2014
Annual Report
FINANCIAL MANAGEMENT SERVICES

Dedicated to the memory of John McGee, Chief Financial Officer of the Arizona Department of Transportation from 1999-2009.

John will be remembered as a remarkable leader and mentor.

FINANCIAL MANAGEMENT SERVICES

Table of Contents
Economic Highlights ....................................................................................................................... 1
Sources and Uses ............................................................................................................................ 4
Revenue Sources


Highway User Revenue Fund (HURF) ........................................................................................ 5
State Highway Fund…………………………………………………………………………………………………….10



Regional Area Road Fund (RARF) ........................................................................................... 11



Federal Aid Program ........................................................................................................... 16

Debt Financing Program ............................................................................................................... 19
Cash Management ........................................................................................................................ 24
2015-2019 Five-Year Transportation Facilities Construction Program .......................................... 25
Audited Financial Statement ........................................................................................................ 26
Financial Management Services Administration ........................................................................... 28
Listing of Acronyms....................................................................................................................... 39

FINANCIAL MANAGEMENT SERVICES

Economic Highlights

FINANCIAL MANAGEMENT SERVICES

ECONOMIC HIGHLIGHTS: YEAR IN REVIEW
FY 2014 at a Glance

FY 2014 HURF HIGHLIGHTS

In fiscal year 2014, Arizona saw modest economic improvements with sluggish growth in
employment, personal income and population. According to the July 17, 2014 Arizona Department
of Administration’s employment report, the Arizona unemployment rate decreased from 8.1 percent
in June 2013 to 6.9 percent in June 2014. During this period, the private sector created 45,900 jobs
while the government sector lost 3,100 jobs for a net gain of 42,800. The number of jobs gained in
FY 2014 was lower than the 49,400 jobs gained in FY 2013.
The Department’s two main state funding sources, the Highway User Revenue Fund (HURF) and the
Regional Area Road Fund (RARF), also known as the Maricopa County Transportation Excise Tax,
posted positive results in fiscal year 2014. In fiscal year 2014, the HURF revenue collections were
$1,241.3 million, 2.6 percent above fiscal year 2013 and 1.4 percent above the forecast. The RARF
revenues equaled $365.6 million, an increase of 7.0 percent over fiscal year 2013 and 1.0 percent
above the estimate. Despite solid year-over-year growth, HURF and RARF revenue sources remain at
fiscal year 2005 and fiscal year 2006 revenue levels, respectively.
The Federal Highway Administration (FHWA) provides federal aid apportionments to states from the
Highway Trust Fund (HTF). In federal fiscal year 2014, Arizona received $705.3 million in federal aid
apportionments. In the summer of 2014, the HTF was on the brink of insolvency and warned that
reimbursements to states may be delayed if Congress did not take action. Ultimately, Congress did
pass legislation which provided a one-time cash infusion to the HTF to avert insolvency through May
of 2015, but the HTF will need additional funds to meet its obligations beyond this timeframe.

Historic HURF and RARF Revenues









2005
$316.8
$1,245.6

2006
$367.6
$1,331.6

FY 2014

2007
$392.5
$1,382.5

2008
$380.1
$1,344.5

2009
$328.2
$1,248.6

HURF = $1,241.3
RARF = $365.6

2010
$299.0
$1,194.4

2011
$309.2
$1,205.1

2012
$324.2
$1,210.6

2013
$341.6
$1,210.0

2014
$365.6
$1,241.3

FY 2014 HURF and RARF
revenues were at FY 2005 and
FY 2006 levels, respectively.

FINANCIAL MANAGEMENT SERVICES

Fuel tax revenues, which accounted for 51
percent of HURF, continued to have little or no
growth.

FY 2014 RARF HIGHLIGHTS


RARF collections were $365.6 million in fiscal
year 2014, which was 7.0 percent greater than
FY 2013 revenues.



RARF revenues have posted four years of
positive growth, however, revenues remained at
FY 2006 levels.



Although FY 2014 contracting revenues grew
14.0 percent compared to last fiscal year, a
slowdown in the Phoenix real estate market in
the last quarter of the fiscal year tempered
contracting revenue growth in the last three
months of FY 2014.

Fiscal Year-End Revenues by Fund ($ in Millions)
FUND
RARF
HURF

Fiscal year 2014 HURF revenues totaled $1,241.3
million, which was 2.6 percent above FY 2013.
This is the strongest year-over-year growth seen
since the Great Recession.
The vehicle license tax revenue category
experienced the strongest rate of growth in FY
2014 at 6.7 percent.
Vehicle license tax was the only revenue
category that registered positive year-over-year
growth every month in FY 2014.

1

ECONOMIC HIGHLIGHTS: ECONOMIC FACTORS INFLUENCING ARIZONA TRANSPORTATION REVENUE SOURCES

Motor fuel taxes and
various fees related to
the operation of motor
vehicles are collected
by the State of Arizona
and deposited into the
Highway User Revenue
Fund (HURF).
Therefore, statewide
economic factors affect
HURF revenues.

Maricopa County
voters approved a ½
cent sales tax (RARF)
on business activities
in the county.
Therefore, Maricopa
County economic
factors affect RARF
revenues.

HURF Gasoline
Revenue

HURF Use Fuel (Diesel)
Revenue

HURF Vehicle License
Tax (VLT) Revenue

AZ Population
AZ Personal Income
Fleet fuel efficiency (mpg)
AZ Gas Price Per Gallon

AZ Non-farm Employment
AZ Diesel Price Per Gallon

AZ Non-farm Employment

RARF Retail Revenue

Phoenix Area Non-farm
Employment
Maricopa County Personal
Income

FINANCIAL MANAGEMENT SERVICES

RARF Restaurant &
Bar Revenue

RARF Contracting
Revenue

Maricopa County Personal
Income
PHX/Mesa Gateway Airports
Passenger Traffic
Maricopa County Population

30-year Fixed Mortgage Rate
Phoenix Area Construction
Employment

2

ECONOMIC HIGHLIGHTS: ECONOMIC INDICATORS

Total Nonfarm Employment

Jobs - Arizona Total Nonfarm Employment (in Thousands)

Arizona Population (in Millions)

2,600

6.8

2,550

6.6

2,500

6.4

2,450

6.2
6.0

2,400

5.8

2,350

5.6

2,300

Jul

Aug Sep Oct Nov Dec Jan

Feb Mar Apr May Jun

5.2

Month
FY 2012

FY 2013

5.4

FY 2014
Fiscal Year

Source: Bureau of Labor Statistics Not Seasonally Adjusted total nonfarm employment

Population

Arizona Gas and Diesel Price Per Gallon in FY 2014

Arizona Personal Income ($ in Millions)

$4.50

$300
$250

$4.00

$200
$3.50
$150
$100

$3.00

$50

$2.50

$0

$2.00
Jul

Fiscal Year

Personal Income

FINANCIAL MANAGEMENT SERVICES

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Month
Gas
Diesel

3

Sources and Uses

FINANCIAL MANAGEMENT SERVICES

SOURCES AND USES: FY 2014
Highlights


Sources ($ in Millions)

The Department’s FY 2014 Financial Program totaled $1.58
billion. The major funding Sources and Uses are detailed in the
pie charts to the right.



The Department’s primary funding source in FY 2014 was
Federal Funds which accounted for 44 percent of the funding
followed by the State Highway Fund at 29 percent of funding.
Bonding accounted for 10 percent, the Regional Area Road
Fund (RARF) totaled 10 percent and Aviation and Other
combined amounted to 7 percent.



The majority of the uses of funding were the Capital Budget at
58 percent along with Debt Service at 18 percent and
Operating Budget/Land, Buildings and Improvements (L,B&I) at
14 percent. The remaining uses were Maintenance at 9 percent
and Other at 1 percent.

Federal Funding
$696.5 , 44%

Other
$87.8 , 6%
Aviation
$24.3 , 1%

Bonding
$153.7 , 10%

Total: $1,584.4 Million

Uses ($ in Millions)

Maintenance
$141.5 , 9%

Operating
Budget/L,B&I
$212.5 , 14%

FINANCIAL MANAGEMENT SERVICES

RARF
$159.8 , 10%

State Highway
Fund
$462.3 , 29%

Debt Service
$288.0 , 18%

Other
$21.0 , 1%
Capital Budget
$921.4 , 58%

Total: $1,584.4 Million

4

Revenue Sources

FINANCIAL MANAGEMENT SERVICES

Highway User Revenue Fund

FINANCIAL MANAGEMENT SERVICES

HIGHWAY USER REVENUE FUND (HURF)
Highlights






Revenue History ($ in Millions)

Fiscal year 2014 HURF revenues totaled $1,241.3 million,
which was 2.6 percent above FY 2013. This was the
strongest year-over-year growth seen since the Great
Recession. Even so, FY 2014 HURF revenues are
approximately at the levels seen in FY 2005.
Four of the six HURF revenue categories experienced
positive year-over-year growth rates, but growth was
strongest in the vehicle license tax (VLT) category at 6.7
percent.
Vehicle license tax was the only revenue category that
registered positive year-over-year growth every month in
FY 2014.

2,900
$1,400
2,850
$1,350
2,800

8.0%
6.0%

$3.50
$3.00

4.0%

2,750
$1,300
2,700
$1,250
2,650

2.0%
0.0%

2,600
$1,200

$2.50
$2.00
$1.50

-2.0%$1.00

2,550
$1,150
2,500

-4.0%$0.50

$1,100
2,450

-6.0%$0.00
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Gasoline Gallonage

$1,050
2,900

HURF Sources: FY 2014 ($ in Millions)
Total: $1,241.3 Million
Other,
$56.5 , 5%

Gasoline Price Per Gallon

-8.0%

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Revenue

$4.00

Annual % Change

2,850

$3.50

Monthly Comparisons ($ in Thousands)
2,800

$3.00

2,750

Registration,
$163.7 , 13%

$4.00

FY 2013
Actual

2,700
July

FY 2014
Actual

Change

FY 2014
Estimate

$2.50
Change
3.1%$2.00

$97,577

$104,799

7.4%

$101,691

101,151

99,277

-1.9%

99,284

0.0%

100,314

102,824

2.5%

102,768

0.1%

94,632

99,475

5.1%

98,866

0.6%$1.00

96,347

98,260

2.0%

97,708

0.6%

December
2,500

101,776

102,062

0.3%

100,696

January

100,290

107,186

6.9%

103,474

3.6%

February

103,971

103,713

-0.2%

104,535

-0.8%

2,650
August
September
2,600
October

2,550
November
2,450

$1.50

1.4%$0.50

$0.00

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

VLT,
$348.5 , 28%

March

Motor
Carrier,
$38.8 , 3%

Fuel:
Gasoline and
Use Fuel,
$633.8 , 51%

FINANCIAL MANAGEMENT SERVICES

Gasoline100,260
Gallonage

103,084

2.8%
Gasoline
Price101,092
Per Gallon

2.0%

April

109,220

113,312

3.7%

110,570

2.5%

May

101,381

101,631

0.2%

99,332

2.3%

June

103,106

105,711

2.5%

104,284

1.4%

$1,210,024

$1,241,332

2.6%

$1,224,300

1.4%

Total

5

HIGHWAY USER REVENUE FUND: GAS TAX
Highlights








Gasoline Gallons Sold and Price Per Gallon (Gallonage in Millions)

Gasoline gallonage sold increased from 2.608 billion
gallons in FY 2013 to 2.645 billion gallons in FY 2014, a 1.4
percent increase. Despite this increase, gasoline gallonage
sold in FY 2014 remained significantly below the peak in FY
2007.
Gasoline price per gallon has decreased over the past
three fiscal years, from $3.50 in FY 2012 to $3.48 in FY
2013 to $3.36 in FY 2014.
State Gas Tax Revenue Per Capita has decreased from $81
in FY 2004 to $69 in FY 2014. Factors that contributed to
the decrease in Gas Tax Revenue Per Capita include
curtailed consumer gasoline consumption and modest
state population growth.
FY 2014 Gas Tax revenues of $457.4 million were below FY
2004 Gas Tax collections of $463.5 million.

2,900

$4.00

2,850

$3.50

2,800

$3.00

2,750

$2.50

2,700

$2.00

2,650

$1.50

2,600
2,550

$1.00

2,500

$0.50

2,450

$0.00
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Gasoline Gallonage

Gasoline Price Per Gallon

State Gas Tax Revenue Per Capita
Gas Tax 12-Month Rolling Total ($ in Millions)

$85
$80

$510

$75

$500

$70

$490

$81

$81

$80

$79
$74
$71

$71

$71

$70

$69

$69

$65

$480

$60

$470

$55

$460

$50

$440

$45
Jun 03
Dec 03
Jun 04
Dec 04
Jun 05
Dec 05
Jun 06
Dec 06
Jun 07
Dec 07
Jun 08
Dec 08
Jun 09
Dec 09
Jun 10
Dec 10
Jun 11
Dec 11
Jun 12
Dec 12
Jun 13
Dec 13
Jun 14

$450

$40

FINANCIAL MANAGEMENT SERVICES

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

6

HIGHWAY USER REVENUE FUND: USE FUEL TAX (DIESEL)
Highlights








Gallons Consumed and Price Per Gallon (Gallonage in Millions)

Use Fuel gallonage consumed decreased from 752.7
million gallons in FY 2013 to 745.4 million gallons in FY
2014, a decrease of 1.0 percent.
Use Fuel tax collections were tracking 1.6 percent above
FY 2013 through the first half of FY 2014, but the harsh
winter that swept across most of the United States
brought the national economy to a standstill in the third
quarter of the fiscal year which ultimately reduced the
commercial truck traffic in Arizona.
Use Fuel price per gallon in FY 2014 decreased nine cents
per gallon from FY 2013, while the use fuel gallonage
consumed in FY 2014 remained approximately 144 million
gallons below the peak in FY 2006.
A direct relationship typically exists between the Port of
Los Angeles and Port of Long Beach shipping container
volume and use fuel consumption in Arizona because of
the movement of goods from California through Arizona
to destinations throughout the United States. Shipping
container volume at the two major ports in California
peaked in FY 2007 during the economic boom and
experienced a sharp drop in FY 2009 and FY 2010 during
the Great Recession. Container volume increased 5.6
percent in FY 2014 from FY 2013, but was still below FY
2008 levels.

1,000
900
800
700
600
500
400
300
200
100
0

$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Use Fuel Gallonage

Use Fuel Price Per Gallon

Shipping Container Volume (Volume in Thousands of TEUs)
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Port of Los Angeles

Port of Long Beach

TEU (Twenty-foot equivalent unit) - a maritime industry standardized measurement used for counting cargo containers of differing lengths.

FINANCIAL MANAGEMENT SERVICES

7

HIGHWAY USER REVENUE FUND: VEHICLE LICENSE TAX (VLT)
Vehicle Count by Class (in Thousands)

Highlights







FY 2014 VLT revenues increased 6.7 percent above FY
2013 which represented the strongest year-over-year
growth since FY 2007.
The number of vehicles that paid the VLT increased from
5.2 million in FY 2004 to 6.3 million in FY 2014.
Pent-up demand caused by the Great Recession and a
modestly improving Arizona economy have positively
affected new motor vehicle sales over the last three fiscal
years, although the growth rate decreased to 11.7 percent
in FY 2014 from 24.9 percent in FY 2013.
The renewal motor vehicle fleet experienced an increase
of over 200,000 vehicles in FY 2014, which was the result
of some of the new motor vehicle and new to Arizona
vehicle registrations from FY 2013 becoming renewal
motor vehicle registrations in FY 2014.

6,500
6,000

215
215

5,500
5,000

211
226

335

159
300

90
202

87
176

89
194

135
274

378

407
4,500

341

113
219

5,300

134
306

5,747
5,513 5,470 5,525 5,549 5,623 5,651

5,963

4,930
4,589

4,000
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Renewal Vehicles

New Vehicles

New to Arizona

Average VLT Paid per Vehicle
VLT Revenue 12-Month Rolling Total ($ in Millions)

$180
$170

$400
$390
$380
$370
$360
$350
$340
$330
$320
$310

$160
$150
$140

$130

$144
$138

$149

$150

$150
$139
$130

$124

$122

$125

$126

$120
Jun 04
Dec 04
Jun 05
Dec 05
Jun 06
Dec 06
Jun 07
Dec 07
Jun 08
Dec 08
Jun 09
Dec 09
Jun 10
Dec 10
Jun 11
Dec 11
Jun 12
Dec 12
Jun 13
Dec 13
Jun 14

$110
$100

FINANCIAL MANAGEMENT SERVICES

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

8

HIGHWAY USER REVENUE FUND: COLLECTIONS AND DISTRIBUTIONS ($ IN THOUSANDS)
Collections
Fiscal
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total

Gas Tax
$463,531
481,284
489,081
497,702
492,536
456,812
455,436
456,299
454,770
453,851
457,415
$5,158,717

Use Fuel Tax
$179,002
194,368
213,460
210,282
207,859
173,931
171,308
178,684
180,242
177,240
176,368
$2,062,745

Vehicle
License Tax
$312,262
328,232
373,864
393,497
385,186
357,498
329,915
322,017
320,979
326,541
348,509
$3,798,499

Motor Carrier
$34,617
37,980
40,504
45,226
40,177
40,483
35,807
36,300
37,350
37,310
38,842
$424,598

Registration
$146,638
154,122
158,805
177,788
162,765
167,565
152,236
156,148
158,124
157,801
163,715
$1,755,707

Percent
Change
6.1%
5.6%
6.9%
3.8%
-2.7%
-7.1%
-4.3%
0.9%
0.5%
0.0%
2.6%

Other
$43,510
49,567
55,911
57,979
55,953
52,294
49,714
55,626
59,122
57,280
56,484
$593,439

Total
$1,179,561
1,245,553
1,331,625
1,382,474
1,344,477
1,248,583
1,194,417
1,205,073
1,210,586
1,210,024
1,241,332
$13,793,705

ECONOMIC
STRENGTH
PROJECT
FUND
$1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
$11,000

OTHER
MISCELLANEOUS
APPROPRIATIONS
TOTAL
$383
$1,179,561
118,420
1,245,553
633
1,331,625
607
1,382,474
7,465
1,344,477
60,908
1,248,583
44,453
1,194,417
45,260
1,205,073
198,535
1,210,586
4,063
1,210,024
5,585
1,241,332
$486,312
$13,793,705

Distributions

FISCAL
YEAR
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total

STATE
HIGHWAY
FUND
$483,688
410,362
539,865
584,531
565,381
442,020
437,848
441,554
328,878
460,839
474,132
$5,169,098

MAG
12.6% / 2.6%
MONIES
$65,024
55,167
72,576
78,581
76,006
59,422
58,862
59,360
44,212
61,952
63,739
$694,902

PAG
12.6% / 2.6%
MONIES
$21,675
18,389
24,192
26,194
25,335
19,807
19,621
19,787
14,737
20,651
21,246
$231,634

CITIES
AND
TOWNS
$344,491
363,535
386,128
418,114
404,434
356,458
339,823
342,892
304,092
332,234
342,230
$3,934,430

FINANCIAL MANAGEMENT SERVICES

COUNTIES
$214,601
226,464
240,538
260,465
251,942
222,056
211,693
213,605
193,524
206,965
213,192
$2,455,046

ARIZONA
DEPARTMENT
OF PUBLIC
SAFETY
$48,698
52,216
66,693
12,983
12,913
86,912
81,118
81,615
125,607
122,320
120,208
$811,282

9

Highway User Revenue Fund


State Highway Fund

FINANCIAL MANAGEMENT SERVICES

STATE HIGHWAY FUND
Highlights








State Highway Funds ($ in Thousands)

The State Highway Fund (SHF) receives 50.5 percent of the
HURF revenue that is available for distribution after all “off
the top” appropriations have been made.
In FY 2014, gross HURF distributions to the SHF totaled
$537.8 million. After various statutory, policy and
appropriated distributions, the SHF received a net of
$452.3 million for the year.
The State Highway Fund is impacted by both the health of
the economy and transfers established by legislative
appropriation.
Since FY 2007, State Highway Funds available for
construction have been positive only twice; first in FY 2013
and again in FY 2014.

Net State Highway Fund Revenue History ($ in Thousands)

FY 13 Actual
$1,210,024
1,000
625

123,211
88,691
$997,022
304,092
189,434
58,950
2,396
18,667
105,822
1,234
2,126
4,090
$310,211

Plus Other Income:
MVD Retained Fees
Miscellaneous Receipts
Transfer from SETIF
HURF Transfers for MVD Funding
Less:
Operating Budget
Capital Outlay and Building Renewal
Capital Non-Lapsing Carryovers
Department of Public Safety Transfer from Highway Fund
Transfer To Automation Projects Fund
Debt Service
Net State Highway Funds Available for Construction

FY 14 Actual
$1,241,332
1,000
672
5

(765)
119,873

117,592

$1,089,291
332,234
206,965
82,603
2,447
19,696

$1,122,064
342,230
213,192
84,986
2,616
21,822

1,048
3,155

1,205
3,704

$441,142

$452,310

16,352
12,486
448
663
242,048
1,270

16,920
14,547

14,239
27,960

625
335,809
793

672
336,634
2,268

0

6,780

110,675
($13,834)

110,223
$19,629

6,744
2,348
112,237
$34,949

Transfers Taken from State Highway Fund’s Share of HURF and VLT ($ in Millions)

$600,000

$250

$500,000

$200

$400,000

FY 12 Actual
$1,210,586
1,000
663

HURF Collections
Less: Economic Strength Fund
MVD for Registration Compliance Program
Transfer To Automation Projects Fund
Reversion from MVD Operations (FY 2012)
Department of Public Safety Transfer
ADOT - MVD Funding
Net HURF Available for Distribution
Less: Cities
Counties
MAG/PAG (12.6% & 2.6% Funds)
DPS Parity Compensation Fund
MVD Third Party Retainage (2% of VLT or $4)
State General Fund
State General Fund (Five-Year VLT)
State General Fund (Abandoned Vehicle Fee-VLT)
Counties (10 least populated)
Net State Highway Fund

$150

$300,000

$100

$200,000
$50

$100,000

$0

$0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fiscal Year
State Highway Fund Revenue

FINANCIAL MANAGEMENT SERVICES

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fiscal Year
Transfers from SHF's share of HURF and VLT

10

Regional Area Road Fund

FINANCIAL MANAGEMENT SERVICES

REGIONAL AREA ROAD FUND (RARF)
Highlights







Revenue History ($ in Thousands)

FY 2014 RARF revenues totaled $365.6 million, an increase of
7.0 percent over FY 2013.

$450,000

20.0%

$400,000

15.0%

Total RARF revenues have posted four consecutive years of
positive growth, however, FY 2014 revenues still remained at
FY 2006 levels.

$350,000

10.0%

Compared to FY 2013, all of the major RARF revenue
categories, except Rental of Personal Property, experienced
positive year-over-year growth.

$200,000
$100,000

-10.0%

In FY 2014, Contracting revenues experienced double digit
year-over-year growth rates until the 4th quarter of the fiscal
year, when a slowdown in the Phoenix real estate market
tempered growth in this category.

$50,000

-15.0%

$300,000

5.0%

$250,000

0.0%
-5.0%

$150,000

$0

-20.0%
FY
2004

FY
2005

FY
2006

FY
2007

FY
2008

FY
2009

RARF Revenue

Utilites,
$31.3 , 9%

Contracting,
$37.2 , 10%

Other,
$21.5 , 6%

FY
2011

FY
2012

FY
2013

FY
2014

Annual % Change

Monthly Comparisons ($ in Thousands)

RARF Sources: FY 2014 ($ in Millions)
Rental of Real Rental of
Property,
Personal
$38.6 , 11%
Property,
Restaurant
$12.1 , 3%
and Bar,
$38.5,
10%

FY
2010

Total: $365.6
Million

Retail Sales,
$186.4 , 51%

FINANCIAL MANAGEMENT SERVICES

July

FY 2013
Actual

FY 2014
Actual

Change

FY 2014
Estimate

Change

$28,653

$29,651

3.5%

$29,902

-0.8%

August

26,183

28,798

10.0%

27,858

3.4%

September

27,053

29,076

7.5%

28,831

0.8%

October

27,053

28,969

7.1%

29,237

-0.9%

November

27,239

29,171

7.1%

28,593

2.0%

December

27,539

29,881

8.5%

29,414

1.6%

January

32,815

37,604

14.6%

34,995

7.5%

February

27,236

28,423

4.4%

28,923

-1.7%

March

27,416

29,753

8.5%

29,580

0.6%

April

31,325

32,940

5.2%

33,015

-0.2%

May

28,999

30,387

4.8%

30,663

-0.9%

June

30,066

30,908

2.8%

30,989

-0.3%

$341,577

$365,561

7.0%

$362,000

1.0%

Total

11

REGIONAL AREA ROAD FUND: RETAIL SALES
Highlights









RARF Retail Sales Revenue Per Capita

Retail sales was the largest category and was responsible
for 51 percent of total RARF revenues in FY 2014.
RARF retail sales revenue has a direct relationship with
personal income and non-farm employment in the Greater
Phoenix Area.
RARF retail sales revenue per capita have increased over
the last four consecutive fiscal years, but FY 2014 was still
below the peak in FY 2007.
Greater Phoenix per capita personal income and non-farm
employment have steadily increased since FY 2010, but FY
2014 non-farm employment levels remained below the
peak experienced in FY 2007.
Based on the 12-month rolling total, FY 2014 RARF retail
sales tax revenues of $186.4 million were almost back to
the levels seen in FY 2007.

RARF Retail Sales Tax 12-Month Rolling Total ($ in Millions)

$55
$50

$50

$50
$47

$47
$44

$44

$45

$42

$42
$40
$40

$40
$37

$35
$30
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

RARF Retail Sales Revenue Per Capita

Greater Phoenix Per Capita Personal Income and Non-Farm Employment
$50,000

$200

1,950,000
1,900,000

$190
$45,000

$180

1,850,000
1,800,000

$170

$40,000

1,750,000

$160

1,700,000

$35,000

$150

1,650,000

$140

1,600,000

$30,000

$130

1,550,000
Jun 03
Dec 03
Jun 04
Dec 04
Jun 05
Dec 05
Jun 06
Dec 06
Jun 07
Dec 07
Jun 08
Dec 08
Jun 09
Dec 09
Jun 10
Dec 10
Jun 11
Dec 11
Jun 12
Dec 12
Jun 13
Dec 13
Jun 14

$120

$25,000

FINANCIAL MANAGEMENT SERVICES

1,500,000
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Greater Phoenix Per Capita Personal Income

Greater Phoenix Non-Farm Employment

12

REGIONAL AREA ROAD FUND: CONTRACTING
Highlights






Greater Phoenix Single Family Permits and Construction Employment

FY 2014 RARF contracting revenues were $37.2 million, an
increase of 14.0 percent above FY 2013. Year-over-year
growth rates in this category were in double digits until the
4th quarter of the fiscal year, when a slowdown in the
Phoenix real estate market tempered contracting revenue
growth particularly when compared to the large growth
rates experienced in the 4th quarter of FY 2013.
Single family housing permits are a leading indicator of
construction activity to come, as permits must be
purchased before structures can be built. Single family
housing permits in Maricopa County peaked in FY 2005,
while construction employment and RARF contracting
revenue peaked in FY 2007.
The contract rates for 30 year, fixed-rate conventional
home mortgages experienced in FY 2014 were still well
below pre-recession levels.

70,000

200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0

60,000
50,000
40,000
30,000
20,000

10,000
0
FY
FY
FY
FY
FY
FY
FY
2004 2005 2006 2007 2008 2009 2010
Single Family Permits in Maricopa County

FY
2011

FY
FY
FY
2012 2013 2014
Construction Employment

Contracting Revenue ($ in Thousands)
Contract Rate on 30 Year, Fixed-Rate Conventional
Home Mortgages 12-Month Rolling Average

$80,000
$70,000
$60,000

7.0%

$50,000

6.0%

$40,000
5.0%

$30,000

4.0%

$20,000

3.0%

$10,000
$0
Jun 04
Dec 04
Jun 05
Dec 05
Jun 06
Dec 06
Jun 07
Dec 07
Jun 08
Dec 08
Jun 09
Dec 09
Jun 10
Dec 10
Jun 11
Dec 11
Jun 12
Dec 12
Jun 13
Dec 13
Jun 14

2.0%

FINANCIAL MANAGEMENT SERVICES

FY
2004

FY
2005

FY
2006

FY
2007

FY
FY
FY
FY
2008 2009 2010 2011
RARF Contracting Revenues

FY
2012

FY
2013

FY
2014

13

REGIONAL AREA ROAD FUND: RESTAURANT AND BAR
Highlights


Greater Phoenix Personal Income and Food Services Employment (In Thousands)

Phoenix Sky Harbor passenger counts and personal income
in the Greater Phoenix Area both typically exhibit a direct
relationship with RARF restaurant and bar revenues.
Greater Phoenix personal income has steadily increased
over the past four years as has RARF restaurant and bar
revenue per capita.
Food service employment within the Greater Phoenix Area
was estimated at 141,600 in FY 2014 compared to 135,400
in FY 2013.
June was the seventh consecutive month of FY 2014 that the
Phoenix Sky Harbor passenger count was higher
than the same month of the previous year.







$180,000,000
$170,000,000
$160,000,000
$150,000,000
$140,000,000
$130,000,000
$120,000,000
$110,000,000
$100,000,000
$90,000,000
$80,000,000
$70,000,000
$60,000,000
$50,000,000

160
140
120
100
80
60
40
20
0
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Personal Income
Food Services Employment

RARF Restaurant & Bar Revenue Per Capita

Restaurant & Bar Revenue and Phoenix Sky Harbor Passenger Count 12-Month
Rolling Total ($ in Millions, Passenger count in Thousands)

$12

$40

44,000

$10

$38

43,000

$26

37,000

$9.66

38,000

$9.23

$28

$8.82

39,000

$8.26

$30

$4

$7.99

40,000

$8.05

$32

$8.67

$6
$8.81

41,000

$8.37

$34

$7.60

42,000

$7.16

$36
$8

$2

$24

$0
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

36,000
Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun
04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14
Rest. & Bar Revenue 12-Month Total

FINANCIAL MANAGEMENT SERVICES

Sky Harbor Passenger Count 12-Month Total

14

REGIONAL AREA ROAD FUND: COLLECTIONS AND DISTRIBUTIONS ($ IN THOUSANDS)
Collections
Fiscal
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
TOTAL

Retail Sales
$144,817
158,179
182,378
187,817
177,845
153,681
143,205
152,003
162,391
172,935
186,406
$1,821,656

Contracting
$43,524
52,325
64,822
73,864
66,046
46,865
28,953
28,012
30,513
32,661
37,243
$504,829

Utilities
$19,980
20,813
23,600
26,697
28,630
28,511
29,385
29,511
30,217
30,976
31,271
$299,592

Resturant
& Bar
$24,807
27,191
30,656
33,073
33,021
30,763
30,558
31,729
34,278
36,429
38,532
$351,036

Rental
of Real
Property
$27,163
29,310
32,949
36,398
38,605
37,757
35,825
35,731
36,415
38,096
38,547
$386,796

Rental
of Personal
Property
$12,631
12,624
13,923
15,053
15,111
13,470
11,983
11,606
11,966
12,130
12,092
$142,589

Other
$15,678
16,364
19,309
19,548
20,808
17,139
19,115
20,643
18,389
18,349
21,470
$206,812

Total
$288,600
316,806
367,637
392,452
380,066
328,186
299,024
309,234
324,170
341,577
365,561
$3,713,311

Percent
Change
7.4%
9.8%
16.0%
6.7%
-3.2%
-13.7%
-8.9%
3.4%
4.8%
5.4%
7.0%

Distributions

FISCAL
YEAR
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total

REGIONAL AREA ROAD FUND (RARF)
ARTERIAL
FREEWAYS
MAG/VALLEY METRO
STREETS
$281,012
$7,588
309,092
7,713
292,487
7,877
$16,127
213,119
8,095
41,050
205,576
8,334
39,832
176,235
8,555
34,376
159,604
8,742
31,327
165,321
8,845
32,379
173,334
8,928
34,019
182,806
9,119
35,875
196,106
9,283
38,397
$2,354,691
$93,079
$303,383

FINANCIAL MANAGEMENT SERVICES

PUBLIC
TRANSPORTATION
FUND

$51,146
130,188
126,324
109,020
99,351
102,689
107,889
113,776
121,774
$962,157

TOTAL
$288,600
316,806
367,637
392,452
380,066
328,186
299,024
309,234
324,170
341,577
365,561
$3,713,311

15

Federal Aid Program

FINANCIAL MANAGEMENT SERVICES

FEDERAL AID PROGRAM
Highlights

Federal Apportionments, Obligation Authority and Actual Receipts ($ in Millions)



$900







The Federal Aid program is a reimbursement program. The state or
local jurisdiction funds the cost of the project and is then
reimbursed a certain percentage (generally 94.3 percent in Arizona)
by the Federal Highway Administration (FHWA).
Arizona receives federal apportionments by various funding
programs and then is provided obligation authority (OA) to obligate
a certain share of the apportionments. In FFY 2014 that share was
94.9 percent.
Arizona received $705.3 million in federal aid apportionments in
FFY 2014, along with $708.2 million in obligation authority. There
were $38.5 million in August redistributions in FFY 2014, leading to
an OA amount greater than the apportionment amount.
Arizona’s largest category of federal apportionments in FFY 2014
was the National Highway Performance Program (NHPP), which
provided 56 percent, followed by the Surface Transportation
Program (STP) at 25 percent.

$800
$700
$600
$500
$400
$300
$200
$100

FFY 2014 Apportionments ($ in Millions)

Transportation
Alternatives,
$15.2 , 2%

Rail,
$2.7 , 0%

Highway
Safety,
$40.8 , 6%

FFY 2005 FFY 2006 FFY 2007 FFY 2008 FFY 2009 FFY 2010 FFY 2011 FFY 2012 FFY 2013 FFY 2014

Apportionments

Obligation Authority

Actual Receipts

Distribution of FFY 2014 Total Apportionments ($ in Millions)
Rec. Trails,
$1.9 , 0%

FFY 2014
Apportionments
Totaled $705.3
Million

$600

$553.1

FFY 2014
Apportionments
Totaled $705.3
Million

$500
$400
$300

STP,
$177.5 ,
25%
Bridge,
$4.1 , 1%
Planning,
$19.5 , 3%

$0

$200
$116.1
$100
CMAQ,
$49.5 , 7%

NHPP,
$394.1 , 56%

$20.9

$15.2

PAG

Greater AZ (GAZ)

$0
State

MAG

Total Apportionments

FINANCIAL MANAGEMENT SERVICES

16

FEDERAL AID PROGRAM


Tracking the dollar amount of inactive projects ensures that a minimal amount of federal funding is committed to idle projects. Inactive projects in the last quarter
of State FY 2014 totaled $15.8 million; 56.6 percent of that amount was due to inactive ADOT projects and 43.4 percent was due to inactive MAG, PAG and GAZ
projects. On June 30, 2014, ADOT’s inactive projects were 1.3 percent of Arizona’s federal apportionments while the MAG/PAG/GAZ inactive projects were 1.0
percent of Arizona’s federal apportionments.



Obligation Authority is tracked on a monthly basis to ensure all federal aid is utilized. While project delivery is the key factor influencing the timing of the use of
federal funds, spikes occur towards the end of the state fiscal year and the federal fiscal year as final reconciliations are completed.



The Federal Highway Trust Fund (HTF) gets the majority of its revenue from a federal excise tax on gasoline and diesel fuel. The federal taxes on gasoline and diesel
fuel are not indexed to inflation and have not been increased since 1993. The HTF ended State FY 2014 on the brink of insolvency (as shown on page 18). The
FHWA issued warnings to state agencies that if the HTF went insolvent cash management measures, such as delaying reimbursements to states, might have to be
taken. Ultimately, Congress did pass legislation which provided a one-time cash infusion to the HTF to avert insolvency through May of 2015, but the HTF will need
additional funds to meet its obligations beyond this timeframe.

FFY 2014 Obligation Authority (OA) Usage by Month ($ in Millions)

$70,000,000

7.0%

$60,000,000

6.0%

$50,000,000

5.0%

$40,000,000

4.0%

$30,000,000

3.0%

$20,000,000

2.0%

$10,000,000

1.0%

$0

0.0%
9/30/13

ADOT $
ADOT %

12/31/13

3/31/14

Percent of Inactive AZ Apportionments

Dollar Amount

Inactive Projects by Quarter

6/30/14

MAG/PAG/GAZ $
MAG/PAG/GAZ AZ %

FINANCIAL MANAGEMENT SERVICES

$225
$200
$175
$150
$125
$100
$75
$50
$25
$0
-$25
Oct

Nov

Dec

Jan

ADOT OA Used

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

MAG/PAG/GAZ OA Used

17

FEDERAL AID PROGRAM: FUNDING CHALLENGES

FINANCIAL MANAGEMENT SERVICES

18

Debt Financing Program

FINANCIAL MANAGEMENT SERVICES

DEBT FINANCING PROGRAM
Highlights

Tax Exempt Municipal Market Data

ADOT issues Highway Revenue Bonds (HURF), Transportation Excise Tax Bonds
(RARF) and Grant Anticipation Notes (GANs) to help fund the Board’s Five Year
Transportation Facilities Construction Program. In 2014, ADOT had a total of
$2.955 billion in outstanding principal across these three credits. ADOT’s bonds
and notes are currently rated as follows by the three primary credit rating
agencies:
Type of
Bond
HURF (Senior Lien)
HURF (Subordinate Lien)
RARF
GAN

Standard & Poor’s
AAA
AA+
AA+
AA

Rating Agency
Moody’s
Aa1
Aa2
Aa1
Aa2

Fitch
AA

6.00
5.50
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00

AAA 5-Yr

AAA 10Yr

AAA 30Yr

ADOT Total Debt Service by Fiscal Year ($ in Millions)
$350

GAN,
$296.2 ,
10%

Outstanding Debt Service

$300
$250
$200

RARF,
$926.0 ,
31%

$150

Includes Principal only

Total Outstanding Principal

Total:
$2955.5
Million

HURF,
$1,733.3 ,
59%

$100
$50
$0
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

Fiscal Year
HURF Bond

FINANCIAL MANAGEMENT SERVICES

RARF Bond

GAN

19

DEBT FINANCING PROGRAM
Debt Issuance History FY 2004 – FY 2014 ($ in Millions)

Note: New Money issues in white and Refunding
issues in tan. 2011 and 2013 HURF A issues had both
New Money and Refunding.
TIC: True Interest Costs, includes all ancillary fees and
costs.

Par amount refers to the face value of the
credits issued.

FINANCIAL MANAGEMENT SERVICES

20

DEBT FINANCING PROGRAM – HIGHWAY USER REVENUE (HURF) BONDS
Highlights

Total: $2.7 Billion

$140

Outstanding Senior Debt

$22

$34

$34

$34
$45

$34

$34

$22

$0

$45

$34

$73
$45

$20

$45

$73

$73
$45

$45

$73

$45

$45

$91

$81

$45

$127
$19

$101

$127
$19

$45

$127
$19

$101

$127
$19

$40

$58

$60

HURF Bond Parameters

Fiscal Year
Outstanding Subordinate Debt

Revenue Pledged to HURF Bonds - Historical and Projected ($ in Millions)

Maximum Debt Amount

None

Additional Bonds Test

3:1

Maximum Term

30 Years

$500

Subordinated Debt Allowed

Yes

$400

$700

$616

$639

$554

$538

2011

$524

2010

$602

4:1 Senior

$200

$577

Resolution Requirements

$370

$300

$504

$600

$501

Statutory Authorization

Additional Bonds Test

$45

$127
$19

$80

$108

$88

$100

$81

$120

$38



$160

$58



$180

$86



HURF bonds are secured by and repaid from HURF
revenues received by the State Highway Fund.
As of June 30, 2014, outstanding HURF bond principal
totaled $1.73 billion, including $492.8 million of Senior lien
bonds and $1.24 billion of Subordinate lien bonds.
Total annual HURF debt service (for both Senior and
Subordinate bonds) peaks at approximately $146 million in
fiscal years 2016-2024 and then declines to $22 million in
2037-2038. These amounts do not reflect any new or
refunding issues which may occur during this period.
There were no new or refunding HURF transactions in FY
2014.

$53



HURF Bond Debt Service ($ in Millions)

Est
2016

Est
2017

Est
2018

Est
2019

$100
$0

3:1 Subordinate

2012

2013 2014
Est
Fiscal Year 2015
HURF Pledged Revenues

FINANCIAL MANAGEMENT SERVICES

21

DEBT FINANCING PROGRAM – REGIONAL AREA ROAD FUND (RARF) BONDS
RARF Bond Debt Service ($ in Millions)



$150

Total: $1.2 Billion

$125
$100

$104

$104

$104

$104

$104

$25
$0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Outstanding Senior Debt

RARF Bond Parameters

$104

$104

$104

$50

$104

$75
$104



RARF bonds are secured by a pledge of 66.7 percent of
transportation excise taxes collected in Maricopa County.
The 20-year tax was approved by County voters in 2004 to
help fund the Regional Transportation Plan. The tax expires
as of December 31, 2025.
As of June 30, 2014, outstanding RARF bond principal
totaled $926 million of Senior lien bonds; no Subordinate
lien bonds have been issued.
Total annual RARF debt service is approximately $104
million through 2025. This amount does not reflect any
new or refunding issues which may occur during this
period. There were no new or refunding RARF transactions
in FY 2014.

$104



$104

Highlights

Fiscal Year
Outstanding Subordinate Debt

Revenue Pledged to RARF Bonds - Historical and Projected ($ in Millions)

Statutory Authorization

$700
None

$600

Additional Bonds Test

None

$500

Maximum Term

Lesser of 20 years
or expiration of tax

$400

Subordinated Debt Allowed

Yes

$300
$244

$252

$268

$281

$295

$307

2010

2011

2012

2013

2014

Est
2015

Est
2016

Est
2017

Est
2018

Est
2019

$0

2:1 Senior
Additional Bonds Test

$228

Resolution Requirements

$216

$100

$206

$200
$199

Maximum Debt Amount

1.2:1 Subordinate
1:1 Third Lien

FINANCIAL MANAGEMENT SERVICES

Fiscal Year

RARF Pledged Revenues

22

DEBT FINANCING PROGRAM – GRANT ANTICIPATION NOTES (GANs)
Highlights

$40
$30

$63

$65
$57

$20
$10

$19

$19

$19

$19

$19

$19

$19

$19

$19

$19

$0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Fiscal Year
GANs Debt Service

FINANCIAL MANAGEMENT SERVICES

2006

$708

2005

$685

Additional Bonds Test

1.5:1 Current Federal
Authorization
3:1 Future Federal
Authorization

$700

Resolution Requirements

$700
$600
$500
$400
$300
$200
$100
$0

$713

Statutory Authorization
Maximum Debt Amount
None
Additional Bonds Test
None
Maximum Term
None
Subordinated Debt Allowed
Yes

$707

Revenue Pledged to GANs - Historical ($ in Millions)

$691

GANs Parameters

$50

$705



Total: $376.2 Million

$60

$669



$70

$602



GANs are generally issued by the State Transportation
Board (STB) for terms of 15 years or less. These Notes are
secured by and repaid from a pledge of ADOT’s future
federal aid revenues under certain grant agreements with
the Federal Highway Administration (FHWA). GAN proceeds
are generally used to fund larger transportation projects.
As of June 30, 2014, outstanding GANs principal totaled
$296.2 million of Senior lien bonds; no Subordinate lien
bonds have been issued.
Total annual GANs debt service peaks in fiscal year 2015 at
$65 million and then declines to approximately $19 million
for the period 2017-2026. This amount does not reflect any
new or refunding issues which may occur during this
period.
There were no new or refunding GANs transactions in FY
2014.

$587



GANs Debt Service ($ in Millions)

2007

2008

2009

2010

2011

2012

2013

2014

Federal Fiscal Year
GANs Pledged Revenues

23

Cash Management

FINANCIAL MANAGEMENT SERVICES

CASH MANAGEMENT
Highlights


State Highway Fund (SHF): Low and Average Cash Balance History (S in Millions)

In FY 2014, the State Highway Fund cash balance
continued a slow recovery from dangerously low levels,
ending with an actual balance of $50 million. Operating
cash guidelines are $150 million to ensure timely payments
of Department liabilities.
The Maricopa Association of Governments (MAG) Regional
Transportation Plan Freeway Program (RTPFP) Cash Flow
finished FY 2014 with an ending balance of $731.3 million
or $331.8 million above the estimated ending balance. The
variance was mainly due to the delay of a major freeway
project, the South Mountain project.
Investment interest earned in FY 2014 amounted to $11.3
million, a decrease of $0.1 million from the previous year.
The low interest rates of recent years have kept the
investment interest earned well below the $56.3 million
experienced in FY 2007.





Investment Interest Received by Fiscal Year ($ in Millions)
Millions

$60

FY11 Avg Bal
$35.5M

FY10 Avg Bal
$4.6M

FY12 Avg Bal
$13.6M

FY13 Avg Bal
$15.9M

FY14 Avg Bal
$23.6M

$30
$0
-$30
-$60
Month

Average SHF Balance

Low SHF Balance

MAG RTPFP Cash Flow Actual Versus Estimated Ending Balance ($ in Millions)
$900
$800

$70

$700

$60

$600

$50

$500

$40

$400

$30

$300
$200

$20

$100

$10

$0

$0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Pool 2

Fiscal Year
Pool 3
Pool 4

FINANCIAL MANAGEMENT SERVICES

Actual Ending Cash Balance

Estimated Ending Cash Balance

24

2015-2019 Five-Year Transportation Facilities Construction Program

FINANCIAL MANAGEMENT SERVICES

FY 2015-2019 FIVE-YEAR TRANSPORTATION FACILITIES CONSTRUCTION PROGRAM
Highlights


Sources ($ in Billions)

The FY 2015-2019 Five-Year Transportation Facilities Construction
Program approved by the State Transportation Board on June 13,
2014 totaled $4.4 billion.
The major funding Sources and Uses are detailed in the pie charts
to the right. The Department’s main funding source for the FY
2015-2019 Five-Year Transportation Facilities Construction
Program was Federal Funds which accounted for 53 percent of
the funding.
The Uses of funding consisted of the MAG Regional
Transportation Plan Freeway Program (RTPFP) at 50 percent,
Statewide Total at 41 percent and the PAG Regional
Transportation Highway Program (RTHP) at 9 percent.
Of the $1.8 billion in funding available for statewide and
subprogram use, 51 percent of it is used for system preservation.







FY 2015-2019 Summary of Dollars for Statewide Highway
Construction ($ in Millions)
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0

23
36

106

102

178

172

FY 2015

FY 2016

70

Preservation
Project Development

20
31
25
72
159
FY 2017

Modernization
Planning

Total: $4.4
Billion

Bonding
$0.9 , 21%

Regional Area
Road Fund
$0.8 , 17%

State and Other
Funding
$0.4 , 9%

Uses ($ in Billions)

$1.8 Billion in funding available for statewide
and subprogram use FY 2015-2019
23
36
65

Federal Aid
$2.3 , 53%

20
31
10
73

20
31
38
56

199

209

FY 2018

FY 2019

Expansion

FINANCIAL MANAGEMENT SERVICES

MAG RTPFP
$2.2 , 50%

Total: $4.4
Billion

PAG RTHP
$0.4 , 9%

Statewide Total,
$1.8 , 41%

25

Audited Financial Statement

FINANCIAL MANAGEMENT SERVICES

FY 2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
Arizona Department of Transportation
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
for the fiscal year ended June 30, 2014
Special Revenue Funds
Maricopa
Regional
Area Road
Construction
Fund

General
Fund
(State Highway
Fund)
Revenues
Transportation excise taxes
$
Vehicle registration, title, license,
and related taxes and fees
287,045,595
Fuel and motor carrier taxes and fees
308,026,646
Flight property taxes
Reimbursement of construction
expenditures - federal aid
337,944,137
Other federal grants and reimbursements
63,914,583
Reimbursements from Arizona counties and cities
8,761,605
Distributions from other state agencies
914,992
Interest on loans receivable
89,325
Income from investments
2,657,105
Grand Canyon National Park Airport
Rental income
4,642,060
Other
3,162,013
Total revenues
1,017,158,061
Expenditures
Current:
Administration
Highway
Highway maintenance
Motor vehicle
Total current expenditures

$

Motor
Vehicle
Division
Clearing
Fund

243,786,442

$

Highway
User
Revenue
Fund
-

$

Debt
Service
Fund
-

$

Total
Non-Major
Governmental
Funds
(See Exhibit 10)

Capital
Projects
Fund
-

$

-

$

-

Total
Governmental
Funds
$

243,786,442

-

461,584,090
19,128,899
-

325,908,620
354,292,251
-

-

-

10,627,979
33,404,349
12,974,652

1,085,166,284
714,852,145
12,974,652

134,735,136
601,654
4,046,454
1,383,197
1,579,132
386,132,015

480,712,989

315,151
5,763,428
686,279,450

868,353
868,353

3,312,062
3,312,062

63,513,077
84,987,754
9,950,513
138,418
300,608
1,170,320
1,454,849
218,522,519

536,192,350
148,902,337
19,313,772
914,992
227,743
11,499,733
1,170,320
6,025,257
11,959,422
2,792,985,449

85,214,859
36,875,071
133,572,358
98,251,460

269,467
945,210
-

1,961,877

4,771,522

65,475
-

232,221
-

7,184,226
90,375,747
4,568,064

92,966,248
128,196,028
133,572,358
109,552,923

353,913,748

1,214,677

1,961,877

4,771,522

65,475

232,221

102,128,037

464,287,557
(continued)

FINANCIAL MANAGEMENT SERVICES

26

FY 2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
Special Revenue Funds
Maricopa
Regional
Area Road
Construction
Fund

Motor
Vehicle
Division
Clearing
Fund

Highway
User
Revenue
Fund

41,515,502

$ 47,840,553
430,910,559

$ 128,538,896
552,969,032

6,183,510
519,850
208,495,442
254,996,394
863,605,161

45,080,751
173,548,634
261,359,564

480,712,989

686,279,450

153,552,900

124,772,451

-

<136,991,290>
900,071
2,327,699
13,235,820
<120,527,700>

<103,252,009>
29,130,257
<74,121,752>

-

33,025,200
398,282,867

50,650,699
440,711,830

<8,128,423>

-

491,362,529

$ <8,128,423> $

-

General
Fund
(State Highway
Fund)
Expenditures (continued)
Intergovernmental:
Distributions to other state agencies
Distributions to Arizona counties and cities
Debt service:
Principal
Interest
Non-capital, including asset preservation
Capital outlay
Total expenditures

$

Excess <deficiency> of revenues over
<under> expenditures
Other financing sources <uses>
Transfers in
Transfers out for debt service
Sale of capital assets
Insurance recovery
Debt and capital lease issuances
Total other financing sources <uses>
Net changes in fund balances <deficits>
Fund balances <deficits> - July 1
Fund balances <deficits> - June 30

$

9,204,052
30,292,165

431,308,067

$

$

Debt
Service
Fund

$

Total
Non-Major
Governmental
Funds
(See Exhibit 10)

Capital
Projects
Fund

-

$

-

$

30,898,863
10,111,071

Total
Governmental
Funds

$

216,482,364
1,065,798,329

165,615,000
139,739,218
305,419,693

15,076,618
134,883,005
150,191,844

143,137,971

-

<304,551,340>

<146,879,782>

75,384,548

<97,721,223>

-

303,029,536
303,029,536

<62,786,237>
<62,786,237>

303,029,536
<303,029,536>
900,071
2,327,699
42,366,077
45,593,847

12,598,311
49,609,263

<52,127,374>
1,341,635,769

<1,521,804>
1,700,524
$

178,720

<146,879,782>
459,459,708
$ 312,579,926

$

62,207,574

216,879,261
140,259,068
223,572,060
563,428,033
2,890,706,672

$ 1,289,508,395

For complete CAFR: http://azdot.gov/about/FinancialManagementServices/transportation-funding/financial-reports

FINANCIAL MANAGEMENT SERVICES

27

Financial Management Services Administration

FINANCIAL MANAGEMENT SERVICES

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION
Kristine Ward, Chief Financial Officer

Contact Information:
Phone: (602) 712-7441
Fax: (602) 712-6672
Email: kward@azdot.gov

The Financial Management Services Division (FMS) of the Arizona
Department of Transportation is responsible for managing the financial
foundation on which Arizona’s highways and bridges are built and
administered. This includes forecasting, collecting, distributing and
accounting for all the funds available to construct and maintain
Arizona’s highway system. To accomplish this vital mission, FMS is
comprised of five core units and approximately 100 employees.
The key areas of Financial Management Services are:
• Financial Planning and Cash Management - responsible for
revenue forecasting, coordinating daily cash investments, cash
flow management and analyzing the fiscal impact of legislation.

Kristine Ward was appointed as the Chief Financial Officer of the Arizona
Department of Transportation in December 2011. Prior to joining ADOT,
Ms. Ward served as the Deputy Director for the Department of Revenue
(DOR) from 2005-2011. As Deputy Director she oversaw all aspects of
Department operations including the accounting and processing of the
State’s 5+ million tax documents and $12 billion in tax revenue. Before
joining DOR, Ms. Ward served three administrations, Governor Symington,
Governor Hull and Governor Napolitano, in the Office of Strategic Planning
and Budgeting (OSPB) in various roles including Director and Deputy
Director. At OSPB she oversaw and coordinated 120+ state agency budgets
totaling $20.6 billion, representing the Governor in budget matters.
Ms. Ward holds a Bachelor of Science degree in Business with a
concentration in finance from Bowie State University and a Master’s degree
in Public Administration from Arizona State University.

FINANCIAL MANAGEMENT SERVICES

•

Revenue and Fuel Tax Administration - responsible for the
accounting, collections and distribution of Highway User
Revenue Fund (HURF) revenues and the administration of
motor fuel taxes.

•

Resource Administration - responsible for managing the
financial life cycle of transportation projects and programs.

•

Fiscal Operations - administers and directs all accounting and
payroll activities.

•

Debt Management and Compliance - oversees the
administration of the debt and financing programs issued and
overseen by the State Transportation Board.

In addition, FMS provides support to internal and external customers
such as council of governments (COGs) and metropolitan planning
organizations (MPOs), coordinates with the ADOT Multimodal Planning
Division (MPD) and the ADOT Intermodal Transportation Division (ITD),
and tracks legislation pertaining to transportation at both the state and
national level.

28

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: ORGANIZATION CHART

CHIEF FINANCIAL OFFICER
STRATEGIC INITIATIVES MANAGER

Kristine Ward

Sheryl Jones

EXECUTIVE STAFF ASSISTANT
Tiffiny Baumeister

FEDERAL AID ADMINISTRATOR

CHIEF ECONOMIST

SR DIVISION ADMINISTRATOR

CONTROLLER

Patrick Stone

Brad Steen

Mark Zimmerman

Keith Fallstrom

FINANCIAL MANAGEMENT SERVICES

DEBT MANAGEMENT
COMPLIANCE ADMINISTRATOR
Lisa Danka

29

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: FINANCIAL PLANNING AND CASH MANAGEMENT
Brad Steen, Chief Economist

Contact Information:
Phone: (602) 712-4637
Fax: (602) 712-6672
Email: bsteen@azdot.gov

Financial Planning is responsible for forecasting the Department’s
revenues, including the Highway User Revenue Fund (HURF) and
Maricopa County Transportation Excise Tax. Accurate revenue
forecasts are essential for planning and ensuring the effective delivery
of the Five-Year Highway Construction Program and for the
Department’s day-to-day operating needs.
Cash Management is
responsible for tracking the statewide and Maricopa Association of
Governments (MAG) Regional Transportation Plan Freeway Program
(RTPFP) cash flows and daily cash investment activities.
Specific duties include:
•

•

Mr. Steen has been ADOT’s Chief Economist since 1996 overseeing the
Office of Financial Planning. In December 2011, Mr. Steen assumed the
Cash Management duties and now directs both Financial Planning and Cash
Management. He was previously an Economist with ADOT from 1989 to
1992 and 1995-1996. Prior to joining the Department, Mr. Steen worked at
the Maricopa Association of Governments (MAG) and in the banking
industry.

•
•
•

Develops the Highway User Revenue Fund (HURF) and
Maricopa County Transportation Excise Tax revenue forecasts
that are then incorporated into the State Transportation
Board’s Five Year Transportation Facilities Construction
Program and the MAG RTPFP Life Cycle Program.
Responsible for the Statewide and MAG RTPFP cash flow
forecasts that track the revenues, expenditures and available
cash balances for the State Transportation Board’s Five Year
Transportation Facilities Construction Program and the MAG
RTPFP Life Cycle Program.
Manages the Department’s daily cash investment activity and
coordinates the semi-annual debt service payments.
Provides financial impact on pending legislative proposals from
the national and state level.
Develops ad hoc financial and investment analyses.

Mr. Steen holds a Bachelor of Science degree in Commercial Economics
from South Dakota State University and a Master’s degree in Business
Administration from University of South Dakota.

FINANCIAL MANAGEMENT SERVICES

30

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: FINANCIAL PLANNING AND CASH MANAGEMENT
Key Performance Measurements
Percent of Variance in Statewide Cash Flow Forecast

Percent of Variance in MAG RTPFP Cash Flow Forecast

30%

100%

20%

80%
60%

10%

40%

0%

20%

-10%

0%

-20%

-20%

-30%

-40%

Actual

Target Range

Actual

Variance from the Forecast: State Highway Fund Operating
Cash

Percentage of Total ADOT Funds Invested Daily
100.0%
99.0%
98.0%
97.0%
96.0%
95.0%
94.0%
93.0%
92.0%
91.0%
90.0%

Target Range

$55,000,000
$50,000,000
$45,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
-$5,000,000

Actual

Target

FINANCIAL MANAGEMENT SERVICES

Actual

Target

31

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: REVENUE AND FUEL TAX ADMINISTRATION
Mark Zimmerman, Senior Division Administrator

Contact Information:
Phone: (602) 712-8381
Fax: (602) 712-3445
Email:
mzimmerman@azdot.gov

Revenue and Fuel Tax Administration (RFTA) is responsible for
the accounting of Highway User Revenue Fund (HURF) and
Vehicle License Tax (VLT) revenues as well as the licensing,
collection, reporting and compliance with all motor fuel tax laws.
HURF is defined in the Arizona Constitution and the Arizona
Revised Statutes and is a major funding source for Arizona’s
highways and streets.
Specific responsibilities include:

Mr. Zimmerman serves as the Senior Division Administrator for the Revenue
and Fuel Tax Administration (RFTA). Mr. Zimmerman has worked for the
State of Arizona since 1993, beginning his career with the Arizona
Department of Economic Security as an Unemployment Tax Auditor. Since
2000, Mr. Zimmerman worked for ADOT’s Office of Audit and Analysis as a
Revenue Field Auditor, Audit Manager, and in 2007, served as the Director
of Revenue Audit. In March 2010, Mr. Zimmerman was appointed as Deputy
Division Administrator for RFTA, and in late 2012, began serving as the
Senior Division Administrator.

•

Collecting and accounting for HURF and VLT revenues.
Through various taxes and fees, HURF and VLT generate
over a billion dollars in revenue each year.

•

Ensuring accurate and timely distribution of all HURF
revenues. Arizona Statute and State Transportation
Board policy dedicate specific proportions of HURF and
VLT revenues to the state highway fund and city and
county governments. These monies provide funding for
highway, street, transportation and general purpose
projects.

•

Administering Arizona’s motor fuel tax laws. Motor fuel
is defined as gasoline, diesel and aviation fuel. The State
of Arizona requires licensed fuel suppliers to collect and
remit taxes to ADOT on behalf of consumers and users.
In addition, the unit administers the International Fuel
Tax Agreement (IFTA) which simplifies the reporting of
fuel usage taxes by interstate motor fuel carriers.

Mr. Zimmerman holds a Bachelor of Arts degree in Liberal Studies from
Arizona State University and is a Certified Fraud Examiner (CFE).

FINANCIAL MANAGEMENT SERVICES

32

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: REVENUE AND FUEL TAX ADMINISTRATION
Key Performance Measurements
Percentage of Bank Deposits Validated by the State
Treasurer's Office On the Same Day

80.00%

% Validated same day

$115
$110
$105
$100
$95
$90

Fuel Tax Compliance Revenue

HURF Distribution Timeliness, Volume and Accuracy

HURF Distribution Days
Goal - Days to close & distribute HURF
HURF Distribution Amt. in Million

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

91.00%

95.70%

% Processed in five days

Target

12
$113.3
11
10
$107.2
9
$105.7
$104.8
$103.7
8
$103.1
$102.8
$102.1
7
$101.6
6
$99.5
$99.3
$98.3
5
4
3
2
1
0

96.00%

99.40%

99.55%

99.80%

99.91%

99.77%

99.89%

99.85%

99.80%

99.93%

85.00%

100.0%
95.0%
90.0%
85.0%
80.0%
75.0%
70.0%
65.0%

91.50%

90.00%

93.25%

95.00%

98.37%

99.92%

100.00%

72.30%

Percentage of Completed Fuel Tax License
Applications Processed within Five Days

Target

Fuel Tax Compliance Revenue Recovered
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-

Total Revenue
Recovered in
FY 2014 was
$1.96 million

Hurf Close Days
Number of errors

FINANCIAL MANAGEMENT SERVICES

33

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: RESOURCE ADMINISTRATION
Patrick Stone, Federal Aid Administrator

Contact Information:
Phone: (602) 712-7469
Fax: (602) 712-6672
Email: pstone@azdot.gov

The Resource Administration unit is responsible for managing the
financial life cycle of transportation projects and programs. The life
cycle begins with the programming of funds in the State Transportation
Board’s Five-Year Transportation Facilities Construction Program and
the Statewide Transportation Improvement Program (STIP). It
continues with the assigning and expenditure of funds during the
design, right of way and construction phases, culminating with the final
project accounting. Throughout the entire finance life cycle, the unit
manages various funding sources and monitors projects and programs
to ensure efficient and effective utilization of public transportation
funds.
Specific objectives include:

Mr. Stone became the Department’s Federal Aid Administrator in April of
2014 and is responsible for overseeing the State’s federal aid highway
funding program and tracking the State Transportation Board’s Five Year
Construction Program budget. He has dedicated his entire 25 year
professional career to working for the Arizona Department of Transportation.
Mr. Stone began his career in ADOT’s Finance department, working in Fixed
Assets and General Ledger before assuming the duties of Accounts Payable
Manager in 1998. In 2004 he joined the Program Budget team as the
Program Budget Manager, then in 2006 accepted a position in the Right of
Way Group as first the Operations Manager before being appointed as
Assistant Chief Right of Way Agent in 2008. In 2012 Mr. Stone became the
Local Public Agency Program Manager until accepting his current position.

•

Tracking the utilization of funds and the delivery of projects in
the Five-Year Transportation Facilities Construction Program
and STIP. This includes tracking several million dollars in
current projects as well as a multi-million dollar portfolio of
future projects.

•

Managing the State’s annual allocation of federal highway
funding, which is used by a variety of project sponsors
throughout the State, including ADOT, local governments,
regional planning organizations and other state agencies. These
funds must be authorized on a project-by-project basis and
fully obligated by the end of each federal fiscal year.

•

Reporting to a variety of stakeholders on the status and
disposition of projects and funding, including management,
project development and construction staff, regional planning
organizations and other state and federal agencies.

Mr. Stone holds a Bachelor of Arts degree in History from Arizona State
University.

FINANCIAL MANAGEMENT SERVICES

34

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: RESOURCE ADMINISTRATION
Key Performance Measurements
Percent of Statewide Program obligated year-to-date
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%

Actual Obligated

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
14 14 14 14 14 14 14 14 14 14 14 14
Dollar Value
Target < $15 mil

FINANCIAL MANAGEMENT SERVICES

Oct Nov Dec
13 13 13

Jan
14

Feb Mar Apr May Jun
14 14 14 14 14

Obligated Target 8.33% monthly

25

Actual Obligated

Average number of days to process federal aid
authorization requests

300

250

20

200

15

150
10

100

Average # of Days to Process

Sep

Jul

Aug

Jun

May

Apr

0
Feb

0
Mar

50
Jan

5
Dec

Dollar value of federal projects inactive
for at least 6 months

Aug Sep
13
13

Number of Requests Submitted to
FHWA

Jul
13

Nov

$65,000
$60,000
$55,000
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0

Feb Mar Apr May Jun
14 14 14 14 14

Oct

Thousands

Obligated Target 8.33% monthly

Jan
14

Sep

Oct Nov Dec
13 13 13

Aug

Aug Sep
13 13

Average # of Days Taken to Process the
Requests Submitted to FHWA

Jul
13

Jul

100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%

Percent of MAG RTPFP obligated year-to-date

Target # of Days to Process

Total Requests Sent to FHWA

35

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: FISCAL OPERATIONS
Keith Fallstrom, Controller

Contact Information:
Phone: (602) 712-6594
Fax: (602) 712-3442
Email: kfallstrom@azdot.gov

Mr. Fallstrom started with the State of Arizona in 2000 at the Governor’s
Office of Strategic Planning and Budgeting (OSPB). As a budget analyst, he
assisted agencies with the preparation and implementation of their budgets
and strategic plans. Mr. Fallstrom also helped develop the Executive Budget
Recommendation and lobbied the legislature for its passage. After OSPB,
Mr. Fallstrom worked at the Arizona State Land Department as the Budget
and Accounting Manager and then as the Administration Division Director,
where he was responsible for the administrative functions of the agency,
including accounting, procurement, budget, facilities and human resources.
Mr. Fallstrom has been the Controller at ADOT since July 2011.

Fiscal Operations directs all general accounting and cost
accounting activities, in accordance with generally accepted
accounting principles (GAAP), Governmental Accounting Standards
Board (GASB) Pronouncements and State and Federal regulations.
The responsibilities of Fiscal Operations include:
•

General
accounting for the Department including
Accounts Payable, Accounts Receivable, Cost Accounting,
Fixed Assets, General Ledger and Payroll Services.

•

Develop, interpret and administer financial policies, rules
and regulations for the Department.

•

Prepare annual financial reports, including the Arizona
Department of Transportation Comprehensive Annual
Financial Report (CAFR).

•

Track, analyze and validate costs associated with highway
construction and other projects including the
reconciliation and closing of federally funded projects.

•

Invoice, collect and deposit federal funds in a timely and
efficient manner.

•

Administer the Agency’s financial information system,
ensuring Federal and State requirements are met with
ADOT’s current and/or future financial systems.

Mr. Fallstrom holds a Bachelor of Science degree in Physics and a Master’s
degree in Public Administration from Brigham Young University.

FINANCIAL MANAGEMENT SERVICES

36

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: FISCAL OPERATIONS
Key Performance Measurements

Percent of Invoice Payments Made Within
Statutory Deadline

Federal Expenditures Billed within 7 Days
100%

96%

88%

87%

89%

92%

81%

91%

92%

0%

0.00%

June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June
2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June
2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014
% on Time

% Billed w/in 7 Days

Target

Percent of Payroll Processed Accurately
50

47

99.98%
99.93%
99.95%
99.91%
99.88%
99.95%
99.98%
99.91%
99.88%
99.84%
99.63%
99.93%
99.51%
99.61%
99.81%
99.61%
99.68%
99.65%
99.70%
99.59%
99.70%
99.59%
99.84%
99.77%
99.79%
99.70%
99.65%
99.95%

Target

Days to Complete the Advantage® vs. AFIS
Reconciliation

100.0%

40
30

97.0%

06/07/2013
06/21/2013
07/05/2013
7/19/2013
8/2/2013
8/16/2013
8/30/2013
9/13/2013
9/27/2013
10/11/2013
10/25/2013
11/8/2013
11/22/2013
12/6/2013
12/20/2013
1/3/2014
1/17/2014
1/31/2014
2/14/2014
02/28/2014
03/14/2014
03/28/2014
04/11/2014
04/25/2014
05/09/2014
05/23/2014
06/06/2014
06/20/2014
% Processed accurately

Target

FINANCIAL MANAGEMENT SERVICES

14

17

11

9

7

7

7

8

16

10

95.0%

8

20

96.0%

6

98.0%

90%

20%

20.00%

99.0%

83%

40%

80%

40.00%

60%
80%

97.00%

96.69%

96.09%

96.79%

98.31%

99.98%

93.80%

93.34%

92.68%

92.51%

93.44%

60.00%

93.80%

80.00%

96%

80%

100.00%

0

# Days

Target

37

FINANCIAL MANAGEMENT SERVICES ADMINISTRATION: DEBT MANAGEMENT AND COMPLIANCE
Lisa Danka, Debt Management and Compliance Administrator

Contact Information:
Phone: (602) 712-7441
Fax: (602) 712-6672
Email: ldanka@azdot.gov

As a highly–rated issuer with $2.9 billion in principal outstanding
(as of June 30, 2014), ADOT takes seriously its responsibility to
Arizona citizens, bond holders, financial markets and federal
regulators. As a result, the position of Debt Management and
Compliance Administrator (DMCA) was created in 2014 to provide
a full-time and exclusive focus on ADOT debt programs.
The DMCA is responsible for debt issuance, managing various debt
financing programs and ensuring compliance with legal covenants,
disclosure requirements and IRS regulations. In addition, the
DMCA will execute a strategic plan to implement “best in class”
debt management and compliance activities focused on
continuous improvement. This includes implementation of an inhouse compliance management database, development of new
informational tools and robust annual review of policies,
procedures and processes.

Ms. Danka joined ADOT in November 2009 and is currently responsible for
ADOT’s debt financing and Highway Expansion and Extension Loan (HELP)
programs. Prior to assuming the Debt Management and Compliance
Administrator role, Ms. Danka led the Resource Administration Unit and was
responsible for the federal aid highway program. Before joining the
Department, Ms. Danka was the Assistant Deputy Director for Finance and
Investment at the Arizona Department of Commerce. In this role, she
oversaw eight business tax credit, grant and loan programs, private activity
bonds, and served as the Executive Director of both the Greater Arizona
Development Authority and Commerce and Economic Development
Commission.
Ms. Danka holds a Bachelor of Arts degree in Political Science from Western
Illinois University and a Master’s degree in Business Administration from
Bradley University. Ms. Danka has completed the Wharton Transportation
Executive Program.

FINANCIAL MANAGEMENT SERVICES

In addition, DMCA manages the Highway Expansion and Extension
Loan Program (HELP), a state infrastructure bank which provides
loans to public entities, enabling eligible transportation projects to
be built sooner than currently programmed.

38

Listing of Acronyms

FINANCIAL MANAGEMENT SERVICES

Acronyms

Description
ADOT
AFIS
CAFR
CMAQ
COG
DPS
FFY
FHWA
FMS
FY
GAAP
GANs
GASB
GAZ
HTF
HURF
IFTA
ITD
L,B & I
MAG
MPD
MPO
MVD
NHPP
OA
PAG
RARF
RFTA
RTHP
RTP
RTPFP
SETIF

Arizona Department of Transportation
Arizona Financial Information System
Comprehensive Annual Financial Report
Congestion Mitigation and Air Quality Improvement (CMAQ) Program
Council of Governments
Department of Public Safety
Federal Fiscal Year
Federal Highway Administration
Financial Management Services
State Fiscal Year
Generally Accepted Accounting Principles
Grant Anticipation Notes
Government Accounting Standards Board
Greater Arizona
Highway Trust Fund
Highway User Revenue Fund
International Fuel Tax Agreement
Intermodal Transportation Division
Land, Buildings and Improvements
Maricopa Association of Governments
Multimodal Planning Division
Metropolitan Planning Organization
Motor Vehicle Division
National Highway Performance Program
Obligation Authority
Pima Association of Governments
Regional Area Road Fund, also known as the Maricopa County Excise Tax
Revenue and Fuel Tax Administration
Regional Transportation Highway Program
Regional Transportation Plan
Regional Transportation Plan Freeway Program
Safety Enforcement and Transportation Infrastructure Fund

FINANCIAL MANAGEMENT SERVICES

39

Acronyms

Description
SHF
STAN
STB
STIP
STP
TIC
VLT

State Highway Fund
Statewide Transportation Acceleration Needs
State Transportation Board
State Transportation Improvement Program
Surface Transportation Program
True Interest Cost
Vehicle License Tax

FINANCIAL MANAGEMENT SERVICES

40