CITY OF GLENDALE, ARIZONA Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2004 This page left blank intentionally. GLEND LE CITY OF GLENDALE, ARIZONA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2004 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 - Neighborhood Services Kenneth A. Reedy Deputy City Manager - Public Works Gloria Santiago-Espino Deputy City Manager - Community Information & Services Horatio Skeete Deputy City Manager - Community Development 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, 2004 This page left blank intentionally. City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2004 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 City Officials...................................................................................................................................7 Glendale Council District Boundaries.............................................................................................8 Organization 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 C. REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund ........................................................................75 Budgetary Comparison Schedule – Transportation Fund..............................................................77 Notes to Required Supplementary Information.............................................................................78 iii City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2004 TABLE OF CONTENTS Page D. COMBINING STATEMENTS Non-Major Governmental Funds Combining Balance Sheet..........................................................................................................82 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances..................84 Non-Major Proprietary Funds – Business-type Activities Combining Statement of Net Assets..........................................................................................86 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets.....................87 Combining Statement of Cash Flows ........................................................................................88 Internal Service Funds Combining Statement of Net Assets..........................................................................................90 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets.....................91 Combining Statement of Cash Flows ........................................................................................92 E. OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules – Other Funds Community Development Block Grants Fund.......................................................................93 Highway Users Gas Tax Fund ...............................................................................................94 Development Impact Fees Fund.............................................................................................95 Other Special Revenue Fund..................................................................................................96 General Obligation Debt Service Fund ..................................................................................97 Special Assessment Debt Service Fund .................................................................................98 Highway User Debt Service Fund..........................................................................................99 Municipal Property Corporation Debt Service Fund ...........................................................100 Arena Construction Fund .....................................................................................................101 Streets Construction Fund....................................................................................................102 Fire and Police Construction Fund.......................................................................................103 Parks Bond Construction Fund ............................................................................................104 Other Construction Fund......................................................................................................105 Cemetery Perpetual Care Permanent Fund ..........................................................................106 Water and Sewer Fund.........................................................................................................107 Landfill Fund .......................................................................................................................109 Sanitation Fund ....................................................................................................................110 Housing Fund.......................................................................................................................111 Risk Management Fund .......................................................................................................112 Workers’ Compensation Fund .............................................................................................113 Employee Benefits Fund......................................................................................................114 Federal Financial Data Schedule .............................................................................................116 Capital Assets Used in the Operation of Governmental Funds Schedule by Function and Activity ......................................................................................120 Schedule of Changes by Function and Activity ...................................................................122 iv City of Glendale, Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2004 TABLE OF CONTENTS III. STATISTICAL SECTION Table Page General Governmental Expenditures by Function ............................................................. 1.............123 General Governmental Revenues by Source ...................................................................... 2.............124 Property Tax Levies and Collections ................................................................................. 3.............125 Assessed and Estimated Actual Value of Taxable Property............................................... 4.............126 Property Tax Rates – Direct and Overlapping Governments ............................................. 5.............127 Principal Property Taxpayers ............................................................................................. 6.............128 Special Assessment Billings and Collections..................................................................... 7.............129 Computation of Legal Debt Margins.................................................................................. 8.............130 Ratio of General Obligation Bonded Debt to Assessed Value and Net Direct Bonded Debt Per Capita ...................................................................................... 9.............131 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures .......................................................................................... 10.............132 Computation of Net Direct and overlapping General Obligation Bonded Debt............... 11.............133 Water and Sewer Revenue Bond Coverage...................................................................... 12.............134 Demographic Statistics..................................................................................................... 13.............135 Property Value, Construction and Bank Deposits ............................................................ 14.............136 Miscellaneous Statistics ................................................................................................... 15.............137 Insurance Coverage .......................................................................................................... 16.............138 Miscellaneous Water and Sewer Rate Statistics............................................................... 17.............139 Miscellaneous Water and Sewer Statistics ....................................................................... 18.............140 Government-wide Expenses by Function......................................................................... 19.............141 Government-wide Revenues ............................................................................................ 20.............142 v This page left blank intentionally. October 1, 2004 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Glendale, Arizona: State law requires that cities annually publish after the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS) by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Glendale, Arizona (the “City”) for the fiscal year ended June 30, 2004. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City’s financial statements have been audited by Heinfeld, Meech & Co., P.C., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2004, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City’s separately issued Single Audit reporting package. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. City of Glendale Municipal Complex • 5850 West Glendale Avenue • Glendale, Arizona 85301-2599 • Phone (623) 930-2000 www.ci.glendale.az.us 1 Profile of the Government The City, incorporated in 1910, is located in the northwestern part of metropolitan Phoenix, which is considered to be one of the top growth areas in the country. The City currently occupies a land area of 56.7 square miles and serves a population of 233,281. The City is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the city council. The City has operated under the council-manager form of government since 1910. Policy-making and legislative authority are vested in a city council consisting of the mayor and six other members. The city council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the government’s manager, clerk, attorney and municipal judges. The government’s manager is responsible for carrying out the policies and ordinances of the city council, for overseeing the day-to-day operations of the government, and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council members serve four-year terms, with three council members elected every two years. The mayor is elected to serve a four-year term. The council members are elected by district. The mayor is elected at large. The City provides a full range of services, including police and fire protection; water and sewer and sanitation services; the construction and maintenance of highways, streets, public facilities and other infrastructure; and recreational activities and cultural events. Certain housing services are provided by the city’s public housing authority, which functions, in essence, as a department of the City and therefore has been included as an integral part of the City’s financial statements. The City also is financially accountable for a legally separate municipal property corporation, which is reported separately within the City’s financial statements. The annual budget serves as the foundation for the City’s financial planning and control. All agencies of the City are required to submit requests for appropriation to the government’s manager on or before the last week in January each year. The government’s manager uses these requests as the starting point for developing a proposed budget. The government’s manager then presents this proposed budget to the council for review during the month of April. The council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 30th, the close of the City’s fiscal year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Department heads may make transfers of appropriations within a department. Transfers of appropriations between funds, however, require the special approval of the governing council. Budget-to-actual comparisons are provided in this report for each individual fund for which an appropriated annual budget has been adopted. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Local economy. The City currently enjoys an economic environment that continues to grow and diversify. Local indicators point to continued stability and strength. The economy of Glendale is based on manufacturing, defense activities, services, private graduate schools, retail trade, restaurants and sports and entertainment. The Arizona Department of Economic Security currently lists the total labor force in the City as 130,060 for the period January through June 2004. Average employment for the same period last year is 125,786, demonstrating that the positive growth in jobs has kept pace with population growth. The City receives significant “State Shared Revenues” that are allocated to various funds. The State’s financial condition has improved significantly from last year’s economic slowdown. Therefore, the City does not anticipate an adverse impact on revenues received in future years. 2 The City of Glendale has continued to follow its strategy, developed by the Finance Department, to build fund balances. The growth in the various sectors of the City’s economy is reflective of the positive growth trends of the Phoenix metropolitan area and of the state of Arizona. The County’s population is approximately 3.39 million. The state’s population reached 5.58 million in 2003, representing a 2.59% increase over the previous fiscal year. Long-term financial planning. The Glendale Arena opened its doors on December 27, 2003, to a standing-room-only crowd of 18,000 hockey fans. The arena will host the National Hockey League’s All Star Game in 2006. This major-league hockey arena for the Phoenix Coyotes opened the door to an exciting era for the City, as well as the West Valley region. The arena has been host to a number of major concerts and special events. The Cardinals Stadium began construction in 2003. It is being built by the State’s Tourism and Sports Authority, and is currently the single-largest construction project in Arizona. The multi-purpose stadium will be home to the Arizona Cardinals, the Fiesta Bowl, 2008 Super Bowl, as well as other major events. The Ellman Companies are continuing to develop the 200-acre, mixed-used project adjacent to the arena, dubbed Westgate City Center. This development is strategically located at Glendale Avenue and the 101 freeway. Build-out for the mixed-use project should occur over the next seven to ten years. High profile tenants for the entertainment district of the project, including themed restaurants, trendy nightspots and a premium, 4,000-seat theater are awaiting the fall start of construction. As part of the development agreement with the Ellman Companies, a Wal-Mart Super Center opened in April 2004 as part of the Northern Crossing project, located at 57th and Northern Avenues. Currently a Lowe’s Home Improvement Store is under construction. This redevelopment effort has recharged a blighted property, and many more pads and shops will serve to reinforce this new thriving retail center. Substantial investments have been made by the City to enact and stay current on issues faced by the water and sewer system in addition to proceeding with the necessary federally mandated upgrades. These have been and continue to be funded with revenue bonds/obligations in order to meet the long-term needs of the City. The City has also updated new rate models and new rate increases have been implemented. The debt service funds of the City are backed by property taxes or excise taxes. The City has continued its practice of paying off its general obligation and revenue obligation bond debt rapidly. Cash management policies and practices. Staff invests temporarily idle cash in repurchase agreements collateralized by high quality U.S. government securities, the Arizona State Treasurer’s Local Government Investment Pool or U.S. Treasury obligations. The City’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits are either insured by the Federal Deposit Insurance Corporation or collateralized. All collateral on deposits is held by the City’s agent or financial institution’s trust department in the City’s name. Categorized investments are classified in credit risk category 1 as defined by the Governmental Accounting Standards Board (GASB). Risk management. During 2003-04, the City continued its self-insurance program for public liability and property damage claims. As part of the Risk Management Plan, resources are maintained in the risk management fund to meet potential losses. In the event of a deficit at June 30, premiums charged to other funds are increased in the following fiscal year to cover shortages. The City has implemented various risk control techniques such as employee accident prevention training to minimize accident-related losses. The Risk Management Division also conducts a competitive bidding process to obtain other types of commercial insurance. An employee benefit fund was established in prior years to help offset the rising benefit costs to the City. An actuarial study of health insurance funding indicated that creating a separate 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 Mayor & Council Boards & Commissions City Clerk Pam Hanna City Manager Ed Beasley City Court Judge Elizabeth Finn City Attorney Vacant Police Chief Randy Henderlite Fire Chief Mark Burdick Assistant City Manager Pam Kavanaugh City Auditor Candace MacLeod Intergovernmental Programs Miryam Gutier Deputy City Manager Community Information & Services Gloria Santiago-Espino Deputy City Manager Public Works Ken Reedy Chief Financial Officer Art Lynch Deputy City Manager Community Development Horatio Skeete 9 Library & Arts Rodeane Widom Engineering Larry Broyles Accounting Billing Customer Service Materials Management Building Safety Deborah Mazoyer Marketing & Communications Julie Frisoni Environmental Resources Doug Kukino Materials Warehouse Revenue Recovery Tax & License Economic Development Iain Vasey Parks & Recreation Warren Smith Field Operations Vacant Planning Jon Froke Deputy City Manager Neighborhood Services Tim Ernster Community Partnerships Erik Strunk Community Housing Karen Russell Community Revitalization Gilbert Lopez Neighborhood Partnerships Civic Center John Moses Report to Mayor & Council Utilities Roger Bailey Report to City Manager Report to Assistant City Manager Transportation Jim Book Report to Deputy City Managers Divisions Code Compliance Dan Gunn Community Action Program Norma Alvarez Budget & Management Sherry Schurhammer City Manager Relations Cathy Gorham Human Resources Alma Carmicle Information Technology Chuck Murphy This page left blank intentionally. 10 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ FINANCIAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 This page left blank intentionally. City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ MANAGEMENT’S DISCUSSION & ANALYSIS (Required Supplementary Information) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 This page left blank intentionally. CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (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, 2004. 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 2003-04 as follows. • The City’s total net assets increased $64,311 or 7.24%. The governmental net assets increased by $52,489 or 10.09% and the business-type net assets increased by $11,822 or 3.21%. • General revenues from governmental activities increased $9,448 or 6.07%, and were 74.96% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions increased $2,446 or 4.64%. • The business-type activities revenue decreased by $704 or 0.82%. • The total cost of all City programs increased by $22,592 or 10.31%. • A major governmental fund, the general fund, had $117,358 in revenues, which is an increase of $8,056 or 7.37% from the prior year. The primary sources of revenue in the general fund are local taxes and intergovernmental taxes. The total expenditures of the general fund were $102,522, which is a decrease of $1,448 or 1.39% from the prior year. The fund balance increased $11,620 or 23.69%. This increase resulted from increased tax and special assessments revenue, combined with planned expenditure reductions in general government. • The City issued 1) $80,000 in subordinate lien water and sewer bonds to fund the construction of various water and sewer improvements, 2) $36,645 in general obligation bonds to fund the construction of public improvements, and 3) $14,655 in street and highway user revenue bonds to fund the construction of certain street and highway public improvements. In addition, its municipal property corporation (MPC) issued the following: 1)$10,880 in excise tax revenue bonds to finance the refunding of certain outstanding improvement district bonds, and 2) $7,250 refunding bond issue to finance the refunding of other outstanding MPC bonds. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) 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 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (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 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (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 $952,310 as of June 30, 2004. 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 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (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, 2004, and 2003 (in thousands) Governmental Activities 2004 2003 Current and other assets Capital assets Total assets $ 276,340 746,074 1,022,414 $ Total Primary Government Business-type Activities 2004 2003 335,020 628,443 963,463 $ 175,854 395,684 571,538 $ 111,521 371,792 483,313 2004 $ 452,194 1,141,758 1,593,952 2003 $ 446,541 1,000,235 1,446,776 Current liabilities Long-term liabilities Total liabilities 67,010 382,919 449,929 88,803 354,664 443,467 27,021 164,692 191,713 22,960 92,350 115,310 94,031 547,611 641,642 111,763 447,014 558,777 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 353,135 169,434 49,916 572,485 259,802 127,393 132,801 519,996 228,252 10,479 141,094 379,825 275,204 10,235 82,564 368,003 581,387 179,913 191,010 952,310 535,006 137,628 215,365 887,999 $ $ $ $ $ $ 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. 16 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2004, were $306,082. The total cost of all programs and services was $241,771. The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2004, and 2003. Changes in Net Assets (in thousands) Governmental Activities 2004 2003 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues $ 27,228 24,503 3,429 55,160 $ 25,898 22,522 4,294 52,714 $ 75,378 7,643 168 83,189 General revenues: Property taxes Sales taxes State shared sales tax Urban revenue sharing (state shared income tax) Auto in-lieu taxes Investment earnings, unrestricted Gain (loss) on disposal of capital assets Loss on joint venture Miscellaneous Capital contributions Total revenues 18,321 74,763 18,409 16,739 63,832 17,113 19,731 8,978 315 9 349 24,614 220,649 23,288 8,619 (1,602) 445 299 27,042 208,489 1,115 (1,285) 2,414 85,433 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 24,003 56,176 13,883 33,914 3,446 20,425 142 15,838 167,827 20,209 52,625 11,411 32,210 3,433 20,308 148 7,223 147,567 52,822 60,922 Excess before transfers Transfers in (out) (333) Total Primary Government 2004 2003 Business-type Activities 2004 2003 $ - (67) 73,144 7,091 520 80,755 $ - 102,606 32,146 3,597 138,349 $ 99,042 29,613 4,814 133,469 18,321 74,763 18,409 16,739 63,832 17,113 (123) (725) (1,011) 7,241 86,137 19,731 8,978 1,430 9 (1,285) 349 27,028 306,082 23,288 8,619 (1,725) (280) (1,011) 299 34,283 294,626 45,628 7,164 12,294 8,858 73,944 43,442 7,784 12,353 8,033 71,612 24,003 56,176 13,883 33,914 3,446 20,425 142 15,838 45,628 7,164 12,294 8,858 241,771 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 11,489 14,525 64,311 75,447 333 67 - - Increase in net assets 52,489 60,855 11,822 14,592 64,311 75,447 Net assets, beginning Net assets, ending 519,996 572,485 459,141 519,996 368,003 379,825 353,411 368,003 887,999 952,310 812,552 887,999 $ $ $ $ $ The size of the increase in net assets results primarily from sustained economic growth including developer investment in city facilities and infrastructure. 17 $ CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (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 18 Housing CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Revenue Sources Fiscal Year 2003-04 Gain (loss) on disposal of capital assets 0.00% Investment earnings, unrestricted 0.46% Loss on joint venture 0.42% Miscellaneous 0.11% Capital contributions 8.76% Charges for services 33.24% Auto in-lieu taxes 2.91% Urban revenue sharing (state shared income tax) 6.39% Operating grants and contributions 10.41% State shared sales tax 5.96% Capital grants and contributions 1.17% Sales taxes 24.22% Property taxes 5.94% Functional Expenses Fiscal Year 2003-04 Housing 3.66% General government 9.93% Sanitation 5.08% Landfill 2.96% Public safety 23.24% Water and sewer 18.87% Interest on long-term debt 6.55% Public works 5.74% Other 0.06% Street maintenance 8.45% Community environment 1.43% 19 Community services 14.03% CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (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 $203,226, a decrease of $29,148 or 12.54% in comparison with the prior year. This decrease was due to capital outlay in the arena project fund. Excluding the arena project fund the City’s governmental funds had combined ending balances of $198,636, an increase of $51,161 or 35% in comparison with the prior year. • Unreserved undesignated fund balance, which is available for spending at the City’s discretion within a fund, was $117,165, a decrease of $42,416 or 26.58% from the prior year. This decrease resulted primarily due to the completion of the Glendale arena. Excluding the arena project fund the City’s governmental funds had total unreserved, undesignated funds of $117,165, an increase of 57% in comparison with the prior year. • The City also had $35,291 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 $ 9,582 22,113 14,332 98 4,645 $ 50,770 The general fund is the chief operating fund of the City. At the end of the current fiscal year, the unreserved fund balance of the general fund was $51,080, while total fund balance reached $60,662. 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 49.82% of total general fund expenditures, while total fund balance represents 59.17% of that same amount. The transportation fund accounts for the City’s public transit program. The fund saw an increase in fund balance of $8,899 for the fiscal year ended June 30, 2004. This increase is due to increased operating revenue over operating expenses. 20 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) The general obligation debt service fund accounts for the accumulation of resources for and payment of general obligation debt. The fund saw an increase in fund balance of $3,026 for the fiscal year ended June 30, 2004, due to more debt being repaid directly by revenues instead of property taxes. The special assessment debt service fund accounts for the accumulation of resources for and payment of special assessment debt. The fund saw a decrease in fund balance of $282 for the fiscal year ended June 30, 2004. This was due to a refunding of special assessment debt. The arena project fund accounts for bond proceeds received and expenses paid related to the construction of the Glendale arena. The fund saw a decrease in fund balance of $80,309 for the fiscal year ended June 30, 2004. This decrease is due to completion of construction of the Glendale arena. 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 $12,447 or 3.32%. The enterprise funds total net assets were 2.75% restricted and 37.24% unrestricted. Internal service funds were 100.0% unrestricted. The water and sewer fund accounts for operations, maintenance and construction projects of City-owned water and sewer systems. The fund saw an increase in net assets of $8,801 for the fiscal year ended June 30, 2004. This increase is due to 1) increased operating revenue greater than operating expenses, and 2) capital contributions. The landfill fund accounts for operations of the City-owned landfill. The fund saw an increase of $2,733 for the fiscal year ended June 30, 2004. This increase is due to an increase in operating revenues and a decrease in operating expenses. The internal service fund accounts for risk management, workers’ compensation, and employee benefits provided to other departments. The fund saw an increase of $573 for the fiscal year ended June 30, 2004. This is due to 1) self-insurance premiums being greater than operating expenses, and 2) investment income. 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 decrease in fair market value of the City’s investments and decrease in interest rates. • General fund revenues exceeded the final amended budget by $10,533 or 8.12%, primarily due to the sale of Northern Crossing. • General fund expenditures were less than the final amended budget by $14,776 or 11.32%. This positive variance resulted from $5,706 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, 2004, for its governmental type activities was $746,074 and for the business type activities was $395,684. 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. 21 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Major capital asset events during the current fiscal year included the following: • Construction of the Glendale Arena, $188,951; • Three new fire trucks, $1,105; • Westside Public Safety Building, $5,269; • The City invested an additional $1,844 on enhancements at the Cholla Water Treatment Plant; and • Modifications were made to the West Area Water Reclamation Facility totaling $26,030. The following table is a summary of capital assets reflected in the June 30, 2004, as compared to last year’s financial statements. Capital Assets at Year End (Net of depreciation) (in thousands) Construction in progress Land Artwork Buildings Improvements other than buildings Infrastructure-streets Infrastructure-parks Infrastructure-airport Infrastructure-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 2004 2003 44,460 $ 136,486 43,930 42,679 1,175 1,166 132,054 42,739 76,565 21,080 359,367 320,097 23,729 12,031 7,589 4,159 25,532 25,636 22,034 13,636 510 503 270 341 8,859 7,890 746,074 $ 628,443 $ $ Business-type Activities 2004 2003 52,028 $ 34,788 9,477 9,477 9,589 9,844 9,345 5,296 63,698 62,733 78,953 68,537 56,395 58,940 83,802 85,607 21,479 22,235 3,783 3,884 692 4,583 327 145 6,116 5,723 395,684 $ 371,792 $ $ Total Primary Government 2004 2003 96,488 $ 171,274 53,407 52,156 1,175 1,166 141,643 52,583 85,910 26,376 359,367 320,097 23,729 12,031 7,589 4,159 25,532 25,636 63,698 62,733 78,953 68,537 56,395 58,940 83,802 85,607 21,479 22,235 3,783 3,884 22,726 18,219 837 648 270 341 14,975 13,613 1,141,758 $ 1,000,235 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 $552,323, compared to the $460,904 last year, a 19.83% net increase. Of this amount, $170,545 comprises debt backed by the full faith and credit of the City and $109 is special assessment debt for which the City is liable in the event of default by the property owners subject to the assessment. 22 CITY OF GLENDALE, ARIZONA Management’s Discussion and Analysis (MD&A) For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) 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 2004 2003 153,688 $ 127,104 109 12,036 22,730 20,030 180,230 14,704 17,098 388,559 $ 170,590 14,971 20,193 364,924 $ $ Business-type Activities 2004 2003 16,857 $ 19,031 11,005 121,470 14,432 163,764 $ 12,838 49,280 14,831 95,980 $ Total Primary Government 2004 2003 170,545 $ 146,135 109 12,036 22,730 20,030 $ 180,230 25,709 121,470 31,530 552,323 $ The City’s total long-term debt increased by $91,419 from the prior year. The key factor in this increase was an $80,000 water and sewer revenue bond issue for various water and sewer improvements. 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, 2004, was $15,402 and $114,850, 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 2004-05 budget is $653,000 (up 10.11% from 2003-04), including a $268,000 operating budget (an increase of 13.08% from 2004) and $287,000 in capital outlay (down 2.26% from 2004). The fiscal year 2004-05 budget includes $51,000 contingency appropriation to cover emergency expenses or revenue shortages. • Fiscal year 2003-04 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 2004 was 4.1%, which is a decrease from a rate of 6.5% a year ago. This compares favorably to the state’s average unemployment rate of 5.1% and the national average rate of 5.4%. 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. 23 170,590 27,809 49,280 35,024 460,904 This page left blank intentionally. 24 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ BASIC FINANCIAL STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 This page left blank intentionally. City of Glendale, Arizona Statement of Net Assets June 30, 2004 (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 $ 225,399 $ 779 10,254 745 5,788 645 4,862 21,337 50,068 Total $ 275,467 779 19,255 803 6,241 6,272 93,208 9,001 58 453 (645) 1,410 71,871 . LIABILITIES Vouchers payable Accounts payable Retainage payable Accrued expenses Accrued interest payable Intergovernmental payable Deposits 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 Primary Government Business-type Activities $ 89,565 656,509 6,531 1,022,414 61,505 334,179 6,490 37,148 571,538 151,070 990,688 6,531 6,490 37,148 1,593,952 23,920 409 51 6,901 148 506 8,019 6,631 49 584 1,096 3,954 242 647 - 30,551 458 635 1,096 10,855 390 1,153 8,019 27,056 382,919 449,929 13,818 164,692 191,713 40,874 547,611 641,642 353,135 228,252 581,387 102,148 14,721 4,770 47,795 49,916 572,485 2,255 6,900 1,324 141,094 379,825 102,148 16,976 6,900 4,770 49,119 191,010 952,310 The notes to the financial statements are an integral part of this statement. 25 $ $ City of Glendale, Arizona Statement of Activities For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) 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 $ $ 24,003 56,176 13,883 33,914 3,446 20,425 142 15,838 167,827 45,628 7,164 12,294 8,858 73,944 241,771 $ $ 9,092 1,043 148 16,942 3 27,228 52,456 9,593 12,817 512 75,378 102,606 Program Revenues Operating Grants and Contributions $ $ 135 2,198 76 2,216 3,469 16,409 24,503 1 7,642 7,643 32,146 Capital Grants and Contributions $ $ 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 on disposal of capital assets Loss on joint venture Miscellaneous Capital contributions Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The notes to the financial statements are an integral part of this statement. 26 262 2,719 448 3,429 15 153 168 3,597 Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ $ (14,776) (52,935) (13,397) (12,037) 26 (3,568) (142) (15,838) (112,667) $ - $ (14,776) (52,935) (13,397) (12,037) 26 (3,568) (142) (15,838) (112,667) (112,667) 6,843 2,430 523 (551) 9,245 9,245 6,843 2,430 523 (551) 9,245 (103,422) 3,480 14,841 74,763 18,409 19,731 8,978 315 9 349 24,614 (333) 165,156 52,489 519,996 572,485 1,115 (1,285) 2,414 333 2,577 11,822 368,003 379,825 3,480 14,841 74,763 18,409 19,731 8,978 1,430 9 (1,285) 349 27,028 167,733 64,311 887,999 952,310 $ $ 27 City of Glendale, Arizona Balance Sheet Governmental Funds June 30, 2004 (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 $ 63,169 $ 147 7,313 692 1,345 2,514 356 441 3,522 79,499 $ $ The notes to the financial statements are an integral part of this statement. 11,822 395 688 146 437 5,349 18,837 Major Funds General Obligation Debt Service Transportation $ 25,871 $ 1,592 124 27,587 $ 772 51 21 10 854 $ 17,889 $ 632 18,521 $ 1 2,411 435 7,115 9,962 Special Assessment Debt Service $ 174 $ 32 206 $ Other Non-major Governmental Funds Arena Project 3 33 36 $ 1,123 $ 10,570 11,693 $ 7,103 7,103 $ 103,953 $ 1,302 53 3,149 282 10,162 2,976 121,877 $ 4,095 7 71 2 1,288 69 4,425 5,385 4,023 19,365 Total Governmental Funds $ 212,179 $ 779 10,207 745 1,345 5,787 638 21,173 6,530 259,383 $ 23,793 402 51 780 148 1,288 506 6,839 11,212 11,138 56,157 9,582 - 8,559 170 - 32,459 50,770 3,791 - 299 - - 4,590 563 26,048 3,791 563 30,937 47,289 60,662 79,499 26,434 26,733 27,587 8,559 18,521 170 206 4,590 11,693 2,810 40,632 102,512 121,877 47,289 29,244 40,632 203,226 259,383 $ $ $ $ $ $ City of Glendale, Arizona Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2004 (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 $ 203,226 958,696 (212,622) 746,074 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 4,551 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. 6,664 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 (345,618) (31,802) (9,415) (4,381) (391,216) 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 3,248 $ The notes to the financial statements are an integral part of this statement. 29 572,485 City of Glendale, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2004 (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) Payment to refunded bonds escrow agent Discount on long-term debt Long-term debt issued Premium on long-term debt issued Proceeds from equipment disposal Capital lease proceeds Other uses: Transfers in Transfers out Total other financing sources and uses Transportation $ $ 19,022 1,734 167 342 3 21,268 $ 15,005 15,005 Special Assessment Debt Service $ 372 372 Other Non-Major Governmental Funds Arena Project $ 183 9 264 456 $ 4,930 7,597 24,271 2,540 983 986 41,307 Total Governmental Funds $ 93,655 16,667 73,166 4,824 3,169 1,511 2,774 195,766 15,471 47,901 12,710 18,729 - 8,026 - 271 58 484 113 616 - 1,319 5,791 106 2,635 3,311 9,811 226 17,274 53,805 12,816 30,006 3,311 9,811 555 1,535 981 5,613 102,940 5,226 13,252 7,115 4,593 11,979 982 692 1,732 79,552 80,765 8,458 9,732 30,442 71,831 18,090 15,998 120,833 282,499 14,418 8,016 3,026 (1,360) (80,309) (30,524) (86,733) 8,198 428 - - (10,945) - - (10,317) (82) 69,522 1,114 - (21,262) (82) 69,522 1,114 8,198 428 - 12,023 1,078 - 19,934 (21,749) 58,422 32,943 (33,276) 57,585 86 (11,510) (2,798) Net change in fund balances Fund balances, July 1 Fund balances, June 30 54,326 8,887 47,161 2,108 3,169 (78) 1,785 117,358 Major Funds General Obligation Debt Service 900 (17) 883 11,620 8,899 3,026 (282) (80,309) 27,898 (29,148) 49,042 60,662 17,834 26,733 5,533 8,559 452 170 84,899 4,590 74,614 102,512 232,374 203,226 The notes to the financial statements are an integral part of this statement. $ $ $ $ $ $ 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, 2004 (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 $120,833 exceeded depreciation of $25,540 for the current period. The net effect of various transactions involving capital is to increase net assets. Capital contributions Disposals Gain on sales (29,148) 95,293 $ 24,614 (8,198) 9 16,425 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. The net effect of long-term debt issuance and the related transactions is to decrease net assets. Lease proceeds Bond refunded Bond premium Bond discount Bonds issuance costs Principal paid Debt issued 209 (428) 21,262 (1,114) 82 1,456 18,090 (69,522) (30,174) 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. (544) Internal service funds are used by management to charge the costs of fleet management and management information systems to individual funds. 416 The net revenue of certain activities of internal service funds is reported with governmental activities. 11 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 1 $ The notes to the financial statements are an integral part of this statement. 31 52,489 City of Glendale, Arizona Statement of Net Assets Proprietary Funds June 30, 2004 (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 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: Debt service Revenue bond retirement, replacement and extension Other purposes Unrestricted Total net assets $ $ 29,928 $ 18,681 $ 1,459 Total $ 50,068 6,870 (187) 58 6 1,405 38,080 746 (4) 19,423 1,600 (24) 447 5 3,487 9,216 (215) 58 453 1,410 60,990 69,563 1,835 473 71,871 476,244 (105,560) 370,684 6,490 37,148 483,885 521,965 20,477 (4,940) 15,537 17,372 36,795 19,565 (10,102) 9,463 9,936 13,423 Governmental Activities Internal Service Funds $ 13,221 47 260 13,528 165 516,286 (120,602) 395,684 6,490 37,148 511,193 572,183 165 13,693 6,213 584 721 1,096 171 462 - 292 146 81 - 126 49 201 57 71 101 3 - 6,631 49 584 1,068 1,096 57 242 644 3 - 132 5,259 2,690 198 6,330 27 772 3,825 23,089 162 1,454 110 2,245 1,117 19 1,744 2,852 198 6,330 2,598 772 3,954 27,078 5,391 313 13,135 3,469 115,140 13,661 57 145,775 168,864 52 870 6,466 9,443 16,831 19,076 157 43 1,886 2,086 3,830 522 14,005 3,469 115,140 43 13,661 8,409 9,443 164,692 191,770 56 1,582 1,638 7,029 215,206 6,585 6,461 228,252 - 2,255 6,900 677 128,063 353,101 11,134 17,719 647 2,485 9,593 2,255 6,900 1,324 141,682 380,413 6,664 6,664 $ Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds Net assets of business-type activities The notes to the financial statements are an integral part of this statement. 32 $ $ (588) 379,825 $ 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, 2004 (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 $ 14 26,321 19,452 1,149 46,936 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) 13,036 9,149 9,260 9,475 40,920 6,016 Nonoperating revenues (expenses): Impact fees Investment income Interest expense Net loss from joint venture Bond issuance cost Gain (loss) on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 5,485 788 (4,620) (1,285) (30) 50 388 Income before contributions and transfers Capital contributions Transfers in Transfers out Change in net assets Total net assets - beginning Total net assets - ending $ $ 5,064 441 1,122 6,627 2,761 2,733 2,733 344,300 353,101 $ 14,986 17,719 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities The notes to the financial statements are an integral part of this statement. 33 7,643 4,564 8,136 520 20,863 $ 8,498 11,330 1,168 20,996 (133) 207 307 (461) (81) (28) 6,404 2,414 (17) 8,801 $ 7,117 2,239 32 9,388 Totals 7,657 26,321 19,452 4,564 8,136 7,117 2,239 1,701 77,187 Governmental ActivitiesInternal Service Funds $ 13,036 9,149 5,064 8,498 441 11,330 9,260 11,765 68,543 8,644 16,645 16,645 16,281 16,281 364 107 20 (112) (45) 153 123 5,799 1,115 (5,193) (1,285) (30) (76) 153 483 209 209 (10) 350 340 9,127 2,414 350 (17) 11,874 573 2,500 (2,500) 573 9,253 9,593 $ $ (52) 11,822 6,091 6,664 City of Glendale, Arizona Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) 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 operating activities $ Cash flows from (used) for noncapital financing activities: Cash received from federal government Proceeds from issuance of long-term debt Proceeds from sale of investments Transfers in Transfers out Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Proceeds from sale of capital assets 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 provided by or used for capital and related financing activities Cash flows from investing activities: Interest received from investments Net cash provided by investing activities Net increase in cash and cash equivalents during fiscal year Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ 46,638 - $ 9,118 - $ 13,110 7,558 Totals $ 68,866 7,558 Governmental Activities Internal Service Funds $ 16,647 - (5,949) (16,217) (1,203) (1,860) (6,594) (8,483) (13,746) (26,560) - (7,586) 16,886 (1,866) 4,189 (4,616) 975 (14,068) 22,050 (16,600) 47 73 (17) - 14 29 350 - 73 14 29 350 (17) - 56 - 393 449 - 55 85,563 (12,759) (38,631) 5,485 (2,457) - (1,633) (107) 207 (440) - 655 (984) (514) 107 (109) 153 55 85,563 655 (15,376) (39,252) 5,799 (3,006) 153 - 37,256 (1,973) (692) 34,591 - 823 823 308 308 20 20 1,151 1,151 209 209 55,021 2,524 696 58,241 256 44,470 99,491 $ The notes to the financial statements are an integral part of this statement. 34 17,992 20,516 $ 1,236 1,932 $ 63,698 121,939 $ 13,130 13,386 Business-type Activities - Enterprise Funds Other Major Funds Proprietary Water and Sewer Landfill Funds Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Amortization and Depreciation Less cash received from federal government Changes in assets and liabilities: Accounts receivable Intergovernmental receivable Inventories and prepaid items Accounts payable Vouchers payable Accrued expenses Intergovernmental payable 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 $ 6,016 $ 9,475 (73) $ $ $ 16,886 29,928 69,563 99,491 2,414 (1,285) $ 1,122 - (295) 59 (958) (61) 3,560 (924) 11 76 - $ 2,761 $ $ $ 35 441 4,189 18,681 1,835 20,516 - $ 1,168 - (265) 107 (4) 27 - $ (133) Totals $ $ $ 975 1,459 473 1,932 - $ 11,765 (73) (106) (100) 18 71 (1) 15 53 (5) (1) (4) - $ 8,644 Governmental Activities Internal Service Funds - (666) (41) (958) (43) 3,738 (925) 15 53 2 (1) 99 - $ $ $ $ 441 22,050 50,068 71,871 121,939 2,414 (1,285) 364 (47) 9 (42) (427) 49 141 $ $ $ $ 47 13,221 165 13,386 - CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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 ............................. 45 Deposits and Investments ........................................................................................................ III ............................. 45 Capital Assets ..........................................................................................................................IV ............................. 47 Construction and Other Significant Commitments................................................................... V ............................. 49 Self-Insurance Funds ...............................................................................................................VI ............................. 49 Leases .....................................................................................................................................VII ............................. 51 Short-Term Debt................................................................................................................... VIII ............................. 52 Long-Term Debt ......................................................................................................................IX ............................. 52 Landfill Obligations.................................................................................................................. X ............................. 61 Interfund Transactions.............................................................................................................XI ............................. 62 Encumbrances.........................................................................................................................XII ............................. 64 Equity in Joint Venture......................................................................................................... XIII ............................. 64 Jointly Governed Organizations ........................................................................................... XIV ............................. 65 Related Party Transaction...................................................................................................... XV ............................. 65 Fund Balance/Net Assets Reservation, Designation, and Restriction................................... XVI ............................. 65 Employee Retirement Systems and Pension Plans ..............................................................XVII ............................. 70 Other Post-Employment Benefits ...................................................................................... XVIII ............................. 72 Contingent Liabilities and Commitments ............................................................................. XIX ............................. 72 Subsequent Events................................................................................................................. XX ............................. 73 36 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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, workers’ 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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 financial resources to be used by cemetery fund. 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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, 2004, the postage portion of the general fund supplies inventory was $46. 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 $5,193. In addition, $630 was included as part of the cost of capital assets under construction in connection with water and sewer projects. 41 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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, 2004, is $2,390. 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, 2004, the City has capitalized payment of $4,100 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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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, 2003 August 18, 2003 October 1, 2003 March 1, 2004 November 3, 2003 May 3, 2004 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, 2004, is as follows: Fund General fund General obligation debt service fund Total Rate $ 0.34 1.38 $ 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 80 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, 2004, and 2) sick leave, taken and paid for illness during that period, paid to terminating employees or paid under the optional annual declaration. Long-term liabilities of governmental funds are not shown on the fund financial statements. For the government-wide financial statements, as well as the proprietary fund financial statements, all of the outstanding vacation, compensatory time, and sick leave are recorded as a liability. O. Deferred revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. 43 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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 2003-04 was $1,338. II. Compliance - Excess of expenditure over appropriations For the year ended June 30, 2004, expenditures exceeded appropriations in the highway user debt service fund and housing fund (the legal level of budgetary control) by $54 and $496, respectively. These overexpenditures were funded by available fund balance in the housing fund, in addition to operating transfers in the highway user debt service fund. 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 $54,218. The bank ledger balances were $54,216, of which $270 was insured by the Federal Depository Insurance Corporation (FDIC), $101,751 was collateralized by the bank’s agent in the City’s name, covering $53,946. 45 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) At year-end, the carrying amount of the City’s cash with fiscal agents totaled $917. 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, $677 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. 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 Trust Money Market 2,068 26,633 110,337 153,320 585 630 6,505 12,964 498 Total investments $ 46 313,540 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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, 2004, is as follows: Balances June 30, 2003 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 $ 136,486 42,679 1,166 180,331 Additions $ 131,614 633 132,247 Transfers $ Disposals (223,640) 618 9 (223,013) 68,158 58,016 412,132 19,867 27,975 8,199 17,270 1,179 495 22,771 636,062 819 6,959 159 813 71 20 2,161 11,002 (25,419) (36,936) (92,035) (7,836) (2,339) (4,040) (3,634) (676) (154) (14,881) (187,950) (3,446) (4,546) (10,905) (874) (378) (269) (2,505) (243) (91) (2,287) (25,544) - 448,112 (14,542) 223,013 628,443 47 $ 117,705 $ 91,942 60,031 43,216 12,572 115 3,699 10,087 186 1,165 223,013 $ - $ - Balances June 30, 2004 $ 44,460 43,930 1,175 89,565 (33) (23) (890) (946) 160,919 118,047 462,307 32,439 28,249 11,898 28,137 1,413 515 25,207 869,131 36 16 820 872 (28,865) (41,482) (102,940) (8,710) (2,717) (4,309) (6,103) (903) (245) (16,348) (212,622) (74) 656,509 (74) $ 746,074 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Balances June 30, 2003 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 $ 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 $ 32,653 1 1,652 482 9,477 44,265 Additions $ 32,331 149 113 32,593 Transfers $ - 13,520 7,276 82,860 97,159 90,596 90,384 27,650 5,187 8,266 934 14,090 437,922 212 2,999 2,364 12,283 26 290 105 32 356 18,667 (3,676) (1,980) (20,127) (28,622) (31,656) (4,777) (5,415) (1,303) (3,683) (789) (8,367) (110,395) (488) (505) (1,399) (1,867) (2,571) (2,095) (756) (101) (312) (98) (1,502) (11,694) (644) 915 (237) 34 327,527 6,973 34 371,792 48 $ 39,566 Disposals $ 21 2,200 (4,315) 252 1,842 - $ 34 (13,284) (150) (1,652) (267) (15,353) Balances June 30, 2004 $ (4) (462) (5) (1,337) (1,808) 13,753 12,471 85,224 109,442 90,622 90,674 27,650 5,187 3,594 1,213 14,951 454,781 3 178 1 1,271 1,453 (4,164) (3,126) (21,526) (30,489) (34,227) (6,872) (6,171) (1,404) (2,902) (886) (8,835) (120,602) (355) $ 51,700 328 9,477 61,505 (15,708) 334,179 $ 395,684 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Depreciation was charged to functions/programs as follows: V. Governmental activities: General Public safety Public works Street maintenance Community services Community environment Total depreciation expense $ 7,208 2,454 1,105 10,654 3,976 147 $ 25,544 Business-type activities: Water and sewer Landfill Sanitation Housing Total depreciation expense $ 9,404 1,122 809 359 $ 11,694 Construction and other significant commitments The City has active construction projects as of June 30, 2004. The projects include street construction, park facilities, field operation complex, and the construction of additional water and sewer facilities. At year-end the government’s commitments with contractors are as follows: VI. Project Spent-to-Date Construction Commitment General government Community services Public safety Public works Street maintenance Water and sewer facilities Total governmental activities $ $ $ 606 10,490 2,479 22,157 8,728 51,041 95,501 $ 127 3,267 355 3,606 6,525 14,314 28,194 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. 49 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) 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 On July 1, 2000, the City established an employee benefits fund to meet future cost increases for healthrelated 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, mini-premium and selfinsured insurance plans. The medical insurance plan covers individual claims in excess of $150 for each plan year. These premiums are set prior to the beginning of each plan year equal to 105% of the expected claims liability. 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. 50 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) 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 $6,841 as of June 30, 2004. Changes in the balances of claims liabilities during the past two years are as follows: Risk Management 2004 2003 Unpaid claims, beginning of fiscal year Current year claims and changes in estimate Claims payments $ Balance at fiscal year end $ 2,318 $ 1,462 (1,212) 1,644 Workers' Compensation 2004 2003 $ 3,208 (2,534) 2,568 $ 2,318 2,503 $ 435 (744) $ 2,194 1,868 Employee Benefits 2004 2003 $ 2,060 (1,425) $ 2,503 1,879 $ 11,847 (11,647) $ 2,079 1,448 11,653 (11,222) $ 1,879 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, 2004, is as follows: Capital Leases Year Ending June 30 2005 2006 2007 2008 2009 2010-2014 2015-2019 Total minimum lease payments Less: Amount representing interest Present value of net minimum lease payments 51 $ $ 4,556 4,210 3,712 3,295 3,137 13,436 303 32,649 (6,941) 25,708 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) 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 $ $ $ 472 2,975 197 5,493 9,137 (2,943) 6,194 $ 2,905 5,108 6,800 2,498 17,311 (5,102) 12,209 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. Combined annual rental payments in fiscal year 2003-04 were $216. 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 $204,806 (cost of $209,466 less accumulated depreciation of $4,660). The leased properties and buildings are included as capital assets in the government-wide financial statements. Certain leases contain provisions for future increased revenues based upon changes in the Consumer Price Index. Scheduled minimum revenues for non-cancelable leases for succeeding fiscal years ending June 30 are as follows: Fiscal Year 2005 2006 2007 2008 Beyond 2009 Total Total Revenues $ 1,072 1,065 955 397 980 $ 4,469 VIII. Short-term debt The City did not issue short-term debt for the year ended June 30, 2004. IX. 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. 52 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) B. Revenue bonds Highway User Revenue Bonds are used to construct street and highway projects. The debt service is repaid through the highway user revenue fund, a special revenue fund, from the City’s share of the gasoline taxes that are collected by the State of Arizona and distributed to cities and towns based on a formula of population and gasoline sales within the county. Water and Sewer Revenue Bonds are issued, pursuant to voter authorization, for the construction, acquisition, and equipping of water and sewer facilities and related systems and infrastructure. The bonds are backed by the revenues of the water and sewer systems. C. Municipal property corporation bonds (MPC) In 1982, 2002, and 2003 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, July 31, 2002, and May 1, 2003, 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. In addition, on April 1, 2004, the City entered into a lease agreement with the MPC to issue bonds to finance an escrow account to refund certain outstanding City improvement district bonds. 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, February 1, 2003, July 1, 2003, and January 1, 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, 2004, 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. 53 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) E. Changes in long-term liabilities The following is a summary of changes in long-term liabilities reported in the governmental activities financial statements for the year ended June 30, 2004. June 30, 2003 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 $ Additions 127,104 $ June 30, 2004 Reductions 36,645 $ (10,061) $ 153,688 Amounts Due Within One Year $ 8,583 12,036 - (11,927) 109 34 20,030 170,590 329,760 14,655 18,222 69,522 (11,955) (8,582) (42,525) 22,730 180,230 356,757 275 2,280 11,172 14,971 20,193 35,164 428 428 (695) (3,095) (3,790) 14,704 17,098 31,802 963 2,336 3,299 9,539 6,700 655 13,747 (13,606) 10,194 6,841 7,081 5,259 3,425 291 19,955 1,114 15,516 (158) (291) (14,055) 4,381 21,416 245 12,585 384,879 $ 85,466 $ (60,370) $ 409,975 $ 27,056 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. 54 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) The following is a summary of changes in long-term liabilities reported in the business-type activities financial statements for the year ended June 30, 2004. June 30, 2003 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 17,845 1,186 $ Reductions - 609 49,280 14,831 12,838 3,203 80,000 907 655 9,003 1,492 29 107,113 440 98 14 85,317 $ June 30, 2004 $ (2,020) (154) $ (145) (7,810) (1,305) (2,486) $ (13,920) $ 15,825 1,032 Amounts Due Within One Year $ 2,690 162 3,667 121,470 14,433 11,007 198 6,330 772 2,598 9,443 1,590 43 178,510 1,068 13,818 $ 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, 2004. However, a current refunding was done. The remaining balance of bonds considered defeased at June 30, 2004, are as follows: Issue Refunded Date Refunded Water and sewer G.O. bonds: Series 1984 May 1, 1985 55 Remaining Balance $ 2,225 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) G. Bonds payable Bonds payable at June 30, 2004, 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 Various 5.00-5.40 2000 2015 Various 2.50-5.00 2002 2022 Various 1.50-5.00 2003 2022 Various 3.00-5.00 2004 2019 Total Amount of Original Issue Bonds Outstanding June 30, 2004 $ $ Revenue bonds payable from highway user revenue funds Streets 5.00-5.37 2000 2010 Streets 2.50-4.00 2004 2014 Total 36,125 12,000 20,215 40,235 52,525 36,645 8,750 14,655 4,210 6,696 17,627 37,985 50,525 36,645 153,688 8,075 14,655 22,730 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 MPC refunding 4.70-4.70 2004 2033 7,250 MPC excise tax 2004A 2.00-5.00 2004 2014 10,880 Total 9,095 5,055 49,940 98,010 7,250 10,880 180,230 Special assessment bonds payable due from assessments on property owners District 73 5.35 1997 2007 299 Total 109 109 Total bonds payable recorded in governmental activities Less current portion Long-term portion of bonds payable recorded in governmental activities 56 $ 356,757 (11,172) 345,585 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) 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 Water and sewer 1.50-5.00 2003 Total 2007 2022 20,375 13,875 1,950 13,875 15,825 Revenue bonds payable from water and sewer fund Refunding 4.25-4.50 1994 Various 4.75-5.75 2000 Various 4.00-5.00 2004 Total 2005 2010 2023 17,010 5,300 80,000 1,465 40,005 80,000 121,470 Purpose Interest Rate G.O. bonds payable from landfill fund Landfill 5.00-5.40 Amount of Original Issue Bonds Outstanding June 30, 2004 $ $ 1,460 Total bonds payable recorded in business-type activities Less current portion Long-term portion of bonds payable recorded in business-type activities $ 1,032 138,327 (9,182) 129,145 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, 2004, is as follows: 6% Capacity to incur bonded debt Less: Bonded debt applicable to limit Unused bonded debt capacity $ $ 64,801 (49,399) 15,402 20% $ $ 216,003 (101,153) 114,850 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. 57 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) H. Bonds authorized, issued and unissued Bonds authorized but not fully issued as of July 1, 2004, as shown below: G.O. Bonds Voter authorized October 20, 1981 Operations center Authorized Amount $ Voter authorized March 10, 1987 Library 6,750 Issued through June 30, 2004 $ 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 15,023 18,215 35,412 23,837 Governmental facilities(1) 40,910 12,055 28,855 Landfill development(1) Library Open spaces Parks and recreation Public safety 17,000 15,398 53,700 57,188 64,801 1,460 3,175 41,981 3,438 15,540 15,398 50,525 15,207 61,363 Streets and parking(1) 38,050 22,787 15,263 6,935 418,005 185 123,742 Voter authorized November 2, 1999 Transit(1) Total G.O. bonds $ $ $ 6,750 294,263 Revenue bonds Voter authorized March 10, 1987 Streets and highway Water and sewer $ 57,770 56,000 $ 47,890 49,657 $ 9,880 6,343 Voter authorized November 2, 1999 Water and sewer(1) Total revenue bonds Total bonds 10,000 123,770 $ 541,775 97,547 $ 221,289 10,000 26,223 $ 320,486 (1) Certain General Obligation Bonds or Revenue Bonds can be issued as General Obligation Bonds, Revenue Bonds or a combination thereof. 58 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) I. 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. 1,089 Northern Crossing Land 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 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 1,500 9 $ 17,098 (2,336) 14,762 $ 2,391 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 $12,598 was drawn down and recorded as a liability as of June 30, 2004. 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. 12,041 Total notes payable recorded in business-type activities Less current portion Long-term portion of notes payable recorded in business-type activities 14,432 (771) 13,661 59 $ CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) J. Debt service requirements Fiscal Year Ending 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 $ 3,179 2,727 2,723 2,723 2,728 2,727 2,723 2,726 2,728 2,725 27,709 Landfill G.O. Bonds Municipal Property Corporation Bonds Special Assessment District Bonds $ $ $ 5,254 $ 22,455 $ 215 215 216 216 139 1,001 10,902 11,656 11,486 11,442 12,509 11,006 11,542 11,657 11,689 11,753 9,848 9,906 12,275 12,330 12,384 12,442 12,497 12,549 12,605 13,249 13,308 13,363 13,420 13,478 12,674 13,611 13,671 13,732 6,532 8,563 358,079 131 180,129 870 $ 177,950 $ Various Purposes G.O. Notes Bonds Payable 39 39 40 118 $ 17,219 16,676 14,727 14,098 12,634 12,768 12,759 12,777 12,820 12,835 12,815 10,652 10,583 10,530 6,092 2,759 2,761 2,762 198,267 9 109 $ G.O. Bonds Water and Sewer Notes Revenue Payable Bonds Total 3,220 3,330 3,337 2,669 2,466 2,364 2,364 2,364 2,364 24,478 $ 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 1,214 17,541 $ 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 22,018 $ 10,961 10,975 10,996 11,017 11,012 11,010 6,568 6,568 6,564 6,568 6,564 6,568 6,569 6,567 6,566 6,566 6,567 6,568 7,693 7,696 7,694 7,693 7,696 7,697 190,943 $ 53,162 9,716 4,406 8,358 75,803 336,968 $ 145,105 $ 14,762 $ 13,135 $ 13,660 $ 115,140 $ 503,186 The following table discloses the debt service requirements as of June 30, 2004, segregating principal and interest, for the next five years and in five-year increments thereafter. Fiscal Year 2005 2006 2007 2008 2009 2010-2014 2015-2019 2020-2024 2025-2029 2030-2034 Total Principal $ 25,025 25,730 23,705 23,409 23,682 102,447 89,303 67,690 72,850 49,345 $ 503,186 Interest $ 23,957 23,140 22,216 21,148 20,199 91,444 61,516 42,411 24,173 6,764 $ 336,968 60 Total $ 48,982 48,870 45,921 44,557 43,881 193,891 150,819 110,101 97,023 56,109 $ 840,154 48,982 48,870 45,921 44,557 43,881 42,260 38,336 38,472 38,553 36,270 31,605 29,491 31,782 31,770 26,171 22,896 22,954 23,008 20,298 20,945 21,002 21,056 21,116 21,175 12,674 13,611 13,671 13,732 6,532 8,563 840,154 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) K. New bonds 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 August 1, 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. This transaction resulted in a total economic gain of $455 and a reduction of $1,886 in future debt service payments. This current refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $0. On December 1, 2003, the City issued $80,000 in subordinate lien water and sewer bonds to fund the construction of various water and sewer improvements in the City. The bonds mature on various dates starting 2011 through 2023 with various interest rates of 4.0% to 5.0%. The bonds are not general obligations of the City, but are a limited obligation of the City and are payable as to both principal and interest solely from and secured by a subordinate pledge of net revenues of the system. On May 1, 2004, the City issued $10,880 of Municipal Property Corporation (MPC) Excise Tax Revenue Bonds Series 2004A to finance the refunding of certain outstanding improvement district bonds. The bonds mature on various dates starting 2005 through 2014 with various interest rates of 2.0% to 5.0%. 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. This transaction resulted in a total economic gain of $1,118 and a reduction of $655 in future debt service payments. This current refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of ($65). On June 1, 2004, the City issued $36,645 in general obligation bonds to fund the construction of public improvements in the City. The bonds mature on various dates starting 2005 through 2014 with various interest rates of 3.0% 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 June 1, 2004, the City issued $14,655 in street and highway user revenue bonds to fund the construction of certain street and highway public improvements in the City as well as refund portions of the City’s highway revenue bonds. The bonds mature on various dates starting 2005 through 2019 with various interest rates of 2.5% to 4.0%. The bonds are not general obligations of the City, but are limited obligations of the city and are payable as to both principal and interest solely from revenues received by the City from highway user taxes collected by the State. This transaction resulted in a total economic gain of $131 and a reduction of $140 in future debt service payments. This current refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $40. 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. 61 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) The landfill closure and post-closure care liability at June 30, 2004, 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, 2004 as of June 30, 2003 22,594 15,910 70% $ 14,322 14,099 $ 13,411 13,202 Closure and post-closure care costs: Amount remaining to be recognized as of June 30, 2004 $ 14,322 $ 3,968 Liability recognized as of June 30, 2004 $ - $ 9,443 These amounts are based on what it would cost to perform all closure and post-closure care in fiscal year 2003-04. 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 41 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, 2004, 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 Due To 1,345 Due From $ - - Non-major enterprise funds: Housing fund Total $ 1,345 148 791 349 $ 57 1,345 The interfund balances at June 30, 2004, 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, 2004, are expected to be repaid within one year. 62 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) B. Interfund transfers Interfund transfers for the year ended June 30, 2004, consisted of the following: Transfers to general fund from: Transportation special revenue fund Non-major governmental funds Highway users gas tax special revenue fund Streets 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 MPC debt service fund Total transfers to special assessment debt service funds Transfers to non-major governmental funds from: General fund Transfers to non-major debt service funds from: General fund MPC special revenue fund Non-major governmental funds Highway users gas tax special revenue fund Total transfers to non-major debt service funds $ 17 8 30 14 17 86 900 695 11,328 12,023 2,327 7,087 4,914 5,455 17,456 Transfers to non-major capital projects funds from: General Fund 151 Transfers to non-major enterprise funds from: General fund 350 Grand total all transfers $ 33,293 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. 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 2004 that were either non-routine in nature or inconsistent with the activities of the fund making the transfer. 63 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) 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, 2004, the City intended to honor $26,372 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, 2004, the City recognized a loss of $1,285. 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, 2004, (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 $ $ 64 59,316 538,533 597,849 48,209 549,640 130,536 (48,739) 81,797 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Calculation of the City’s equity: City’s share of SROG equity (Total equity of $549,640 plus unrealized loss of $535 less assets not owned by the City of $160,226 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 $ 33,497 $ 1,080 2,571 37,148 $ $ 5,951 (1,285) 4,666 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, 2004, is $7 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. 65 $ 356 2,121 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Reserved for cable equipment (PEG) Amount to be used only for expenditure by City’s cable television station as required by agreement with cable system providers. $ 4 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. 52 Reserved for court security Security surcharges collected by the City Court are required by ordinance to be spent solely on court security. 85 Reserved for court computer upgrade Surcharge that provides for monies to improve, maintain and enhance the ability to collect and manage monies received by courts and to improve court automation and improve case processing (administration of justice). 92 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. 61 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. 259 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. 1,064 Reserved for vehicle/equipment replacement For future scheduled replacement of existing equipment and vehicles. 5,488 Total reserved for general fund type $ 9,582 Designated for computer replacement For future schedule replacement of existing personal computers. $ 2,877 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. 178 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. 26 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. 124 Designated for equipment management For maintenance of City equipment. 398 66 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Designated for telephone For payment of future telephone charges and maintenance. $ Total designated for general fund type $ 3,791 188 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 67 $ 184 47 389 43 432 1,108 609 207 249 1,180 509 2,582 376 1,742 1,296 1,645 5,757 2,728 19,988 1,142 320 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Total reserved for Police and Fire activities $ 1,462 Total reserved for special revenue fund type $ 22,113 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 48 515 $ 563 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. $ 14,332 Total reserved for debt service fund type $ 14,332 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. $ 8,753 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. 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. 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. 68 11,438 139 99 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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. $ 3,012 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. 487 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. 2,120 Total designated for capital projects fund type $ 26,048 Enterprise Fund Type 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. $ 301 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, 2004, only the loan with the State Revolving Fund (authorized by revenue bond election in 1961) was not covered by a surety bond. 1,954 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. 6,900 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. 677 Net assets held by the housing fund may only be used for that purpose. 647 $ 10,479 Total restricted for enterprise fund type 69 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) Permanent Fund Type Reserved for cemetery perpetual care Funds are reserved by ordinance for future cemetery maintenance and operational expenses. $ 4,645 Total reserved for permanent fund type $ 4,645 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 3010 East Camelback Road #200 Phoenix, Arizona 85016 (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, 2004, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 5.7% (5.2% retirement and 0.5% long-term disability) of the members’ annual covered payroll. The City’s contributions from employer 70 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) and employees to ASRS for the years ended June 30, 2004, 2003 and 2002 were $6,860, $2,940 and $2,800, 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 13.49% 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, 2004, 2003 and 2002 were $29, $20 and $20, respectively, which were equal to the required contributions for the year. Agent Plans. For the year ended June 30, 2004, 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 5.76% and 11.11% 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, 2004, the date of the most recent available actuarial valuation, and related information follow. Fire Police Contribution rates: City Plan members 5.76% 7.65% 11.11% 7.65% Annual pension cost $ 622 $ 1,906 Entry Age Entry Age 8.75% 6.25% - 9.25% 5.25% 8.75% 6.25% - 9.25% 5.25% 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, 2004, follows. Contributions required and contributions made Year Ended Percentage of APC June 30 APC Contributed Police 2004 $1,906 100.0% 2003 $1,489 100.0% 2002 $1,764 100.0% Fire 2004 $ 622 100.0% 2003 $ 443 100.0% 2002 $ 337 100.0% Includes insurance premium tax, where applicable. 71 Net Pension Obligation $ $ $ - $ $ $ - CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (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, 2004, follows. Valuation Date June 30 Police 2004 2003 2002 Valuation Date June 30 Fire 2004 2003 2002 Actuarial Value of Plan Assets $ $ $ 72,743 71,955 69,747 Actuarial Accrued Liability $ $ $ Actuarial Value of Plan Assets $ $ $ 56,727 56,183 54,913 86,792 79,669 71,892 Funding Liability (Excess) $ $ $ Actuarial Accrued Liability $ $ $ 54,893 50,467 44,743 14,050 7,714 2,145 Funding Liability (Excess) $ $ $ (1,834) (5,716) (10,170) Annual Covered Payroll Funded Ratio 83.8% 90.3% 97.0% $ $ $ Annual Covered Payroll Funded Ratio 103.3% 111.3% 122.7% 17,343 16,906 17,147 $ $ $ 9,849 9,236 9,468 Unfunded Liability as Percentage of Covered Payroll 81.0% 45.6% 12.5% Unfunded Liability as Percentage of Covered Payroll -% -% -% 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. 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. 72 CITY OF GLENDALE, ARIZONA Notes to the Financial Statements June 30, 2004 (amounts expressed in thousands) XX. Subsequent events On July 13, 2004, the Mayor and Council adopted a resolution to conceptually approve an alternative Arizona Sports and Tourism Authority (AZSTA) funding approach. On September 28, 2004, the Mayor and Council approved a resolution to enter into a memorandum of agreement with the City, AZSTA, and B & B Holdings (DBA Arizona Cardinals) for improving the land around the Stadium. The remainder of this page left blank intentionally. 73 This page left blank intentionally. 74 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule General Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Investment income (loss) Proceeds from disposal of assets 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, 2004 $ Final 23,771 $ 23,771 Variance with Final Budget Positive (Negative) Actual Amounts (budgetary basis) $ 49,409 $ 25,638 47,697 9,051 45,086 17,394 3,280 844 400 5,887 129,639 558 (9,542) 144,426 47,697 9,051 45,086 17,394 3,280 844 400 5,887 129,639 558 (6,971) 146,997 54,326 8,887 47,161 17,560 3,169 (79) 7,353 10 1,785 140,172 669 (12,092) 178,158 6,629 (164) 2,075 166 (111) (923) 7,353 (390) (4,102) 10,533 111 (5,121) 31,161 25,468 46,506 20,252 19,778 8,020 25,174 47,949 20,573 20,553 5,706 22,957 47,121 19,429 19,358 - 2,217 828 1,144 1,195 5,706 1,377 1,058 6,037 128,496 1,377 1,058 8,089 130,479 1,507 981 4,350 115,703 (130) 77 3,739 14,776 15,930 $ 16,518 $ 62,455 $ 45,937 (Continued) 75 City of Glendale, Arizona Budgetary Comparison Schedule (continued) General Fund For the Fiscal Year Ended June 30, 2004 (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 Internal charges for services provided Proceeds from disposal of assets 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 Noncash exchange for capital outlay Principal retirement Change in compensated absences liability Salaries payable 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 76 $ 178,158 (49,409) (15,452) (7,353) (10) (669) 12,092 $ 117,357 $ 115,703 845 28 107 1,310 (19) (15,452) $ 102,522 City of Glendale, Arizona Budgetary Comparison Schedule Transportation Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 14,481 Final $ 14,481 Actual Amounts (budgetary basis) $ 17,844 Variance with Final Budget Positive (Negative) $ 3,363 RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation 17,633 5,827 160 250 1 23,871 900 39,252 17,632 5,827 160 250 1 23,870 900 39,251 19,022 1,734 167 342 3 21,268 900 (17) 39,995 1,390 (4,093) 7 92 2 (2,602) (17) 744 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community services Capital outlay Total charges to appropriations 10,019 27,794 37,813 10,019 15,109 25,128 7,980 5,226 13,206 2,039 9,883 11,922 Budgetary fund balance, June 30, 2004 $ 1,439 $ 14,123 $ 26,789 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 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 Salaries payable Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds 77 $ 12,666 $ 39,995 (17,844) (900) 17 $ 21,268 $ 13,206 11 35 $ 13,252 CITY OF GLENDALE, ARIZONA Notes to Required Supplementary Information June 30, 2004 (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. 78 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ COMBINING STATEMENTS ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 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). 79 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. 80 This page left blank intentionally. 81 City of Glendale, Arizona Combining Balance Sheet Non-Major Governmental Funds June 30, 2004 (amounts expressed in thousands) Special Revenue Funds 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 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 Community Development Block Grants $ - $ 2 446 2,976 3,424 $ 250 2 148 2,976 3,376 $ 82 Highway Users Gas Tax $ - $ 1,309 184 47 1,540 $ Other Special Revenue Fund Development Impact Fees 416 44 791 58 1,309 $ 21,827 $ 61 21,888 $ 184 187 61 1,468 1,900 $ 2,255 $ 364 2 1,151 3,479 7,251 $ 462 7 25 2 349 11 1,176 2,032 - 231 19,988 1,894 48 48 3,424 231 1,540 19,988 21,888 515 2,810 5,219 7,251 $ $ $ Debt Service Funds Highway Users $ 543 $ 543 $ $ 16 252 275 543 Municipal Property Corporation Streets Construction Capital Project Funds Fire and Parks Police Bond Construction Construction $ 5,233 $ 20,544 $ 3,838 $ 6,636 11,869 $ 5 20,549 $ 3,838 $ $ $ $ 8 243 98 14,885 $ 125 4,770 $ 103,953 $ 1,302 53 3,149 282 10,162 2,976 121,877 - 98 4,645 32,459 543 5,603 11,869 20,191 20,191 20,549 3,784 3,784 3,838 30,090 30,090 31,320 5,857 6,758 12,713 14,885 4,645 4,770 26,611 43,442 102,512 121,877 $ 125 125 $ - $ 2,020 152 2,172 4,645 - 83 $ $ 5,603 $ 480 750 1,230 14,536 - $ 54 54 $ 750 38 31,320 $ Total Non-major Governmental Funds 3,986 2,280 6,266 $ $ 30,532 Other Construction Cemetery Perpetual Care 213 145 358 $ - $ Permanent Fund $ $ 4,095 7 71 2 1,288 69 4,425 5,385 4,023 19,365 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, 2004 (amounts expressed is thousands) Special Revenue Funds Community Development Block Grants REVENUES Taxes and special assessments Licenses and permits Intergovernmental Charges for services Investments Miscellaneous Total revenues $ 3,105 204 3,309 EXPENDITURES Current: General government Public safety Public works Community services Community environment Street maintenance Miscellaneous Debt service: Principal Interest Capital outlay Total expenditures Highway Users Gas Tax $ 15,149 15,149 Other Special Revenue Fund Development Impact Fees $ 7,597 150 325 8,072 $ 4,930 3,875 2,540 50 752 12,147 3,000 - 9,811 - 37 - 650 5,495 31 2,523 311 - 303 3,303 26 10 1,282 11,129 1,476 375 2,955 4,843 21 2 1,196 10,229 6 4,020 3,229 1,918 OTHER FINANCING SOURCES (USES) Payment to refunded bonds escrow agent Discount on long-term debt issued Long-term debt issued Premium on long-term debt issued Transfers in Transfers out Total other financing sources and uses - 1,490 (5,463) (3,973) Excess (deficiency) of revenues and other sources over Net change in fund balances 6 Excess (deficiency) of revenues over expenditures Fund balances, July 1 Fund balances, June 30 $ 84 42 48 47 $ 184 231 $ - 837 (4,914) (4,077) 3,229 (2,159) 16,759 19,988 $ 7,378 5,219 Debt Service Funds Municipal Property Corporation Highway Users $ - $ Other Construction $ $ $ 44 44 24 24 $ 198 198 Permanent Fund 1,992 88 2,080 Total Non-major Governmental Funds Cemetery Perpetual Care $ 76 30 106 $ 4,930 7,597 24,271 2,540 983 986 41,307 40 2 224 173 - 10 259 - 274 112 - 172 75 - - 1,319 5,791 106 2,635 3,311 9,811 226 4,655 815 5,512 2,280 8,530 11,034 2,549 2,722 199 468 3,577 3,963 18,381 18,628 - 8,458 9,732 30,442 71,831 (5,512) (10,856) (2,678) (444) (3,765) (16,548) 106 (30,524) (3,065) 3,105 17 5,455 5,512 (7,252) 18,222 555 12,001 (11,328) 12,198 (82) 16,616 75 (30) 16,579 16,357 242 (14) 16,585 15,222 225 151 15,598 - (10,317) (82) 69,522 1,114 19,934 (21,749) 58,422 1,342 13,901 - $ 178 178 Streets Construction Capital Projects Funds Fire and Parks Police Bond Construction Construction - $ 4,261 5,603 $ 6,290 20,191 - (444) $ 12,820 4,228 3,784 $ 85 17,270 30,090 (950) $ 13,663 12,713 106 $ 4,539 4,645 27,898 $ 74,614 102,512 City of Glendale, Arizona Combining Statement of Net Assets Non-Major Proprietary Funds - Business-type Activities June 30, 2004 (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 $ 993 Noncurrent assets: Restricted cash and investments Capital assets: Capital assets Accumulated depreciation Capital assets, net Total noncurrent assets Total assets Housing $ 466 Total $ 1,459 1,600 (24) 2,569 447 5 918 1,600 (24) 447 5 3,487 430 43 473 8,729 (5,145) 3,584 4,014 6,583 10,836 (4,957) 5,879 5,922 6,840 19,565 (10,102) 9,463 9,936 13,423 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 126 193 22 68 - 49 8 57 49 33 3 126 49 201 57 71 101 3 1,117 19 1,545 199 1,117 19 1,744 Noncurrent liabilities: Compensated absences Other long-term debt Capital lease obligations Total noncurrent liabilities Total liabilities 85 1,886 1,971 3,516 72 43 115 314 157 43 1,886 2,086 3,830 582 5,879 6,461 2,485 3,067 647 6,526 647 2,485 9,593 NET ASSETS Invested in capital assets, net of related debt Restricted for: Other purposes Unrestricted Total net assets $ 86 $ $ City of Glendale, Arizona Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Non-Major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2004 (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) 4,564 8,136 8 12,708 Housing $ 11,330 809 12,139 569 7,643 512 8,155 Total $ 8,498 359 8,857 (702) 7,643 4,564 8,136 520 20,863 8,498 11,330 1,168 20,996 (133) Nonoperating revenues (expenses): Impact fees Investments Interest expense Loss on disposal of assets Intergovernmental - capital grants Total nonoperating revenue (expenses) 107 20 (112) (45) (30) 153 153 107 20 (112) (45) 153 123 Income before contributions and transfers 539 (549) (10) 350 350 (199) 340 Transfers in - Change in net assets Total net assets - beginning Total net assets - ending 539 $ 87 2,528 3,067 $ 6,725 6,526 $ 9,253 9,593 City of Glendale, Arizona Combining Statement of Cash Flows Non-Major Proprietary Funds - Business-type Activities For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Housing 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 $ 12,600 (6,594) (1,347) (3,306) 1,353 Cash flows from noncapital financing activities: Proceeds from issuance of long-term debt Proceeds from sale of investments 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 (7,136) (1,310) (378) 13,110 7,558 (6,594) (8,483) (4,616) 975 14 29 350 - 393 393 655 (984) (321) 107 (109) - (193) 153 655 (984) (514) 107 (109) 153 (652) (40) (692) Net increase (decrease) in cash and cash equivalents during fiscal year 721 88 $ 14 29 350 20 20 $ 510 7,558 - Cash flows from investing activities: Interest received from investments Net cash provided by investing activities Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 $ Total 702 1,423 - 20 20 (25) $ 534 509 696 $ 1,236 1,932 Sanitation Reconciliation of operating loss to net cash provided by (used by) operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Depreciation Changes in assets and liabilities: Accounts receivable Intergovernmental receivable Vouchers payable Intergovernmental payable Deposits Unearned rent Due to other funds Compensated absences Net cash provided by (used in) operating activities Reconciliation of balance sheet cash and investments to the statement of cash flows: Per combined balance sheet: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents $ $ $ $ 89 569 Housing $ (702) 809 359 (106) 70 (4) 15 1,353 (100) 18 15 (1) (1) 53 (19) (378) 993 430 1,423 $ $ $ 466 43 509 Total $ (133) 1,168 $ $ $ (106) (100) 88 15 (5) (1) 53 (4) 975 1,459 473 1,932 City of Glendale, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2004 (amounts expressed in thousands) Risk Management ASSETS Current assets: Equity in pooled cash and investments Accounts receivable, net Inventories and prepaid items Total current assets $ Noncurrent assets: Restricted cash and investments Workers' Compensation 3,837 260 4,097 $ 4,676 4,676 Employee Benefits $ 4,708 47 4,755 Total $ 13,221 47 260 13,528 - 150 15 165 4,097 4,826 4,770 13,693 LIABILITIES Current liabilities: Vouchers payable Estimated claims payable Total current liabilities 64 2,150 2,214 18 1,030 1,048 50 2,079 2,129 132 5,259 5,391 Noncurrent liabilities: Deferred revenue Estimated claims payable Total noncurrent liabilities Total liabilities 418 418 2,632 1,164 1,164 2,212 56 56 2,185 56 1,582 1,638 7,029 NET ASSETS Unrestricted 1,465 2,614 2,585 6,664 Total assets Total net assets $ 1,465 $ 90 2,614 $ 2,585 $ 6,664 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, 2004 (amounts expressed in thousands) Risk Management Operating revenues: Self-insurance premiums $ Operating expenses: Insurance claims and premiums 2,300 Workers' Compensation $ 2,933 Operating income (loss) Nonoperating revenues: Investments Income (loss) before transfers 1,133 Employee Benefits $ 13,212 16,645 12,560 16,281 (633) 345 652 364 19 116 74 209 (614) 461 726 573 2,500 - (2,500) - Change in net assets 1,886 (2,039) 726 $ $ 788 Operating transfers in Operating transfers out Net assets - beginning Net assets - ending Total (421) 1,465 91 $ 4,653 2,614 $ 1,859 2,585 2,500 (2,500) 573 $ 6,091 6,664 City of Glendale, Arizona Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2004 (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 $ $ (2,667) Net cash provided by (used for) operating activities Reconciliation of operating income to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operations: Change in accounts receivable Change in inventories and prepaid items Change in vouchers payable Change in accounts payable Change in claims payable Change in deferred revenue Net cash provided by operating activities Reconciliation of balance sheet cash and investments to the statement of cash flows: Per combined balance sheet: Equity in pooled cash and investments Restricted cash and investments Total cash and cash equivalents 116 2,152 $ $ 1,685 3,837 (633) (2,330) $ $ $ 3,837 3,837 92 13,212 $ 16,645 (16,598) 360 47 - - 74 209 434 256 $ 7,156 4,826 $ 4,289 4,723 $ 13,130 13,386 $ 345 $ 652 $ 364 (30) 46 250 (367) Total (12,852) (2,500) 19 Net increase (decrease) in cash during fiscal year $ 54 2,500 Cash flows from investing activities: Interest received 1,133 (1,079) (367) Cash flows from noncapital financing activities: Operating transfers in (out) Cash and cash equivalents, July 1 Cash and cash equivalents, June 30 2,300 Employee Benefits - $ $ $ 18 (309) 54 4,676 150 4,826 $ $ $ (47) (47) 39 (491) (42) 200 49 360 9 (427) (42) 141 49 47 4,708 15 4,723 $ $ $ 13,221 165 13,386 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 This page left blank intentionally. City of Glendale, Arizona Budgetary Comparison Schedule Community Development Block Grants Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ Actual Amounts (budgetary basis) Final - $ - $ 45 Variance with Final Budget Positive (Negative) $ 45 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Total revenues Amounts available for appropriation 5,488 45 5,533 5,533 5,488 45 5,533 5,533 3,103 204 3,307 3,352 (2,385) 159 (2,226) (2,181) CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Community environment Capital outlay Total charges to appropriations 5,533 5,533 5,219 327 5,546 2,994 303 3,297 2,225 24 2,249 Budgetary fund balance, June 30, 2004 $ - $ (13) $ 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. Change in intergovernmental revenue due to receivable for reimbursement of payroll accrual. 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. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 93 55 $ 68 $ 3,352 2 (45) $ 3,309 $ 3,297 (1) 7 $ 3,303 City of Glendale, Arizona Budgetary Comparison Schedule Highway Users Gas Tax Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Intergovernmental 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, 2004 Actual Amounts (budgetary basis) Final - $ - $ 185 Variance with Final Budget Positive (Negative) $ 185 15,155 15,155 2,236 (5,396) 11,995 15,155 15,155 2,236 (5,396) 11,995 15,149 15,149 1,490 (5,463) 11,361 (6) (6) (746) (67) (634) 10,205 1,754 10,387 1,704 9,735 1,282 652 422 26 10 11,995 26 10 12,127 26 10 11,053 1,074 $ - $ (132) $ 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. 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. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 94 308 $ 440 $ 11,361 (185) (1,490) 5,463 $ 15,149 $ 11,053 2 74 $ 11,129 City of Glendale, Arizona Budgetary Comparison Schedule Development Impact Fees Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Licenses and permits Intergovernmental Investments Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Public safety Capital outlay Principal retirement Interest expense Total charges to appropriations Budgetary fund balance, June 30, 2004 17,313 Final $ 7,595 7,595 418 8,013 25,326 12,455 12,455 $ 17,313 12,871 $ Actual Amounts (budgetary basis) $ 16,759 $ (554) 418 8,013 25,326 7,597 150 325 8,072 24,831 2 150 (93) 59 (495) 11,761 1,468 374 13,603 37 2,955 1,476 375 4,843 (37) 8,806 (8) (1) 8,760 11,723 $ 19,988 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. 95 Variance with Final Budget Positive (Negative) $ 8,265 $ 24,831 (16,759) $ 8,072 $ 4,843 $ 4,843 City of Glendale, Arizona Budgetary Comparison Schedule Other Special Revenue Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Taxes Intergovernmental Charges for services Investments Miscellaneous Total revenues Add: Transfers in Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public safety Public works Community services Community environment Contingencies Capital outlay Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2004 $ 7,313 Final $ 7,313 Actual Amounts (budgetary basis) $ 7,405 Variance with Final Budget Positive (Negative) $ 92 3,335 10,426 3,605 40 1,874 19,280 875 (8,000) 19,468 3,335 10,423 3,607 40 1,874 19,279 875 (8,000) 19,467 4,930 3,875 2,540 50 752 12,147 837 (4,914) 15,475 1,595 (6,548) (1,067) 10 (1,122) (7,132) (38) 3,086 (3,992) 671 8,190 985 3,588 365 250 4,191 679 8,176 985 3,986 372 203 1,962 647 5,444 31 2,514 311 1,196 32 2,732 954 1,472 61 203 766 21 2 18,263 21 2 16,386 21 2 10,166 6,220 1,205 $ 3,081 $ 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. 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. Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 96 5,309 $ 2,228 $ 15,475 (7,405) (837) 4,914 $ 12,147 $ 10,166 (4) 67 $ 10,229 City of Glendale, Arizona Budgetary Comparison Schedule General Obligation Debt Service Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): 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, 2004 $ 5,294 Final $ 5,294 Actual Amounts (budgetary basis) $ 5,533 Variance with Final Budget Positive (Negative) $ 239 14,909 14,909 20,203 14,909 14,909 20,203 15,005 15,005 20,538 96 96 335 336 336 271 65 10,339 6,629 17,304 9,773 6,557 16,666 7,115 4,593 11,979 2,658 1,964 4,687 2,899 $ 3,537 $ 8,559 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. 97 $ 5,022 $ 20,538 (5,533) $ 15,005 $ 11,979 $ 11,979 City of Glendale, Arizona Budgetary Comparison Schedule Special Assessment Debt Service Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 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, 2004 $ Actual Amounts (budgetary basis) Final 441 $ 441 $ 452 Variance with Final Budget Positive (Negative) $ 11 740 853 1,593 2,034 740 853 1,593 2,034 372 372 695 1,519 (368) (853) (1,221) 695 (515) 2 2 4 (2) 982 692 1,676 982 692 1,676 982 363 1,349 358 $ 358 $ 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. Differences - budget to GAAP: Other financing uses on bond refunding. Net effect of other financing sources/(uses) on interest expenditures. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 98 170 329 327 $ $ (188) 1,519 (452) (695) $ 372 $ 1,349 55 329 $ 1,733 City of Glendale, Arizona Budgetary Comparison Schedule Highway User Debt Service Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Long term debt issued Total Revenues Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General Administration Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2004 Actual Amounts (budgetary basis) Final 62 $ 62 $ - Variance with Final Budget Positive (Negative) $ (62) 5,396 5,458 5,396 5,458 57 57 5,455 5,512 5 5 40 2 (40) 3 4,655 798 5,458 4,655 798 5,458 4,655 815 5,512 (17) (54) $ - $ - $ 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. Less: Transfers in. Less: 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. 99 - 57 57 59 54 $ $ - 5,512 (5,455) (57) $ - $ 5,512 $ 5,512 City of Glendale, Arizona Budgetary Comparison Schedule Municipal Property Corporation Debt Service Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Investments Total revenues Add: Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Miscellaneous Debt service: Principal Interest Total charges to appropriations Budgetary fund balance, June 30, 2004 $ 6,118 Actual Amounts (budgetary basis) Final $ 6,118 $ 4,261 Variance with Final Budget Positive (Negative) $ (1,857) 320 320 9,734 16,172 320 320 9,734 16,172 178 178 12,001 16,440 (142) (142) 2,267 268 11 11 27 (16) 2,280 8,854 11,145 2,280 8,854 11,145 2,280 8,530 10,837 5,027 $ 5,027 $ 5,603 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Less: Transfers in. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Differences - budget to GAAP: Other Financing uses on bond refunding. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 100 324 308 $ 576 $ 16,440 (4,261) (12,001) $ 178 $ 10,837 197 $ 11,034 City of Glendale, Arizona Budgetary Comparison Schedule Arena Construction Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 78,355 Final $ 78,355 Actual Amounts (budgetary basis) $ 84,899 Variance with Final Budget Positive (Negative) $ 6,544 RESOURCES (INFLOWS): Licenses and permits Charges for services Investments Total revenues Amounts available for appropriation 930 25 955 79,310 930 25 955 79,310 183 9 264 456 85,355 (747) (16) 264 (499) 6,045 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Public safety Capital outlay Total charges to appropriations 1,000 657 214 75,898 77,769 687 741 214 79,424 81,066 483 616 113 79,553 80,765 204 125 101 (129) 301 Budgetary fund balance, June 30, 2004 $ 1,541 $ (1,756) $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Changes in compensated absences liability Salaries payable. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 101 4,590 $ 6,346 $ 85,355 (84,899) $ 456 $ 80,765 (2) 2 $ 80,765 City of Glendale, Arizona Budgetary Comparison Schedule Streets Construction Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 7,220 Final $ 7,220 Actual Amounts (budgetary basis) $ 6,290 Variance with Final Budget Positive (Negative) $ (930) RESOURCES (INFLOWS): Investments Long-term debt issued Total revenues Less: Transfers out Amounts available for appropriation 262 6,891 7,153 14,373 262 6,891 7,153 14,373 44 16,691 16,735 (30) 22,995 (218) 9,800 9,582 (30) 8,622 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Capital outlay Payment to refunded bond escrow agent Total charges to appropriations 11,521 11,521 9,837 9,837 173 2,549 82 2,804 (173) 7,288 (82) 7,033 Budgetary fund balance, June 30, 2004 $ 2,852 $ 4,536 $ 20,191 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. Differences - budget to GAAP: Less: Payment to refunded bond escrow agent. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 102 $ 15,655 $ 22,995 (6,290) (16,691) 30 $ 44 $ 2,804 (82) $ 2,722 City of Glendale, Arizona Budgetary Comparison Schedule Fire and Police Construction Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Investments Total revenues Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): General administration Public safety Capital outlay Total charges to appropriations Budgetary fund balance, June 30, 2004 $ 10,339 Final $ 10,339 Actual Amounts (budgetary basis) $ 4,228 Variance with Final Budget Positive (Negative) $ (6,111) 414 414 10,753 414 414 10,753 24 24 4,252 (390) (390) (6,501) 6,506 6,506 5,673 5,673 10 259 199 468 (10) (259) 5,474 5,205 4,247 $ 5,080 $ Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances governmental funds. Uses/outflows or resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule. Total expenditures as reported in the statement of revenues, expenditures, and changes in fund balances - governmental funds. 103 3,784 $ (1,296) $ 4,252 (4,228) $ 24 $ 468 $ 468 City of Glendale, Arizona Budgetary Comparison Schedule Parks Bond Construction Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 16,847 Final $ 16,847 Actual Amounts (budgetary basis) $ 17,270 Variance with Final Budget Positive (Negative) $ 423 RESOURCES (INFLOWS): Investments Long-term debt issued Total revenues Less: Transfers out Amounts available for appropriation 674 6,720 7,394 24,241 674 6,720 7,394 24,241 198 16,599 16,797 (14) 34,053 (476) 9,879 9,403 (14) 9,812 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General administration Community services Capital outlay Total charges to appropriations 22,840 22,840 21,885 21,885 274 112 3,577 3,963 (274) (112) 18,308 17,922 Budgetary fund balance, June 30, 2004 $ 1,401 $ 2,356 $ 30,090 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. 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. 104 $ 27,734 $ 34,053 (17,270) (16,599) 14 $ 198 $ 3,963 $ 3,963 City of Glendale, Arizona Budgetary Comparison Schedule Other Construction Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 13,656 Final $ 13,656 Actual Amounts (budgetary basis) $ 13,565 Variance with Final Budget Positive (Negative) $ (91) RESOURCES (INFLOWS): Intergovernmental Investments Long-term debt issued Total revenues Add: Transfers in Amounts available for appropriation 3,000 415 7,300 10,715 2,998 27,369 3,000 415 7,300 10,715 427 24,798 1,992 88 15,447 17,527 151 31,243 (1,008) (327) 8,147 6,812 (276) 6,445 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: General government Public works Capital outlay Total charges to appropriations 24,861 24,861 10 29,325 29,335 172 75 18,381 18,628 (162) (75) 10,944 10,707 Budgetary fund balance, June 30, 2004 $ 2,508 $ (4,537) $ 12,615 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. 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. 105 $ 17,152 $ 31,243 (13,565) (151) (15,447) $ 2,080 $ 18,628 $ 18,628 City of Glendale, Arizona Budgetary Comparison Schedule Cemetery Perpetual Care Permanent Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Investments Miscellaneous Total revenues Amounts available for appropriation Budgetary fund balance, June 30, 2004 4,493 Final $ 470 470 4,963 $ 4,963 4,493 Actual Amounts (budgetary basis) $ 470 470 4,963 $ 4,963 $ 76 30 106 4,645 $ 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. 106 4,539 Variance with Final Budget Positive (Negative) 4,645 46 76 (440) (364) (318) $ $ (318) 4,645 (4,539) $ 106 City of Glendale, Arizona Budgetary Comparison Schedule Water and Sewer Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) UNAUDITED 1 of 2 Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 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 Proceeds from equipment disposal 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, 2004 $ Actual Amounts (budgetary basis) Final 17,549 $ 17,549 $ 31,881 Variance with Final Budget Positive (Negative) $ - - 28,468 19,819 6,400 450 315 80,000 2,406 137,858 155,407 28,468 19,819 6,400 450 315 80,000 2,406 137,858 155,407 26,440 19,452 5,485 1,146 778 3 83,203 893 55 137,469 (17) 169,333 (2,028) (367) (915) 696 463 3 3,203 (1,513) 55 (389) (17) 13,926 9,080 13,013 8,974 2,000 102,942 9,351 14,045 10,184 1,747 98,438 9,412 12,889 9,128 1,096 38,000 (61) 1,156 1,056 (1,096) 1,747 60,438 9,068 3,254 148,331 9,068 5,588 148,421 9,818 5,304 85,647 (750) 284 62,774 7,076 $ 6,986 14 14,332 $ 83,686 14 $ 76,700 (Continued) 107 City of Glendale Budgetary Comparison Schedule (continued) Water and Sewer Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) UNAUDITED 2 of 2 Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures Sources/inflows of resources: Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule. The fund balance at the beginning of the year is a budgetary resource but is not a current year revenue for financial reporting purposes. Interest earned on restricted assets not available for appropriation. Bond proceeds. Loan proceeds. Proceeds from disposal of capital assets. Internal staff and administrative charges reported as revenue only on budgetary basis. 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. Internal staff and administrative charges reported as revenue only on budgetary basis. Accrued payroll. 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. 108 $ 169,333 (31,881) 11 (83,203) (893) (55) (120) 17 $ 53,209 $ 85,647 (55) (38,000) 76 (42) 9,475 (1,066) (9,818) (684) (120) 157 $ 45,570 City of Glendale, Arizona Budgetary Comparison Schedule Landfill Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 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, 2004 $ 17,847 Final $ 17,847 Actual Amounts (budgetary basis) $ 18,072 Variance with Final Budget Positive (Negative) $ 225 6,344 1,550 911 525 242 9,572 27,419 6,344 1,550 911 525 242 9,572 27,419 7,487 2,238 33 189 307 207 10,461 28,533 1,143 688 (878) 189 (218) (35) 889 1,114 2,000 6,392 - 1,953 6,290 149 5,382 295 1,953 908 (146) 1,650 566 10,608 1,650 566 10,608 1,640 433 7,750 10 133 2,858 16,811 $ 16,811 $ 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. Internal staff and administrative charges reported as revenue only on budgetary basis. 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. Depreciation expense. Principal payments on long-term obligations. Interest expense. Accrued payroll. Internal staff and administrative charges reported as revenue only on budgetary basis. Loss on disposal of assets. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets. 109 20,783 $ 3,972 $ 28,533 (18,072) (370) (189) $ 9,902 $ 7,750 (295) 27 441 1,122 (1,640) 28 26 (370) 80 $ 7,169 City of Glendale, Arizona Budgetary Comparison Schedule Sanitation Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Charges for services: Container service Curb service Impact fees Recycle sales Investments Proceeds from equipment disposal 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, 2004 $ 1,837 Final $ 1,837 Actual Amounts (budgetary basis) $ 2,250 Variance with Final Budget Positive (Negative) $ 413 4,846 8,222 257 10 737 14,072 15,909 4,846 8,222 257 10 737 14,072 15,909 4,564 8,137 107 8 19 22 655 13,512 15,762 12,196 1,645 12,196 1,645 11,268 347 928 1,298 1,113 149 15,103 1,113 149 15,103 984 109 12,708 129 40 2,395 806 $ 806 $ 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. 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. Accrued payroll. 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. 110 3,054 (282) (85) (150) 8 9 22 (82) (560) (147) $ 2,248 $ 15,762 (2,250) (22) (655) $ 12,835 $ 12,708 809 3 15 46 (984) (346) $ 12,251 City of Glendale, Arizona Budgetary Comparison Schedule Housing Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ Actual Amounts (budgetary basis) Final 207 $ 207 $ 783 Variance with Final Budget Positive (Negative) $ 576 RESOURCES (INFLOWS): Intergovernmental Miscellaneous Investments Total revenues Add: Transfers in Amounts available for appropriation 7,530 390 7,920 241 8,368 7,530 390 7,920 241 8,368 7,795 512 8,307 350 9,440 265 512 (390) 387 109 1,072 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Housing Capital outlay Total charges to appropriations 8,003 365 8,368 8,003 365 8,368 8,518 346 8,864 (515) 19 (496) Budgetary fund balance, June 30, 2004 $ - $ - $ 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. Accrued payroll. Depreciation expense. Capital outlay. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets - non-major proprietary funds. 111 576 $ 576 $ 9,440 (783) (350) $ 8,307 $ 8,864 8 (28) 359 (346) $ 8,857 City of Glendale, Arizona Budgetary Comparison Schedule Risk Management Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Transfers in Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Contingencies Total charges to appropriations Budgetary fund balance, June 30, 2004 $ 1,772 Final $ 1,772 2,300 55 2,355 2,300 55 2,355 4,127 2,250 500 2,750 1,377 $ Actual Amounts (budgetary basis) $ $ (105) 4,127 2,300 19 2,319 2,500 6,486 (36) (36) 2,500 2,359 2,650 500 3,150 2,713 2,713 (63) 500 437 977 $ 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. Less: Transfers in. 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. 112 1,667 Variance with Final Budget Positive (Negative) 3,773 $ 2,796 $ 6,486 (1,667) (2,500) $ 2,319 $ 2,713 250 (30) 2,933 $ City of Glendale, Arizona Budgetary Comparison Schedule Workers' Compensation Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Less: Transfers out Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations Budgetary fund balance, June 30, 2004 $ 6,908 Final $ 6,908 Actual Amounts (budgetary basis) $ 7,156 1,133 190 1,323 1,133 190 1,323 8,231 8,231 1,133 116 1,249 (2,500) 5,905 1,407 1,407 1,407 1,407 1,196 1,196 6,824 $ 6,824 $ 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. 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. Change in estimated claims payable. Total expenses as reported in the statement of revenues, expenses, and changes in fund net assets. 113 4,709 Variance with Final Budget Positive (Negative) $ 248 (74) (74) (2,500) (2,326) 211 211 $ (2,115) $ 5,905 (7,156) 2,500 $ 1,249 $ 1,196 (408) $ 788 City of Glendale, Arizona Budgetary Comparison Schedule Employee Benefits Fund For the Fiscal Year Ended June 30, 2004 (amounts expressed in thousands) Budgeted Amounts Original Budgetary fund balance, July 1, 2003 $ 2,129 Final $ 2,129 Actual Amounts (budgetary basis) $ 3,738 Variance with Final Budget Positive (Negative) $ 1,609 RESOURCES (INFLOWS): Self-insurance premiums Investments Total revenues Amounts available for appropriation 12,141 12,141 14,270 12,141 12,141 14,270 13,268 74 13,342 17,080 1,127 74 1,201 2,810 CHARGES TO APPROPRIATIONS (OUTFLOWS): Current: Insurance and claims Total charges to appropriations 12,577 12,577 12,577 12,577 12,360 12,360 217 217 Budgetary fund balance, June 30, 2004 $ 1,693 $ 1,693 $ 4,720 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. 114 $ 3,027 $ 17,080 (3,738) (56) $ 13,286 $ 12,360 200 $ 12,560 This page left blank intentionally. 115 City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2004 (Rounded to nearest dollar) 1 of 4 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. 111 100 116 121 122 125 126 126.1 126.2 120 132 143 143.1 144 150 161 162 163 164 165 166 167 160 180 190 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 - miscellaneous Accounts receivable - tenants - dwelling rents Allowance for doubtful accounts - dwelling rents Allowance for doubtful accounts - other Total receivables, net of allowances for doubtful accounts 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 $ 364,045 364,045 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 101,998 101,998 $ Total - $ 466,043 466,043 100 144 244 - - 7,984 7,984 242,119 166,187 408,306 30,588 30,588 242,119 204,759 100 144 447,122 4,500 266,453 635,242 - - 7,984 43,305 553,609 30,588 43,305 4,500 266,453 1,227,423 - 7,984 149,998 125,577 (133,162) 142,413 142,413 696,022 24,883 22,232 (10,983) 327,500 363,632 363,632 394,220 135,533 7,825,065 386,912 300,600 1,860,800 (4,957,406) 327,500 5,879,004 5,879,004 7,106,427 135,533 7,675,067 362,029 114,710 1,860,800 (4,812,334) 5,335,805 5,335,805 5,971,047 $ 38,081 (927) 37,154 37,154 37,154 $ $ $ $ $ (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2004 (Rounded to nearest dollar) Line Item No. 312 322 332 333 341 342 347 310 2 of 4 (continued) 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 $ 66,296 3,815 49,295 33,030 3,222 155,658 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program - $ - $ 7,984 7,984 Public Housing Capital Fund Program Housing Choice Vouchers $ 40,002 4,133 227,881 272,016 $ 30,588 30,588 Total $ 106,298 7,948 49,295 33,030 3,222 266,453 466,246 117 353 354 350 300 Noncurrent liabilities Noncurrent liabilities- other Accrued compensated absences - noncurrent Total noncurrent liabilities Total liabilities 34,338 34,338 189,996 - - 7,984 43,305 37,199 80,504 352,520 30,588 43,305 71,537 114,842 581,088 508 508.1 511 511.1 512.1 513 600 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 5,335,805 445,246 5,781,051 5,971,047 37,154 37,154 37,154 - 7,984 142,413 201,089 343,502 696,022 363,632 363,632 394,220 5,879,004 646,335 6,525,339 7,106,427 $ $ $ $ $ $ $ (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2004 (Rounded to nearest dollar) Line Item No. 703 704 705 706 706.1 715 720 700 118 911 912 914 915 916 924 931 932 933 938 941 942 943 945 952 961 962 963 964 969 970 973 974 900 1004 1010 1000 3 of 4 (continued) 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 OTHER FINANCING SOURCES (USES) Operating transfers from/to component unit Total other financing sources (Uses) Excess (deficiency) of total revenues over (under) total expenditures Public and Indian Housing Drug Elimination Program 256,534 8,179 264,713 $ - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ - $ Total - $ 256,534 8,179 264,713 337,902 201 602,816 21,554 21,554 - 90,786 90,786 7,167,445 246,888 7,414,333 45,714 131,497 177,211 7,641,847 153,051 247,089 8,306,700 338,787 (9,431) 90,759 51,744 400 50,433 15,674 1,238 26,191 221,215 40,515 68,910 57,829 15,153 16,300 (1,264) 984,453 (381,637) 21,554 - 16,283 74,503 90,786 - 512,452 (10,217) 130,731 94,759 5,502 22,868 42,724 798,819 6,615,514 36,596 9,118 45,714 131,497 851,239 (19,648) 221,490 199,382 74,903 50,433 15,674 1,238 26,191 221,215 55,135 68,910 57,829 38,021 42,724 16,300 (1,264) 1,919,772 6,386,928 840 840 - 90,786 6,578,481 12,542 7,389,842 8,517 54,231 6,578,481 358,809 8,857,062 20,714 - - 24,491 122,980 336,910 1,321,363 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program 350,000 350,000 (368,547) $ $ $ $ $ $ 350,000 350,000 (200,362) (continued) City of Glendale, Arizona Federal Financial Data Schedule (PHA: AZ003) For the Fiscal Year Ended June 30, 2004 (Rounded to nearest dollar) Line Item No. 1102 1103 1104 1113 1114 1115 1116 1120 1121 4 of 4 (continued) 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 Public and Indian Housing Drug Elimination Program $ 5,873,456 276,142 1,860 1,830 $ Resident Opportunity and Supportive Services Section 8 Rental Voucher Program 16,440 - $ - $ Public Housing Capital Fund Program Housing Choice Vouchers - $ 319,011 11,085,157 1,322,028 12,407,185 12,648 12,352 $ Total 516,794 (276,142) - $ 6,725,701 11,085,157 1,322,028 12,407,185 14,508 14,182 119 City of Glendale, Arizona Capital Assets Used in the Operation of Governmental Funds Schedule By Function and Activity (1) For the Fiscal Year Ended June 30, 2004 (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 $ $ 11,604 434 6,347 23,680 1,033 732 100 43,930 Buildings $ 103,029 24,852 13,659 19,379 $ 160,919 (1) This schedule presents only the capital asset balances related to governmental funds. 120 Improvements Other Than Buildings $ 65,012 9,703 3,429 32,529 2,873 4,501 $ 118,047 Machinery and Equipment $ $ 20,453 4,914 334 1,997 439 28,137 Computer Equipment $ $ 1,250 73 9 73 8 1,413 Software $ $ 97 338 80 515 Automotive Equipment $ $ 10,400 7,647 1,036 2,960 13 3,151 25,207 Infrastructure $ 44,095 28,134 42,430 420,234 $ 534,893 121 Construction in Process $ $ 605 2,479 22,157 10,490 8,729 44,460 Other $ $ 1,175 1,175 Total $ 256,545 50,440 75,105 134,713 3,919 437,874 100 $ 958,696 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, 2004 (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, 2003 $ $ 153,386 48,022 54,188 127,458 3,919 429,320 100 816,393 Additions $ $ 300,018 8,846 21,306 23,327 13,392 366,889 Deductions $ (196,859) (6,428) (389) (16,072) (4,838) $ (224,586) (1) This schedule presents only the capital asset balances related to governmental funds. 122 Governmental Funds Capital Assets June 30, 2004 $ $ 256,545 50,440 75,105 134,713 3,919 437,874 100 958,696 City of Glendale, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT _________________________________________________________ STATISTICAL SECTION ___________________________ FOR THE FISCAL YEAR ENDED JUNE 30, 2004 This page left blank intentionally. City of Glendale, Arizona General Governmental Expenditures by Function (1) Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1994-95 General Government $ 10,187 Public Safety $ 26,686 Public Works $ 7,400 Table 1 Community Services Community Environment Street Maintenance Community Housing (2) Miscellaneous and Contingency $ $ $ $ $ 12,596 1,447 7,153 4,603 195 Capital Outlay $ 27,160 Debt Service $ 17,659 Total $ 115,086 123 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 2003-04 17,274 53,805 12,816 30,006 3,311 9,811 - 556 120,415 34,088 282,082 Notes: (1) Includes all Governmental Fund Types. (2) In fiscal year 2001-02, the City reclassified the Housing function to be accounted for within a proprietary fund. This function will be eliminated from the table prospectively. City of Glendale, Arizona General Governmental Revenues by Source (1) Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1994-95 Table 2 Taxes and Special Assessments Licenses and Permits Intergovernmental $ $ $ 40,934 5,131 Charges for Services Local 44,780 $ 15,038 $ 2,629 Fines and Forfeitures $ 1,516 Investments $ 3,254 Miscellaneous $ Total 1,764 $ 115,046 124 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 (805) 2,834 181,653 2,774 195,765 2002-03 82,458 16,771 73,836 - 3,313 3,246 2003-04 93,655 16,667 73,166 - 4,824 3,169 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. 1,510 City of Glendale, Arizona Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Total Tax Levy Fiscal Year 1994-95 $ 9,718 Table 3 Current Tax Collections $ 9,412 Percent of Current Tax Collections 96.85 % Delinquent Tax Collections $ 238 Total Tax Collections $ 9,650 Ratio of Total Tax Collections to Total Tax Levy 99.30 % Outstanding Delinquent Taxes $ Ratio of Delinquent to Total Tax Levy 335 3.45 % 125 1995-96 10,506 10,241 97.48 254 10,496 99.90 294 2.80 1996-97 10,761 10,448 97.09 211 10,659 99.05 292 2.71 1997-98 12,051 11,661 96.76 245 11,906 98.79 342 2.84 1998-99 12,131 11,764 96.98 312 12,076 99.55 327 2.69 1999-00 12,978 12,507 96.37 288 12,795 98.59 376 2.89 2000-01 14,227 13,833 97.23 339 14,172 99.62 397 2.79 2001-02 16,136 15,529 96.24 291 15,820 98.04 556 3.45 2002-03 16,743 16,289 97.29 440 16,729 99.92 484 2.89 2003-04 18,468 17,899 96.92 397 18,296 99.07 537 2.91 City of Glendale, Arizona Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 1994-95 Real Estate $ Improvements Secured Personal $ 1,951 Table 4 Utilities Rails and Wires Unsecured Personal $ 31,215 $ 30,192 Gross Valuation (1) $ 526,063 Net Assessed Value (1) Less: Exemptions (1) 126 160,082 $ 302,623 1995-96 161,175 358,969 2,045 25,714 31,092 578,995 815 578,180 4,809,344 1996-97 191,755 401,560 2,564 23,711 46,017 665,607 65,362 600,245 5,022,245 1997-98 206,083 475,031 2,688 29,718 46,299 759,819 62,626 697,193 5,824,504 1998-99 215,309 485,708 2,974 29,627 44,837 778,455 61,065 717,390 5,931,081 1999-00 223,785 548,672 2,748 30,259 45,209 850,673 62,981 787,692 6,526,885 2000-01 233,712 619,842 2,609 39,388 46,580 942,131 65,228 876,903 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 2003-04 298,152 820,414 2,113 35,832 58,517 1,215,028 135,011 1,080,017 9,391,120 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. $ 796 $ 525,267 Estimated Actual Value $ 4,321,468 City of Glendale, Arizona Property Tax Rates - Direct and Overlapping Governments Per $100 Assessed Valuation Last Ten Fiscal Years City of Glendale Fiscal Year 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 $ 1.98 1.93 1.88 1.83 1.78 1.73 1.72 1.72 1.72 1.72 Glendale Elementary District $ 7.19 7.93 7.07 7.45 7.98 7.71 7.19 6.89 6.87 6.50 Peoria Unified School District Glendale High School District $ 3.82 4.20 4.12 3.89 3.95 3.85 3.56 3.46 3.63 3.35 Table 5 $ 8.30 8.51 8.78 9.47 9.98 9.70 9.49 8.72 8.69 8.60 Deer Valley Unified School District $ 127 Total Within Following Districts: Glendale Elementary and High School Districts 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 $ 16.68 17.96 16.44 16.62 17.15 16.72 15.81 15.36 15.51 14.79 Peoria Unified School District $ 13.97 14.34 14.03 14.75 15.20 14.86 14.55 13.73 13.69 13.59 Deer Valley Unified School District $ 15.94 15.25 15.47 15.01 15.03 14.33 13.12 13.12 12.59 12.06 Source: Maricopa County 2001 Tax Rates. Note: The City rounds the rates to two digits from the four presented by the county. 10.27 9.42 10.22 9.73 9.81 9.17 8.06 8.11 7.59 7.12 Maricopa County/ Education Equalization State $ 0.47 0.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 1.77 1.83 1.79 1.79 1.81 1.82 1.79 1.77 1.78 1.75 Community College District $ 0.90 1.11 1.05 1.13 1.11 1.13 1.12 1.11 1.11 1.08 Flood Control District $ 0.36 0.33 0.34 0.34 0.33 0.29 0.25 0.23 0.21 0.21 Central Arizona Water Conservation District $ 0.14 0.14 0.14 0.14 0.14 0.14 0.13 0.13 0.13 0.12 County Library District $ 0.04 0.01 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.05 Fire District Assistance $ 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 City of Glendale, Arizona Principal Property Taxpayers June 30, 2004 (amounts expressed in thousands) Taxpayer Qwest Corporation Arizona Public Service Honeywell Inc. New River Associates Southwest Gas Corporation Corning Gilbert Inc. Toys DC South LLC Alliance WE Limited Partnership Lexington Glendale LLC Chase Commercial Mtg Banking Monadnock Property Trust LLC VHS of Arrowhead Inc. 51 Bell Limited Partnership Wal-Mart Stores Inc. May Department Stores Burlington Northern/Santa Fe Railway Condev West Inc. Banner Health System Sanderson Ford The Home Depot USA Table 6 Type of Property Telephone Utility Electrical Utility Industrial Park Shopping Center Gas & Electric Industrial Park Warehouse/Truck Terminal Apartments Industrial Park Shopping Center Apartments Medical Building Warehouse/Truck Terminal Shopping Center Shopping Center Railroad Operating Property Shopping Center Medical Building Auto Sales Commercial Building Assessed Valuation $ Percentage of Total Secondary Assessed Valuation 16,477 14,716 10,708 8,308 5,318 4,310 4,101 3,754 3,546 3,435 3,192 3,187 3,045 2,958 2,845 2,841 2,787 2,731 2,646 2,624 1.53 % 1.36 0.99 0.77 0.49 0.40 0.38 0.35 0.33 0.32 0.30 0.30 0.28 0.27 0.26 0.26 0.26 0.25 0.25 0.24 Total principal taxpayers 103,529 9.59 Other taxpayers 976,488 90.41 Total secondary assessed valuation $ 1,080,017 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. 128 100.00 % 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) 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 2003-04 29 322 Notes: (1) Includes prepayments and billings that assessees paid before assessment went to bond. 129 City of Glendale, Arizona Computation of Legal Debt Margins June 30, 2004 (amounts expressed in thousands) Table 8 Secondary assessed value, February 10, 2003 $ 1,080,017 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 2004 Governmental facilities 2004 Streets Total amount of 6% type debt applicable to debt limit Less amount available in debt service fund and water & sewer fund: 6% G.O. principal payment 7/1/04 Debt service fund Total amount available Total debt applicable to debt limit 6% type debt--legal debt margin $ 64,801 $ 49,399 15,402 $ 216,003 $ 101,153 114,850 $ 4,005 20 2,982 1,193 795 707 644 1,033 424 3,038 1,308 131 1,892 10,213 2,385 4,950 13,569 1,146 8,545 5,065 $ 64,045 7,480 7,166 14,646 Debt limit: 20% of assessed value Amount of 20% type debt applicable to debt limit:(1) 1993 Refunding 1993 Refunding water & sewer 1998 Parks 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 2004 Flood control 2004 Parks Total amount of 20% type debt applicable to debt limit Less amount available in debt service fund and water and sewer fund: 20% G.O. principal payment 7/1/04 Debt service fund Total amount available Total debt applicable to debt limit 20% type debt--legal debt margin Notes: (1) Includes the July 1, 2004, debt service payment. 130 205 1,930 1,725 5,625 450 5,300 4,368 2,883 2,499 2,335 13,795 4,390 2,725 1,033 20,327 13,875 6,678 16,357 $ 106,500 3,955 1,392 5,347 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 131 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Population (1) 173 186 192 197 207 213 224 228 231 233 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 $ 525,267 578,180 600,245 697,193 717,390 787,692 876,903 954,119 989,092 1,080,017 $ 71,855 74,815 67,160 70,800 62,575 74,830 64,690 90,135 146,135 170,545 $ 7,040 9,382 9,998 10,892 11,611 12,416 13,241 15,955 17,478 18,236 $ 19,690 16,750 14,000 11,835 10,000 9,635 7,498 5,156 16,858 14,006 $ 45,125 48,683 43,162 48,073 40,964 52,779 43,951 69,024 111,799 138,303 8.59 8.42 7.19 6.90 5.71 6.70 5.01 7.23 11.30 12.81 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, $1,032 for 2002-03 and $870 for 2003-04. 0.26132 0.26103 0.22526 0.24437 0.19775 0.24752 0.19660 0.30325 0.48397 0.59286 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 1994-95 Principal $ 9,570 $ Table 10 Total General Government Expenditures Interest Total Debt Service 7,198 $ 16,768 $ 115,087 Ratio of Debt Service to Total Expenditures 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 2003-04 15,032 14,630 29,662 282,082 10.52 Note: Principal and interest expenditures for 1999-00 include a current refunding transaction. 132 City of Glendale, Arizona Computation of Net Direct and Overlapping General Obligation Bonded Debt June 30, 2004 (amounts expressed in thousands) Jurisdiction Peoria Unified School District No. 11 Table 11 Net Debt Outstanding $ 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 1,267,219 178,267 111,800 111,800 City of Glendale Debt Total $ 1,379,019 Source: Maricopa County - Abstract by tax authority and class, Abstract by tax area code and Annual Report of Bonded Indebtedness. 133 $ 290,067 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) 1994-95 $ 37,898 $ 15,509 $ Net Revenue Available for Debt Service 22,389 Revenue Bond Debt Service Requirements Principal (3) $ 4,705 Interest (3) $ 1,828 Total $ Coverage 6,533 3.43 134 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 2003-04 53,209 31,445 21,764 7,102 4,760 11,862 1.83 Notes: (1) Operating revenues and nonoperating revenues excluding non-cash contributions, gains and losses. (2) Excluding depreciation. (3) Principal and interest amounts include debt service on the note payable to the Waste Infrastructure Financing Authority of Arizona for the 96-97and 00-01 loans. The City used its 1961 Revenue Bond authorization in obtaining both loans. Therefore, this table includes the loan activity to calculate revenue bond coverage. City of Glendale, Arizona Demographic Statistics Last Ten Fiscal Years (amounts expressed in thousands) Table 13 Fiscal Year City Population (1) County-Wide Per Capita Income (2) County-Wide School Enrollment (3) County-Wide Unemployment Rate (4) County-Wide Population (4) 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 2003-04 233 33 626 4.2 3,397 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. 135 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 Industrial Bank Others Totals Deposits (3) 252,431 $ Year Value 1994-95 $ 4,321,468 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 2003-04 9,391,120 182,012 157,536 53,832 393,380 37,333 $ 185,913 $ 34,736 $ 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. 136 31,782 $ 20,754 City of Glendale, Arizona Miscellaneous Statistics June 30, 2004 Table 15 Date of Incorporation 1910 Form of Government Council-Manager Area 56.7 square miles Miles of streets 702 Building permits issued 6,330 Number of employees (full time equivalents) 1,654 Fire Protection: Number of stations Number of firefighters (excluding volunteer firefighters) Fire hydrants Eight 192 7,600 Police Protection: Number of stations Number of police officers (exclusive of police reserve) Three 351 Recreation and Culture: Number of parks Number of libraries Number of library books 93 parks with 1,998 acres Three 601,440 137 City of Glendale, Arizona Insurance Coverage For the Fiscal Year Ended June 30, 2004 (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 Policy Limits Deduction Amount $ $ 100,000 244,554 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) Expiration Date $ 206 1/26/2005 118 1/26/2005 14 1/26/2005 50 37 4/9/2005 500 127 6/30/2005 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 Annual Premium 15,000 2,000 Workers' Compensation Limit each accident/disease a) Workers' compensation b) Employer liability Midwest Employers Excess Public Entity Liability First Layer Genesis Ins. Co. 10,000 1,000 605 7/1/2005 Excess Public Liability Second Layer Princeton Ins. 10,000 11,000 370 7/1/2005 Excess Public Liability Third Layer Gulf Ins. 5,000 16,000 65 7/1/2005 Excess Public Liability Fourth Layer Westchester Ins. Co. 25,000 31,000 134 7/1/2005 Kidnap, Ransom, and Extortion National Union Fire Ins. Co. 10,000 N/A 4 5/2/2007 Statutory limits 2,000 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. 138 City of Glendale, Arizona Miscellaneous Water and Sewer Rate Statistics June 30, 2004 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 $ 12.02 All Sizes $ 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 SEWER SERVICE RATES 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 Inside City $ 20.92 31.99 60.26 339.51 45.85 139 Outside City $ 37.03 N/A 67.21 185.49 N/A $ 2.36 2.36 2.36 2.36 City of Glendale, Arizona Miscellaneous Water and Sewer Statistics June 30, 2004 Table 18 HISTORICAL AVERAGE NUMBER OF WATER ACCOUNTS (1) Fiscal Year Ending June 30 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 (3) 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 54,349 4,590 4,649 5,197 5,431 4,361 54,914 55,818 57,933 59,085 58,710 Residential (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 2003 Residential (1) Commercial 27,361 29,458 31,294 30,477 32,779 35,135 34,667 36,044 34,348 5,616 6,202 4,562 4,491 4,739 9,413 8,865 8,865 5,342 Other Total 8,998 9,081 8,667 6,344 8,942 893 722 1,031 1,042 41,975 44,741 44,523 41,312 46,460 45,441 44,254 45,940 40,732 (1) 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 1995 1996 1997 1998 1999 2000 2001 2002 Accounts Billed 41,498 44,090 45,813 47,064 49,021 50,564 52,688 55,506 (MGD) Actual 10.0 11.0 12.3 10.4 10.9 11.7 11.4 11.9 2003 55,239 (4) 10.8 (1) Estimated. (2) Peak Day is based on 150% of the Multi-City Plant Use. (3) Began operations in 2000. (4) As of July 29, 2004. SOURCE: City of Glendale Finance and Utilities Departments. 140 Arrowhead (MGD) 1.1 1.6 1.9 2.2 2.7 2.8 2.8 2.8 3.0 (1) West (3) Peak (MGD) (MGD) (2) 15.0 16.5 18.5 15.6 16.4 17.6 17.1 17.9 4.3 4.3 4.3 7.0 16.2 City of Glendale, Arizona Government-wide Expenses by Function Last Three Fiscal Years (1) (amounts expressed in thousands) Fiscal Year Public Safety Public Works 22,490 $ 53,779 $ 12,766 2002-03 20,209 52,625 11,411 32,210 2003-04 24,003 56,176 13,883 33,914 2001-02 General Government 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 3,433 20,308 148 7,223 43,442 7,784 12,353 8,033 219,179 3,446 20,425 142 15,838 45,628 7,164 12,294 8,858 241,771 Community Services Community Environment Street Maintenance $ $ $ 30,919 3,414 Notes: (1) Only three years' data is available. In subsequent years this table will be expanded to include ten fiscal years. 141 City of Glendale, Arizona Government-wide Revenues Last Three Fiscal Years (1) (amounts expressed in thousands) Table 20 PROGRAM REVENUES Fiscal Year 2001-02 Operating Grants and Contributions Charges for Services $ 90,250 (2) $ 29,232 Capital Grants and Contributions $ 3,262 Taxes $ 115,942 GENERAL REVENUES Grants and Contributions Not Restricted Unrestricted to Specific Investment Programs Earnings $ 10,796 $ 2,612 Gains or (losses) and Miscellaneous $ (1,278) Total $ 250,816 2002-03 99,042 29,613 4,814 129,591 34,283 (1,725) (992) 294,626 2003-04 102,606 32,146 3,597 140,202 27,028 1,235 (927) 305,887 142 Notes: (1) Only three 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. This page left blank intentionally. City of Glendale Finance Department 5850 West Glendale Avenue, Suite 302 Glendale, Arizona 85301 (623) 930-2480