COMPREHENSIVE ANNUAL FINANCIAL REPORT Chandler, Arizona Fiscal Year Ended June 30, 2004 Calendar Year 2003 has been referred to as the “Year of Transportation” in Chandler, Arizona, due to all of the traffic activity the City is experiencing. As one of the fastest growing cities in the nation, Chandler is coping with increased traffic. This Geographic Information System (GIS) map shows the locations of street intersections that are part of the Traffic Communications Network. The Santan Freeway that is under construction will connect the East Valley with the 101 and Interstate 10. CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2004 Boyd Dunn, Mayor Phillip Westbrooks, Vice-Mayor Lowell Huggins, Councilmember Donna Wallace, Councilmember Bob Caccamo, Councilmember Matt Orlando, Councilmember Martin Sepulveda, Councilmember Executive Staff: Mark Pentz, City Manager Patrick McDermott, Assistant City Manager Rich Dlugas, Assistant City Manager Prepared by: Management Services Department Patricia Walker, Director Cynthia Sneed, Accounting Manager CITY OF CHANDLER, ARIZONA COMPREHENSIVE ANNUAL FINANICAL REPORT FOR THE YEAR ENDED JUNE 30, 2004 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal.................................................................................................................................. 1 Organizational Chart................................................................................................................................. 7 Certificate of Achievement........................................................................................................................ 8 FINANCIAL SECTION Independent Auditors' Report ................................................................................................................... 9 Management’s Discussion and Analysis (MD&A)................................................................................... 11 Basic Financial Statements: Government-wide Financial Statements Statement of Net Assets ............................................................................................................. 20 Statement of Activities ................................................................................................................ 22 Fund Financial Statements Balance Sheet – Governmental Funds ....................................................................................... 24 Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Assets........................................................... 25 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds............................................................................................................. 26 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities........................................................................................................... 27 Statement of Net Assets - Proprietary Funds ............................................................................. 28 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds.................................................................................................................. 30 Statement of Cash Flows - Proprietary Funds ............................................................................ 32 Statement of Fiduciary Funds Net Assets................................................................................... 34 Statement of Changes in Fiduciary Net Assets- Fiduciary Fund…………………………………..35 Notes to Financial Statements ....................................................................................................... 37 Budgetary Comparison Schedule – Required Supplementary Information Budgetary Comparison Schedule for the General Fund ................................................................ 70 Note to Required Supplementary Information................................................................................ 71 Combining Non-Major and Fiduciary Fund Financial Statements: Non-Major Governmental Funds Combining Balance Sheet – All Non-Major Governmental Funds By Fund Type........................................................................................................................... 74 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – All Non-Major Governmental Funds - By Fund Type ................................... 75 i TABLE OF CONTENTS, continued FINANCIAL SECTION, continued Non-Major Special Revenue Funds Combining Balance Sheet .......................................................................................................... 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................. 80 Non-Major Debt Service Funds: Combining Balance Sheet .......................................................................................................... 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................. 85 Non-Major Capital Projects Funds: Combining Balance Sheet .......................................................................................................... 88 Combining Statement of Revenues, Expenditures and Changes In Fund Balances .................. 90 Non-Major Enterprise Funds: Combining Statement of Net Assets ........................................................................................... 94 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ...................................................................................................................... 95 Combining Statement of Cash Flows.......................................................................................... 96 Fiduciary Funds: Combining Statement of Changes in Assets and Liabilities - All Agency Funds ....................... 98 Other Supplemental Information: Budgetary Comparison Schedules- Non-Major Governmental Funds: Special Revenue Funds Highway Users …….. .................................................................................................... 102 Local Transportation Assistance ................................................................................... 103 Grants-in-Aid ………. ................................................................................................... 103 Parks and Recreation.................................................................................................... 104 Library………………...................................................................................................... 105 Community Center Building .......................................................................................... 105 Chandler Employee....................................................................................................... 106 Downtown Redevelopment ........................................................................................... 107 Municipal Arts………..................................................................................................... 107 Capital Projects Funds Streets……………. ........................................................................................................ 110 Community Services ..................................................................................................... 111 Public Works and General Government........................................................................ 111 Public Safety Buildings and Improvements ................................................................... 112 Capital Equipment Acquisition and Replacement ......................................................... 113 Special Assessments .................................................................................................... 113 Computer Purchase ...................................................................................................... 114 Fleet Replacement ........................................................................................................ 115 ii TABLE OF CONTENTS, concluded FINANCIAL SECTION, concluded Other Supplemental Information, concluded: HUD Programs: Combining Statement of Net Assets - All HUD Programs ....................................................... 118 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - All HUD Programs .......................................................................... 120 STATISTICAL SECTION Government-Wide Revenues ............................................................................................................... 123 Government-Wide Expenses by Function ............................................................................................ 124 General Governmental Revenues By Source - Last Ten Fiscal Years................................................. 125 General Governmental Tax Revenues By Source - Last Ten Fiscal Years.......................................... 126 General Governmental Expenditures by Function Last Ten Fiscal Years ..................................................................................................................... 127 Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years ..................................................................................................................... 128 Property Tax Levies - Direct and Overlapping Governments Last Ten Fiscal Years ..................................................................................................................... 130 2003-2004 Property Tax Levies Applicable to Chandler Property Owners .......................................... 132 Property Tax Levies and Collections - Last Ten Fiscal Years .............................................................. 134 Special Assessment Collections - Last Ten Fiscal Years..................................................................... 135 Ratio of Net General Bonded Debt to Assessed Valuation and Net General Bonded Debt Per Capita - Last Ten Fiscal Years ................................................................................................. 136 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures - Last Ten Fiscal Years ............................................................................................. 137 Computation of Legal Debt Margin - General Obligation Bonds........................................................... 138 Computation of Direct and Overlapping Bonded Debt and Assessed Valuation .................................. 138 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years........................... 139 Estimated Assessed Valuations of Major Taxpayers............................................................................ 140 Schedule of Revenue Bond Coverage: Highway Users Fund - Last Ten Fiscal Years................................................................................. 141 Enterprise Funds - Last Ten Fiscal Years ...................................................................................... 141 Property Value and Construction - Last Ten Fiscal Years.................................................................... 142 System Development Fees - Last Ten Fiscal Years............................................................................. 143 Demographic Statistics - Last Ten Fiscal Years ................................................................................... 144 Miscellaneous Statistical Data .............................................................................................................. 145 iii INTRODUCTORY SECTION This GIS map shows the locations of parks and the amenities that are offered at the particular locations. Other locations such as libraries, museums and pools are of interest to the Community Services Department. The locations are represented by polygons that outline the particular site area. INTRODUCTORY SECTION The introductory section includes the letter of transmittal, an organizational chart, and the Certificate of Achievement for Excellence in Financial Reporting. GOVERNMENTAL STRUCTURE, LOCAL ECONOMIC CONDITION AND OUTLOOK The City, incorporated on February 17, 1920, is located in the southeastern portion of Maricopa County (the County), and encompasses approximately 63 square miles. The City has operated under a council-manager form of government since May 25, 1964, and is governed by the City Council, consisting of a mayor and a seven member council. Council members are elected atlarge on a staggered basis; the mayor is elected for a two-year term and council members are elected for four-year terms. The City Council is vested with policy and legislative authority, and is responsible for passing ordinances, adopting the budget, appointing committee, commission and board members, and appointing the positions of City Manager, City Attorney, City Clerk and City Magistrate. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City is one of the fastest growing communities in the County and is one of several major cities comprising the greater Phoenix metropolitan area, which is the economic, political and population center of the state of Arizona. Between 1992 and 2004, the City’s population increased by over 100 percent, from 100,416 to 224,644. The City’s tremendous growth is attributable to the growth in its manufacturing sector, which is led by high-tech industrial companies such as Intel, Motorola, and Microchip Technology. These three companies combined employ 14,250 in the City. The City boasts a strong labor market serving the high technology field’s demand for skilled workers. Resident population has a median age of 31.2 years and a median household income of approximately $71,190. In addition, approximately 77 percent of the population has a college degree or some college education. The City has an expanding high technology base. Over 75 percent of the City’s manufacturing employees are in high technology fields; the national average is 15 percent. Unemployment averaged 3.1 percent for fiscal year 2003/2004. The City’s outlook for sales tax revenue is positive. The City is experiencing continued growth in its retail sector with the Chandler Fashion Center. This upscale retail mall includes a movie theater and well-known fashion stores such as Nordstrom’s, Robinson-May, and Dillard's. Also included are restaurants such as the Cheesecake Factory, P.F. Chang’s, and many others. For the fiscal year ended June 30, 2004, City sales tax increased by 11.9 percent, or $7.2 million, over the previous fiscal year. 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 3.3 million, making it the 4th most populous county in the nation. The state’s population reached 5.6 million in 2003, representing a 2.9 percent increase over the previous fiscal year. The State’s unemployment rate of 5.1 percent is comparable with the national average of 5.6 percent. MAJOR INITIATIVES For The Year In response to the direction set by the Mayor and Council, top priority was given to quality of life issues during the 2003/2004 fiscal year. The City is proud of the following accomplishments enhancing residents’ quality of life: • Completed the remodeling of “Pages @ the Downtown Library” to create a more functional and attractive reading, popular materials, and programming space and enhanced the Friends’ retail area. • Completed construction of Phase 3 of Tumbleweed Park. La Paloma and Chuparosa Parks were completed and dedicated and Los Arboles Park was constructed. • Completed construction of Fire Station #8 located at 811 W. Frye Road. 2 • Completed the 5 MGD expansion of the Airport Water Reclamation Facility to serve new growth in the southeast portion of the City. Department Focus The Public Works Department is committed to providing safe, reliable, cost effective infrastructure and services to enhance the quality of life in Chandler. The department consists of two divisions, Engineering and Transportation and Operations. Some highlights of the Department include: • Becoming the first city in Arizona and the fifteenth agency in the United States to earn national accreditation from the American Public Works Association. • Administered 70 capital improvement program construction projects, for a total of $69 million. Change orders on closed out projects were less than 1.8% of the overall construction costs. • Completed pavement rehabilitation on 35 lanes of arterial/local streets, completed 57 lane miles of slurry and micro seal, 70 lane miles of acrylic seal and 27 miles of asphalt millings in alleys. • Installed 1,100 new streetlights through land development and capital improvement projects, performed ongoing maintenance on over 23,000 streetlights and 153 traffic signals, installed 17 new permanent traffic signals and 7 temporary span wire signals throughout the City. • Invested in capital improvement projects in Downtown: added period lighting along Boston Street, Commonwealth Avenue and Buffalo Street, created two new parking areas for Old Towne Market Square and Downtown, repaved alleys to serve the Downtown Merchants and created directional signing downtown. For The Future The City Council continues to develop strategies to achieve its overall goal of making the City a great place to live, work and play. These strategies include a commitment to continue to improve the City’s financial strength, a commitment to hold the line on tax and fee increases, a commitment to the City’s employees, and a commitment to quality of life improvements. To this end, several key initiatives in the 2004/05 fiscal year include: • Continuing Neighborhood Revitalization. The City will continue to preserve older neighborhoods through various neighborhood program initiatives and support of neighborhood improvement projects through grants. • Assisting Aging Commercial Centers: The City’s goal is to continue retention and expansion visits to identify distressed strip shopping centers and devise programs for improvements and assistance. • Improving Transportation: The City will continue the evaluation of corridors relative to capacity improvements while maintaining quality aesthetic appearance and improve public transit. FINANCIAL INFORMATION Internal Control Structure Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with GAAP. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. 3 As a recipient of federal, state and county financial assistance, the City is also responsible for ensuring that an adequate internal control structure is in place to ensure and document compliance with applicable laws and regulations related to these programs. This internal control structure is subject to periodic evaluation by management and various other City staff, as needed. Single Audit As a part of the City’s single audit, described earlier, tests were made of the City’s internal control structure and of its compliance with applicable laws and regulations, including those related to federal financial assistance programs. The audit for the fiscal year ended June 30, 2004, disclosed no material internal control weaknesses or material violations of laws and regulations. Budgetary Controls The City maintains budgetary controls as an integral part of its overall system of internal controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, capital projects funds, enterprise funds and internal service funds are included in the annual appropriated budget. The level of budgetary control, i.e., the level at which expenditures cannot legally exceed the appropriated amount, is the total budget, as adopted (e.g., FY 2003/2004, $636,460,827). The City additionally exercises management control and oversight of the budget at the department level within each fund and maintains an encumbrance accounting system as another method of maintaining budgetary control. Encumbered amounts do not lapse at fiscal year-end and subsequent year(s) expenditures against those encumbrances are charged against an encumbrance reserve established at the end of the preceding year(s). As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Cash Management Policies and Practices The cash management program of the City provides for the continuous investment of all idle funds. Also, the City utilizes a pooled cash and investment concept for all funds. Each fund type’s portion of the pool is displayed in the financial statements as Equity in Pooled Cash and Investments. Cash temporarily idle during the fiscal year was invested primarily in the State of Arizona’s Local Government Investment Pool (LGIP) and external investment management firms. In addition, the City may invest in direct obligations of the United States of America or any agency thereof, or any obligation guaranteed by the United States of America or any of its agencies. It is the City’s investment policy to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, all cash deposits were either insured by the Federal Depository Insurance Corporation (FDIC) or collateralized. Risk Management The City maintains and has substantially funded a self-insurance program for its liability, property, worker’s compensation and group insurance coverage needs. Public liability, property claims and worker’s compensation are administered by the City’s Risk Management division in the Management Services Department. Liabilities for these claims, as reported in the financial statements, are based on independently prepared actuarial reports and historical analyses performed by the City. Excess commercial coverage is purchased for claims above the City’s selfinsurance retention and this coverage is obtained via a competitive bidding process. At June 30, 2004, the City’s reserve for self-insurance claims amounted to $30 million. 4 6 City of Chandler, Arizona Organizational Chart Citizens of Chandler Mayor/City Council Advisory Boards/Commissions Community Services Center for the Arts Building & Facilities Community Services Administration City Magistrate City Attorney City Clerk City Manager General Government Library Park Development & Operations Recreation Communications & Public Affairs (Video Production, Administrative Services) Economic Development (Downtown Redevelopment) Public Works Management Services Administration Engineering Transportation & Operations Administration Streets Traffic Engineering Transit Services Street Sweeping Airport Administration & Budget Purchasing & Materials Accounting Licensing,Tax & Utility Services Municipal Utilities Administration Solid Waste Management Water Distribution Water Production Risk Management Environmental Management Fleet Services Police Department Environmental Resources Water Quality Wastewater Collection Wastewater Reserve Osmosis Wastewater Treatment Wastewater Quality Airport Water Reclamation Administration Professional Standards Property & Evidence Forensic Services Operations Criminal Investigation Planning & Research Communications Support Services Detention Services Community Services Neighborhood Services Planning & Development Administration Current Planning Long Range Planning Human Resources Neighborhood Programs IT/GIS Fire Department Development Services Housing & Redevelopment Community Development Administration Emergency Medical Services Operations 7 Prevention Support Services Training 8 FINANCIAL SECTION The financial section includes the City’s independent auditors’ report, management’s discussion and analysis, basic financial statements, required supplementary information, and financial statements for individual funds. FINANCIAL SECTION This GIS map shows the locations of some of the Fire stations, large square footage and multi-storied buildings, 1.5 and 2.5-mile buffers around each Fire station, and the number of fire hydrants within the buffer zones. The Fire Department evaluates this information for public fire protection. MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information) As management of the City of Chandler (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 beginning on page one and the accompanying notes to the financial statements. FINANCIAL HIGHLIGHTS The financial statements which follow the Management’s Discussion and Analysis, provide these significant key financial highlights for 2004 as follows. • The City’s total net assets of $416.0 million in governmental activities and $398.5 million in business-type activities represent 51% and 49% respectively, of the total net assets of $814.6 million. • General revenues from governmental activities accounted for $146.0 million in revenue, or 70% of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $62.9 million or 30% of total governmental activities revenues. The City had $109.5 million of program revenues and $955 thousand in general revenues and transfers related to business-type activities. • The major governmental fund, the General Fund, had $156.3 million in revenues, which primarily consisted of local taxes, intergovernmental taxes, charges for services, and licenses and permits. The total expenditures of the General Fund were $128.6 million and the fund balance increased from $169.6 million to $176.7 million. • Net assets of the Internal Service Fund increased $1.2 million. Operating expenses of $6.4 million exceeded operating revenues of $4.5 million. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are 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 debt, restricted by a outside third 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). In the government-wide financial statements the City’s activities are presented in the following categories: • • Governmental activities – Most of the City’s basic services are included here, such as general government, public safety, community services, community development, and public works. Sales taxes, state shared revenues, and charges for services finance most of these activities. Business type activities – The services provided by the City included here are water, wastewater, solid waste, airport services, and housing authority. The services are financed through user fees and charges. 11 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 • Component units – The discretely presented component units are the Chandler Industrial Development Authority and the Chandler Cultural Foundation. 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 uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows 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 the City’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 decision. 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. These reconciliations are on pages 27 and 29, respectively. The City maintains 21 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 General Fund, which is considered to be a major fund. Data from the other 20 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 in the supplemental section of this report. 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, wastewater, solid waste, airport, 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 an internal service fund to account for its self-insurance fund. Because the self-insurance fund is funded predominantly by governmental functions rather than business-type functions, it has 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, wastewater, and solid waste services, all of which are considered to be major funds of the City. Data from the other two enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor enterprise funds are provided in the form of combining statements and schedules in the supplemental section of 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 reflected in the government-wide financial statement because the resources of those 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. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found immediately following the basic financial statements in this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budget process. The City adopts an annual budget for all governmental and enterprise funds. A budgetary comparison schedule has been provided for the General Fund as required supplementary information. 12 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceeded liabilities by $814.6 million as of June 30, 2004. A significant portion of the City’s net assets (44% percent) reflects its investment in capital assets (e.g., land and improvements, buildings and improvements, improvements other than buildings, vehicles, machinery and equipment and construction in progress), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its 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. The following table presents a condensed statement of the City’s net assets for the fiscal year ended June 30, 2004. Governmental Activities Current assets Capital assets, net Non-current assets Total assets $ 2004 331,796,187 298,530,453 1,320,767 631,647,407 $ Business-type Activities 2003 337,817,824 242,354,198 1,431,644 581,603,666 $ 2004 169,785,510 402,268,224 4,708,267 576,762,001 $ Total (Primary Govt.) 2003 164,293,597 391,518,252 4,825,664 560,637,513 $ 2004 501,581,697 700,798,677 6,029,034 1,208,409,408 $ 2003 502,111,421 633,872,450 6,257,308 1,142,241,179 Current liabilities Non-current liabilities Total liabilities 42,769,242 172,856,890 215,626,132 42,337,265 179,770,730 222,107,995 21,358,343 156,856,452 178,214,795 22,657,080 164,690,663 187,347,743 64,127,585 329,713,342 393,840,927 64,994,345 344,461,393 409,455,738 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 101,665,063 103,169,305 211,186,907 416,021,275 55,963,968 117,111,402 186,420,301 359,495,671 252,117,283 63,985,390 82,444,533 398,547,206 232,259,546 37,198,611 103,831,613 373,289,770 353,782,346 167,154,695 293,631,440 814,568,481 288,223,514 154,310,013 290,251,914 732,785,441 $ $ $ $ $ $ Total net assets Total liabilities Total assets - 200 400 600 800 1,000 1,200 1,400 Millions Governmental Activities Business-type Activities The following are significant current year transactions that have had an impact on the Statement of Net Assets. 13 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 • The addition of $65.8 million in governmental activities capital assets and $65.2 million in business-type activities capital assets through the construction of infrastructure, buildings and improvements, system improvements and equipment additions. Changes in net assets. The City’s total revenues for the fiscal year ended June 30, 2004, were $319.9 million. The total cost of all programs and services was $238.2 million. The following table presents a summary of the changes in net assets for the fiscal year ended June 30, 2004. Governmental Activities 2004 2003 Revenues: Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Property taxes Sales tax Franchise taxes State shared revenues System development fees Investment income (loss) Miscellaneous Total revenues Expenses: General government Public safety Community development Public works Community services Municipal utilities Interest and fiscal charges Water Wastewater Solid waste Airport Housing Authority Total expenses Excess before transfers Transfers in (out) $ 39,282,166 1,488,369 22,107,766 Business-type Activities 2004 2003 $ 36,057,978 3,323,489 29,223,045 $ 68,490,087 6,655,089 34,348,267 $ 64,956,002 6,165,984 29,607,826 Total (Primary Govt.) 2004 2003 $ 107,772,253 8,143,458 56,456,033 $ 101,013,980 9,489,473 58,830,871 20,818,622 66,671,049 2,365,749 37,903,674 15,165,191 2,391,875 695,312 208,889,773 17,953,164 60,614,779 2,249,190 39,559,356 8,105,353 (4,895,290) 261,069 192,452,133 1,199,710 376,917 111,070,070 (2,624,182) 897,511 99,003,141 20,818,622 66,671,049 2,365,749 37,903,674 15,165,191 3,591,585 1,072,229 319,959,843 17,953,164 60,614,779 2,249,190 39,559,356 8,105,353 (7,519,472) 1,158,580 291,455,274 32,925,516 59,666,119 7,457,073 21,308,737 20,200,390 671 11,426,919 152,985,425 30,610,529 54,854,074 7,067,675 16,097,894 19,823,356 97,425 10,858,078 139,409,031 40,544,967 24,505,362 9,705,932 1,458,068 8,977,049 85,191,378 35,992,958 22,986,319 14,414,774 1,420,574 7,082,747 81,897,372 32,925,516 59,666,119 7,457,073 21,308,737 20,200,390 671 11,426,919 40,544,967 24,505,362 9,705,932 1,458,068 8,977,049 238,176,803 30,610,529 54,854,074 7,067,675 16,097,894 19,823,356 97,425 10,858,078 35,992,958 22,986,319 14,414,774 1,420,574 7,082,747 221,306,403 55,904,348 53,043,102 25,878,692 17,105,769 81,783,040 70,148,871 621,256 (767,922) (621,256) 767,922 - - Increase in net assets 56,525,604 52,275,180 25,257,436 17,873,691 81,783,040 70,148,871 Beginning net assets 359,495,671 307,220,491 373,289,770 355,416,079 732,785,441 662,636,570 $ 416,021,275 $ 359,495,671 $ 398,547,206 $ 373,289,770 $ 814,568,481 $ 732,785,441 Ending net assets 14 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 GOVERNMENT-WIDE FINANCIAL ANALYSIS, concluded Revenue Sources - Fiscal Year 2004 Miscellaneous 0.3% System development fees 4.7% State shared revenues 11.8% Charges for services 33.7% Operating grants and contributions 2.5% Franchise taxes 0.7% Sales taxes 20.8% Capital grants and contributions 17.6% Property taxes 6.5% Functional Expenses - Fiscal Year 2004 Solid waste 4.1% Housing Authority 3.8% Airport 0.6% General government 13.8% Wastewater 10.3% Public safety 25.1% Community development 3.1% Water 17.0% Interest expense on long-term debt 4.8% Community services 8.5% Public works 8.9% As evident in the previous graph the largest financing source for the City is charges for services at 33.7% due primarily to the user fees and charges for services in the business-type activities. Sales taxes also comprise a significant portion of the City’s revenues at 20.8% of the total revenues with state shared revenues and capital grants and contributions accounting for an additional 11.8% and 17.6% respectively of the City’s total revenues. The City as a whole uses the largest amount of resources for public safety at 25.1% of the total functional expenses of the City. The next largest users of resources are water services and general government functions at 17.0% and 13.8%, respectively, with wastewater services also accounting for 10.3% of the City’s total expenses. 15 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 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 the 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 the City completed the year, its governmental funds reported a combined fund balance of $259.1 million. Total fund balance constitutes unreserved and undesignated fund balance, which is available for spending at the City’s discretion. Fund balance includes reserved fund of 42% for encumbrances, debt service, and capital improvements. The remaining 58% of fund balance is unreserved. The general fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the general fund was $144.5 million, while total fund balance reached $176.7 million. 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 112.3 percent of total general fund expenditures, while total fund balance represents 137.4 percent of that same amount. The fund balance of the City’s general fund increased by $7.1 million during the current fiscal year. Key factors in this increase are as follows: • Sales tax collections exceeded expectations by $4.5 million primarily due increased construction contracting. • Building permit revenues also exceeded expectations by $2.0 million due to the continued construction growth. Proprietary funds. The City’s proprietary funds provide the same type of information found in the governmentwide financial statements, but in more detail. Net assets for the Enterprise Funds and the Internal Service Funds at the end of the fiscal year amounted to $398.5 million and $30 million, respectively. Net assets after invested in capital assets, net of related debt are 43.7% restricted and 56.3% unrestricted. The net assets of the water fund and wastewater fund increased by $18.4 million and $6.9 million, due largely to capital contributions of $22.5 million and $11.1 million respectively. The net assets of the solid waste fund increased by $575 thousand. BUDGETARY HIGHLIGHTS The City revised the general fund annual operating budget during the year for the purpose of funding capital projects in other funds. A schedule showing the budget amounts compared to the City’s actual financial activity for the General Fund is provided in this report as required supplementary information. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. As of June 30, 2004, the City had invested $353.7 million in capital assets net of related debt, including buildings, facilities, vehicles, computers, equipment, and infrastructure assets. Total depreciation expense for the year was $32.2 million. 16 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 The following table presents capital asset balances net of accumulated depreciation for the fiscal years, ended June 30, 2004 and 2003. Governmental Activities 2004 2003 Land $ 62,426,846 Land improvements Infrastructure System improvements 111,425,779 2004 $ 42,722,438 $ 342,863 79,916,346 - $ 35,900,367 $ 101,294,282 365,760 342,863 365,760 111,425,779 79,916,346 - $ 78,622,805 345,820,344 305,432,823 345,820,344 305,432,823 96,982,316 75,740,131 9,437,489 7,882,481 106,419,805 83,622,612 Machinery and equipment 19,802,631 17,175,121 3,558,711 3,347,236 23,361,342 20,522,357 7,892,881 26,800,162 4,241,381 38,589,585 12,134,262 65,389,747 $ 298,530,453 $ 242,354,198 $ 402,268,224 $ 391,518,252 $ 700,798,677 $ 633,872,450 Total - 2003 38,867,436 - Total (Primary Govt.) 2004 2003 Buildings and improvements Construction in progress - Business-type Activities Additional information on the City’s capital assets can be found in Note 4 of the financial statements. Debt Administration. At year-end, the City had $331.7 in long-term debt outstanding with $18.1 million due within one year. The following table presents a summary of the City’s outstanding long-term debt for the fiscal years ended June 30, 2004 and 2003. General obligation bonds Revenue bonds Special assessment bonds Accrued interest - capital appreciation bonds Certificates of participation Intergovernmental loans Total Governmental Activities 2004 2003 $ 102,480,000 $ 106,970,000 46,700,000 48,725,000 1,443,000 1,547,500 30,928,390 29,147,730 $ 181,551,390 $ 186,390,230 Business-type Activities 2004 2003 $ 23,705,000 $ 25,395,000 116,140,000 122,735,000 10,210,000 11,035,000 75,783 93,706 $ 150,130,783 $ 159,258,706 Total (Primary Govt.) 2004 2003 $ 126,185,000 $ 132,365,000 162,840,000 171,460,000 1,443,000 1,547,500 30,928,390 29,147,730 10,210,000 11,035,000 75,783 93,706 $ 331,682,173 $ 345,648,936 State statutes currently limit the amount of general obligation debt a city may issue to 20 percent of its total assessed valuation for water, sewer, light, open space preserves, parks, playgrounds and recreational facilities. The current debt limitation for the City is $361.1 million. The City has $72.1 million of outstanding general obligation debt for these purposes. State statutes also currently limit the amount of general obligation debt a City may issue to 6 percent of its total assessed valuation for all other purposes. The current debt limitation for the City is $108.3 million. The City has $37.6 million of outstanding general obligation debt for this purpose. The City’s current bond ratings on general obligation bonds are Aa2 from Moody’s Investor Services, AA+ from Standard & Poor’s, and AAA from Fitch Ratings. Ratings for the street and highway users is Aa3 from Moody’s, A+ from Standard & Poor’s, and AA- from Fitch. Water and wastewater revenue bonds are Aa3 from Moody’s Investor Services, AA from Standard & Poor’s, and AA from Fitch. Additional information on the City’s long-term debt can be found in Note 6 of the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET Many factors were considered by the City’s officials during the process of developing the fiscal year 2004-2005 budget. The primary factors were the decline of the national and state economies, no increase in the current property tax rate or water and wastewater rates, and declining growth rate affecting revenues. These indicators were considered when adopting the budget for fiscal year 2004-2005. Amounts available for appropriation in the General Fund budget are $220,706,229, an increase of 7.2%. Increased payroll and employee benefit costs are the primary reason for the increase. No new programs were added to the 2003-2004 budget. 17 CITY OF CHANDLER, ARIZONA Management’s Discussion and Analysis (MD&A) Year Ended June 30, 2004 CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional information, contact the Management Services Department, City of Chandler, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 18 BASIC FINANCIAL STATEMENTS 19 CITY OF CHANDLER, ARIZONA STATEMENT OF NET ASSETS JUNE 30, 2004 Governmental Activities ASSETS Current assets: Equity in pooled cash and investments Cash and investments Accounts receivable (net) Accrued interest receivable Property taxes receivable Other taxes receivable Amounts due from other governments Inventories Special assessments receivable Short term notes receivable Other assets Total current assets $ Noncurrent assets: Other assets Cash and investments - restricted Long-term notes receivable Capital assets, net where applicable Total noncurrent assets Total assets 316,320,044 1,255,261 77,566 867,890 6,686,171 4,788,514 617,058 1,077,701 105,982 331,796,187 Business-type Activities $ 162,230,061 6,918,173 39,624 265,183 281,506 45,513 5,450 169,785,510 Total $ 478,550,105 8,173,434 117,190 867,890 6,686,171 5,053,697 898,564 1,077,701 45,513 111,432 501,581,697 1,320,767 298,530,453 299,851,220 631,647,407 2,558,043 1,181,577 968,647 402,268,224 406,976,491 576,762,001 3,878,810 1,181,577 968,647 700,798,677 706,827,711 1,208,409,408 9,672,879 9,490,184 6,964,848 6,356,771 287,006 8,694,500 1,303,054 42,769,242 3,495,258 1,132,393 1,279,358 3,213,412 128,469 9,453,841 2,655,612 21,358,343 13,168,137 10,622,577 8,244,206 9,570,183 415,475 18,148,341 3,958,666 64,127,585 Noncurrent liabilities: Arbitrage liability Bonds payable Landfill closure and postclosure costs Claims payable Total non-current liabilities Total liabilities 172,856,890 172,856,890 215,626,132 36,399 140,676,942 13,232,167 2,910,944 156,856,452 178,214,795 36,399 313,533,832 13,232,167 2,910,944 329,713,342 393,840,927 NET ASSETS Invested in capital assets, net of related debt Restricted for debt service Restricted for claims Restricted for capital improvements Restricted for donor purposes Unrestricted Total net assets 101,665,063 14,177,737 75,869,259 224,309,216 416,021,275 252,117,283 1,484,640 1,542,183 60,958,567 82,444,533 398,547,206 353,782,346 15,662,377 1,542,183 136,827,826 306,753,749 814,568,481 LIABILITIES Current liabilities: Accounts payable Accrued payroll and compensated absences Trust liabilities and deposits Accrued interest payable Arbitrage liability Bonds payable Deferred revenue Total current liabilities $ $ The notes to the financial statements are an integral part of this statement. 20 $ Component Units Chandler Industrial Chandler Development Cultural Authority Foundation $ 254,300 750 255,050 $ - 567,825 26,123 593,948 1,560,976 255,050 $ 934,945 313 9,788 21,982 967,028 - 151,799 151,799 - 151,799 - 26,123 - 255,050 255,050 $ 567,825 815,229 1,409,177 21 CITY OF CHANDLER, ARIZONA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2004 Program Revenues Functions/Programs Primary Government Governmental activities: General government Public safety Community development Public works Community services Municipal utilities Interest and fiscal charges Total governmental activities Business-type activities: Water Wastewater Solid waste Airport Community services - Housing Authority Total business-type activities Total primary government Component Units Chandler Industrial Development Authority Chandler Cultural Foundation Total component units Charges for Services Expenses $ $ $ $ 32,925,516 59,666,119 7,457,073 21,308,737 20,200,390 671 11,426,919 152,985,425 40,544,967 24,505,362 9,705,932 1,458,068 8,977,049 85,191,378 238,176,803 8,406 684,641 693,047 $ $ $ $ 14,339,606 2,515,026 7,833,679 12,879,966 1,713,889 39,282,166 36,148,220 19,849,892 9,850,919 896,968 1,744,088 68,490,087 107,772,253 6,750 564,528 571,278 Operating Grants and Contributions Capital Grants and Contributions $ $ $ $ $ 175,189 515,678 7,775 789,727 1,488,369 6,655,089 6,655,089 8,143,458 91,440 91,440 $ 939,033 142,385 20,940,509 85,839 22,107,766 22,527,595 11,119,954 406,874 60,786 233,058 34,348,267 56,456,033 $ $ General revenues: Taxes: Property taxes, levied for general purposes Sales taxes Franchise taxes State shared revenues System development fees Investment income Miscellaneous Transfers Total general revenues and transfers Changes in net assets Net assets, beginning of year Net assets, end of year The notes to the financial statements are an integral part of this statement. 22 - Governmental Activities $ Net (Expense) Revenue and Changes in Net Assets Primary Government Component Units Chandler Industrial Chandler Development Cultural Business-type Activities Authority Foundation Totals (17,471,688) (56,493,030) 376,606 12,519,513 (17,610,935) (671) (11,426,919) (90,107,124) - - 18,130,848 6,464,484 551,861 (500,314) (344,814) 24,302,065 24,302,065 (90,107,124) - (17,471,688) (56,493,030) 376,606 12,519,513 (17,610,935) (671) (11,426,919) (90,107,124) - 1,199,710 376,917 (621,256) 955,371 359,495,671 373,289,770 732,785,441 398,547,206 $ (1,656) (1,656) (28,673) (28,673) 28,180 28,180 (493) 255,923 814,568,481 $ 23 - - (873) 81,783,040 $ - 783 783 25,257,436 $ - 20,818,622 66,671,049 2,365,749 37,903,674 15,165,191 3,591,585 1,072,229 147,588,099 56,525,604 416,021,275 $ 18,130,848 6,464,484 551,861 (500,314) (344,814) 24,302,065 (65,805,059) - 20,818,622 66,671,049 2,365,749 37,903,674 15,165,191 2,391,875 695,312 621,256 146,632,728 $ $ 255,050 1,409,670 $ 1,409,177 CITY OF CHANDLER, ARIZONA BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2004 General Fund ASSETS Equity in pooled cash and investments Accounts receivable (net) Accrued interest receivable Property taxes receivable Other taxes receivable Due from other funds Amounts due from other governments Inventories Special assessments receivable Other assets Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and compensated absences Trust liabilities and deposits Accrued interest payable Due to other funds Arbitrage liability Bonds payable Deferred revenue Total liabilities $ $ $ 184,971,717 1,208,106 47,241 867,890 6,686,171 2,029,879 617,058 100,642 196,528,704 $ 3,378,479 Fund balances: Reserved for capital improvements Reserved for contractual obligations Reserved for debt service Reserved for encumbrances Unreserved: Undesignated Designated Unreserved reported in: Special revenue funds Total fund balances Total liabilities and fund balances Non-Major Governmental Funds $ $ 96,607,403 40,093 21,844 2,404,000 2,758,635 1,077,701 5,340 102,915,016 $ 281,579,120 1,248,199 69,085 867,890 6,686,171 2,404,000 4,788,514 617,058 1,077,701 105,982 299,443,720 $ 1,623,487 $ 5,001,966 9,120,060 6,964,848 328,706 19,792,093 310,375 6,356,771 2,404,000 287,006 8,585,000 996,003 20,562,642 9,430,435 6,964,848 6,356,771 2,404,000 287,006 8,585,000 1,324,709 40,354,735 31,500,000 13,343,411 5,801,328 75,869,259 834,326 - 75,869,259 31,500,000 14,177,737 5,801,328 5,331,450 120,760,422 196,528,704 5,331,450 120,760,422 - 176,736,611 $ Total Governmental Funds 5,648,789 82,352,374 $ 102,915,016 5,648,789 259,088,985 $ 299,443,720 The notes to the financial statements are an integral part of this statement. 24 CITY OF CHANDLER, ARIZONA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2004 Total Governmental Fund balances $ 259,088,985 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental acitivities are not financial resources and therefore are not reported in the funds. Governmental capital assets Less accumulated depreciation $ 335,669,426 (37,138,973) The Internal service fund is used by management to charge the cost of self insurance programs to user funds. Certain assets and liabilities of the internal service fund are included in governmental activites in the Statement of Net Assets. 298,530,453 30,025,805 Certain revenues are not available to pay for current period expenditures and, therefore, are deferred in the funds. Property taxes Special assessments $ 328,706 996,003 1,324,709 Long-term liabilities, including bonds payable, special assessment debt and accrued interest on capital bonds, are not due and payable in the current period and therefore are not reported in the funds Bonds payable Bond premium Bond issuance costs Special assessment debt Accrued interest, capital appreciation bonds $ (140,595,000) (1,303,054) 1,320,767 (1,443,000) (30,928,390) (172,948,677) $ 416,021,275 Net Assets of Governmental Activities The notes to the financial statements are integral part of this statement. 25 CITY OF CHANDLER, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2004 General Fund Revenues: Taxes-local Taxes-intergovernmental Grants and entitlements System development fees Special assessments Licenses and permits Charges for current services Fines and forfeitures Rentals Contributions Interest income Miscellaneous Total revenues $ Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Capital improvements Debt service Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers out Total other financing sources (uses) 91,492,704 37,948,767 7,500,437 13,283,123 3,517,080 18,012 1,655,916 880,004 156,296,043 $ $ $ 91,492,704 50,173,867 4,217,697 15,165,191 251,608 7,500,437 13,386,852 3,517,080 18,012 5,980 2,170,414 2,204,555 190,104,397 291,746 605,470 8,000 10,550,665 872,112 671 36,794,139 31,024,154 58,407,246 7,449,114 23,027,866 21,048,659 671 36,794,139 128,629,046 8,689,500 9,641,321 67,453,624 8,689,500 9,641,321 196,082,670 27,666,997 (33,645,270) (5,978,273) 570,431 1,000,000 (22,136,958) (20,566,527) 109,588 25,072,155 (6,181,894) 18,999,849 680,019 26,072,155 (28,318,852) (1,566,678) 7,100,470 (14,645,421) (7,544,951) 169,636,141 Fund balances, beginning of year 12,225,100 4,217,697 15,165,191 251,608 103,729 5,980 514,498 1,324,551 33,808,354 Total Governmental Funds 30,732,408 57,801,776 7,441,114 12,477,201 20,176,547 - Changes in fund balances Fund balances, end of year Non-Major Governmental Funds 176,736,611 96,997,795 $ 82,352,374 The notes to the financial statements are an integral part of this statement. 26 266,633,936 $ 259,088,985 CITY OF CHANDLER, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2004 Net Changes in Fund Balances -Total Governmental Funds $ (7,544,951) Amounts reported for governmental activities in the Statement of Activities are different because: 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 as depreciation expense. Expenditures for capital improvements Expenditures for capital assets from general fund Less current year depreciation $ 36,794,139 11,544,973 (9,215,716) 39,123,396 Some items reported in the governmental funds are sources and uses of current financial resources and therefore are not reported as revenues or expenses in statement of activities. These items include. Principal payments on debt Bond premium Loss on disposal of fixed assets $ 8,689,500 105,939 (1,286,238) 7,509,201 Bond issuance costs are recognized as debt service expenditures in the governmental funds, however these costs are capitalized on the statement of assets and amortized in the statement of activities. (110,877) Accrued interest payable related to long-term debt is recognized as an expense in the statement of activities, however is not recognized in the governmental funds because it is not payable from current financial resources. (1,780,660) Certain revenues in the governmental funds that provide current financial resources are not included in the statement of activities because they were recognized in a prior period. However, other revenues that are deferred in the governmental funds because they do not provide current financial resources due to unavailability are recognized in the statement of activities. Property taxes, levied for general purposes Special assessments $ (29,191) (174,402) Capital assets contributed by developers to the City are not recorded in the governmental funds as they do not provide current financial resources but are recognized in the statement of activities as program revenues. (203,593) 18,339,097 Internal service funds are used by management to charge the costs of certain activities, such as the City's self-insurance program to individual funds. The following activities of the internal service fund is reported with governmental activities. Operating loss Investment income $ Elimination of interfund transactions (1,895,423) 221,461 2,867,953 1,193,991 $ 56,525,604 Change in Net Assets in Governmental Activities. The notes to the financial statements are integral part of this statement. 27 CITY OF CHANDLER, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2004 Business Type Activities - Enterprise Funds Water ASSETS Current assets: Equity in pooled cash and investments Accounts receivable Accrued interest receivable Amounts due from other governments Inventories Short term notes receivable Other assets Total current assets $ Noncurrent assets: Other assets Cash and investments - restricted Long-term notes receivable Capital assets, net where applicable Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll and compensated absences Trust liabilities and deposits Accrued interest payable Arbitrage liability Bonds payable Deferred revenue Total current liabilities Noncurrent liabilities: Bonds payable Arbitrage liability Landfill closure and postclosure costs Claims payable Total non-current liabilities Total liabilities Wastewater 108,692,311 4,360,321 26,556 251,057 113,330,245 $ 32,534,515 1,720,517 8,043 34,263,075 Solid Waste $ 17,351,653 821,412 4,161 5,450 18,182,676 1,381,348 289,689 195,831,030 197,502,067 310,832,312 1,176,695 891,888 162,108,652 164,177,235 198,440,310 9,494,651 9,494,651 27,677,327 1,147,392 1,706,150 498,302 582,837 754,569 2,053,476 104,308 5,624,732 1,704,441 11,971,755 252,828 248,072 1,039,112 1,881 3,685,268 900,693 7,834,004 95,640 14,959 97,519 21,404 125,000 35,264 888,088 86,836,101 35,767 2,910,944 89,782,812 101,754,567 49,773,899 475 49,774,374 57,608,378 3,340,000 157 13,232,167 16,572,324 17,460,412 103,350,196 36,181,427 289,689 1,542,183 67,714,250 209,077,745 108,649,485 10,454,782 891,888 20,835,777 140,831,932 6,029,494 14,266,260 303,063 (10,381,902) 10,216,915 NET ASSETS Invested in capital assets, net of related debt Restricted for capital improvements Restricted for debt service Restricted for claims Unrestricted (deficit) Total net assets $ $ $ The notes to the financial statements are an integral part of this statement. 28 Non-Major Enterprise Funds $ $ 3,651,582 15,923 864 265,183 30,449 45,513 4,009,514 Governmental Activities: Internal Service Fund Total $ 162,230,061 6,918,173 39,624 265,183 281,506 45,513 5,450 169,785,510 $ 34,740,924 7,062 8,481 34,756,467 968,647 34,833,891 35,802,538 39,812,052 2,558,043 1,181,577 968,647 402,268,224 406,976,491 576,762,001 34,756,467 143,414 3,495,258 4,670,913 201,088 261,758 23,305 876 18,841 15,214 664,496 1,132,393 1,279,358 3,213,412 128,469 9,453,841 2,655,612 21,358,343 59,749 4,730,662 726,942 726,942 1,391,438 140,676,942 36,399 13,232,167 2,910,944 156,856,452 178,214,795 4,730,662 34,088,108 56,098 4,276,408 38,420,614 252,117,283 60,958,567 1,484,640 1,542,183 82,444,533 398,547,206 30,025,805 30,025,805 $ $ 29 CITY OF CHANDLER, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2004 Enterprise Funds Water Operating revenues: Service fees Grants and entitlements Charges for current services Rentals Worker's compensation premiums Miscellaneous House sales Total operating revenues $ Operating expenses: General and administrative Personal services Contractual services Commodities Claims Housing assistance payments Depreciation and amortization Landfill closure and postclosure House sales expense Total operating expenses Wastewater 36,148,220 8,041 36,156,261 $ 3,559,891 5,837,574 7,309,004 7,830,226 11,580,665 36,117,360 Operating income (loss) $ 2,521,610 2,544,282 4,025,885 2,753,567 9,825,219 21,670,563 38,901 Nonoperating revenues (expenses): Interest income Landfill energy sales 19,849,892 112,638 19,962,530 Solid Waste 830,203 1,227,464 5,534,405 475,648 475,935 968,162 9,511,817 (1,708,033) 717,617 - 9,825,572 996 9,826,568 314,751 334,180 - 119,677 25,347 Gain/Loss on disposal of capital assets Interest expense Accretion of bond premium Amortization of bond issuance costs Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers (41,000) (4,336,428) 158,362 (208,541) (34,398) (2,673,222) 77,493 (204,672) (195,358) 1,313 (70) (3,709,990) (2,500,619) (49,091) (3,671,089) (4,208,652) 265,660 Capital contributions Transfers in Transfers out 22,527,595 159,990 (609,706) 11,119,954 (60,266) 406,874 (97,184) Changes in net assets 18,406,790 6,851,036 575,350 190,670,955 133,980,896 9,641,565 Total net assets, beginning of year Total net assets, end of year $ 209,077,745 $ 140,831,932 $ 10,216,915 The notes to the financial statements are an integral part of this statement. 30 Non-Major Enterprise Funds $ 896,968 6,655,089 599,088 255,242 1,145,000 9,551,387 Total $ 1,845,270 1,826,858 975,978 3,736,505 1,057,062 1,049,856 10,491,529 66,720,652 6,655,089 599,088 376,917 1,145,000 75,496,746 $ 26,030 4,306,147 190,091 4,522,268 6,911,704 11,454,590 18,696,152 12,035,419 3,736,505 22,938,881 968,162 1,049,856 77,791,269 798,507 601,718 701,388 4,316,078 6,417,691 (940,142) (2,294,523) (1,895,423) 28,236 - 1,199,710 25,347 107,401 (50,989) - 32,003 (7,255,997) 237,168 (413,283) 84,648 (6,175,052) (855,494) (8,469,575) (1,673,962) 293,844 (14,090) 34,348,267 159,990 (781,246) 2,900,000 (32,047) (575,740) 25,257,436 1,193,991 373,289,770 28,831,814 38,996,354 $ Governmental Activities: Internal Service Fund 38,420,614 $ 398,547,206 221,461 221,461 $ 30,025,805 31 CITY OF CHANDLER, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2004 ENTERPRISE FUNDS WATER CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received From Customers Cash Received From Grantors Cash Received From Interfund Services Provided Cash Payments to Suppliers Cash Payments to Employees Net Cash Provided By (Used For) Operating Activities $ CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers In From Other Funds Transfers Out To Other Funds Net Cash Provided By (Used For) Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition/Construction of Capital Assets Proceeds from the Sale of Capital Assets Principal Paid on Bond Maturities Interest Paid on Bonds Principal Received on Mortgage Notes Proceeds from Capital Grants Capital Contributed by Developers and Grantors Net Cash Provided By (Used For) Capital And Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES: Interest Received Net Cash Provided By (Used For) Investing Activities 36,554,635 (18,658,471) (5,794,097) 12,102,067 WASTEWATER $ Reconciliation Of Operating Income (Loss) To Net Cash Provided By (Used For) Operating Activities: Operating Income (Loss) Adjustments To Reconcile Operating Income (Loss) To Net Cash Provided By (Used For) Operating Activities: Depreciation and Amortization Landfill Closure and Postclosure Costs Landfill Energy Sales Changes In Assets And Liabilities: (Increase) Decrease In Receivables (Increase) Decrease In Inventories Decrease in Assets Held for Resale (Increase) Decrease in Other Assets (Decrease) Increase In Payables Increase in Accrued Payroll and Compensated Absences Increase In Deposits Increase in Claims Payable Increase (Decrease) In Deferred Revenue Total Adjustments Net Cash Provided By (Used For) Operating Activities Reconciliation of Cash and Cash Equivalents at End of Year to Statement of Net Assets: Equity in Pooled Cash and Investments Cash and Investments - restricted Cash and Cash Equivalents at End of Year (97,184) (97,184) (18,076,608) (13,745,466) (1,537,529) (5,812,395) (4,118,773) 22,527,595 (5,480,181) (3,172,606) (2,865,333) 11,119,954 (8,663,451) (124,843) (203,595) 406,874 (1,459,093) $ $ 38,901 $ $ 410,134 410,134 154,926 154,926 $ (599,652) 34,026,055 33,426,403 $ 290,417 17,061,236 17,351,653 $ (1,708,033) $ 314,751 11,580,665 - 9,825,219 - 475,935 968,162 25,347 306,005 11,848 208,541 (623,542) 43,477 42,191 652,344 (158,363) 12,063,166 12,102,067 397,961 (853,876) 33,160 19,500 9,421,964 7,713,931 90,420 (175,562) (20,642) 1,599 11,758 1,377,017 1,691,768 108,692,311 289,689 108,982,000 $ $ $ The notes to the financial statements are an integral part of this statement. 32 9,930,345 (6,990,471) (1,248,106) 1,691,768 (60,266) (60,266) 7,081,931 101,900,069 108,982,000 $ $ 159,990 (609,706) (449,716) 909,761 909,761 Net Increase (Decrease) In Cash And Cash Equivalents Cash And Cash Equivalents At Beginning Of Year Cash And Cash Equivalents At End Of Year 20,379,991 (10,154,938) (2,511,122) 7,713,931 SOLID WASTE 32,534,515 891,888 33,426,403 $ $ $ 17,351,653 17,351,653 GOVERNMENTAL ACTIVITIES: NON-MAJOR ENTERPRISE FUNDS $ $ $ $ $ $ 2,663,119 6,694,774 (7,178,902) (1,872,355) 306,636 TOTAL $ 69,528,090 6,694,774 (42,982,782) (11,425,680) 21,814,402 INTERNAL SERVICE FUND $ 4,515,229 (6,291,441) (806,763) (2,582,975) (14,090) (14,090) 159,990 (781,246) (621,256) (324,758) 173,684 (17,922) (50,989) 25,576 233,058 60,786 99,435 (33,684,361) 173,684 (9,127,766) (7,238,690) 25,576 233,058 34,115,209 (15,503,290) 35,047 35,047 1,509,868 1,509,868 291,982 291,982 427,028 3,224,554 3,651,582 7,199,724 156,211,914 163,411,638 $ 576,960 34,163,964 34,740,924 $ (1,895,423) (940,142) $ $ (2,294,523) 1,057,062 - 22,938,881 968,162 25,347 (228,657) (9,444) 550,781 (149,016) 917 20,935 4,200 1,246,778 306,636 565,729 2,404 550,781 208,541 (1,801,996) 56,912 84,225 652,344 (142,405) 24,108,925 21,814,402 3,651,582 3,651,582 $ $ $ 162,230,061 1,181,577 163,411,638 2,900,000 (32,047) 2,867,953 - - $ $ $ (7,039) (672,257) (8,256) (687,552) (2,582,975) 34,740,924 34,740,924 33 CITY OF CHANDLER, ARIZONA STATEMENT OF FIDUCIARY FUNDS NET ASSETS JUNE 30, 2004 Volunteer Fireman's Pension and Trust Fund ASSETS Equity in pooled cash and investments Accrued interest receivable Other taxes receivable Accounts receivable Total assets $ 66,799 7 66,806 LIABILITIES Due to others Total liabilities NET ASSETS Held in trust for pension benefits Agency Funds $ - $ 66,806 19,645 887 20,532 20,532 20,532 $ - The notes to the financial statements are an integral part of this statement. 34 CITY OF CHANDLER, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS - FIDUCIARY FUND JUNE 30, 2004 Volunteer Fireman's Pension and Relief Trust Fund ADDITIONS Fire insurance premium tax Investment income Total additions $ DEDUCTIONS Benefits paid to plan members Total deductions 1,307 501 1,808 4,800 4,800 Change in net assets (2,992) Total net assets, beginning of year 69,798 Total net assets, end of year $ 66,806 The notes to the financial statements are an integral part of this statement 35 36 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 The City of Chandler (the City) was incorporated on February 17, 1920. On May 25, 1964, voters ratified a city charter providing for a Council-Manager form of government. The government of the City is operated by authority of its charter, as limited by the state legislature. The City is governed by an elected mayor and sevenmember council. The following notes to the financial statements are an integral part of the City’s financial statements. NOTE 1 - Summary of Significant Accounting Policies The accounting policies and procedures of the City conform to accounting principles generally accepted in the United States of America (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below. A. Reporting Entity As required by GAAP, these financial statements present the City and its component units, i.e., entities for which the City is considered to be financially accountable and/or exercise significant influence over operations. Blended component units, although legally separate entities, are in substance part of the City’s operations, and therefore data from these units are combined with data of the City. The City’s discretely presented component units, on the other hand, are reported in a separate column in the basic financial statements, to emphasize that they are legally separate from the City. The component units discussed below are included in the City’s reporting entity because of the significance of their operational and/or financial relationships with the City. Each component unit has a June 30 year-end. 1. Blended Component Unit The City of Chandler Municipal Property Corporation (the Corporation) is a nonprofit corporation which exists solely for the purpose of constructing or otherwise acquiring or equipping buildings, structures or improvements on land owned by the City for the benefit, common good and general welfare of the City and its citizens. The five members of the Board, who are responsible for approving the Corporation’s bond sales, are appointed by the Chandler City Council. Additionally, all bond sales must be submitted to and approved by the City Council. All financial activities are reported within the Enterprise Funds of the City. Financial statements for the Corporation are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 2. Discretely Presented Component Units The component unit column in the basic financial statements includes the financial data of the Chandler Industrial Development Authority (the Authority). The Authority is responsible for the issuance of taxexempt bonds for qualified projects approved by the Authority and the City Council. The Authority has a seven-member board of directors appointed by the City Council. The City is able to impose its will on the Authority inasmuch as the City Council must vote to ratify the actions of the Authority with regard to the issuance of bonds. The accounting records of the Authority are maintained by the City and financial statements for the Authority are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. The Chandler Cultural Foundation (the Foundation) oversees the operations of the Chandler Center for the Arts, for the selection and scheduling of performances, other facility use and general policy setting activities. The City is able to significantly influence its operations. Specifically, the Foundation’s budget is annually reviewed and approved by the City Council and the Foundation’s nine-member Board is appointed by the City Council. Financial statements for the Foundation are available from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. 37 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 1 - Summary of Significant Accounting Policies, continued B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) present financial information about the City as a whole. The reported information includes all of the nonfiduciary activities of the City and its component units. For the most part, the effect of interfund activity has been removed from these statements. These statements are to distinguish between the governmental and business-type activities of the City. Governmental activities normally are supported by taxes and intergovernmental revenues, and 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, State shared revenues, system development fees, investment income and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation Government-wide Financial Statements - The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund, fiduciary fund, and agency 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 grantor or provider have been met. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements, the exception is any interfund activity between governmental and business type activities, such as transfers. Fund Financial Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, licenses and permits, charges for services, special assessments and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash. Delinquent property taxes have been recorded as deferred revenue. Grants and similar awards received before the eligibility requirements are met are also recorded as deferred revenue. Receivables that will not be collected within the available period have also been reported as deferred revenue on the governmental fund financial statements. 38 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 1 - Summary of Significant Accounting Policies, continued The City reports the following major governmental fund: General Fund – This fund accounts for all financial resources of the City, except those required to be accounted for in other funds. The City reports the following major proprietary funds: Water Services Fund – This fund is used to account for the provision of water services to the residents of the City and certain residents outside of City limits. All activities necessary to provide such service are accounted for in this fund. Wastewater Services Fund – This fund is used to account for the provision of wastewater services to the residents of the City and certain residents outside of City limits. All activities necessary to provide such service are accounted for in this fund. Solid Waste Fund – This fund is used to account for the provision of solid waste (refuse) services to the residential and commercial customers of the City. All activities necessary to provide such service are accounted for in this fund. Additionally, the City reports the following fund types: Internal Service Fund - Internal Service Funds are established to account for financing of goods and services provided by one department or agency to other departments or agencies of the City on a cost reimbursement basis. The Internal Service Fund consists of a Self Insurance Fund that administers the City’s self-insured property, liability and workers’ compensation insurance program. Fiduciary Fund – Fiduciary Funds account for assets held by the City on behalf of others and includes the Volunteer Firefighter’s Relief and Pension Trust Fund. The Volunteer Firefighter’s Relief and Pension Trust Fund accounts for the contributions to and earnings of the volunteer firefighter’s pension trust. Agency Funds – Agency funds account for resources held by the City in a custodial capacity on behalf of others. All applicable pronouncements of the Financial Accounting Standards Board (FASB) issued on or before November 30, 1989, as well as the FASB Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins are followed in both the government-wide business type and enterprise fund financial statements, unless these pronouncements conflict with or contradict GASB pronouncements. Under this requirement, the City is given the option whether or not to apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with or contradict GASB pronouncements. Accordingly, the City has elected not to implement FASB Statements and Interpretations issued after November 30, 1989. 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 City’s internal service fund are interfund transfers from the general fund and water fund for property and liability insurance and charges to user departments for premiums related to worker’s compensation selfinsurance. The principal operating revenues of the City’s enterprise funds are user fees and charges to customers for water, wastewater, solid waste, and airport services. Operating expenses for these funds include the cost of sales and services, administrative expenses, depreciation, claims and premiums. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 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. 39 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 1 - Summary of Significant Accounting Policies, continued The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. Internal service funds are combined and the totals are presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by fund type. D. Budgeting and Budgetary Control The City Council formally adopts an annual operating budget for the General, Special Revenue, Capital Projects, Enterprise and Internal Service Funds. Formal budgetary integration is not employed for the Debt Service Funds because effective budgetary control is alternately achieved through bond indenture provisions. The level of control at which expenditures may not exceed budget is by fund, except for bond and grants-inaid funds, which are exempted by statute. Upon written request by the City Manager, the City Council has the authority to transfer part or all of any unencumbered appropriation balance from one department to another per City Charter requirement. The City Manager and Department heads have the authority to transfer appropriations between divisions and expenditure categories within departments. Appropriations totaling $3,206,937 were transferred from the contingency reserves within the General, Capital Projects, and Internal Service funds. All appropriations expire at the end of the fiscal year except for encumbered appropriations. Encumbrance accounting, under which purchase orders, contracts and other commitments for the future expenditure of funds are recorded in order to reserve that portion of the related fund balance, is employed in the governmental fund types. Encumbrances outstanding at year-end are reported as reservations of fund balances. The budgets are adopted on a basis differing from GAAP in that for budgetary purposes: (1) current year encumbrances are treated as expenditures; (2) bond proceeds for proprietary funds are considered revenue; (3) capital outlays for enterprise funds are treated as expenditures; (4) debt service principal payments are treated as expenditures for enterprise funds; (5) accrued compensated absences are not recognized as expenditures; (6) depreciation and amortization are not recognized as expenditures; (7) estimated landfill closure and postclosure costs are not recognized as expenditures until incurred; and (8) sales tax collected by merchants but not yet required to be remitted at the end of the fiscal year is not recorded as revenue. On June 3, 1980, the voters of Arizona approved an expenditure limitation for all local governments. This limitation restricts the growth of expenditures to a percentage determined by population and inflation, with certain expenditures excluded from the limitation. Through a Home Rule option, any city can adopt its own alternative expenditure limitation if a majority of the qualified electors vote in favor of the issue at a regular election. At the primary election held March 12, 2002, the City of Chandler voters approved continuance of the Home Rule option. The Home Rule option, currently in effect, must be submitted to the electorate for renewal in 2006 at which time an additional four-year period can be implemented. E. Pooled Cash and Investments City Charter, Ordinance and Trust Agreements authorize the City to invest in obligations of the U.S. Treasury, its agencies, and instrumentalities, certificates of deposit in eligible depositories, repurchase agreements, and the State of Arizona’s Local Government Investment Pool (LGIP). The City of Chandler Municipal Property Corporation is additionally authorized to invest in bankers acceptances, U.S. Corporate obligations rated Aa3 and AA-, or better, full faith and credit general obligations or special revenue bonds of any state or political subdivision rated AAA and Aaa, Refcorp interest strips and money market funds. The State Board of Deposit provides oversight for the State Treasurer’s pool, and the LGIP Advisory Committee provides consultation and advice to the Treasurer. The fair value of a participant’s position in the pool approximates the value of that participant’s pool shares. 40 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 1 - Summary of Significant Accounting Policies, continued Nonparticipating interest-earning investment contracts are stated at cost. Money market investments and participating interest investment contracts with a remaining maturity of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Cash resources of the City are combined to form a pool of cash and investments. Excluded from this pool are the cash and investments of the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Interest earned on the pooled cash and investments is distributed each month on the basis of average monthly equity in the pool. F. Restricted Assets Certain proceeds of the City’s enterprise funds revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net assets because their use is limited by applicable bond covenants. G. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All trade and property tax receivables are shown net of an allowance for uncollectibles. Trade accounts receivable in excess of 90 days comprise the trade accounts receivable allowance for uncollectibles. H. Inventories Inventories are stated at average cost using the first-in/first-out (FIFO) method. Inventories are recorded as expenses/expenditures when consumed in the government-wide financial statements and governmental and proprietary fund financial statements, respectively. I. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. General government infrastructure capital assets include only those assets acquired or constructed since July 1, 2001. The City will complete the addition of infrastructure by June 30, 2006. In addition, the City defines these assets in general as those assets included in capital improvement projects completed at year’s end in excess of $100,000. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are completed. 41 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 1 - Summary of Significant Accounting Policies, continued Estimated useful lives for capital assets were determined based on the City’s historical experience and the various industry standards. Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Building Improvements Infrastructure System improvements Vehicles Machinery and equipment Years 20-40 20 12-50 25 4-7 5-15 J. Compensated Absences Vacation leave vests with the employee as it is earned. All employees may carry forward only the amount of vacation benefits equal to the maximum allowable earned credits for the preceding calendar year. Accordingly, at fiscal year end, the liability for accumulated vacation is reported on the government-wide and proprietary fund financial statements as a current liability. Funds include an accrual of vacation pay and related benefits, which would normally be liquidated with expendable available financial resources. Upon termination or retirement, an employee will be compensated for accumulated vacation leave up to a maximum of 240 hours dependent on accumulated time and the individual's vacation benefits associated with their rank within the City. Payment will be based on the individual's rate of pay at termination or retirement. Upon death, the same benefits shall be paid to the employee's beneficiary. Sick leave benefits provided for ordinary sick pay are not vested with the employee. Upon retirement, an employee will be compensated for 50 percent of accumulated sick leave up to 480 hours. Payment will be based on the monthly compensation paid to the employee at the time of retirement. Upon death, the same benefits shall be paid to the employee's beneficiary. K. Long-Term Obligations In the government-wide financial statements and proprietary fund statements, long-term debt and other longterm obligations are reported as liabilities in the applicable governmental or business-type activities and proprietary fund statement of net assets. Bond related charges and credits, such as premiums, discounts and issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. In the fund financial statements, governmental funds 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. The Debt Service Funds are specifically established to account for and service the long-term obligations for the governmental funds and special assessment debt. Each Enterprise Fund individually accounts for and services the applicable bonds and lease purchase obligations which benefit these funds. Long-term obligations are recognized as a liability of a governmental fund when due, or when resources have been accumulated for payment early in the following year. For other long-term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. 42 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 1 - Summary of Significant Accounting Policies, concluded Deep-discount debt instruments ("capital appreciation bonds") are issued at stated interest rates that are significantly below their effective interest rate, resulting in a substantial (i.e., deep) discount. Implicit interest on these bonds is not paid until the bond matures; therefore, the net value of the bonds is accreted (i.e., the discount is reduced) over the life of the bonds. Accreted interest is calculated each year using the interest method and is treated as an addition to the principal amount of the bonds recorded as long-term obligations. In addition, deep-discount capital appreciation bonds may be sold at a substantial premium. In the government-wide financial statements, premiums on capital appreciation bonds are recorded at face value. L. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Restrictions of retained earnings are limited to outside third-party restrictions. Designations of fund balance represent tentative management plans that are subject to change. M. Capital Contributions - Enterprise Funds Capital contributions as shown in the Enterprise Funds represent Federal and State grants received, subdividers’ costs of installing water mains, water service connections installed at the customers’ expense, and transfers of equipment from governmental funds. Capital contributions are shown as an inflow of resources in both the government-wide and fund financial statements. N. Post-Employment Health Care and Life Insurance Benefits In addition to providing pension benefits, the City allows for continuance of certain health care and life insurance benefits for retired employees. Substantially all of the City's employees may become eligible for those benefits if they are eligible to receive a retirement pension when leaving employment with the City. The cost of retiree health care and life insurance premiums is borne both by the retiree and the specific retirement plan under which they participated. There is no direct cost paid by the City. O. Statements of Cash Flows The City considers all highly liquid investments (including restricted assets) with an original maturity of three months or less to be cash equivalents. In the statements of cash flows, cash receipts and payments are classified according to whether they stem from operating, noncapital financing, capital and related financing, or investing activities. P. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund transfers in the fund statements are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. Q. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 43 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 2 - Cash and Investments The City maintains a cash and investment pool that is available for use by all funds, except for the Chandler Industrial Development Authority and the Chandler Cultural Foundation. Each fund’s portion of this pool is displayed on the financial statements as Equity in Pooled Cash and Investments. Pooled cash and investments are stated at fair value with accrued interest shown separately. Restricted cash and investments are amounts held separately by trustees and amounts segregated due to their source and future intent. In addition, investments are separately held by the Industrial Development Authority and the Chandler Cultural Foundation. Deposits At year-end, the carrying amount of the City deposits was $31,890,987, and the bank balance was $37,180,424. Of the bank balance, $100,000 was covered by federal depository insurance and $37,080,424, was covered by collateral held in the pledging bank’s trust department in the City’s name. The $5,289,437 difference represents outstanding checks and other reconciling items at June 30, 2004. At year-end, the carrying amount of deposits for the Chandler Industrial Development Authority was $55,892 and the bank balance was $55,892. The bank balance of $55,892 was covered by federal depository insurance. At year-end, the carrying amount of deposits for Chandler Cultural Foundation was $176,468 and the bank balance was $210,523. Of the bank balance, $100,000 was covered by federal depository insurance. The remaining balance of $110,523 was collateralized with securities held by the pledging financial institution’s trust department or agent, but not in the Chandler Cultural Foundation’s name. Investments The City’s investments are categorized below to give an indication of the level of risk assumed by the City at June 30, 2004. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City’s name. The LGIP is an external investment pool managed by the State Treasurer’s Office with no regulatory oversight. The City’s investment in the State of Arizona’s LGIP is held in shares, each share is stated at $1 fair value, and is not subject to categorization. Fair Value Category 1 U.S. Government Securities $ 427,228,286 $ 427,228,286 $ 20,658,854 447,887,140 Investments Not Subject to Categorization Investment in State of Arizona Local Government Investment Pool Reconciliation of cash and investments as reported on the Statement of Net Assets: Carrying Amount of Deposits Fair Value of Investments Total Cash and Investments Equity in Pooled Cash and Investments Cash and Investments Restricted Cash and Investments Total Cash and Investments Primary Government $ 31,844,542 447,887,140 $ 479,731,682 Component Units $ 232,360 1,524,710 $ 1,757,070 Fiduciary Funds $ 46,444 40,000 $ 86,444 Primary Government $ 478,550,105 Component Units $ 1,189,245 567,825 $ 1,757,070 Fiduciary Funds $ 86,444 - 1,181,577 479,731,682 $ 44 $ 86,444 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 3 - Property Taxes The City’s property tax is levied and collected by the Maricopa County Treasurer. Property taxes are levied on or before the third Monday in August based upon the previous January 1 full cash value of property as determined by the Maricopa County Assessor. Under Arizona Revised Statutes (A.R.S.), two assessed valuations are used. One is for primary taxes (used to fund operating expenditures) and the other is for secondary taxes (used to meet general obligation debt service requirements). Taxes are due in two equal installments on October 1 and March 1 following the levy date and are delinquent on the first day of November and May, respectively. Delinquent amounts bear interest at the rate of 16 percent. The City also levies various personal property taxes during the year, which are due the second Monday of the month following receipt of the tax notice, and become delinquent 30 days thereafter. Pursuant to A.R.S. a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. The State Constitution and State law specify a property tax levy limitation system. The system consists of two levies, a limited levy known as the primary property tax levy and an unlimited levy referred to as the secondary levy, which may only be used to retire bonded indebtedness. There is also a control on the assessed value of property for primary tax purposes. The base year for the new tax system is fiscal year 1978-79. From this base year, two assessed values evolve. The primary assessed values are allowed to increase by no more than 10 percent a year. The dollar amount of the secondary property tax levy is "unlimited" and the actual full cash value of property is used in determining the tax rate. The primary tax levy is limited to an increase of 2 percent over the previous year's maximum allowable primary levy, plus an increased dollar amount because of a net gain in property not taxed the previous year. Also, the primary property tax from all taxing jurisdictions for homeowners may not exceed 1 percent of the market value of their homes. If the combined primary property tax (for the City, County, School District, etc.) exceeds 1 percent of the market value of the homes, the school districts will reduce their rate until the homeowners' aggregate rate is equal to or less than the allowable 1 percent. The State will then subsidize the school districts for the reduced revenue. This 1 percent limitation applies to primary property taxes only and does not affect the secondary property tax levy. In fiscal year 2003-04, current property tax collections were $20,535,246 or 99.95% percent of the tax levy, and were recognized as revenue when received. At fiscal year end, the delinquent property tax expected to be collected within 60 days is recognized as revenue and recorded as a receivable. Property taxes levied in August 2004 are not available for fiscal year 2003-04; accordingly, such taxes will not be recognized as revenue until fiscal year 2004-2005. 45 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 4 – Capital Assets The City has not completed its evaluation of the City’s entire infrastructure as of June 30, 2004, and therefore, only the additions for infrastructure since July 1, 2001, have been capitalized. The City will complete the infrastructure evaluation prior to June 30, 2006. A summary of changes in capital assets for governmental activities is as follows: Balance July 1, 2003 Governmental Activities Capital assets, not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated: Infrastructure Buildings and improvements Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Infrastructure Buildings and improvements Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net $ 42,722,438 26,800,162 69,522,600 82,267,527 92,034,810 27,394,993 201,697,330 (2,351,181) (16,294,679) (10,219,872) (28,865,732) 172,831,598 $ 242,354,198 Additions and Transfers In $ Deletions and Transfers Out 19,704,408 45,051,769 64,756,177 $ 34,794,543 25,774,965 5,311,575 65,881,083 (63,959,050) (63,959,050) (1,707,151) (521,563) (2,228,714) (3,285,110) (3,565,394) (2,365,212) (9,215,716) 56,665,367 $ 121,421,544 739,765 202,710 942,475 (1,286,239) $ (65,245,289) Construction in progress in the governmental activities capital assets is comprised of the following: Expended During FYE June 30, 2004 $ 20,925,072 11,190,847 12,935,850 $ 45,051,769 Streets Parks and recreation Buildings and related improvements Total 46 Remaining Commitments $ 13,520,200 2,540,555 3,095,450 $ 19,156,205 Balance June 30, 2004 $ 62,426,846 7,892,881 70,319,727 117,062,070 116,102,624 32,185,005 265,349,699 (5,636,291) (19,120,308) (12,382,374) (37,138,973) 228,210,726 $ 298,530,453 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 4 – Capital Assets, continued A summary of changes in capital assets for business-type activities is as follows: Balance July 1, 2003 Business-Type Activities Capital assets, note being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated: System improvements Building and improvements Vehicles, machinery and equipment Land improvements Total capital assets being depreciated Less accumulated depreciation for: System improvements Buildings and improvements Vehicles, machinery and equipment Land improvements Total accumulated depreciation Total capital assets, being depreciated, net Business-type activities capital assets, net $ 35,900,367 38,589,585 74,489,952 Additions and Transfers In $ Deletions and Transfers Out 2,996,068 24,309,927 27,305,995 $ (28,999) (58,658,131) (58,687,130) Balance June 30, 2004 $ 38,867,436 4,241,381 43,108,817 492,120,268 15,255,263 12,495,486 1,251,852 521,122,869 62,133,820 2,134,731 967,595 5,025 65,241,171 (128,137) (161,113) (289,250) 554,254,088 17,261,857 13,301,968 1,256,877 586,074,790 (186,687,445) (7,372,782) (9,148,250) (886,092) (204,094,569) 317,028,300 (21,746,299) (483,939) (680,722) (27,922) (22,938,882) 42,302,289 32,353 85,715 118,068 (171,182) (208,433,744) (7,824,368) (9,743,257) (914,014) (226,915,383) 359,159,407 $ 391,518,252 $ 69,608,284 $ (58,858,312) Construction in progress in the business-type activities is comprised of the following: Expended to June 30, 2004 $ 332,054 2,209,478 985,579 45,522 668,748 $ 4,241,381 Buildings and improvements Sewer system improvements Water system improvements Airport improvements Solid waste improvements Total 47 Remaining Commitments $ 153,873 4,920,160 6,746,527 2,338,847 2,855,136 $ 17,014,543 $ 402,268,224 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 4 – Capital Assets, concluded A summary of changes in capital assets for the Chandler Cultural Foundation is as follows: Chandler Cultural Foundation Artwork, not being depreciated Equipment Office furniture Leasehold improvements Site improvement Balance July 1, 2003 Additions and Transfers In Deletions and Transfers Out Balance June 30, 2004 $ $ $ $ Total capital assets being depreciated Less accumulated depreciation Total capital assets, net 6,000 35,941 13,466 5,414 52,552 - - 6,000 35,941 13,466 5,414 52,552 107,373 - - 107,373 (81,176) (6,074) - (87,250) $ 32,197 $ (6,074) $ Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Community services Community development Public works $ Total depreciation expense - governmental activities Business-type activities: Water Wastewater Solid waste Airport Chandler Housing Authority 926,489 2,136,286 2,569,144 7,959 3,575,838 $ 9,215,716 $ 11,580,665 9,825,220 475,935 724,677 332,385 Total depreciation expense - business-type activities 48 $ 22,938,882 - $ 26,123 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 5 - Operating Leases The City leases approximately 69,000 square feet of office and library space under noncancelable operating leases expiring through June 2020. One office lease allows for basic annual rent escalations of 3% per annum in the 4th, 7th and 10th lease years and the library lease allows for annual rent escalations of 3.5% per annum. Total costs for such leases were $1,422,169 for the year ended June 30, 2004. The future minimum lease payments for these leases are as follows: Year Ending June 30 2005 2006 2007 2008 2009 2010-2020 Total $ 1,456,416 1,496,210 1,532,880 1,178,554 922,705 6,022,134 $ 12,608,899 NOTE 6 - Long-Term Liabilities 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. Bonds issued for business-type activities are reported in the Proprietary Funds as they are to be repaid from proprietary revenues. In addition, general obligation bonds have been issued to refund other general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds are generally issued as 10 to 15 year serial bonds, except for refunding issues, with varying amounts of principal maturing each year. General Obligation bonds outstanding as reported in governmental and business-type activities at June 30, 2004 were as follows: Governmental Activities General Obligation Bonds: $25,285,000 Refunding Bonds, Series 1992, due in annual installments of $600,000 to $2,700,000 through 7/1/09; interest at 5 percent to 5.75 percent. $9,850,000 Capital Improvement Bonds, Series 1993, due in annual installments of $100,000 to $5,000,000 through 7/1/13; interest at 4.38 percent to 7.38 percent. $8,275,000 Capital Improvement Bonds, Series 1994, due in an annual installment of $1,450,000 at 7/1/10; interest at 8 percent. $6,650,000 Capital Improvement Bonds, Series 1996, due in annual installments of $125,000 to $3,300,000 starting 7/1/03 through 7/1/15; interest at 5.13 percent to 6.63 percent. $8,205,000 Capital Improvement Bonds, Series 1996B, due in annual installments of $430,000 to $4,000,000 starting 7/1/10 through 7/1/16; interest at 5.25 percent to 7.25 percent. $9,730,000 Refunding Bonds, Series 1997, due in annual installments of $100,000 to $2,350,000 starting 7/1/98 through 7/1/13; interest at 4.7 percent to 7.5 percent. $3,590,000 Capital Improvement Bonds, Series 1998, due in annual installments of $165,000 to $325,000 starting 7/1/03 through 7/1/17; interest at 4.38 percent to 6.3 percent. $6,950,000 Capital Improvement Bonds, Series 1999, due in annual installments of $550,000 to $875,000 starting 7/1/09 through 7/1/18; interest at 4.35 percent to 6.35 percent. 49 Outstanding June 30, 2004 $ 11,595,000 1,080,000 1,450,000 1,225,000 1,905,000 6,705,000 3,100,000 6,950,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 6 - Long-Term Liabilities, continued $8,520,000 Capital Improvement Bonds, Series 2000, due in annual installments of $575,000 to $1,025,000 starting 7/1/09 through 7/1/19; interest at 5 percent to 7 percent. $8,040,000 Capital Improvement Bonds, Series 2001, due in annual installments of $475,000 to $905,000 starting 7/1/09 through 7/1/20; interest at 5 percent to 5.5 percent. $23,000,000 Capital Improvement Bonds, Series 2002, due in annual installments of $700,000 to $2,235,000 starting 7/1/03 through 7/1/19; interest at 3 percent to 5 percent. $21,375,000 Capital Improvement Bonds, Series 2003, due in annual installments of $500,000 to $2,775,000 starting 7/1/04 through 7/1/17; interest at 2 percent to 4 percent. $8,935,000 Refunding Bonds, Series 2003, due in annual installments of $730,000 to $2,775,000 starting 7/1/10 through 7/1/16; interest at 2.75 percent to 5 percent. Total Governmental Activities General Obligation Bonds Business-Type Activities Supported General Obligation Bonds: $9,850,000 Capital Improvement Bonds, Series 1993, due in annual installments of $100,000 to $5,000,000 through 7/1/13; interest at 4.38 percent to 7.38 percent. $17,225,000 Refunding Bonds, Series 2001, due in annual installments of $335,000 to $2,290,000 through 7/1/11; interest at 4.25 percent to 5 percent. $7,330,000 Refunding Bonds, Series 2003, due in annual installments of $140,000 to $2,580,000 starting 7/1/10 through 7/1/15; interest at 2.75 percent to 5.0 percent. Total Business-Type Activities General Obligation Bonds Outstanding June 30, 2004 8,520,000 8,040,000 21,600,000 21,375,000 8,935,000 $ 102,480,000 Outstanding June 30, 2004 $ 1,195,000 15,180,000 7,330,000 $ 23,705,000 B. Street and Highway Revenue Bonds Street and highway revenue bonds are issued specifically for the purpose of constructing street and highway projects. These bonds are payable solely from the revenues derived by the City from highway user taxes, including motor vehicle fuel taxes and all other taxes, fees and charges relating to registration, operation or use of vehicles on public highways or streets or to fuels or any other energy source used for the vehicles collected by the State and returned to the City. Street and highway revenue bonds outstanding as reported in governmental activities at June 30, 2004 were as follows: Governmental Activities Revenue Bonds: $6,130,000 Street & Highway User Bonds, Series 1991, due in annual installments of $855,000 at 7/1/05; interest at 9.13 percent. $11,175,000 Street & Highway User Refunding Bonds, Series 1992, due in annual installments of $40,000 to $1,805,000 through 7/1/10; interest at 5.38 percent to 6.88 percent. 50 Outstanding June 30, 2004 $ 855,000 1,250,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 6 - Long-Term Liabilities, continued $2,500,000 Street & Highway User Bonds, Series 1993, due in annual installments of $800,000 to $875,000 starting 7/1/11 through 7/1/13; interest at 5 percent to 6 percent. $5,750,000 Street & Highway User Bonds, Series 1994, due in an annual installment of $1,100,000 at 7/1/11; interest at 8 percent. $6,550,000 Street & Highway User Bonds, Series 1996, due in annual installments of $125,000 to $2,750,000 starting 7/1/97 through 7/1/15; interest at 4.88 percent to 6.38 percent. $1,250,000 Street & Highway User Bonds, Series 1996B, due in annual installments of $25,000 to $1,000,000 starting 7/1/06 though 7/1/16; interest at 5.5 percent to 7.5 percent. $5,280,000 Street & Highway User Refunding Bonds, Series 1997, due in annual installments of $25,000 to $2,230,000 starting 7/1/98 through 7/1/14; interest at 5.38 percent to 8 percent. $5,715,000 Street & Highway User Bonds, Series 1998, due in annual installments of $165,000 to $475,000 starting 7/1/99 through 7/1/17; interest at 4.88 percent to 7.38 percent. $3,300,000 Street & Highway User Bonds, Series 1999, due in annual installments of $100,000 to $250,000 starting 7/1/99 through 7/1/17; interest at 4 percent to 7 percent. $2,250,000 Street & Highway User Bonds, Series 2000, due in annual installments of $75,000 to $200,000 starting 7/1/00 through 7/1/18; interest at 5.2 percent to 7 percent. $6,830,000 Street & Highway User Bonds, Series 2001, due in annual installments of $210,000 to $555,000 starting 7/1/01 through 7/1/19; interest at 4.4 percent to 6.4 percent. $10,540,000 Street & Highway User Refunding Bonds, Series 2002, due in annual installments of $240,000 to $1,845,000 starting 7/1/05 through 7/1/13; interest at 3.0 percent to 4.3 percent. $5,000,000 Street & Highway User Bonds, Series 2003, due in annual installments of $1,000,000 to $1,500,000 starting 7/1/16 through 7/1/19; interest at 3.5 percent to 5.0 percent. Total Governmental Activities Revenue Bonds Outstanding June 30, 2004 800,000 1,100,000 5,450,000 1,250,000 5,130,000 4,750,000 2,650,000 1,950,000 5,975,000 10,540,000 5,000,000 $ 46,700,000 C. Water, Sewer and Solid Waste Revenue Bonds Water, sewer and solid waste revenue bonds are issued as authorized by the voters to provide funds to acquire and construct certain improvements to the water, sewer and solid waste systems of the City and to pay the costs incurred in connection with the issuance of the bonds. These bonds are secured by a pledge of revenues from these systems, and do not constitute a general obligation of the City backed by the general taxing authority. Water, sewer and solid waste revenue bonds outstanding as reported in business-type activities at June 30, 2004 were as follows: Business-Type Activities Revenue Bonds: $5,150,000 Water & Sewer Bonds, Series 1994, due in annual installments of $2,150,000 to $3,000,000 starting 7/1/14 through 7/1/15; interest at 6.5 percent to 8 percent. $16,890,000 Water & Sewer Bonds, Series 1996, due in annual installments of $240,000 to $7,500,000 starting 7/1/09 through 7/1/16; interest at 5.25 percent to 7.25 percent. 51 Outstanding June 30, 2004 $2,150,000 1,390,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 6 - Long-Term Liabilities, continued $7,770,000 Water & Sewer Refunding Bonds, Series 1997, due in annual installmentsof $50,000 to $4,100,000 starting 7/1/15; interest at 5.13 percent to 7percent. $10,330,000 Water & Sewer Bonds, Series 1998, due in annual installments of $250,000 to $4,000,000 starting 7/1/04 through 7/1/17; interest at 4.5 percent to 6.5 percent. $5,985,000 Water & Sewer Bonds, Series 1999, due in annual installments of $275,000 to $575,000 starting 7/1/03 through 7/1/17; interest at 4.2 percent to 6.2 percent. $3,000,000 Water & Sewer Bonds, Series 2000, due in annual installments of $100,000 to $500,000 starting 7/1/01 through 7/1/09 and 7/1/13 through 7/1/17; interest at 5 percent to 6.5 percent. $12,500,000 Water & Sewer Bonds, Series 2001, due in annual installments of $420,000 to $1,045,000 starting 7/1/01 through 7/1/18; interest at 4.25 percent to 6 percent. $26,145,000 Water & Sewer Refunding Bonds, Series 2001, due in annual installments of $515,000 to $3,485,000 starting 7/1/02 through 7/1/10; interest at 4.25 percent to 5 percent. $13,525,000 Sub Lien Water & Sewer Bonds, Series 2002, due in annual installments of $350,000 to $1,185,000 starting 7/1/02 through 7/1/10; interest at 3 percent to 4 percent. $10,970,000 Water & Sewer Refunding Bonds, Series 2002, due in annual installments of $300,000 to $3,755,000 starting 7/1/03 through 7/1/13; interest at 3 percent to 5 percent. $17,830,000 Water & Sewer Refunding Bonds, Series 2003, due in annual installments of $30,000 to $7,515,000 starting 7/1/04 through 7/1/16; interest at 2 percent to 5 percent. $10,000,000 Water & Sewer Bonds, Series 2003, due in annual installments of $ 150,000 to $4,200,000 starting 7/1/04 through 7/1/13; interest at 2 percent to 4 percent. $1,700,000 Solid Waste Bonds, Series 1996, due in annual installments of $50,000 to $150,000 starting 7/1/98 through 7/1/16; interest at 5.38 percent to 7.38 percent. $1,700,000 Solid Waste Bonds, Series 1998, due in annual installments of $50,000 to $275,000 starting 7/1/99 through 7/1/17; interest at 6.25 percent to 6.75 percent. Total Business-Type Activities Revenue Bonds 52 Outstanding June 30, 2004 7,245,000 10,330,000 5,710,000 2,400,000 10,835,000 23,080,000 11,700,000 10,670,000 17,830,000 10,000,000 1,350,000 1,450,000 $ 116,140,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 6 - Long-Term Liabilities, continued D. Special Assessment Bonds with Governmental Commitment As trustee for improvement districts, the City is responsible for collection of assessments levied against the owners of property within the improvement districts and for disbursement of these amounts for retirement of the respective bonds issued to finance the improvements. At June 30, 2004, the special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, are adequate for the scheduled maturities of the bonds payable and related interest. Special assessment bonds are collateralized by properties within the districts. In the event of default by the property owner, the City may enforce an auction sale to satisfy the debt service requirements of the bonds. The City is contingently liable on special assessment bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. Special assessment bonds payable with governmental commitment outstanding as reported in governmental activities at June 30, 2004 were as follows: Governmental Activities Special Assessment Bonds: $145,000 Improvement District #88 Bonds, due in annual installments of $14,500 starting 1/1/99 through 1/1/08; interest at 5.63 percent. $1,760,000 Improvement District #89 Bonds, due in annual installments of $85,000 to $160,000 starting 1/1/00 through 1/1/15; interest at 4.75 percent. Total Special Assessment Bonds with Governmental Commitment Outstanding June 30, 2004 $ 38,000 1,405,000 $ 1,443,000 E. Municipal Property Corporation Certificates of Participation The Corporation issued $20,150,000 of Certificates of Participation in 1995 (Certificates). These Certificates were used to acquire a ground lease; acquire and construct certain water production facilities and water system improvements, an industrial process water treatment facility and certain improvements and facilities related to the recharge and reuse of treated wastewater, including engineering, program management and other consulting fees; and to pay all costs incurred to issue the Certificates. The City is required to make lease payments to the Corporation in amounts equal to the principal and interest payable on the Certificates. The lease payments are secured by the City’s pledge of net revenues from the operation of the City’s water and sewer systems. The Corporation’s Certificates outstanding as reported in business-type activities at June 30, 2004 were as follows: Business-Type Activities Certificates of Participation: $20,150,000 Taxable Certificates of Participation, Series 1995, due in annual installments of $525,000 to $1,850,000 through 7/1/15; interest at 7 percent to 9.75 percent. Outstanding June 30, 2004 $ 10,210,000 F. Intergovernmental Loan The City has an intergovernmental loan with the Arizona Department of Transportation. The original loan amount was $200,000. The City is required to make loan payments to the Arizona Department of Transportation in amounts equal to the principal and interest payable on the loan. The outstanding amount as reported in business-type activities at June 30, 2004 was as follows: Business-Type Activities Intergovernmental Loan: $200,000 Intergovernmental Loan, due in quarterly installments of $5,575 through 2/1/08; interest at 5.08 percent 53 Outstanding June 30, 2004 $ 75,783 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 6 - Long-Term Liabilities, continued Changes in Long-Term Liabilities Long-term liability activity for the year ended June 30, 2004 was as follows: Governmental Activities: Balance July 1, 2003 General obligation bonds $ 106,970,000 Revenue bonds Special assessment bonds Additions Reductions $ Balance June 30, 2004 Due Within One Year (4,490,000) $ 102,480,000 $ 6,475,000 48,725,000 (2,025,000) 46,700,000 2,110,000 1,547,500 (104,500) 1,443,000 109,500 (6,619,500) $ 181,551,390 $ 8,694,500 Balance June 30, 2004 Due Within One Year Accrued interest - capital appreciation bonds Totals 29,147,730 $ 186,390,230 Balance July 1, 2003 Business-Type Activities: General obligation bonds Revenue bonds Certificates of participation Intergovernmental loans Landfill closure/post closure Totals 1,780,660 $ $ 1,780,660 30,928,390 $ Additions 25,395,000 Reductions 23,705,000 $ 1,770,000 122,735,000 $ (6,595,000) 116,140,000 6,790,000 11,035,000 (825,000) 10,210,000 875,000 93,706 (17,923) 75,783 18,841 12,264,005 $ 171,522,711 (1,690,000) 968,162 $ 968,162 $ 13,232,167 $ (9,127,923) $ 163,362,950 $ 9,453,841 Statutory Debt Limitation In the absence of more restrictive bond authorization ballot limitations, the City is subject to state limitations on the amount of net bonded debt, (exclusive of revenue and improvement district bonds) it may have outstanding. The statutory debt limitation is 20 percent of the secondary assessed valuation for purposes of water, sewer, open space and artificial lighting and 6 percent of the secondary assessed valuation for all other purposes. At June 30, 2004, the 6 percent debt limitation was $108,344,928, providing a debt margin of $66,819,928, and the 20 percent debt limitation was $361,149,760, providing a debt margin of $284,734,760. Bond Covenants Pursuant to certain bond indenture agreements, the City is obligated to various limitations and restrictions on annual debt service requirements, maintenance and flow of monies through various restricted accounts, minimum amounts to be maintained in various sinking funds and minimum revenue bond coverages. The City is in compliance with all such significant limitations and restrictions. 54 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 6 - Long-Term Liabilities, concluded Debt Service Requirements to Maturity The following is a summary of debt service requirements to maturity for all bonds, loans and certificates of participation payable as of June 30, 2004: GOVERNMENTAL ACTIVITIES 2005 $ 6,475,000 Highway Users Highway Users Revenue Revenue Interest Principal General Obligation Interest General Obligation Principal Years Ended June 30 $ Improvement Districts Principal Improvement Districts Interest Total 7,155,118 $ 2,110,000 $ 2,171,308 $ 109,500 $ 68,875 2006 6,125,000 7,198,227 2,095,000 2,036,730 114,500 63,591 $ 18,089,801 17,633,048 2007 4,412,572 7,289,553 2,645,000 1,920,709 119,500 58,069 16,445,403 2008 4,417,571 7,336,398 2,740,000 1,821,123 124,500 52,309 16,491,901 2009 4,292,571 7,406,680 2,885,000 1,712,979 120,000 46,312 16,463,542 2010-2014 38,622,286 15,108,212 16,380,000 6,447,940 695,000 139,888 77,393,326 2015-2019 33,450,000 4,778,253 15,790,000 2,055,173 160,000 7,600 56,241,026 2020-2023 4,685,000 160,000 2,055,000 40,125 - - 6,940,125 18,206,087 $ 1,443,000 $ Total $ 102,480,000 $ 56,432,441 $ 46,700,000 $ 436,644 $225,698,172 BUSINESS-TYPE ACTIVITIES General Obligation Principal Years Ended June 30 2005 Revenue Principal $ 6,790,000 Revenue Interest $ Certificates of Participation Principal Certificates of Participation Interest Intergov. Loan Principal Intergov. Loan Interest Total 1,770,000 $ 1,066,826 5,069,853 $ 875,000 $ 755,295 $ 18,841 $ 3,460 2006 1,955,000 985,222 7,640,000 4,776,866 950,000 694,045 19,807 2,494 17,023,434 2007 2,092,429 892,893 7,925,000 4,475,378 1,025,000 625,170 20,822 1,479 17,058,171 2008 2,172,429 792,648 8,245,000 4,156,746 1,100,000 550,857 16,313 413 17,034,406 2009 2,252,428 691,422 8,605,000 3,824,218 1,175,000 471,108 - - 17,019,176 2010-2014 8,497,714 2,005,159 42,585,000 13,535,551 5,085,000 946,480 - - 72,654,904 2015-2019 4,965,000 243,375 34,350,000 3,393,823 - - 42,952,198 $ 23,705,000 $ 6,677,545 $ 116,140,000 Total $ General Obligation Interest - - $ 39,232,435 $ 10,210,000 $ 4,042,955 55 $ 75,783 $ 7,846 $ 16,349,275 $ 200,091,564 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 7 - Defeased Debt Prior Year Defeasance In prior years, the City defeased certain general obligation, water and sewer revenue, street and highway user revenue, and Municipal Property Corporation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. Bonds which have been advance refunded (defeased) as of June 30, 2004 are as follows: Refunded Debt Outstanding Water and Sewer Revenue Bonds, Series 1994 Water and Sewer Revenue Bonds, Series 1996 Streets and Highway User Revenue Bonds, Series 1994 General Obligation Bonds, Projects of 1985 & 1987, Series 1989 General Obligation Bonds, Series 1990 General Obligation Bonds, Series 1994 General Obligation Bonds, Series 1996 General Obligation Bonds, Series 1996B General Obligation Bonds, Series 1998 Municipal Property Corporation Bonds, Series 1995 Total Refunded Bonds Outstanding 56 $ $ Amount 3,000,000 15,500,000 4,650,000 8,300,000 6,435,000 6,825,000 5,300,000 6,300,000 325,000 4,165,000 60,800,000 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 8 – Landfill Closure and Postclosure Costs State and federal 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 thirty years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and postclosure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. As of June 30, 2004, the City estimated total costs, related to landfill closure and postclosure care, is $17,677,211. Using the percentage of usage method, currently at 96.66 percent, the City has recognized closure and postclosure care costs of $17,085,997, of which $3,853,831 has been paid to date. The remaining balance of $13,232,167 is recorded as a non-current liability on the City’s financial statements. The remaining estimated costs of $591,214 will be recognized between July 1, 2004 and October 2005 when the landfill is projected to be filled to capacity. The estimated total current cost of the landfill closure and postclosure, $17,677,211, is based on the amount that would be paid if all equipment, facilities, and services required to care, monitor and maintain the landfill were acquired as of June 30, 2004. However, the actual cost of closure and postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The City is required by state and federal regulations to comply with the local government financial test requirements that assure the City can meet the costs of landfill closure, postclosure, and corrective action when needed. The City meets the Bond Rating Requirement as the City’s outstanding, rated, general obligation bonds are not secured by insurance, a letter of credit, or other collateral or guarantees, and the general obligation bonds have a current rating of Aaa, Aa, A, or Baa, as issued by Moody’s, or AAA, AA, A, or BB, as issued by Standard and Poor’s on all such general obligation bonds. In addition, the City is neither currently in default on any outstanding general obligation bonds, nor has any general obligation bonds rated lower than Baa, as issued by Moody’s, or BBB, as issued by Standard and Poor’s. It is anticipated that future inflation costs will be financed in part from earnings on investments. The remaining portion of anticipated future inflation costs and any additional costs that might arise from changes in postclosure requirements, e.g., due to changes in technology or more rigorous environmental regulations, may need to be covered by additional charges to future landfill users, taxpayers, or both. 57 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 9 - Capital Contributions Capital contributions in the Water, Wastewater, Solid Waste, Airport, and Housing Authority funds amounted to the following: Water Wastewater Solid Waste Airport Housing Authority Total System Development Fees $ 18,128,543 6,914,410 406,874 $ 25,449,827 Developer Contributions Government Contributions $ 4,399,052 4,205,544 $ 8,604,596 $ $ 60,786 233,058 293,844 Total $ $ 22,527,595 11,119,954 406,874 60,786 233,058 34,348,267 NOTE 10 – Fund Equity In addition, reserves for encumbrances and inventories are shown on the governmental fund financial statements. The City may also designate through administrative policy portions of net assets in funds to demonstrate the government’s intended use of those net assets. Restrictions, reservations and designations of fund balances and net assets at June 30, 2004, were as follows: Fund Statements Non-Major General Governmental Funds Fund Balance: Reserved: Encumbrances Contractual Obligations Debt Service Capital Improvements Total Reserved Unreserved: Designated: Capital Improvements Compensated Absences Expenditure Control Budgeting Bugetary Commitments Self-Insurance City Council 15 percent Contingency Reserve Undesignated Total Fund Balance $ $ 5,801,328 31,500,000 13,343,411 50,644,739 82,514,039 4,922,000 2,584,755 5,569,560 2,500,000 22,670,068 5,331,450 176,736,611 $ 834,326 75,869,259 76,703,585 5,648,789 $ 82,352,374 Reservations of Fund Balances At June 30, 2004, reserved amounts of fund balance represent the following: 1) Encumbrances - comprises purchase obligations outstanding at the end of the fiscal year; 2) Debt Service - payment of future principal and interest unpaid at the end of the fiscal year and/or amounts accumulated and reserved/restricted for improvement district debt and general obligation debt; 3) Capital Improvements - amounts reserved for specific projects and amounts appropriated as part of the City’s 2004/2005 budget. 58 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 10 – Fund Equity, concluded Net Assets Restricted net assets shown on the financial statements are restrictions imposed by external sources or by law through constitutional provisions or enabling legislation. Net assets at June 30, 2004, were as follows: Governmental Activities Water Wastewater $ 101,665,063 $ 103,350,196 $ 108,649,485 Solid Waste Non-Major Enterprise Funds Pension Trust Net Assets: Invested in capital assets, net of related debt $ 6,029,494 $ 34,088,108 Restricted: Debt Service 14,177,737 289,689 891,888 303,063 Capital Improvements 75,869,259 36,181,427 10,454,782 14,266,260 (10,381,902) Claims 56,098 1,542,183 Volunteer Fireman's Pension 66,806 Unrestricted Total Net Assets 224,309,216 67,714,250 20,835,777 $ 416,021,275 $ 209,077,745 $ 140,831,932 $ 10,216,915 4,276,408 $ 38,420,614 $ 66,806 Restricted Net Assets At June 30, 2004, restricted amounts of net assets represent the following: 1) Debt Service - amount reserved pursuant to Municipal Property Corporation bond agreement; 2) Capital Improvements - amounts reserved for specific projects and amounts appropriated as part of the City’s 2004/2005 budget; 3) Volunteer Firemen’s Pension - actuarially determined benefits payable under the Volunteer Firemen’s Pension and Relief Trust Fund. NOTE 11 - Retirement and Pension Plans All full-time employees of the City, the Mayor and City Council are covered by one of three pension plans. All full-time City employees, except public safety personnel, participate in the Arizona State Retirement System, a multiple-employer cost-sharing pension plan. Public safety personnel participate in the Public Safety Personnel Retirement System, which is an agent multiple-employer plan. The Mayor and City Council participate in the Elected Officials’ Retirement Plan, a multiple-employer cost sharing pension plan. All three pension plans are administered by the State of Arizona. Arizona State Retirement System A. Plan Description All full-time City employees (except public safety personnel) participate in the Arizona State Retirement System (the System), a multiple-employer cost sharing defined benefit pension plan. The System was established by the State of Arizona to provide pension benefits for employees of the state and employees of participating political subdivisions and school districts. The System is administered in accordance with Title 38, Chapter 5, of the Arizona Revised Statutes. The system provides for retirement, disability, health insurance premium benefits, and death and survivor benefits. The Arizona State Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to Arizona State Retirement System, P.O. Box 33910, Phoenix, AZ 85067-3910, or by calling 1-800-621-3778. 59 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 11 - Retirement and Pension Plans, continued B. Funding Policy The Arizona Revised Statutes provide statutory authority for determining the employees' and employers' contribution amounts as a percentage of covered payroll. Employers are required to contribute at the same rate as employees. Although the statutes prescribe the basis of making the actuarial calculation, the Arizona Legislature is able to legislate a contribution rate other than the actuarially determined rate. The actuarially determined contribution rates for the years ended June 30, 2004, 2003, and 2002 were 5.7 percent (5.2 percent retirement and 0.50 percent long-term disability), 2.49 percent (2.0 percent retirement and 0.49 percent long-term disability), and 2.49 percent (2.0 percent retirement and 0.49 percent long-term disability), respectively for both employees and employers. The City’s contributions to the System for the years ended June 30, 2004, 2003 and 2002, were $2,790,651, $1,159,788, and $1,068,785, respectively, equal to the required contributions for each year. Arizona Public Safety Personnel Retirement System (Full-time Police and Fire Employees) A. Plan Description All full-time sworn police officers and fire fighters are eligible to participate in the Public Safety Personnel Retirement System (PSPRS) in separate agent multiple-employer defined benefit retirement plans. PSPRS was established by Title 38, chapter 5, Article 4 of the Arizona Revised Statutes to provide pension benefits for public safety employees of certain state and local governments. The PSPRS is jointly administered by the fund manager and 167 local boards. The fund manager is a five-member board appointed by the Governor and the State Legislature. The fund manager is responsible for establishing contribution rates in accordance with an actuarial study. The PSPRS provides retirement benefits, as well as death and disability benefits. The Public Safety Personnel Retirement System of the State of Arizona issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Public Safety Personnel Retirement System, 1020 East Missouri Avenue, Phoenix, AZ 85014 or by calling (602) 255-5575. B. Funding Policy The System is funded through a member contribution of 7.65 percent of gross payroll, an employer contribution set by an actuarial valuation expressed as a percent of gross payroll, and a distribution of the net earnings of the Fund. The City’s current contribution rate for police is 9.03 percent of annual covered payroll, and the current contribution rate for firefighters is 6.77 percent of annual covered payroll. Contribution rates for police for 2003 and 2002 were 8.11 percent and 10.32 percent, respectively and contribution rates for firefighters for 2003 and 2002 were 5.11 percent and 7.61 percent respectively. C. Annual Pension Cost For fiscal year 2003/04, the City’s annual pension cost of $1,617,595 for police and $701,282 for firefighters for PSPRS was equal to the City’s required and actual contributions. The required contributions were determined as part of the June 30, 2003, actuarial valuations using the individual entry-age actuarial cost method. For police, the actuarial assumptions include (a) a rate of return on the investment of present and future assets of 9 percent per year compounded annually, attributable to inflation and other across-the-board increases, (b) projected salary increases of 6.5 percent compounded annually attributable to inflation and other across-the-board increases, and (c) additional projected salary increases of 0 percent to 3 percent per year attributable to seniority/merit. For firefighters, the actuarial assumptions include (a) a rate of return on the investment of present and future assets of 9 percent per year compounded annually, attributable to inflation and other across-the-board increases, (b) projected salary increases of 6.5 percent compounded annually attributable to inflation and other across-the-board increases, and (c) additional projected salary increases of 0 percent to 3.0 percent per year attributable to seniority/merit. For both police and firefighters, 60 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 11 - Retirement and Pension Plans, continued Included in (b) is an inflation component of 5.5 percent. The actuarial value of PSPRS assets was determined using techniques that smooth the market value of assets over a four-year period. PSPRS’s unfunded accrued liability is being amortized as a level percent of projected payroll on an open basis. The remaining amortization period at July 1, 2003, was 20 years. Arizona Public Safety Personnel Retirement System - Police Three-Year Trend Information Fiscal Annual Percent Net Pension Year Pension of APC Obligation Ending Cost (APC) Contributed 2001 $ 1,654,558 100% $ 2002 $ 1,677,675 100% $ 2003 $ 1,451,591 100% $ - Arizona Public Safety Personnel Retirement System - Firefighters Three-Year Trend Information Fiscal Annual Percent Net Pension Year Pension of APC Obligation Ending Cost (APC) Contributed 2001 $ 867,410 100% $ 2002 $ 797,177 100% $ 2003 $ 720,336 100% $ - 61 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 11 - Retirement and Pension Plans, continued Arizona Public Safety Personnel Retirement System - Police Schedule of Funding Progress Valuation Date 30-Jun 2001 2002 2003 (1) Actuarial Value of Assets 39,280,337 42,359,413 46,801,690 (2) Entry Age Actuarial Accrued Liability (AAL) 35,481,639 39,896,296 47,605,863 (3) Percent Funded (1)/(2) 110.7% 106.2% 98.3% (4) Unfunded AAL (2) - (1) (3,798,698) (2,463,117) 804,173 (5) Annual Covered Payroll 15,612,044 16,650,975 17,809,817 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) _ _ _ Arizona Public Safety Personnel Retirement System - Firefighters Schedule of Funding Progress Valuation Date 30-Jun 2001 2002 2003 (1) Actuarial Value of Assets 28,698,459 30,500,426 33,197,589 (2) Entry Age Actuarial Accrued Liability (AAL) 22,722,135 25,675,248 30,396,139 (3) Percent Funded (1)/(2) 126.3% 118.8% 109.2% (4) Unfunded AAL (2) - (1) (5,976,324) (4,825,178) (2,801,450) (5) Annual Covered Payroll 8,568,962 9,239,086 10,015,921 (6) Unfunded AAL as a Percentage of Covered Payroll (4)/(5) _ _ _ Elected Officials’ Retirement Plan (Mayor and City Council) A. Plan Description The City’s Mayor and Council participate in the Elected Officials’ Retirement Plan (EORP), a multipleemployer cost sharing defined benefit pension plan. The EORP was established and is administered by the State of Arizona to provide pension benefits for state and county elected officials, judges, and certain Cityelected officials. The fund manager of the PSPRS is also the administrator for the EORP. EORP provides retirement benefits, as well as death and disability benefits. The Elected Officials’ Retirement Plan issues a publicly available financial report that includes financial statements and required supplementary information for EORP. The report may be obtained by writing to Elected Officials’ Retirement Plan, 1020 East Missouri Avenue, Phoenix, AZ 85014 or by calling (602) 255-5575. 62 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 11 - Retirement and Pension Plans, concluded B. Funding Policy Covered employees are required by state statute to contribute an amount equal to 7 percent of gross salary. Incorporated city or town employers are required to contribute an amount sufficient to meet both the normal cost of a level-cost method attributable to the EORP, plus the amount required to amortize the unfunded accrued liability for the employer. Such amount is to be determined each year by actuarial valuation and paid as a level percent of compensation. The contribution requirements for plan members are established and may be amended by the Fund Manager, a five-member board. The City’s rates for fiscal years ended June 2004, 2003, and 2002, were 13.49 percent, 6.97 percent, and 6.97 percent, respectively. The city’s contributions to EORP for the years ended June 30, 2004, 2003, and 2002, were $14,967, $7,576 and $7,652, respectively, equal to the required contributions for each year. Volunteer Firemen's Pension And Relief Fund A. Plan Description The Volunteer Firemen’s Pension Plan (VFPP) is a single-employer defined benefit pension plan administered by the City. The last actuarial valuation of the Volunteer Firemen's Pension and Relief Fund was made as of June 30, 1983, at which time the actuarial liability was fully funded. As of June 30, 2004, there were two retirees and/or beneficiaries of retirees receiving retirement benefits under the plan. There were no terminated employees entitled to benefits and not yet receiving them. Additionally there are no nonvested active employees and no partially vested employees covered by the plan. The VFPP issues a publicly available financial report that may be obtained from the City of Chandler, Management Services Department, P.O. Box 4008, MS 702, Chandler, AZ 85244-4008. B. Funding Policy There were no contributions to the Volunteer Firemen's Pension and Relief Fund by the City in fiscal year 2003/04. Pursuant to the June 30, 1983, actuarial valuation, the present value of all benefits payable in future years was $42,626 and the pension obligation was deemed to be fully funded. To be eligible for benefits under the plan, individuals must have served with a legally organized volunteer fire company or a fire department of any legally incorporated city or town for (1) at least twenty-five years or more or (2) at least twenty years and have reached sixty years of age. Maximum monthly benefits under the plan are two hundred dollars. Pensions may increase or decrease or be discontinued at the discretion of the Board of Directors. NOTE 12 - Commitments and Contingencies A. Contractual Commitments The City has entered into a contract with the United States Government, the State of Arizona, the Central Arizona Water Conservation District, the Flood Control District of Maricopa County, the Salt River Agricultural Improvement Power District, the Salt River Valley Water User's Association and the cities of Glendale, Phoenix, Mesa, Tempe and Tucson to fund certain facilities of the Central Arizona Project known as "Plan Six." Actual contributions and accumulated earnings at June 30, 2004, amounted to $700,112, and the account is fully funded at June 30, 2004. 63 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 12 - Commitments and Contingencies, concluded B. Litigation The City is subject to a number of lawsuits, investigations, and other claims (some of which involve substantial amounts) that are incidental to the ordinary course of its operations, including those related to wrongful death and personal injury matters. Although the City Attorney does not currently possess sufficient information to reasonably estimate the amounts of the liabilities to be recorded upon the settlement of such claims and lawsuits, some claims could be significant to the City’s operations. While the ultimate resolution of such lawsuits, investigations, and claims cannot be determined at this time, in the opinion of City management, based on the advice of the City Attorney, the resolution of these matters will not have a material adverse effect on the City’s financial position. NOTE 13 - Risk Management The City is exposed to various risks of loss related to litigation, claims and torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters (for which the City carries commercial insurance). The City established a Self-Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. In fiscal year 2003/2004, the Self-Insurance Fund provided coverage for up to a maximum of $2,000,000 per occurrence for liability claims and $50,000 for each property damage claim. The City purchases commercial insurance for claims in excess of coverage provided by the Self-Insurance Fund and for all other risks of loss. During fiscal year 2003/2004, there were not significant reductions in the amounts of excess coverage purchased, nor has the City experienced any settlements in excess of insurance coverage over the past four fiscal years. Premiums are paid into the Internal Service Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. As with any risk retention program, the City is contingently liable with respect to claims beyond those actuarially projected. Interfund premiums are used to reduce the amount of claim expenditures reported in the Internal Service Fund. In the opinion of City management, based on the advice of the City Attorney, the outcome of such litigation and claims will not have materially adverse effect on the City’s financial position. The claims liability of $4,566,000 reported in the Self-Insurance Fund at June 30, 2004, is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that liabilities be reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $2,000,000 for general liability and $500,000 for worker’s compensation. Liabilities include an amount for claims that have been incurred but not reported (IBNR). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. Changes in the Fund’s claims liability amount in fiscal years 2003 and 2004 were: Years Ended June 30, Beginning of Fiscal Year Liability Current Year Claims and Changes in Estimates 2003 $ 3,470,000 $ 3,223,679 $(1,391,679) $ 5,302,000 2004 $ 5,302,000 $4,316,078 ($5,052,078) $ 4,566,000 64 Claim Payments Balance at Fiscal Year End CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 14 – Interfund Transfers The interfund transfers in and out at June 30, 2004 are as follows: Fund General Transfer Detail Debt Service-General Obligation Bonds Capital Projects-Capital Equipment Capital Projects-Computer Replacement Capital Projects-Streets Capital Projects-Community Services Capital Projects-Fleet Replacement Capital Projects-Public Safety Internal Service-Self Insurance Total General Fund $ Transfers In 1,000,000 1,000,000 $ Transfers Out 13,789,654 2,209,014 1,847,400 1,092,444 39,506 658,940 2,500,000 22,136,958 Special Revenue Highway User Revenue Debt Service-Highway User Revenue Bonds Capital Projects-Computer Replacement Capital Projects- Capital Equipment Total Special Revenue-Highway User Revenue - 4,365,270 18,683 231,036 4,614,989 Special Revenue Local Trans. Assistance Capital Projects-Computer Replacement Capital Projects-Capital Equipment Total Special Revenue-Local Transportation Assistance - 1,525 3,852 5,377 Capital Projects-Computer Replacement Total Special Revenue-Grants in Aid - 96,862 96,862 Total Special Revenue Funds - 4,717,228 Special Revenue Grants In Aid Debt Service General Obligation Bonds Special Revenue-Highway User Revenue Total Debt Service Capital Projects Streets General Total Capital Projects-Streets Capital Projects Community Services General Capital Projects-Public Safety Total Capital Projects-Community Services Capital Projects Capital Equipment General Special Revenue-Highway User Revenue Special Revenue-Local Transportation Assistance Capital Projects-Computer Replacement Capital Projects-Fleet Replacement Enterprise-Airport Enterprise-Solid Waste Enterprise-Wastewater Enterprise-Water Internal Service-Self Insurance Total Capital Projects-Capital Equipment 65 13,789,654 4,365,270 18,154,924 - 1,092,444 1,092,444 1,000,000 106,660 106,660 2,209,014 231,036 3,852 10,740 83,163 39,632 150,232 6,047 2,733,716 1,000,000 35,313 162,703 198,016 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 14 – Interfund Transfers, concluded Fund Capital Projects Computer Purchase Transfer Detail General Special Revenue-Highway User Revenue Special Revenue-Local Transportation Assistance Special Revenue-Grants in Aid Capital Projects-Capital Equipment Enterprise-Airport Enterprise-Solid Waste Enterprise-Wastewater Enterprise-Water Internal Service-Self Insurance Total Capital Projects-Computer Replacement Transfers In 1,847,400 18,683 1,525 96,862 35,313 3,350 14,021 20,634 59,474 10,444 2,107,706 Transfers Out - Capital Projects Fleet Replacement General Capital Projects-Capital Equipment Internal Service-Self Insurance Total Special Revenue-Fleet Replacement 39,506 162,703 15,556 217,765 Capital Projects Public Safety General Capital Projects-Community Services Enterprise-Water Total Special Revenue-Public Safety 658,940 658,940 106,660 159,990 266,650 6,917,231 1,464,666 Total Capital Projects Funds - Enterprise Airport Capital Projects-Capital Equipment Capital Projects-Computer Replacement Total Enterprise-Airport - 10,740 3,350 14,090 Enterprise Solid Waste Capital Projects-Capital Equipment Capital Projects-Computer Replacement Total Enterprise-Solid Waste - 83,163 14,021 97,184 Enterprise Wastewater Capital Projects-Computer Replacement Capital Projects-Capital Equipment Total Enterprise-Wastewater - 39,632 20,634 60,266 Enterprise Water Capital Projects-Capital Equipment Capital Projects-Computer Replacement Capital Projects-Public Safety Internal Service-Self Insurance Total Enterprise-Water 159,990 159,990 400,000 609,706 Total Enterprise Funds 159,990 781,246 2,500,000 - 6,047 10,444 15,556 32,047 Internal Service Self Insurance General Capital Projects-Capital Equipment Capital projects-Computer Replacement Capital Projects-Fleet Replacement Enterprise-Water Total Internal Service 150,232 59,474 400,000 2,900,000 Total Transfers $ 29,132,145 $ 29,132,145 Interfund transfers are made from various funds and cost centers to fund costs including dental insurance, computer replacements, capital equipment purchases and debt service. 66 CITY OF CHANDLER, ARIZONA Notes to the Financial Statements June 30, 2004 NOTE 15 – Interfund Due To/Due From The interfund loans at June 30, 2004 are as follows: Fund Special Revenue Highway User Revenue Loan Detail Due From Special Revenue - Grants-in-Aid Total Special Revenue - Highway User Revenue Special Revenue Grants-in-Aid Due To Special Revenue - Highway User Revenue Total Special Revenue Funds $ - 2,404,000 2,404,000 - 2,404,000 Total Interfund Loans $ 2,404,000 2,404,000 2,404,000 2,404,000 $ 2,404,000 The interfund loan is made to cover Grants-In-Aid operating expenditures pending the receipt of grant revenues. 67 68 BUDGETARY COMPARISON SCHEDULE FOR MAJOR GOVERNMENTAL FUND (REQUIRED SUPPLEMENTARY INFORMATION) 69 CITY OF CHANDLER, ARIZONA BUDGETARY COMPARISON SCHEDULE FOR THE GENERAL FUND YEAR ENDED JUNE 30, 2004 Budgeted Amounts Original Revenues: Taxes-local Taxes-intergovernmental Licenses and permits Charges for current services Fines and forfeitures Rentals Interest income Miscellaneous Total revenues $ Final 84,916,926 35,977,350 5,477,400 13,731,118 4,471,600 56,650 3,036,545 484,408 148,151,997 $ 84,916,926 35,977,350 5,477,400 13,816,118 4,421,600 21,650 3,036,545 484,408 148,151,997 Non-GAAP Actual $ 90,978,636 39,696,879 7,499,922 13,256,259 3,506,668 18,012 2,414,401 879,995 158,250,772 Variance with Final Budget Positive (Negative) $ 6,061,710 3,719,529 2,022,522 (559,859) (914,932) (3,638) (622,144) 395,587 10,098,775 Expenditures: Current General government Public safety Community development Public works Community services Total expenditures 78,269,155 59,556,867 8,881,859 21,003,636 21,850,374 189,561,891 75,378,872 60,612,295 9,712,574 19,475,860 22,811,366 187,990,967 29,019,890 57,361,318 7,168,625 10,979,886 20,157,871 124,687,590 46,358,982 3,250,977 2,543,949 8,495,974 2,653,495 63,303,377 Excess (deficiency) of revenues over expenditures (41,409,894) (39,838,970) 33,563,182 73,402,152 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers out Total other financing sources (uses) 34,000 1,000,000 (24,995,113) (23,961,113) 34,000 1,000,000 (24,511,950) (23,477,950) 570,431 1,000,000 (22,136,958) (20,566,527) 536,431 2,374,992 2,911,423 Change in fund balances (65,371,007) (63,316,920) 12,996,655 76,313,575 164,377,248 164,377,248 Fund balances, July 1, 2003 Fund balances (deficits), June 30, 2004 $ (65,371,007) $ (63,316,920) See accompanying notes to this schedule. 70 $ 177,373,903 $ 240,690,823 CITY OF CHANDLER, ARIZONA Notes to Required Supplementary Information June 30, 2004 NOTE 1 – Budgetary Basis of Accounting The adopted budget of the City is prepared on a basis consistent with accounting principles generally accepted in the United States of America with the following exceptions: (1) reserved encumbrances at year end are recognized as expenditures, (2) sales, property, and auto lieu tax accruals, (3) accrued compensated absences and accrued payroll were not recognized as expenditures (4) unrealized loss on investments, (5) miscellaneous cash receipts. Consequently, the following adjustments are necessary to present the change in fund balance on a budgetary basis in order to provide a meaningful comparison. Change in Fund Balances Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds $ 7,100,470 Taxes accrued as revenue for GAAP in the fiscal year ended June 30, 2003 7,965,308 Taxes accrued as revenue for GAAP in the fiscal year ended June 30, 2004 (6,731,264) Unrealized loss accrued for GAAP in the fiscal year ended June 30, 2004 758,485 Cash receipts accrued as revenue for GAAP in the fiscal year ended June 30, 2004 (44,041) Reserved encumbrances at June 30, 2003 recognized as budgetary expenditures in the fiscal year ended June 30, 2003 8,537,062 Reserved encumbrances at June 30, 2004 recognized as budgetary expenditures in the fiscal year ended June 30, 2004 (5,801,328) Accrued payroll not recognized as budgetary basis expenditures for the fiscal year ended June 30, 2004 915,757 Accrued compensated absences not recognized as budgetary basis expenditures for the fiscal year ended June 30, 2004 296,206 Budgetary Comparison Schedule for the General Fund $ 71 12,996,655 72 COMBINING NON-MAJOR AND FIDUCIARY FUND FINANCIAL STATEMENTS 73 CITY OF CHANDLER, ARIZONA COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE JUNE 30, 2004 Special Revenue ASSETS Equity in pooled cash and investments Accounts receivable Accrued interest receivable Due from other funds Amounts due from other governments Special assessments receivable Other assets Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and compensated absences Accrued interest payable Due to other funds Arbitrage liability Bonds payable Deferred revenue Total liabilities $ $ $ Fund balances: Reserved for capital improvements Reserved for debt service Unreserved: Undesignated Total fund balances Total liabilities and fund balances $ Debt Service Capital Projects 3,633,909 2,093 2,252 2,404,000 2,758,635 8,800,889 $ 15,699,577 1,077,701 $ 16,777,278 $ 247,297 300,189 2,404,000 2,951,486 $ $ 5,178 6,356,771 8,585,000 996,003 15,942,952 $ 77,273,917 38,000 19,592 5,340 77,336,849 1,371,012 10,186 287,006 1,668,204 Total Non-Major Governmental Funds $ $ $ 96,607,403 40,093 21,844 2,404,000 2,758,635 1,077,701 5,340 102,915,016 1,623,487 310,375 6,356,771 2,404,000 287,006 8,585,000 996,003 20,562,642 200,614 - 834,326 75,668,645 - 75,869,259 834,326 5,648,789 5,849,403 834,326 75,668,645 5,648,789 82,352,374 8,800,889 $ 16,777,278 74 $ 77,336,849 $ 102,915,016 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE YEAR ENDED JUNE 30, 2004 Special Revenue Revenues: Taxes-intergovernmental Grants and entitlements System development fees Special assessments Charges for current services Contributions Interest income Miscellaneous Total revenues $ 12,225,100 4,217,697 103,729 5,980 43,863 385,518 16,981,887 Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Capital improvements Debt service Principal retirement Interest and fiscal charges Total expenditures $ 291,746 605,470 8,000 10,550,665 872,112 671 - Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers out Total other financing sources (uses) Change in fund balances Fund balances, beginning of year Fund balances, end of year Debt Service Capital Projects $ - 15,165,191 470,635 939,033 16,574,859 $ 12,225,100 4,217,697 15,165,191 251,608 103,729 5,980 514,498 1,324,551 33,808,354 36,794,139 291,746 605,470 8,000 10,550,665 872,112 671 36,794,139 12,328,664 8,689,500 9,641,321 18,330,821 36,794,139 8,689,500 9,641,321 67,453,624 4,653,223 (18,079,213) (20,219,280) (33,645,270) (4,717,228) (4,717,228) 18,154,924 18,154,924 109,588 6,917,231 (1,464,666) 5,562,153 109,588 25,072,155 (6,181,894) 18,999,849 (64,005) 75,711 (14,657,127) (14,645,421) 758,615 90,325,772 96,997,795 5,913,408 $ 251,608 251,608 Total Non-Major Governmental Funds 5,849,403 $ 75 834,326 $ 75,668,645 $ 82,352,374 76 NON-MAJOR SPECIAL REVENUE FUNDS A Special Revenue Fund is used to finance particular activities and is created out of receipts of specific taxes or other earmarked revenues. Such funds are authorized by statutory or charter provisions to pay for certain activities with some special form of continuing revenues. Highway Users Used to account for the receipt and expenditure of the City’s allocation of State highway user taxes. State law restricts the use of these monies to maintenance, construction and reconstruction of streets, and repayment of transportation-related debt. Local Transportation Assistance Used to account for the receipt and expenditure of the City’s allocation of State lottery monies. State law restricts the use of these monies to street and highway projects in the public right-of-way and to mass transportation purposes. Grants-In-Aid Used to account for the receipt and expenditure of miscellaneous federal and state grants awarded to the City for various, specific purposes. Parks and Recreation Use to account for donations for park improvements and programs restricted pursuant to donor covenants. Library Used to account for donations for library improvements and programs restricted pursuant to donor covenants. Community Center Building Used to account for donations restricted to improvements to the City's Community Services Building and facilities. Chandler Employee Used to account for monies derived from vending machine income utilized to defray expenses associated with City-sponsored employee functions. Downtown Redevelopment Used to account for contributions earmarked for downtown improvements. Municipal Arts Used to account for amounts earmarked for municipal arts. 77 CITY OF CHANDLER, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS JUNE 30, 2004 ASSETS Equity in pooled cash and investments Accounts receivable Accrued interest receivable Due from other funds Amounts due from other governments Total assets Highway Users Fund Local Transportation Assistance $ $ $ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and compensated absences Due to other funds Total liabilities Fund balances (deficits): Reserved for capital improvements Unreserved: Undesignated Total fund balances Total liabilities and fund balances 3,040,829 2,111 2,404,000 1,056,407 6,503,347 $ $ $ 38 1,702,228 1,702,266 Parks and Recreation $ $ 235,706 58 235,764 37,041 110,067 96,906 1,777 266,118 303,159 17,332 127,399 16,739 2,404,000 2,517,645 1,777 - - 6,200,188 6,200,188 $ 111,684 2,093 20 113,797 Grants-in-Aid 6,503,347 78 - (13,602) (13,602) $ 113,797 - (815,379) (815,379) $ 1,702,266 233,987 233,987 $ 235,764 Library $ $ $ 16,398 4 16,402 Community Center Building $ $ 18,598 5 18,603 Chandler Employee $ $ 2,050 1 2,051 Downtown Redevelopment Municipal Arts $ $ 6,537 2 6,539 $ $ Totals 202,069 51 202,120 $ $ 3,633,909 2,093 2,252 2,404,000 2,758,635 8,800,889 $ 247,297 - - - - 1,506 - - - - 1,506 300,189 2,404,000 2,951,486 - - - - 200,614 200,614 16,402 16,402 18,603 18,603 2,051 2,051 6,539 6,539 200,614 5,648,789 5,849,403 16,402 $ 18,603 $ 2,051 $ 6,539 79 $ 202,120 $ 8,800,889 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 Local Transportation Assistance Highway Users Fund Revenues: Taxes-intergovernmental Grants and entitlements Charges for current services Contributions Interest income Miscellaneous Total revenues $ 12,225,100 17,890 36,810 55,588 12,335,388 Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Total expenditures 164,121 6,961,253 7,125,374 Excess (deficiency) of revenues over expenditures 5,210,014 Other financing sources (uses): Transfers out Total other financing sources (uses) 595,025 5,605,163 Fund balances (deficits), beginning of year $ 6,200,188 80 1,285,031 2,698 147,039 1,434,768 $ 1,586,691 1,586,691 (4,614,989) (4,614,989) Change in fund balances Fund balances (deficits), end of year $ $ 2,932,666 887 121,988 3,055,541 $ 126,303 605,470 8,000 2,002,721 683,533 671 3,426,698 (151,923) (371,157) (5,377) (5,377) (96,862) (96,862) (157,300) (468,019) 143,698 (347,360) (13,602) Parks and Recreation Grants-in-Aid $ (815,379) 1,546 60,777 62,323 63,267 63,267 (944) - (944) 234,931 $ 233,987 Library $ 5,980 81 6,061 Community Center Building $ 2,639 2,639 - 3,422 121 - $ 121 121 $ 121 12,980 18,482 $ 18,603 23 126 149 Downtown Redevelopment Municipal Arts $ $ 1,322 1,322 $ 1,654 87,493 122,673 (35,180) 4,653,223 122,673 (4,717,228) (4,717,228) 43 3,224 (35,180) 6,496 $ 6,539 81 12,225,100 4,217,697 103,729 5,980 43,863 385,518 16,981,887 291,746 605,470 8,000 10,550,665 872,112 671 12,328,664 - (1,173) 2,051 - Totals 85,839 43 - $ 43 43 - (1,173) - 3,422 16,402 Chandler Employee (64,005) 235,794 $ 200,614 5,913,408 $ 5,849,403 82 NON-MAJOR DEBT SERVICE FUNDS Debt Service Funds are established to account for the accumulation of resources and payments of debt other than debt issued for and serviced by Enterprise Funds. General Obligation Bonds Accumulates monies for the payment of principal and interest requirements of the City's tax-supported General Obligation Bonds. General Obligation Bonds are repaid from secondary property taxes. Highway User Revenue Bonds Accumulates monies for the payment of principal and interest requirements of the City's Highway User Revenue Bonds. Revenues for repayment are generated from gas tax generated within the State of Arizona. Special Assessment Bonds Accumulates monies for the payment of principal and interest on Special Assessment Bonds that were issued to finance costs of improvements applicable to benefiting properties within certain improvement districts. 83 CITY OF CHANDLER, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR DEBT SERVICE FUNDS JUNE 30, 2004 General Obligation Bonds ASSETS Equity in pooled cash and investments Special assessments receivable Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued interest payable Bonds payable Deferred revenue Total liabilities Special Assessment Bonds Totals $ 11,679,309 11,679,309 $ 3,229,093 3,229,093 $ 791,175 1,077,701 1,868,876 $ 15,699,577 1,077,701 16,777,278 $ 5,204,309 6,475,000 11,679,309 $ 1,119,093 2,110,000 3,229,093 $ 5,178 33,369 996,003 1,034,550 $ 5,178 6,356,771 8,585,000 996,003 15,942,952 Fund balances: Reserved for debt service Total fund balances Total liabilities and fund balances Highway User Revenue Bonds - $ - 11,679,309 $ 84 3,229,093 834,326 834,326 $ 1,868,876 834,326 834,326 $ 16,777,278 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2004 General Obligation Bonds Revenues: Special assessments Total revenues $ Expenditures: Debt service Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Total other financing sources (uses) - Highway User Revenue Bonds $ - Special Assessment Bonds $ 251,608 251,608 Totals $ 251,608 251,608 6,475,000 7,314,654 13,789,654 2,110,000 2,255,270 4,365,270 104,500 71,397 175,897 8,689,500 9,641,321 18,330,821 (13,789,654) (4,365,270) 75,711 (18,079,213) 13,789,654 13,789,654 4,365,270 4,365,270 - 18,154,924 18,154,924 Change in fund balances - - 75,711 75,711 Fund balances, beginning of year - - 758,615 758,615 Fund balances, end of year $ - 85 $ - $ 834,326 $ 834,326 86 NON-MAJOR CAPITAL PROJECTS FUNDS Capital Projects Funds are designed to account for the resources expended to acquire assets of a relatively permanent nature. (Special Revenue and Enterprise Fund resources are not included in this category.) These funds evolved from the need for special accounting for bond proceeds and grants and contributions for the acquisition of capital assets. Streets Used to account for the acquisition, construction and improvements of City streets’ projects. Community Services Used to account for the acquisition of land and equipment, development, construction and improvement of community parks and projects. Public Works and General Government Used to account for the acquisition, construction, reconstruction, improvement and renovation of general government projects. Public Safety Buildings and Improvements Used to account for public safety, e.g., police and fire department, building construction, renovation and improvements and equipment purchases. Capital Equipment Acquisition and Replacement Used to account for the purchase and/or replacement of general equipment-type assets, e.g., vehicles, furniture, office equipment. Special Assessments Used to account for expenditures related to special assessment districts within the City. Computer Purchase Used to account for the purchase and/or replacement of computer equipment. Fleet Replacement Used to account for the replacement of vehicle fleet. 87 CITY OF CHANDLER, ARIZONA COMBINING BALANCE SHEET - ALL CAPITAL PROJECTS FUNDS JUNE 30, 2004 Community Services Streets ASSETS Equity in pooled cash and investments Accounts receivable Accrued interest receivable Other assets Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and compensated absences Arbitrage liability Total liabilities $ 29,356,163 7,412 29,363,575 $ 23,526,586 5,868 5,340 23,537,794 $ 859,664 $ 161,926 Fund balances: Reserved for capital improvements Total fund balances Total liabilities and fund balances $ Public Works and General Government $ 4,391,424 1,098 4,392,522 $ 138,424 150,325 1,009,989 92,136 254,062 138,424 28,353,586 28,353,586 23,283,732 23,283,732 4,254,098 4,254,098 23,537,794 $ 4,392,522 29,363,575 88 $ Public Safety Buildings and Improvements Equipment Acquisition and $ 8,330,742 2,096 8,332,838 $ 4,032,943 1,040 4,033,983 $ $ $ $ 44,989 75,555 Special Assessments 5,030,693 38,000 1,420 5,070,113 - Computer Purchase $ 2,450,830 639 2,451,469 $ $ $ 90,454 44,545 89,534 75,555 10,186 10,186 90,454 8,243,304 8,243,304 3,958,428 3,958,428 5,059,927 5,059,927 2,361,015 2,361,015 $ 8,332,838 $ 4,033,983 5,070,113 $ 2,451,469 $ Fleet Replacement 89 154,536 19 154,555 - $ Totals $ 77,273,917 38,000 19,592 5,340 77,336,849 $ 1,371,012 10,186 287,006 1,668,204 154,555 154,555 75,668,645 75,668,645 154,555 $ 77,336,849 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2004 Community Services Streets Revenues: System development fees Interest income Miscellaneous Total revenues $ 6,389,512 82,076 909,381 7,380,969 $ Public Works and General Government 6,045,702 223,410 6,269,112 $ 1,234,855 40,160 1,275,015 Expenditures: Capital improvements Total expenditures 16,086,807 16,086,807 11,557,469 11,557,469 3,189,370 3,189,370 Excess (deficiency) of revenues over expenditures (8,705,838) (5,288,357) (1,914,355) 1,092,444 1,092,444 106,660 (1,000,000) (893,340) Change in fund balances (7,613,394) (6,181,697) (1,914,355) Fund balances, beginning of year 35,966,980 29,465,429 6,168,453 28,353,586 $ 23,283,732 $ 4,254,098 Other financing sources (uses): Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) Fund balances, end of year $ 90 - Public Safety Buildings and Improvements Capital Equipment Acquisition and Replacement Special Assessments $ $ $ 1,495,122 42,505 1,537,627 2,280,542 2,280,542 $ 23,541 29,602 53,143 Computer Purchase 52,697 50 52,747 $ 6,466 6,466 Fleet Replacement $ (220) (220) Totals $ 15,165,191 470,635 939,033 16,574,859 2,258,057 2,258,057 91,450 91,450 1,267,454 1,267,454 62,990 62,990 36,794,139 36,794,139 (742,915) (2,204,914) (38,703) (1,260,988) (63,210) (20,219,280) 658,940 (266,650) 392,290 109,588 2,733,716 (198,016) 2,645,288 - 2,107,706 2,107,706 217,765 217,765 109,588 6,917,231 (1,464,666) 5,562,153 (350,625) 440,374 (38,703) 846,718 154,555 (14,657,127) 8,593,929 3,518,054 8,243,304 $ 3,958,428 $ 5,098,630 1,514,297 5,059,927 $ 2,361,015 91 - $ 154,555 90,325,772 $ 75,668,645 92 NON-MAJOR ENTERPRISE FUNDS Enterprise Funds are used to account for the acquisition, operation and maintenance of governmental facilities and services which are predominantly self-supporting by user charges. Airport Used to account for the provision of airport services at the City’s municipal airport. All activities necessary to provide such service are accounted for in this fund, including but not limited to administration, operation, maintenance, financing and related debt service, billing and collection. Chandler Housing Authority Used to account for expenditures of the City's housing assistance programs which consist of housing owned and operated by the City and rent subsidy payments to private sector owners of dwelling units. Financing for this fund is derived from tenants and the United States Department of Housing and Urban Development. 93 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF NET ASSETS - NON-MAJOR ENTERPRISE FUNDS JUNE 30, 2004 Airport ASSETS Current assets: Equity in pooled cash and investments Accounts receivable Accrued interest receivable Amounts due from other governments Inventories Short term notes receivable Total current assets $ Noncurrent assets: Long-term notes receivable Capital assets, net where applicable Total noncurrent assets Total assets 990,062 4,199 242 30,449 1,024,952 Chandler Housing Authority $ 2,661,520 11,724 622 265,183 45,513 2,984,562 Totals $ 3,651,582 15,923 864 265,183 30,449 45,513 4,009,514 26,870,826 26,870,826 27,895,778 968,647 7,963,065 8,931,712 11,916,274 968,647 34,833,891 35,802,538 39,812,052 LIABILITIES Current liabilities: Accounts payable Accrued payroll and compensated absences Trust liabilities and deposits Accrued interest payable Arbitrage liability Bonds payable Deferred revenue Total current liabilities 27,403 116,011 143,414 20,671 33,225 23,305 876 18,841 15,214 139,535 180,417 228,533 524,961 201,088 261,758 23,305 876 18,841 15,214 664,496 Noncurrent liabilities: Bonds payable Total non-current liabilities Total liabilities 726,942 726,942 866,477 524,961 726,942 726,942 1,391,438 26,125,043 56,098 848,160 27,029,301 7,963,065 3,428,248 11,391,313 34,088,108 56,098 4,276,408 38,420,614 NET ASSETS Invested in capital assets, net of related debt Restricted for capital improvements Unrestricted Total net assets $ 94 $ $ CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS NON-MAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2004 Chandler Housing Authority Airport Operating revenues: Service fees Grants and entitlements Rentals Miscellaneous House sales Total operating revenues $ Operating expenses: Personal services Contractual services Commodities Housing assistance payments Depreciation and amortization House sale expenses Total operating expenses 896,968 73 897,041 $ 238,329 28,976 415,097 724,677 1,407,079 6,655,089 599,088 255,169 1,145,000 8,654,346 Totals $ 1,606,941 1,797,882 560,881 3,736,505 332,385 1,049,856 9,084,450 896,968 6,655,089 599,088 255,242 1,145,000 9,551,387 1,845,270 1,826,858 975,978 3,736,505 1,057,062 1,049,856 10,491,529 (510,038) (430,104) (940,142) 5,365 (50,989) 22,871 107,401 - 28,236 107,401 (50,989) (45,624) 130,272 84,648 (555,662) (299,832) (855,494) Capital contributions Transfers out 60,786 (14,090) 233,058 - 293,844 (14,090) Change in net assets (508,966) (66,774) (575,740) Operating loss Nonoperating revenues (expenses): Interest income Gain on disposal of capital assets Interest expense Total nonoperating revenues (expenses) Income (loss) before operating transfers 27,538,267 Total net assets, beginning of year Total net assets, end of year $ 27,029,301 95 11,458,087 $ 11,391,313 38,996,354 $ 38,420,614 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS YEAR ENDED JUNE 30, 2004 AIRPORT CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received From Customers Cash Received From Grantors Cash Payments to Suppliers Cash Payments to Employees Net Cash Provided By (Used For) Operating Activities $ 901,497 (473,748) (237,412) 190,337 CHANDLER HOUSING AUTHORITY $ 1,761,622 6,694,774 (6,705,154) (1,634,943) 116,299 TOTAL $ 2,663,119 6,694,774 (7,178,902) (1,872,355) 306,636 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers Out To Other Funds Net Cash Provided By (Used For) Noncapital Financing Activities (14,090) (14,090) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition/Construction of Capital Assets Proceeds From Sales of Capital Assets Principal Paid on Bond Maturities Interest Paid on Bonds Proceeds from Capital Grants Principal Received on Mortgage Notes Capital Contributed by Developers and Grantors Net Cash Provided By (Used For) Capital And Related Financing Activities (60,786) (17,922) (50,989) 60,786 (68,911) (263,972) 173,684 233,058 25,576 168,346 (324,758) 173,684 (17,922) (50,989) 233,058 25,576 60,786 99,435 7,077 7,077 27,970 27,970 35,047 35,047 $ 114,413 875,649 990,062 $ 312,615 2,348,905 2,661,520 427,028 3,224,554 3,651,582 $ (510,038) $ CASH FLOWS FROM INVESTING ACTIVITIES: Interest Received Net Cash Provided By Investing Activities Net Increase In Cash And Cash Equivalents Cash And Cash Equivalents At Beginning Of Year Cash And Cash Equivalents At End Of Year Reconciliation of Operating Income (Loss) to Net Cash Provided By (Used For) Operating Activities: Operating Income (Loss) Adjustments To Reconcile Operating Income (Loss) To Net Cash Provided By (Used For) Operating Activities: Depreciation and Amortization Changes In Assets And Liabilities: (Increase) In Receivables (Increase) Decrease In Inventories Decrease in Assets Held for Resale (Decrease) In Payables Increase in Accrued Payroll and Compensated Absences Increase In Deposits Increase In Deferred Revenue Total Adjustments Net Cash Provided By (Used For) Operating Activities $ 96 - (430,104) (14,090) (14,090) $ $ (940,142) 724,677 332,385 1,057,062 (444) (9,444) (20,231) 917 700 4,200 700,375 190,337 (228,213) 550,781 (128,785) 20,235 546,403 116,299 (228,657) (9,444) 550,781 (149,016) 917 20,935 4,200 1,246,778 306,636 $ $ FIDUCIARY FUND Fiduciary Funds are used to administer resources received and held by a governmental unit as the trustee or as the agent for others. Use of these funds facilitates the discharge of responsibilities placed upon the governmental unit by virtue of law or other similar authority. Agency Fund Miscellaneous Deposit Used to account for the collection and retention of various deposits as authorized by City Code. 97 CITY OF CHANDLER, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - AGENCY FUND YEAR ENDED JUNE 30, 2004 Balance July 1, 2003 Additions Deductions Balance June 30, 2004 MISCELLANEOUS DEPOSIT FUND Assets Equity in pooled cash and investments Accounts receivable Total assets $ 21,127 693 102,001 261 103,483 67 $ 19,645 887 $ 21,820 102,262 103,550 $ 20,532 $ 21,820 102,262 103,550 $ 20,532 $ 21,820 102,262 103,550 $ 20,532 Liabilities Due to others Total liabilities 98 OTHER SUPPLEMENTAL INFORMATION 99 100 BUDGETARY COMPARISON SCHEDULES – NON-MAJOR GOVERNMENTAL FUNDS 101 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 Highway Users Fund Budget Revenues: Taxes-intergovernmental Grants and entitlements Charges for current services Contributions Interest income Miscellaneous Total revenues $ Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances 12,229,779 Variance - Positive (Negative) $ $ (1,061,086) 17,890 (52,110) 72,000 12,371,779 36,810 55,588 11,278,981 (35,190) 55,588 (1,092,798) 1,831,529 174,688 1,656,841 10,023,963 8,082,262 1,941,701 11,855,492 8,256,950 3,598,542 516,287 3,022,031 2,505,744 (4,631,238) (4,614,989) 16,249 (4,631,238) (4,614,989) 16,249 (4,114,951) (1,592,958) 2,521,993 5,572,537 5,572,537 - $ 11,168,693 70,000 Fund balances, July 1, 2003 Fund balances (deficits), June 30, 2004 Non-GAAP Actual (4,114,951) 102 $ 3,979,579 $ 8,094,530 Local Transportation Assistance Variance Non-GAAP Positive Budget Actual (Negative) $ 1,031,314 $ 45,000 1,076,314 $ 2,698 147,039 1,434,768 118,202 - 253,717 Budget $ 20,793,130 Non-GAAP Actual Variance - Positive (Negative) $ $ 2,357,434 (18,435,696) 2,698 102,039 358,454 20,793,130 887 121,988 2,480,309 887 121,988 (18,312,821) 118,202 407,060 3,469,456 8,000 16,821,014 831,287 36,233 21,573,050 125,734 726,641 8,000 4,712,957 649,680 (35,561) 6,187,451 281,326 2,742,815 12,108,057 181,607 71,794 15,385,599 (779,920) (3,707,142) (2,927,222) 1,856,580 1,631,701 224,879 1,974,782 1,631,701 343,081 (898,468) (196,933) (5,377) (5,377) - (96,862) (96,862) - (5,377) (5,377) - (96,862) (96,862) - (903,845) (202,310) 701,535 (876,782) (3,804,004) 184,445 184,445 - $ 1,285,031 Grants-in-Aid (903,845) $ (17,865) 701,535 $ 885,980 - $ (876,782) (2,927,222) 184,011 $ (3,619,993) 184,011 $ (2,743,211) (Continued) 103 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 (Continued) Parks and Recreation Variance Non-GAAP Positive Budget Actual (Negative) Revenues: Taxes-intergovernmental Grants and entitlements Charges for current services Contributions Interest income Miscellaneous Total revenues $ Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Total expenditures Excess (deficiency) of revenues over expenditures - $ - $ - 2,500 62,350 64,850 1,546 60,777 62,323 (954) (1,573) (2,527) 54,515 - 54,515 160,835 77,783 83,052 215,350 77,783 137,567 (150,500) (15,460) 135,040 Other financing sources (uses): Transfers out Total other financing sources (uses) - Change in fund balances (150,500) Fund balances, July 1, 2003 Fund balances (deficits), June 30, 2004 - - $ 104 (150,500) $ - (15,460) 135,040 236,379 236,379 220,919 $ 371,419 Library Budget $ Actual - $ - $ - $ - $ - $ - 30,000 175 5,980 81 (24,020) (94) 200 121 (79) 30,175 6,061 (24,114) 200 121 (79) 393 $ Community Center Building Variance Positive Budget Actual (Negative) Variance Positive (Negative) - 393 19,200 - 19,200 - 19,200 121 19,121 40,357 2,639 37,718 40,750 2,639 38,111 19,200 (10,575) 3,422 13,997 (19,000) - - - - (10,575) 3,422 13,997 (19,000) - 12,980 12,980 - (10,575) $ 16,402 $ 26,977 $ (19,000) - $ - 121 19,121 18,482 18,482 18,603 $ 37,603 (Continued) 105 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 (Continued) Chandler Employee Budget Revenues: Taxes-intergovernmental Grants and entitlements Charges for current services Contributions Interest income Miscellaneous Total revenues $ - $ - - Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Total expenditures Excess (deficiency) of revenues over expenditures Variance - Positive (Negative) Actual $ - 23 126 149 23 126 149 3,000 1,322 1,678 3,000 1,322 1,678 (3,000) (1,173) 1,827 - - - (3,000) (1,173) 1,827 - 3,224 3,224 Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2003 Fund balances (deficits), June 30, 2004 $ (3,000) $ *The Downtown Redevelopment Fund was included in the City's budget, however, the budget was -0-. 106 2,051 $ 5,051 Downtown Redevelopment Variance Positive Budget* Actual (Negative) $ - $ - Budget - $ - Variance Positive (Negative) Non-GAAP Actual $ - 85,839 85,839 $ - - 43 43 2,500 1,654 (846) - 43 43 88,339 87,493 (846) 341,692 167,625 174,067 341,692 167,625 174,067 (253,353) (80,132) 173,221 - - - - 43 - $ $ Municipal Arts 43 - - - - 43 43 - 6,496 6,496 - $ 6,539 $ - (253,353) - 6,539 $ (253,353) $ - (80,132) 173,221 232,151 232,151 152,019 $ 405,372 (Continued) 107 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2004 (Concluded) Totals Revenues: Taxes-intergovernmental Grants and entitlements Charges for current services Contributions Interest income Miscellaneous Total revenues $ Budget Non-GAAP Actual Variance - Positive (Negative) 12,229,779 21,824,444 155,839 30,000 77,375 107,350 34,424,787 $ $ Expenditures: Current General government Public safety Community development Public works Community services Municipal utilites Total expenditures 2,433,899 3,469,456 8,000 28,701,557 1,374,171 36,233 36,023,316 Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Change in fund balances 2,132,155 2,742,815 14,274,637 476,444 71,794 19,697,845 (1,598,529) (975,223) 623,306 (4,733,477) (4,717,228) 16,249 (4,733,477) (4,717,228) 16,249 (6,332,006) (5,692,451) 639,555 6,450,705 $ 108 (1,061,086) (18,181,979) (52,110) (24,020) (33,512) 278,168 (19,074,539) 301,744 726,641 8,000 14,426,920 897,727 (35,561) 16,325,471 Fund balances, July 1, 2003 Fund balances (deficits), June 30, 2004 11,168,693 3,642,465 103,729 5,980 43,863 385,518 15,350,248 (6,332,006) $ 758,254 6,450,705 $ 7,090,260 109 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - ALL CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2004 Streets Non-GAAP Actual Variance Positive (Negative) 3,213,000 222,480 3,435,480 $ 6,389,512 82,076 909,381 7,380,969 $ 3,176,512 (140,404) 909,381 3,945,489 45,787,899 45,787,899 17,123,051 17,123,051 28,664,848 28,664,848 (42,352,419) (9,742,082) 32,610,337 11,869,150 1,800,000 - 1,092,444 - (11,869,150) (707,556) - 13,669,150 1,092,444 (12,576,706) (28,683,269) (8,649,638) 20,033,631 32,907,506 32,907,506 $ 24,257,868 $ 52,941,137 Budget Revenues: System development fees Interest income Miscellaneous Total revenues $ Expenditures: Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Face amount of bonds issued Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) Change in fund balances Fund balances, July 1, 2003 - Fund balances (deficits), June 30, 2004 $ (28,683,269) 110 Community Services Public Works and General Government Variance Non-GAAP Positive Budget Actual (Negative) Budget Non-GAAP Actual Variance Positive (Negative) $ 4,329,500 286,900 4,616,400 $ 6,045,702 223,410 6,269,112 $ 1,716,202 (63,490) 1,652,712 $ 1,016,400 60,000 1,076,400 $ 1,234,855 40,160 1,275,015 3,472,925 3,472,925 11,498,648 11,498,648 (8,025,723) (8,025,723) 4,348,062 4,348,062 1,684,012 1,684,012 1,143,475 (5,229,536) (6,373,011) (3,271,662) 5,682,778 106,660 (1,000,000) 106,660 (1,000,000) (5,682,778) - - - - 4,789,438 (893,340) (5,682,778) - - - 5,932,913 (6,122,876) (12,055,789) 28,680,854 28,680,854 $ 22,557,978 $ 16,625,065 - $ 5,932,913 (3,271,662) - $ (3,271,662) (408,997) (408,997) $ 218,455 (19,840) 198,615 2,664,050 2,664,050 2,862,665 2,862,665 4,949,957 4,949,957 $ 4,540,960 $ 7,812,622 (Continued) 111 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - ALL CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2004 (Continued) Public Safety Buildings and Improvements Variance Non-GAAP Positive Budget Actual (Negative) Revenues: System development fees Interest income Miscellaneous Total revenues Expenditures: Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Face amount of bonds issued Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) Change in fund balances $ 1,158,000 53,500 1,211,500 $ 1,495,122 42,505 1,537,627 14,356,257 14,356,257 696,707 696,707 13,659,550 13,659,550 (13,144,757) 840,920 13,985,677 2,378,105 1,500,000 (266,650) 658,940 (266,650) (2,378,105) (841,060) - 3,611,455 392,290 (3,219,165) (9,533,302) Fund balances, July 1, 2003 - Fund balances (deficits), June 30, 2004 $ (9,533,302) 112 $ 337,122 (10,995) 326,127 1,233,210 10,766,512 6,196,517 6,196,517 $ 7,429,727 $ 16,963,029 Capital Equipment Acquisition and Replacement Variance Non-GAAP Positive Budget Actual (Negative) $ 45,000 6,488 51,488 23,541 29,602 53,143 $ Budget (21,459) 23,114 1,655 $ 52,000 52,000 Variance Positive (Negative) Non-GAAP Actual $ 52,697 50 52,747 $ 697 50 747 4,106,375 4,106,375 1,842,847 1,842,847 2,263,528 2,263,528 112,075 112,075 90,886 90,886 21,189 21,189 (4,054,887) (1,789,704) 2,265,183 (60,075) (38,139) 21,936 45,000 3,377,414 (198,016) 109,588 2,733,716 (198,016) 64,588 (643,698) - - - - 3,224,398 2,645,288 (579,110) - - - (38,139) 21,936 (830,489) - $ $ Special Assessments (830,489) 855,584 1,686,073 (60,075) 3,906,991 3,906,991 - $ 4,762,575 $ 5,593,064 $ (60,075) 5,099,434 5,099,434 $ 5,061,295 $ 5,121,370 (Continued) 113 CITY OF CHANDLER, ARIZONA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - ALL CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2004 (Concluded) Computer Purchase Budget Revenues: System development fees Interest income Miscellaneous Total revenues $ Expenditures: Capital improvements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Face amount of bonds issued Proceeds from disposal of capital assets Transfers in Transfers out Total other financing sources (uses) Change in fund balances 6,466 6,466 (13,534) (13,534) 814,594 814,594 (2,392,830) (1,591,770) 801,060 1,978,522 - 2,107,706 - 129,184 - 1,978,522 2,107,706 129,184 515,936 930,244 2,286,310 2,286,310 $ 2,802,246 $ 3,216,554 (414,308) *The Fleet Replacement Fund was included in the City's budget, however, the budget was -0-. 114 $ 1,598,236 1,598,236 - $ $ 2,412,830 2,412,830 (414,308) Fund balances, July 1, 2003 Fund balances (deficits), June 30, 2004 20,000 20,000 Variance Positive (Negative) Non-GAAP Actual Fleet Replacement Budget* $ - Actual $ (220) (220) $ Budget Non-GAAP Actual (220) (220) $ 9,716,900 739,880 6,488 10,463,268 $ 15,165,191 470,635 939,033 16,574,859 Variance Positive (Negative) $ 5,448,291 (269,245) 932,545 6,111,591 - 62,990 62,990 (62,990) (62,990) 74,596,423 74,596,423 34,597,377 34,597,377 39,999,046 39,999,046 - (63,210) (63,210) (64,133,155) (18,022,518) 46,110,637 - 217,765 - 217,765 - 19,930,033 45,000 8,762,596 (1,464,666) 109,588 6,917,231 (1,464,666) (19,930,033) 64,588 (1,845,365) - - 217,765 217,765 27,272,963 5,562,153 (21,710,810) - 154,555 154,555 (36,860,192) (12,460,365) 24,399,827 84,027,569 84,027,569 $ 71,567,204 $ 108,427,396 - $ Totals Variance Positive (Negative) - - $ 154,555 - $ - 154,555 $(36,860,192) 115 116 FINANCIAL DATA SCHEDULE City of Chandler Housing and Redevelopment Division As submitted electronically to U.S. Department of Housing and Urban Development Real Estate Assessment Center (REAC) The Financial Data Schedule is a required electronic submission to the U.S. Department of Housing and Urban Development (HUD) by all Housing Authorities receiving HUD funding. Financial data on each of the grant programs is presented in a combining schedule. The Financial Data Schedule presented herein has been submitted electronically to and approved by HUD. The activities of the City of Chandler Housing and Redevelopment Division are reported as an enterprise fund in the City’s Comprehensive Annual Financial Report. 117 CITY OF CHANDLER, ARIZONA FINANCIAL DATA SCHEDULE CITY OF CHANDLER HOUSING AND REDEVELOPMENT DIVISION AS SUBMITTED ELECTRONICALLY TO: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT REAL ESTATE ASSESSMENT CENTER (REAC) COMBINING STATEMENT OF NET ASSETS - ALL HUD PROGRAMS June 30, 2004 HOME 14.239 FDS Line # Low Rent Public Housing 14.850a CDBG 14.218 Housing Choice Vouchers 14.871 Account Description ASSETS 111 113 114 122 124 125 126 126.1 127 129 161 162 164 166 171 Cash - Unrestricted Cash - Restricted for FSS Escrow Accounts Cash - Security Deposits 17,544 - - Accounts Receivable - HUD Other Projects Accounts Receivable - Other Governments Accounts Receivable - Miscellaneous Accounts Receivable - Tenants - Dwelling Rents Allowance for Doubtful Accounts - Dwelling Rents Notes and Mortgages Receivable - current Accrued Interest Receivable 45,601 30,703 6 142,198 14,810 - 1,725 21,710 (11,711) 325 35,287 24 5,086 (5,086) 237,520 42,736 2,654,773 11,212,307 261,110 (6,165,125) 452,967 - 331,374 199,744 9,916,084 311,119 1,229 6,899 2,356 - 11,641 94,302 26,830 9,425 - 11,868 37,739 47,640 78,656 6,611 752 18,193 14,288 - - - 25,653 117,613 10,484 142,198 208,167 150,846 320,890 57,546 7,963,065 1,744,852 160,273 TOTAL NET ASSETS 320,890 57,546 9,707,917 160,273 TOTAL LIABILITIES AND NET ASSETS 331,374 199,744 9,916,084 311,119 Land Buildings Furniture, Equipment, Machinery - Admin Accumulated Depreciation Notes and Mortgages Receivable - non-current TOTAL ASSETS 1,383,694 25,653 78,656 158,195 117,613 - LIABILITIES 311 312 321 322 341 345 Bank Overdraft Accounts Payable Accrued Wage/Payroll Taxes Payable Accrued Compensated Absences Tenant Security Deposits Other Current Liabilities 353 Noncurrent Liabilities - Other TOTAL LIABILITIES NET ASSETS 508.1 512.1 Invested in Capital Assets, net of related debt Unrestricted Net Assets 118 Capital Fund Program 14.872 ROSS Grant 14.870 Other Business Total - - 909,428 - 2,468,861 143,266 78,656 41,292 - 805 - 267 219,582 45,601 1,725 21,710 (11,711) 45,513 622 - - 235,424 2,654,773 11,212,307 266,196 (6,170,211) 968,647 41,292 805 1,145,119 11,945,537 16,817 7,860 8,730 7,885 - 805 - 432 - 29,263 116,011 98,823 81,594 78,656 6,611 - - - 143,266 41,292 805 432 554,224 - - 1,144,687 7,963,065 3,428,248 - - 1,144,687 11,391,313 41,292 805 1,145,119 11,945,537 119 CITY OF CHANDLER, ARIZONA FINANCIAL DATA SCHEDULE CITY OF CHANDLER HOUSING AND REDEVELOPMENT DIVISION AS SUBMITTED ELECTRONICALLY TO: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT REAL ESTATE ASSESSMENT CENTER (REAC) STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS - ALL HUD PROGRAMS FOR THE YEAR ENDED JUNE 30, 2004 HOME 14.239 FDS Line # Low Rent Public Housing 14.850a CDBG 14.218 Account Description REVENUES 703 704 706 706.1 708 711 713 713.1 714 715 716 Net Tenant Rental Revenue Tenant Revenue - Other HUD Operating Grants HUD Capital Grants Other Government Grants Investment Income - Unrestricted Proceeds from disposition of assets held for sale Cost of Sale of Assets Fraud Recovery Other Revenue Gain/Loss on sale of Fixed Assets TOTAL REVENUES 225,477 52 195,415 420,944 1,484,303 11,542 1,495,845 599,088 40,683 527,880 13,155 7,308 107,401 1,295,515 Administrative Salaries Auditing Fees Compensated Absences Employee Benefit Contributions - Administrative Other Operating - Administrative Tenant Services - Other Water Electricity Gas Other Utility Expenditures Ordinary Maintenance and Operations - Labor Ordinary Maintenance and Operations - Materials Ordinary Maintenance and Operations - Contract Costs Insurance Other General Expenditures Bad Debt - Tenant rents Total Operating Expenditures 31,078 (188) 7,020 300 340,982 379,192 187,699 2,000 (5,552) 53,240 11,687 1,253,076 1,502,150 315,706 4,000 4,907 179,470 46,810 4,361 41,489 49,412 2,280 35,751 313,291 175,478 78,828 63,950 23,219 21,081 1,360,033 Other Expenditures: Housing assistance Payments Depreciation TOTAL EXPENDITURES 379,192 1,502,150 332,385 1,692,418 41,752 (6,305) (396,903) - (6,520) 36,520 - - (6,520) 36,520 EXPENSES 911 912 914 915 916 924 931 932 933 938 941 942 943 961 962 964 973 974 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES BEFORE OTHER FINANCING SOURCES (USES) OTHER FINANCING SOURCES (USES) 1001 1002 Operating Transfers In Operating Transfers Out TOTAL OTHER FINANCING SOURCES (USES) CHANGE IN NET ASSETS 1104 Residual Equity Transfer TOTAL NET ASSETS, BEGINNING OF YEAR 41,752 (12,825) 279,138 70,371 (360,383) 233,058 9,835,242 NET ASSETS, END OF YEAR 320,890 57,546 9,707,917 - - OTHER MEMORANDUM AMOUNTS 1113 1115 1120 1121 Maximum Annual Contributions Commitment Contingency Reserve Unit Months Available Number of Unit Months Leased 120 3640 3552 Housing Choice Vouchers 14.871 Capital Fund Program 14.872 ROSS Grant 14.870 Other Business Total 4,079,482 754 221 4,080,457 246,256 233,058 479,314 91,691 91,691 8,910 1,145,000 (1,049,856) 104,054 599,088 40,683 6,429,612 233,058 225,477 22,871 1,145,000 (1,049,856) 221 214,265 107,401 7,967,820 257,843 3,100 2,992 78,215 45,567 387,717 133,734 926 32,042 2,819 46,735 216,256 92 91,599 91,691 12,302 (1,017) 3,233 9,147 5,000 28,665 938,362 9,100 2,068 353,220 70,855 95,960 41,489 49,412 2,280 35,751 313,291 175,478 78,828 63,950 1,714,579 21,081 3,965,704 3,736,505 4,124,222 216,256 91,691 28,665 3,736,505 332,385 8,034,594 (43,765) 263,058 - 75,389 (66,774) - (30,000) - - 36,520 (36,520) - (30,000) - - - (43,765) - 75,389 204,038 233,058 (233,058) - - 1,069,298 (66,774) 11,458,087 160,273 - - 1,144,687 11,391,313 4,159,678 281,105 5760 5712 - - u 121 122 STATISTICAL SECTION The statistical section includes various statistical schedules including historical expenditure comparisons, property taxes, debt service, and demographic information about the City. STATISTICAL SECTION This GIS map is a snapshot of various areas in the City and shows the locations and connections of water facilities such as fire hydrants, water shutoff valves (system valves), water flushing assemblies (water quality), water main pipes, and water meters. CITY OF CHANDLER, ARIZONA GOVERNMENT-WIDE REVENUES YEAR ENDED JUNE 30, 2004 PROGRAM REVENUES Fiscal Year Charges for Services Operating Grants & Contributions GENERAL REVENUES Capital Grants & Contributions Property Taxes Franchise Taxes Sales Taxes State Shared Revenue System Development Fees Investment Income Miscellaneous Total 2001-02 $ 82,046,180 $ 7,279,967 $ 79,241,975 $ 16,001,578 $ 55,070,562 $ 1,957,618 $ 37,850,975 $ 8,320,712 $ 11,684,618 $ 801,904 $ 300,256,089 2002-03 $ 101,013,980 $ 9,489,473 $ 58,830,871 $ 17,953,164 $ 60,614,779 $ 2,249,190 $ 39,559,356 $ 8,105,353 $ (7,519,472) $ 1,158,580 $ 291,455,274 2003-04 $ 107,772,253 $ 8,143,458 $ 56,456,033 $ 20,818,622 $ 66,671,049 $ 2,365,749 $ 37,903,674 $ 15,165,191 $ 3,591,585 $ 1,072,229 $ 319,959,843 Government-Wide Revenues Miscellaneous 0.05% System Development Fees 4.74% State Shared Revenue 11.85% Investment Income 1.12% Miscellaneous 0.34% Charges for Services 33.68% Franchise Taxes 0.74% Sales Taxes 20.84% Operating Grants & Contributions 2.55% Property Taxes 6.51% Capital Grants & Contributions 17.64% 123 CITY OF CHANDLER, ARIZONA GOVERNMENT-WIDE EXPENSES BY FUNCTION YEAR ENDED JUNE 30, 2004 Governmental Activities Fiscal Year General Government Public Safety Community Development Public Works Community Services Interest on Long Term Debt Municipal Utilities 2001-02 $ 32,159,571 $ 50,221,565 $ 6,760,718 $ 20,431,691 $ 17,668,011 $ 84,539 $ 12,398,031 2002-03 $ 30,610,529 $ 54,854,074 $ 7,067,675 $ 16,097,894 $ 19,823,356 $ 97,425 $ 10,858,078 2003-04 $ 32,925,516 $ 59,666,119 $ 7,457,073 $ 21,308,737 $ 20,200,390 $ 671 $ 11,426,919 Business-Type Activities Water Wastewater Solid Waste Airport Housing Authority Total Governmental and Business-Type Activities 2001-02 $ 33,004,765 $ 21,800,113 $ 8,675,676 $ 1,305,935 $ 6,584,884 $ 211,095,499 2002-03 $ 35,992,958 $ 22,986,319 $ 14,414,774 $ 1,420,574 $ 7,082,747 $ 221,306,403 2003-04 $ 40,544,967 $ 24,505,362 $ 9,705,932 $ 1,458,068 $ 8,977,049 $ 238,176,803 Government-Wide Expenses Solid Waste Airport 4.50% 0.68% Housing Authority 4.16% General Government 15.27% Wastewater 11.36% Water 8.35% Interest on Long Term Debt 5.30% Public Safety 27.67% Municipal Utilities Community 0.00% Services 9.37% Public Works 9.88% Community Development 3.46% 124 CITY OF CHANDLER, ARIZONA GENERAL GOVERNMENTAL REVENUES BY SOURCE Last Ten Fiscal Years 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Source: Total Revenues $ 72,133,479 88,015,462 99,670,819 111,930,023 113,261,881 124,620,146 135,757,133 159,303,865 166,867,792 174,208,592 190,104,397 $ Local Taxes 23,459,456 35,270,213 39,802,513 43,144,009 47,514,573 54,743,902 59,732,187 69,079,352 72,951,061 82,591,633 91,492,704 Licenses and Permits $ 2,446,169 3,681,780 3,044,396 3,124,530 4,029,720 5,699,464 5,572,080 6,627,557 5,651,522 6,386,478 7,500,437 InterGovernmental $ 20,725,377 22,747,687 24,218,772 32,430,233 34,241,154 38,188,387 42,199,249 43,772,423 48,797,917 49,850,293 50,173,867 City of Chandler, Arizona, Comprehensive Annual Financial Report General, Special Revenue, Debt Service and Capital Projects Funds, GAAP Basis 125 Fines and Forfeitures $ 1,289,594 1,214,243 1,939,625 2,011,960 2,565,759 2,627,517 1,969,478 2,233,173 2,796,157 3,975,613 3,517,080 $ Interest 978,816 2,170,839 3,785,176 4,841,476 5,807,734 6,340,846 8,670,019 13,767,036 6,885,010 4,327,282 2,170,414 $ Other 15,195,759 17,150,871 22,876,877 22,630,419 17,345,291 16,234,860 17,392,587 23,636,505 29,610,973 26,564,051 34,998,287 Special Assessments $ 8,038,308 5,779,829 4,003,460 3,747,396 1,757,650 785,170 221,533 187,819 175,152 513,242 251,608 CITY OF CHANDLER, ARIZONA GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE Last Ten Fiscal Years Local 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Source: Total Tax Revenue $51,242,066 56,613,533 66,032,041 72,482,656 82,936,033 90,651,036 101,851,459 110,802,036 120,376,489 127,759,094 City Sales $27,457,349 30,909,683 33,386,669 36,188,241 42,523,642 45,371,992 52,747,528 55,070,563 60,614,779 66,671,049 State Shared General Property $7,069,413 8,011,080 8,820,211 10,033,775 11,114,921 12,506,958 14,188,453 15,922,881 17,953,164 20,818,622 Franchise $743,451 881,750 937,129 1,292,557 1,105,339 1,628,723 2,008,187 1,957,617 2,249,190 2,365,749 City of Chandler, Arizona, Comprehensive Annual Financial Report General, Special Revenue and Debt Service Funds, GAAP Basis 126 State Sales $6,922,049 7,482,255 9,331,247 9,867,102 10,577,030 11,626,261 12,270,238 13,607,408 13,810,011 14,827,156 Vehicle License $2,572,942 2,465,230 3,534,117 3,778,304 4,396,845 4,849,432 5,242,763 5,825,942 6,955,624 7,154,321 State Income $6,476,862 6,863,535 10,022,668 11,322,677 13,218,256 14,667,670 15,394,290 18,417,625 18,793,721 15,922,197 CITY OF CHANDLER, ARIZONA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION Last Ten Fiscal Years 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Source: Total Expenditures $ 69,122,505 76,556,549 95,192,361 90,450,083 104,720,964 110,111,066 118,041,931 136,826,832 144,932,184 159,288,531 General Government $ 10,133,454 9,781,149 11,052,664 16,622,720 19,510,960 18,721,568 19,921,160 28,858,549 29,448,025 31,024,154 Public Safety $ 17,886,332 20,123,365 25,089,002 33,593,934 33,611,007 35,968,445 42,355,666 49,910,766 53,885,322 58,407,246 Community Development $ 8,482,726 10,181,640 9,446,705 10,000,217 10,658,913 11,822,939 15,217,991 6,757,787 7,061,116 7,449,114 City of Chandler, Arizona, Comprehensive Annual Financial Report General, Special Revenue and Debt Service Funds, GAAP Basis 127 Public Works $ 8,307,841 11,562,497 13,614,850 8,236,925 9,128,756 12,267,892 13,427,718 20,229,867 18,999,357 23,027,866 Community Services $ 4,860,220 8,523,422 8,944,073 9,380,758 11,103,823 14,075,302 16,786,006 17,575,610 20,310,994 21,048,659 Municipal Utilities $ 2,963,573 1,504,509 786,015 1,479,921 219,178 926,597 165,793 84,539 97,425 671 Debt Service $ 16,488,359 14,879,967 26,259,052 11,135,608 20,488,327 16,328,323 10,167,597 13,409,714 15,129,945 18,330,821 CITY OF CHANDLER, ARIZONA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years (A) Chandler Unified School District (1) City of Chandler Maricopa County Community College Maricopa County Government State of Arizona (B) Flood Control Tax Rates (2): 1994-95 P* 1994-95 S 0.36 0.99 5.25 3.74 0.89 - 1.24 - 0.47 - 0.36 1995-96 P* 1995-96 S 0.36 0.97 5.28 3.32 0.95 - 1.16 - 0.47 - 0.33 1996-97 P* 1996-97 S 0.36 0.97 5.20 3.32 0.98 0.07 1.11 0.16 - 0.34 1997-98 P* 1997-98 S 0.35 0.97 5.06 3.23 0.97 0.16 1.13 0.14 - 0.34 1998-99 P* 1998-99 S 0.35 0.97 5.30 3.73 0.99 0.13 1.15 0.13 - 0.33 1999-00 P* 1999-00 S 0.38 0.93 5.01 3.48 0.97 0.15 1.19 0.11 - 0.29 2000-01 P* 2000-01 S 0.38 0.92 4.69 3.27 0.97 0.15 1.16 0.12 - 0.25 2001-02 P* 2001-02 S 0.38 0.91 4.99 2.87 0.96 0.15 1.18 0.09 - 0.23 2002-03 P* 2002-03 S 0.38 0.90 5.08 2.71 0.96 0.15 1.21 0.08 - 0.21 2003-04 P* 2003-04 S 0.38 0.90 4.69 2.35 0.94 0.14 1.21 0.07 - 0.21 Note 1: For residents located within the following school districts, the statistics are as follows: Mesa Kyrene Tempe High 2003-04 Tax Rate P* $ 4.75 2.13 2.24 S 2.40 1.96 1.05 2003-04 Tax Levy P* S $ 112,263,866 59,916,989 33,173,432 32,663,985 63,921,636 32,236,303 Note 2: Based on $100 of Assessed Valuation, P* = Primary S = Secondary Source: (A) Maricopa County Assessor's Office (B) State of Arizona (CIS) 128 Gilbert 4.85 3.60 51,315,552 40,456,770 Library and Fire Assistance Central Arizona Project Total Hospital District East Valley Institute of Technology Education Equalization Total Rate 0.05 0.07 0.14 0.06 0.53 - 8.74 5.41 0.01 0.06 0.14 0.04 0.53 - 8.75 4.87 0.05 0.06 0.14 0.06 0.11 0.53 - 8.22 5.21 0.05 0.04 0.14 0.06 0.07 0.53 - 8.10 5.14 0.05 0.06 0.14 0.06 0.07 0.53 - 8.38 5.61 0.05 0.02 0.14 0.05 0.07 0.52 - 8.12 5.24 0.05 - 0.13 0.05 0.07 0.51 - 7.76 4.96 0.05 - 0.13 0.05 0.06 0.50 - 8.06 4.49 0.13 0.06 0.06 0.49 - 8.18 4.29 0.12 0.05 0.05 0.47 - 7.74 3.90 0.05 0.06 - - 129 CITY OF CHANDLER, ARIZONA PROPERTY TAX LEVIES DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years (A) City of Chandler Chandler Unified School District (1) Maricopa County Community College Maricopa County Government State of Arizona (B) 118,841,866 - $ 164,865,317 428,377 $ 101,934,235 - 35,318,672 Flood Control Tax Levies: (2) 1994-95 P* 1994-95 S $ 1,813,165 5,076,799 $ 17,682,761 12,855,499 $ 1995-96 P* 1995-96 S 1,990,488 5,632,436 19,782,700 13,079,452 127,583,281 23,643,816 156,257,472 20,670,863 63,420,563 - 36,078,354 1996-97 P* 1996-97 S 2,216,615 6,126,654 22,186,907 14,535,837 136,570,230 10,099,590 154,487,036 22,590,472 - 38,118,477 1997-98 P* 1997-98 S 2,430,088 7,040,766 24,504,765 16,342,625 146,259,046 25,143,528 169,045,638 21,446,852 - 42,339,342 1998-99 P* 1998-99 S 2,730,357 7,917,563 29,588,815 21,742,204 158,026,342 21,173,925 183,750,071 22,058,679 - 44,670,223 1999-00 P* 1999-00 S 3,337,274 8,587,981 31,828,719 23,028,314 170,815,611 28,833,135 207,540,697 20,264,381 - 44,310,754 2000-01 P* 2000-01 S 3,941,711 10,114,962 37,462,185 28,136,682 187,642,684 31,377,241 225,396,514 24,051,128 - 44,309,245 2001-02 P* 2001-02 S 4,495,864 11,319,490 43,927,008 26,779,368 204,648,094 34,930,475 252,676,223 20,071,906 - 45,322,696 2002-03 P* 2002-03 S 4,793,607 11,999,402 49,118,834 27,768,095 221,156,802 36,526,312 277,949,612 19,565,638 - 44,868,063 2003-04 P* 2003-04 S 5,799,062 14,745,383 54,376,493 29,277,839 239,464,278 37,777,314 308,122,580 19,234,591 - 51,153,993 Note 1: For residents located within the following school districts, the statistics are as follows: Mesa Kyrene Tempe High 2003-04 Tax Rate P* 4.75 2.13 2.24 S 2.40 1.96 1.05 2003-04 Tax Levy P* S 112,263,866 59,916,989 33,173,432 32,663,985 Note 2: Based on $100 of Assessed Valuation, P* = Primary S = Secondary Source: (A) Maricopa County Assessor's Office (B) State of Arizona (CIS) 130 63,921,636 32,236,303 - Gilbert 4.85 3.60 51,315,552 40,456,770 Library and Fire Assistance Hospital District Central Arizona Project Total East Valley Institute of Technology Education Equalization Total Levy 7,085,645 844,018 18,929,645 2,863,873 $ 70,502,331 - $ 475,639,675 83,402,528 2,915,806 813,568 19,767,209 3,842,930 71,516,805 - 440,551,309 126,444,434 7,605,530 873,583 20,080,420 3,231,860 6,120,184 74,071,041 - 392,763,689 126,150,747 8,265,184 668,982 22,012,897 3,672,969 4,274,560 79,533,234 - 425,445,740 147,534,736 8,815,645 1,144,708 23,536,796 4,246,713 5,130,129 84,891,508 - 463,233,806 156,189,872 9,736,723 483,234 26,147,456 3,970,493 5,922,133 91,109,039 - 508,601,833 167,314,111 10,786,836 - 27,141,030 4,786,052 6,155,098 99,193,054 - 558,422,200 182,072,222 11,732,514 - 29,787,075 5,197,584 6,258,774 106,221,394 - 617,166,167 186,202,298 12,155,883 - 31,805,013 6,119,631 6,175,823 112,231,223 - 671,369,709 190,864,229 16,247,269 - 33,010,980 5,613,388 6,429,195 120,037,513 - 733,413,314 207,876,564 131 CITY OF CHANDLER, ARIZONA 2003-04 PROPERTY TAX LEVIES APPLICABLE TO CHANDLER PROPERTY OWNERS PRIMARY TAXES Within Chandler Total Valuation School Districts Chandler Unified Mesa Unified Gilbert Unified Kyrene Elementary Tempe Union High Maricopa Community College Total All Schools City Wide Levies City of Chandler Maricopa County Central Arizona Water Conservation Flood Control State of Arizona Library and Fire Assistance Hospital District East Valley Institute of Technology Education Equalization Total City-Wide Levies TOTAL ALL LEVIES $ 1,159,179,080 2,364,699,038 1,058,689,074 1,559,423,591 2,859,909,827 25,477,850,971 Percent 79.40 4.93 2.97 29.34 5.99 Amount $ 920,360,340 116,635,719 31,474,155 457,598,669 Rate (Per $100) $ 1,526,068,883 4.70 4.75 4.85 2.13 2.24 0.94 Chandler Portion $ $ $ 1,526,068,883 25,477,850,971 100.00 5.99 25,477,850,971 - 12,331,112,598 25,477,850,971 12.38 5.99 Total Overall Tax Rates: Inside Chandler Unified School District Inside Kyrene/Tempe High School District Inside Mesa Unified School District Inside Gilbert Unified School District $11.65 $11.98 $11.75 $13.05 Source: Maricopa County Finance Department and Assessor's Office. 132 $ 1,526,068,888 1,526,068,888 $ 0.38 1.21 5,799,062 18,465,434 - 1,526,068,888 1,526,068,888 1,526,068,888 $ 43,256,936 5,540,197 1,526,497 9,746,852 14,345,048 74,415,530 0.05 0.47 763,034 7,172,524 32,200,054 $ 106,615,584 SECONDARY TAXES Within Chandler Total Valuation Percent Amount $ 988,641,671 Rate (Per $100) Chandler Proportion of Levy $ 2.35 $ 23,233,079 Total Chandler Proportion of Levy $ 1,244,759,096 79.42 2,491,663,621 5.00 124,707,353 2.40 2,992,976 8,533,173 1,124,065,140 3.13 35,212,889 3.60 1,267,664 2,794,161 1,665,048,018 29.42 489,814,019 1.96 9,600,355 19,347,207 3,064,882,568 - 1.05 - 27,477,987,528 5.96 0.14 2,293,726 1,638,375,932 $ 66,490,015 16,638,774 $ 39,387,800 $ 113,803,330 0.90 $ 14,745,410 $ 20,544,472 $ 1,638,375,932 100.00 $ 1,638,378,932 27,477,987,528 5.96 1,638,378,932 0.07 1,146,865 19,612,299 27,477,987,528 5.96 1,638,378,932 0.12 1,966,055 1,966,055 24,140,629,062 6.04 1,458,063,781 0.21 3,089,637 3,089,637 N/A 27,477,987,528 12,331,112,598 N/A 5.96 13.29 - $ - - 1,638,378,932 - 0.06 - - 1,638,378,932 968,282 968,282 - 0.05 - - - - 853,595 1,616,629 - 7,172,524.00 22,769,844 $ 62,157,644 133 54,969,898 $ 168,773,228 CITY OF CHANDLER, ARIZONA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years COLLECTIONS Total City Tax Levy 1994-95 $ 6,889,964 Current Amount $ Delinquent % of Levy 6,786,981 98.5 Amount $ Outstanding Delinquencies Total % of Levy 282,432 4.1 Amount $ % of Levy 7,069,413 102.6 Amount (1) $ % of Levy 163,539 2.4 1995-96 7,622,924 7,824,931 102.6 179,851 2.4 8,004,782 105.0 237,022 3.1 1996-97 8,343,269 8,668,735 103.9 151,476 1.8 8,820,211 105.7 308,838 3.7 1997-98 9,470,854 9,842,629 103.9 191,146 2.0 10,033,775 105.9 272,532 2.9 1998-99 10,647,920 10,957,416 102.9 157,506 1.5 11,114,922 104.4 289,456 2.7 1999-00 10,935,270 12,183,893 111.4 323,065 3.0 12,506,958 114.4 218,199 2.0 2000-01 14,056,673 14,041,449 99.9 147,004 1.0 14,188,453 100.9 248,465 1.8 2001-02 15,815,354 15,709,241 99.3 213,640 1.4 15,922,881 100.7 320,226 2.0 2002-03 16,793,009 17,429,004 103.8 275,088 1.6 17,704,092 105.4 86,554 0.5 2003-04 20,544,445 20,535,246 99.9 267,475 1.3 20,802,721 101.3 528,840 2.6 Source: (1) Maricopa County Assessor's Office. 134 CITY OF CHANDLER, ARIZONA SPECIAL ASSESSMENT COLLECTIONS Last Ten Fiscal Years Assessments Due Ratio of Collections To Amount Due Total Outstanding Collections (1) 3,745,158 $ 3,693,633 98.62 1995-96 3,232,574 3,199,847 98.99 32,727 1996-97 2,813,926 2,813,926 100.00 - 1997-98 1,814,614 1,814,614 100.00 - 1998-99 1,184,852 1,184,880 100.00 1999-00 456,148 456,148 100.00 - 2000-01 180,089 180,089 100.00 - 2001-02 174,920 167,445 95.73 7,475 2002-03 143,704 143,704 100.00 0 2003-04 136,553 140,645 103.00 1994-95 $ Assessments Collected Note 1: Under Arizona law, public auctions are held in January of each year at which disposition, of then delinquent assessments, is made. By bid, special lien rights to properties against which due but unpaid assessments exist are offered in return for payment of all outstanding amounts plus penalties. In the event there are no interested bidders, the delinquency must be satisfied from budgetary funds of the sponsoring governmental unit. Thus, in January of each year, all outstanding delinquent assessments are collected. The amounts shown in this column, if any, represent unpaid balances of the June 1 semi-annual interest installment only. 135 $ 51,525 (28) (4,092) CITY OF CHANDLER, ARIZONA RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUATION AND NET GENERAL BONDED DEBT PER CAPITA Last Ten Fiscal Years Assessed Valuation Population 1994-95 $ 125,388 $ 512,807,949 Principal General Bonded Debt $ Less: 7/1 Debt Service Pmts 50,200,000 $ Net General Bonded Debt % Net General Bonded Debt to Assessed Value 3,090,000 $ 47,110,000 9.2 Net General Bonded Debt Per Capita $ 376 1995-96 141,426 580,663,464 51,460,000 3,290,000 48,170,000 8.3 340.60 1996-97 151,420 631,613,770 56,330,000 2,875,000 53,455,000 8.5 353.02 1997-98 161,097 725,852,181 57,175,000 4,245,000 52,930,000 7.3 328.56 1998-99 171,047 816,243,568 59,880,000 5,025,000 54,855,000 6.7 320.70 1999-00 179,844 923,438,771 59,340,000 1,475,000 57,865,000 6.3 321.75 2000-01 189,318 1,099,452,357 65,905,000 1,655,000 64,250,000 5.8 339.38 2001-02 198,840 1,243,900,020 87,250,000 1,675,000 85,575,000 6.9 430.37 2002-03 211,984 1,333,266,930 106,970,000 4,490,000 102,480,000 7.7 483.43 2003-04 224,644 1,638,375,932 102,480,000 6,475,000 96,005,000 5.9 Note (1) Excludes General Obligation Bonded Debt that is being repaid from Enterprise revenues. 136 427 CITY OF CHANDLER, ARIZONA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES Last Ten Fiscal Years Principal 1994-95 $ 1,040,000 Total Debt Service Interest $ 3,655,113 $ 4,695,113 Total General Expenditures $ Percent 69,122,505 6.8 1995-96 3,090,000 2,169,070 5,259,070 76,556,549 6.9 1996-97 4,313,731 2,043,435 6,357,166 95,192,361 6.7 1997-98 2,875,000 2,311,979 5,186,979 90,450,083 5.7 1998-99 5,025,000 2,296,155 7,321,155 104,720,964 7.0 1999-00 1,475,000 6,514,726 7,989,726 110,111,066 7.3 2000-01 1,655,000 6,924,065 8,579,065 118,041,931 7.3 2001-02 1,675,000 7,129,574 8,804,574 136,826,832 6.4 2002-03 4,490,000 6,417,796 10,907,796 144,932,184 7.5 2003-04 6,475,000 7,314,652 13,789,652 159,288,531 8.7 Note (1) Excludes General Obligation Bonded Debt that is being repaid from Enterprise revenues. 137 CITY OF CHANDLER, ARIZONA COMPUTATION OF LEGAL DEBT MARGIN GENERAL OBLIGATION BONDS June 30, 2004 2004 Valuation Assessed Valuation $ 1,805,748,800 6% Bonds (1) Legal Debt Limitation $ 108,344,928 $ 70,769,928 Deduct Bonds Outstanding Margin Available for Future G.O.B. Issues 20% Bonds (2) $ 361,149,760 $ 289,029,760 $ 359,799,688 37,575,000 72,120,000 Total Margin Available Note 1: Under Arizona law, cities can issue general obligation bonds for all purposes other than those listed in Note (2) below, up to an amount not exceeding 6% of assessed valuation Note 2: Under Arizona law, cities can issue general obligation bonds for purposes of water, wastewater and artificial light, and open space preserves, parks, playgrounds and recreational facilities up to an amount not exceeding 20% of assessed valuation. Source: US Bancorp Piper Jaffray, Inc. COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND ASSESSED VALUATION June 30, 2004 2003-04 Secondary Assessed Valuation (in millions) City of Chandler State of Arizona Maricopa County Maricopa County Community College District East Valley Institute of Technology Chandler Unified School District No. 80 Mesa Unified School District No. 4 Gilbert Unified School District No. 41 Kyrene Elementary School District No. 28 Tempe Union High School No. 213 $ Portion Applicable to the City of Chandler Net Bonded Debt 1,806 44,481 30,067 30,067 13,339 1,392 2,669 1,261 1,769 3,230 Total Direct and Overlapping General Obligation Debt Source: Peacock, Hislop, Staley & Given, Inc. 138 $ 117,940,000 none none 234,440,000 6,235,000 122,630,000 208,155,000 69,575,000 51,020,000 171,130,000 $ 981,125,000 % 100.00 % 4.06 6.01 6.01 13.54 79.10 5.05 3.28 29.42 16.11 Amount $ 117,940,000 none none 14,080,466 844,032 97,004,009 10,503,501 2,282,756 15,008,553 27,563,909 $ 285,227,226 CITY OF CHANDLER, ARIZONA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Real Estate Personal Property Improvements Utilities Rails, Wire Gross Valuation Net Assessed Valuations Less Exemptions (A) Estimated Actual Cash Value Percent of Increase 1994-95 P* 1994-95 S 399,563,152 153,559,222 Incl in R.E. 255,137,320 85,238,905 85,238,905 19,064,560 19,081,928 503,866,617 513,017,375 209,777 209,426 503,656,840 512,807,949 -67.00 -68.70 3,545,684,337 1995-96 P* 1995-96 S 452,845,580 156,132,885 Incl in R.E. 324,446,114 80,582,480 80,582,480 19,683,632 19,700,256 553,111,692 580,861,735 198,224 198,271 552,913,468 580,663,464 9.78 13.23 4,234,436,623 1996-97 P* 1996-97 S 534,500,329 173,046,885 Incl in R.E. 378,077,946 87,775,380 87,775,380 46,948,482 46,964,268 669,224,191 685,864,479 53,497,906 54,250,709 615,726,285 631,613,770 11.36 8.77 4,579,542,569 1997-98 P* 1997-98 S 606,160,472 186,772,137 Incl in R.E. 451,582,909 95,169,303 95,253,219 46,478,997 46,494,625 747,808,772 780,102,890 53,497,906 54,250,709 694,310,866 725,852,181 12.76 14.92 5,394,116,278 1998-99 P* 1998-99 S 679,235,590 210,238,011 Incl in R.E. 500,107,377 115,453,515 115,453,515 46,701,597 46,724,721 841,390,702 872,523,624 53,636,163 56,280,056 787,754,539 816,243,568 13.46 12.45 5,487,333,654 1999-00 P* 1999-00 S 770,746,335 233,884,071 Incl in R.E. 585,595,402 114,682,430 114,682,430 49,221,311 49,264,155 934,650,076 983,426,058 56,420,203 59,987,287 878,229,873 923,438,771 11.49 13.13 6,924,106,131 2000-01 P* 2000-01 S 887,887,801 261,595,484 Incl in R.E. 694,957,817 114,682,430 114,682,430 53,081,674 53,135,497 1,055,651,905 1,124,371,228 59,830,337 66,249,033 995,821,568 1,058,122,195 13.39 14.58 7,361,557,694 2001-02 P* 2001-02 S 1,040,269,420 1,117,966,751 Incl in R.E. Incl in R.E. 161,820,085 161,820,085 62,360,508 62,378,730 1,264,450,013 1,342,165,566 81,327,995 98,265,546 1,183,122,018 1,243,900,020 18.81 17.56 8,368,335,959 2002-03 P* 2002-03 S 1,150,010,316 1,248,354,270 Incl in R.E. Incl in R.E. 144,187,125 144,187,125 30,810,045 30,827,856 1,325,007,486 1,423,369,251 63,531,894 90,102,321 1,261,475,592 1,333,266,930 6.62 7.18 8,981,174,789 1,526,068,883 1,638,375,932 20.97 22.88 2003-04 P* 2003-04 S $ 1,372,124,058 1,521,017,420 $ Incl in R.E. Incl in R.E. $ 198,078,400 198,078,400 $ 37,091,309 37,116,372 $ 1,607,293,767 1,756,212,192 $ 81,224,884 117,836,260 $ Note A: Property tax legislation approved by the voters on June 3, 1980 created primary (P) and secondary (S) valuation bases. Taxes levied on primary valuations are for maintenance and operations of counties, cities, school districts, community college districts, and the State. Taxes levied on secondary valuations are for debt retirement, voter-approved budget overrides, and maintenance and operation of special service districts. In 1968, a statewide reappraisal program was completed in which a property's value was assessed by usage classification on varying percentages of actual cash value. Legislation has altered the percentages utilized in determining assessed valuation of various categories of property in subsequent years as follows: 1968 Ratio 1974 Ratio 1980 Ratio 2001 Ratio 1. (mines,timbers,airlines,etc.) 60 % 60 % 52 % 2. (utilities) 40 50 44 25 % 25 3. (commercial) 25 27 25 25 4. (agricultural and vacant land) 18 18 16 16 5. (homes) 18 15 10 10 6. (apartments) 18 21 18 10 7. (railroads) 60 36 34 21 Classes 1 and 2 will be reduced annually until 1999. From 1999 and thereafter, they will remain fixed at 25%. For fiscal year 1989 and thereafter, the percentages for class 7 are calculated annually based on the ratio of the total assessed valuation of all mining, utility and commercial properties to the total full cash value of such properties. P* Primary valuations S Secondary valuations Source: Maricopa County Assessor's Office 139 $ 10,999,084,221 CITY OF CHANDLER, ARIZONA ESTIMATED ASSESSED VALUATIONS OF MAJOR TAXPAYERS Taxpayer Description Intel Corporation Freescale Semiconductor TWC-Chandler LLC Qwest Corporation Basha's Inc. Motorola Inc. Chandler Festival SPE LLC Avnet Inc. San Tan Office Venture Microchip Technology Inc. Manufacturing Plant Commercial Building Shopping Centers Telecommunications Truck Terminal Manufacturing Shopping Center Warehousing Office Building Manufacturing 2003-2004 Assessed Valuation(1) Source: Peacock, Hislop, Staley & Given, Inc. 140 Percent of City's 2003-2004 Secondary Assessed Valuation $ 97,448,324 71,890,305 28,352,913 20,927,982 9,206,191 8,700,988 7,877,012 7,125,140 6,868,330 6,629,320 5.40 % 3.98 1.57 1.16 0.51 0.48 0.44 0.39 0.38 0.37 $ 265,026,505 14.68 % CITY OF CHANDLER, ARIZONA SCHEDULE OF REVENUE BOND COVERAGE HIGHWAY USERS FUND Last Ten Fiscal Years Gross Revenue and Transfers In Debt Service Requirement Total Coverage Required 1994-95 6,236,739 750,000 1,239,869 1,989,869 3.13 2.0 1995-96 6,797,164 810,000 1,636,526 2,446,526 2.78 2.0 1996-97 8,848,784 865,000 1,846,102 2,711,102 3.26 2.0 1997-98 8,805,770 1,010,000 1,788,272 2,798,272 3.15 2.0 1998-99 9,574,791 1,005,000 2,666,225 3,671,225 2.61 2.0 1999-00 9,868,216 1,140,000 2,682,788 3,822,788 2.58 2.0 2000-01 10,215,420 420,000 2,787,849 3,207,849 3.18 2.0 2001-02 11,200,136 1,910,000 2,460,983 4,370,983 2.56 2.0 2002-03 11,535,170 2,025,000 2,021,322 4,046,322 2.85 2.0 4,365,270 2.83 2.0 2003-04 $ 12,335,388 Principal $ 2,110,000 Interest $ 2,255,270 $ ENTERPRISE FUNDS Last Ten Fiscal Years Water and Sewer Revenue Bonds Gross Revenue and Net Operating Transfers Expense Excluding Depreciation Net Revenue Available for Debt Service Principal Interest Total Coverage Required Coverage 1994-95 32,419,062 14,655,530 17,763,532 1,960,000 4,119,080 6,079,080 2.92 1.2 1995-96 40,665,972 18,553,907 22,112,065 2,020,000 4,156,276 6,176,276 3.58 1.2 1996-97 41,058,807 21,676,307 19,382,500 1,630,000 4,036,355 5,666,355 3.42 1.2 1997-98 40,685,946 19,632,375 21,053,571 1,845,000 5,047,680 6,892,680 3.05 1.2 1998-99 43,977,113 22,336,963 21,640,150 1,805,000 5,489,933 7,294,933 2.97 1.2 1999-00 45,737,916 25,500,386 20,237,530 3,305,000 5,596,306 8,901,306 2.27 1.2 2000-01 37,303,967 26,931,098 10,372,869 4,430,000 4,813,294 9,243,294 1.12 1.2 2001-02 50,414,214 29,062,343 21,351,871 5,110,000 5,128,133 10,238,133 2.09 1.2 2002-03 55,973,541 33,136,452 22,837,089 6,470,000 5,538,828 12,008,828 1.90 1.2 2003-04 55,608,809 36,382,039 19,226,770 7,490,000 5,965,401 13,455,401 1.43 1.2 Solid Waste System Revenue Bonds 1996-97 7,142,492 4,671,379 2,471,113 68,020 68,020 36.33 1.2 1997-98 6,812,437 4,847,392 1,965,045 50,000 132,948 182,948 10.74 1.2 1998-99 6,991,747 5,124,323 1,867,424 100,000 236,813 336,813 5.54 1.2 1999-00 7,464,471 5,894,509 1,569,962 100,000 229,750 329,750 4.76 1.2 2000-01 8,132,130 6,423,477 1,708,653 100,000 222,688 322,688 5.30 1.2 2001-02 8,512,593 7,777,349 735,244 125,000 215,750 340,750 2.16 1.2 2002-03 9,156,049 13,627,896 * 2003-04 9,729,384 9,035,882 (4,471,847) 693,502 125,000 206,969 331,969 -13.47 1.2 125,000 152,469 277,469 2.50 1.2 * Expenses for FY 03 include $5,323,714 in landfill closure and postclosure costs. The amount expensed in FY 02 was $812,319. The increase in comparable amounts is due to an increase in costs related to a change in the planned usage of the property following closure. 141 CITY OF CHANDLER, ARIZONA PROPERTY VALUE AND CONSTRUCTION Last Ten Fiscal Years CONSTRUCTION (1) COMMERCIAL NUMBER OF PERMITS 1994-95 28 1995-96 RESIDENTIAL VALUE $ NUMBER OF DWELLING UNITS PROPERTY VALUE (2) VALUE $ 3,676 263 524,093,052 4,068 467,519,924 1,240,313,909 2,935,398,110 1996-97 74 12,979,908 1,870 269,681,765 1,310,983,269 3,268,559,300 1997-98 106 12,966,279 3,246 391,236,063 1,391,222,454 4,026,328,070 1998-99 36 4,668,861 2,748 427,549,093 1,572,206,486 4,374,773,420 1999-00 251 1,883,204,934 2,593 590,628,302 1,788,243,626 5,038,718,960 2000-01 540 517,398,936 5,420 643,755,107 2,160,569,208 5,933,501,040 2001-02 407 161,898,626 2,868 567,872,409 2,469,261,239 6,664,077,870 2002-03 292 113,355,800 6,922 1,365,088,985 2,672,711,661 7,080,253,590 2003-04 261 77,425,246 4,113 835,831,357 3,247,128,508 8,738,220,190 Note (2) Source - Estimated actual value Secondary Assessed Valuation, Maricopa Co. Assessors Office for years 1992 to 2001 142 $ 1,145,826,152 RESIDENTIAL 55,645,466 Note (1) Source - City Building Inspection Program. 368,726,421 COMMERCIAL $ 2,503,833,920 CITY OF CHANDLER, ARIZONA SYSTEM DEVELOPMENT FEES BY FUND Last Ten Fiscal Years Capital Projects Funds 1993-94 $ 15,850 Public Works and General Government Community Services Streets $ Enterprise Funds Public Safety Buildings and Improvements 1,308,826 - - Water $ 4,512,569 Wastewater $ 4,745,540 Solid Waste $ Total 340,185 $ 10,922,970 1994-95 38,354 1,680,968 - - 6,463,246 6,523,133 443,760 15,149,461 1995-96 44,961 1,748,690 - - 6,550,308 6,620,689 313,439 15,278,087 1996-97 438,523 1,404,012 262,485 6,713,962 3,345,097 260,806 12,743,675 1997-98 3,850,461 2,610,610 1,182,617 999,537 7,456,292 4,864,796 319,564 21,283,877 1998-99 1,545,997 730,818 904,644 979,920 7,637,980 4,570,885 291,034 16,661,278 1999-00 2,674,767 2,425,052 1,112,512 1,387,919 8,262,984 5,004,778 249,254 21,117,266 2000-01 3,760,159 2,822,204 1,222,923 1,588,944 9,704,119 4,520,896 261,796 23,881,041 2001-02 2,807,229 3,637,944 877,193 998,346 12,735,073 4,564,949 274,176 25,894,910 2002-03 1,622,002 4,298,047 1,020,450 1,164,854 13,055,419 5,038,674 335,274 26,534,720 6,045,702 1,234,855 1,495,122 $ 18,128,543 406,874 $ 40,615,018 2003-04 $ 6,389,512 $ $ 318,790 $ Source: City of Chandler, Arizona, Comprehensive Annual Financial Report Capital Projects and Enterprise Funds, Budget Basis 143 $ 6,914,410 $ CITY OF CHANDLER, ARIZONA DEMOGRAPHIC STATISTICS Last Ten Fiscal Years Fiscal Year Median Household Income (4) Population (1) 1994-95 125,388 1995-96 $ Median Age (2) Unemployment Rate Percentage (3) 46,618 28.8 4.2 141,426 48,732 28.8 2.4 1996-97 151,420 47,478 30.6 2.2 1997-98 161,097 47,478 30.6 1.8 1998-99 171,047 47,478 30.6 1.8 1999-00 179,844 46,096 30.6 1.7 2000-01 189,498 66,737 31.2 2.8 2001-02 198,840 66,737 31.2 4.2 2002-03 211,984 66,737 31.2 4.0 2003-04 224,644 71,190 31.2 3.1 Sources: (1) City Economic Development, Planning Staff and Official Census. (2) Chandler Chamber of Commerce; Arizona Gold. (3) Arizona Department of Economic Security. (4) Estimate based on Maricopa County statistical figures. 144 CITY OF CHANDLER, ARIZONA MISCELLANEOUS STATISTICAL DATA Date of Incorporation: February 17, 1920 Date Charter Adopted: May 25, 1964 Form of Government: Area (Square Miles) Population 63.186 Council-Manager Refuse Collection: 224,644 Customers Served Assessed Valuation : Primary $1,709,977,241 Secondary $1,805,748,802 Privilege Tax Licenses Issued 3,618 Employees (Total): 1,469 Governmental 1,317 Enterprise Employees Per 1,000 Population Sewer: Miles of Lines Water: Connections Fire Calls Emergency Calls Other Calls Building Inspections: 451 Building Permits Issued Construction Valuation 113,501 8 180 2,236 Street Lights Signalized Intersections $1,109,945,889 Developed Parks 51 Developed Acres 870 Swimming Pools 5 Other Recreation Facilities 29 Library: 33 Bookstock (City-owned) 347 Circulation 11,750 2,463 11,688 Municipal Parks: Registered Borrowers 415,515 1,817,536 124,786 Education System: Streets: Total Miles (Center Line) 66,105 45,000,000 Fire: Fire Investigations 780 Total Daily Pumping Capacity-Plant (Gallons) 38,531 Fire Inspections 21,871 6.53 Traffic Citations Employees (full-time) Refuse Recycled (Tons) 55,800,000 4,588 Fire Stations 134,952 Daily Pumping Capacity-Wells (Gallons) Traffic Accidents Total Calls for Police Services Refuse Collected (Tons) 152 Police: Employees (full-time) 59,121 851 23,140 153 145 Elementary 28 Junior High 6 High School 3 Community College 1 Private University 1 Mailing Address Mail Stop 702 P.O. Box 4008 Chandler, Arizona 85244-4008 Phone (480) 782-2315 www.chandleraz.gov Management Services Suite 201 55 North Arizona Place Chandler, Arizona 85225