433 Notes: (1) Only two years' data is available. In subsequent years this table will be expanded to include ten fiscal years. 143 12/7/2003 7:18 PM N:\Fiancnac\03_audit\Cafr 03\III. Statistical Section\III-190. Table 19 - Government-wide Expenses by Function 03.xls City of Glendale, Arizona Government-wide Revenues Last Two Fiscal Years (1) (amounts expressed in thousands) Table 20 PROGRAM REVENUES Fiscal Year 2001-02 2002-03 Operating Grants and Contributions Charges for Services $ 90,250 99,042 (2) $ 29,232 29,613 Capital Grants and Contributions $ Taxes 3,262 $115,942 4,814 129,591 GENERAL REVENUES Grants and Contributions Not Restricted Unrestricted to Specific Investment Programs Earnings Gains or (losses) and Miscellaneous $ $ 10,796 34,283 $ 2,612 (1,725) Total (1,278) $ 250,816 (992) 294,626 144 Notes: (1) Only two years' data is available. In subsequent years this table will be expanded to include ten fiscal years. (2) For 2001-02 the franchise, license, and impact fees are reclassified and reported as Charges for Services instead of General Revenues, to be consistent with treatment in subsequent years. 12/7/2003 7:23 PM N:\Finance\03_audit\Cafr 03\III. Statistical Section\III-200. Table 20 - Government-wide Revenue 03.xls This page left blank intentionally. City of Glendale Finance Department 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480