City of Yuma Arizona Comprehensive Annual Financial Report CITY COUNCIL Alan L. Krieger, Mayor Cody Beeson Bobbi Brooks Paul B. Johnson Leslie L. McClendon Raul Mendoza Jerry Stuart City Administration Gregory K. Wilkinson City Administrator For the Fiscal Year Ended June 30, 2011 Prepared by: Finance Department Donald (Pat) Wicks, CPA City Departments City Attorney Steven W. Moore City Clerk Lynda L. Bushong Community Development Laurie L. Lineberry Director Wendy Wrenn, CPA Accounting Manager Sharon Willoughby Budget Manager Dana Alexander Minda Federmeyer Linda Johnson Accountants Utilities Jay Simonton Finance Donald (Pat) Wicks Fire Department Jack McArthur, Chief Information Technology Laura S. Neinast Municipal Court Douglas S. Stanley, Judge About the Cover: Marine Corps Air Station-Yuma will be home to the first operational squadrons of the new F-35 Joint Strike Fighter program. The station expects up to $1 billion in new construction to accommodate the program and expand facilities for the increase in military and civilian personnel supporting the program. The City of Yuma is proud to be home to the station and to the U.S. Army Yuma Proving Ground, one of the military’s most important testing commands. Parks and Recreation Rebecca J. Chavez Police Department Jerry Geier, Chief Field Operations Joel Olea CITIZENS OF YUMA MAYOR and COUNCIL City of Yuma MUNICIPAL COURT CITY ADMINISTRATOR CITY ATTORNEY CITY ADMINISTRATION PARKS & RECREATION General Counsel Administration Parks/Mall Maintenance Litigation Public Affairs Recreation Prosecution Strategic Communications Parks Development Heritage Area Civic Center Baseball Complex HUMAN RESOURCES City Clerk Human Resources Economic Development Risk Management Facilities Maintenance Golf Courses COMMUNITY DEVELOPMENT POLICE DEPARTMENT Administration Field Services Building Safety Support Services Arts and Culture FINANCE Administration and Budget Accounting Customer Service Community Planning Purchasing PUBLIC WORKS INFORMATION TECHNOLOGY SERVICES Business Application And Support Telecommunications And Support Fleet Services FIRE DEPARTMENT Professional Services Streets Suppression Solid Waste Community Risk Reduction UTILITIES Emergency Medical Services Utility Treatment Special Operations Utility Systems Emergency Management ENGINEERING Engineering/Capital Improvement Projects City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2011 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal from the Finance Director Certificate of Achievement for Excellence in Financial Reporting FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis (Required Supplementary Information) BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Assets Statement of Activities FUND FINANCIAL STATEMENTS Governmental Funds: Balance Sheet Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund BalancesGovernmental Funds to the Statement of Activities Proprietary Funds: Statement of Net Assets Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows NOTES TO THE FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress - Public Safety Personnel Retirement System Budgetary Comparison Schedules-General Fund and Major Special Revenue Funds: General Fund Highway User Revenue Fund City Road Tax Fund Grants Fund Community Redevelopment Fund NOTES TO REQUIRED SUPPLEMENTARY INFORMATION OTHER SUPPLEMENTARY INFORMATION Combining Balance Sheet-Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances-Nonmajor Governmental Funds Budgetary Comparison Schedules: Major Governmental Funds Not Included In Required Supplementary Information Debt Service Fund Capital Projects Fund Nonmajor Governmental Funds Local Transportation Assistance Special Revenue Fund Public Safety Tax Special Revenue Fund Radio Communication Special Revenue Fund Recreation Complex Special Revenue Fund Two Percent Tax Special Revenue Fund Yuma Mall Maintenance Special Revenue Fund i Page v ix 3 5 20 21 24 26 28 30 31 32 33 35 60 61 64 65 66 67 68 72 74 76 77 78 79 80 81 82 83 City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2011 TABLE OF CONTENTS (Concluded) FINANCIAL SECTION (Concluded) Nonmajor Proprietary Funds: Enterprise Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Combining Statement of Cash Flows Budgetary Comparison Schedules: Water Enterprise Fund Wastewater Enterprise Fund Solid Waste Enterprise Fund Desert Hills Golf Course Enterprise Fund Arroyo Dunes Golf Course Enterprise Fund Internal Service Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Combining Statement of Cash Flows Budgetary Comparison Schedule - Equipment Replacement Internal Service Fund Budgetary Comparison Schedule - Equipment Maintenance Internal Service Fund Budgetary Comparison Schedule - Insurance Reserve Internal Service Fund Page 86 87 88 89 90 91 92 93 96 97 98 99 100 101 STATISTICAL SECTION Net Assets by Component - Last Ten Fiscal Years Changes in Net Assets - Last Ten Fiscal Years Fund Balances of Governmental Funds - Last Ten Fiscal Years Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years Governmental Funds Tax Revenues by Source - Last Ten Fiscal Years Governmental Funds Intergovernmental Shared Revenues - Last Ten Fiscal Years Intergovernmental Revenues - Grants and Other - Last Ten Fiscal Years Taxable Sales by Category - Last Ten Fiscal Years Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years Ratio of Outstanding Debt by Type - Last Ten Fiscal Years Ratio of General Bonded Debt to Assessed Value and General Bonded Debt per Capita - Last Ten Fiscal Years Computation of Direct and Overlapping Debt Legal Debt Margin Information Schedule of Municipal Property Corporation Debt Service Requirements to Maturity and Coverage Pledged Tax Collections Demographic and Economic Statistics - Last Ten Calendar Years Principal Employers Full-Time Equivalent City Government Employees by Function - Last Ten Fiscal Years Operating Indicators by Function - Last Ten Fiscal Years Capital Asset Statistics by Function - Last Ten Fiscal Years ii 106 107 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 INTRODUCTORY SECTION iii iv FINANCE DEPARTMENT One City Plaza P.O. Box 13012 Yuma, Arizona 85366-3012 (928) 373-5087 Fax: (928) 373-5084 City of YUMA November 29, 2011 To the Citizens, Honorable Mayor and City Council, and City Administrator The Finance Department is pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Yuma, Arizona for the fiscal year ended June 30, 2011. The report includes the independent auditors’ report as required by City Charter Article XIII, Section 12, and by Arizona Revised Statutes, Section 9-481. The report is prepared in conformity with generally accepted accounting principles and standards set forth by the Governmental Accounting Standards Board (GASB). Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including disclosures, rests with the City. Management of the City is responsible for establishing and maintaining internal controls to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles as they apply to governmental units. Internal control 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 calculation of costs and benefits requires estimates and judgments by management. To the best of our knowledge and belief, the enclosed data is accurate, in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. Heinfeld, Meech & Co., P.C., a public accounting firm fully licensed and qualified to perform audits of local governments within the State of Arizona, have audited the City’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Yuma, Arizona for the fiscal year ended June 30, 2011, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that the City of Yuma’s financial statements for the fiscal year ended June 30, 2011, are fairly presented in conformity with accounting principles generally accepted in the United States. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of Federal awards. These reports are available in the City’s separately issued Single Audit Reporting Package. v This report has been prepared using the financial reporting requirements as outlined in GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This standard requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditors’ report. PROFILE OF THE CITY OF YUMA The City of Yuma was incorporated in 1914 and adopted its first charter in June of that year. Yuma is the economic hub and county seat of Yuma County. The City is located along the Colorado River in southwestern Arizona and is equidistant from the major population centers of Phoenix, Arizona and San Diego, California. The City operates under a council-manager form of government. The City Council consists of six members elected at large for staggered four-year terms. The elected Mayor is the seventh voting member of council, who, along with the remaining council members is elected on a non-partisan basis. The City Council is responsible for passing ordinances, adopting the budget, appointing members of commissions and hiring the City Administrator. The City Administrator carries out the policies and ordinances of the City Council, oversees the day-to-day operations of the City and appoints the various department heads. The City provides a full range of municipal services. These include public safety (police, fire and municipal court), street construction and maintenance, water and wastewater utility services, sanitation and residential refuse collection, parks, recreation and culture, planning and zoning, and general administrative and support services. This CAFR includes the financial activity of the primary government, which includes several enterprise activities, as well as its blended component units. Component units are legally separate units for which the primary government is financially accountable. Blended component units, while legally separate, are part of the City’s operations and are combined within the report. The Yuma Municipal Property Corporation and the City of Yuma Employee Benefits Trust have been included in the reporting entity. Conversely, the report does not include the City of Yuma Housing Authority as the City is not financially accountable for the authority, nor does the City directly or indirectly rely upon or benefit from the financial activity of the authority. ECONOMIC CONDITION AND OUTLOOK Industrial Expansion. Yuma’s economy is based primarily in agriculture, tourism and government, although further diversification continues. Agriculture remains the Yuma area’s dominant industry, producing more than $1 Several major agricultural companies maintain operations here. Their chief billion in revenues annually1. consumer products of packaged produce and salad mixes continue to be popular products for today’s convenience-minded customers. The Yuma area’s stable allocation of Colorado River water will assure that agriculture remains the foundation of Yuma’s economy. The United States Marine Corps Air Station (MCAS) and United States Army Yuma Proving Ground (YPG) help provide economic stability. These two installations are cornerstones in the military’s flight training and equipment testing programs and should survive any continued base closure efforts by the federal government. In fact, both installations are enjoying new construction and expansion to meet their needs into the 21st century. MCAS will be the home of one of the first squadrons of the new Joint Strike Fighter, the new generation aircraft being adopted by all military services. Although manufacturing currently accounts for less than 10% of countywide employment, the City’s partnership with the Greater Yuma Economic Development Corporation continues to attract attention to the area. Several companies have located or expanded operations in Yuma in recent years. 1 Source: Greater Yuma Economic Development Corporation vi Economic Growth. Yuma’s most reliable indicator of the condition of its economy is sales tax. The graph below reflects the last ten years of data. After three years of decline, general sales tax saw a slight increase of 1.4% for fiscal year 2011. Tax data show that construction, an important segment of the sales tax measure, has rebounded to a 1% growth. Planning for fiscal year 2012 anticipates stable sales tax collections. Millions Yuma’s continued as a regional retail and services center during 2011 with no additional “big box” closures of nationally-recognized stores during the year. The retail classification of the sales tax showed a 1.4% increase, matching the overall increase and 25 showing that retail sales continue to be relatively strong. General Sales Tax Tourism. Yuma has enjoyed an influx of seasonal residents for decades. Visitors from throughout the United States and Canada continue to call Yuma their winter home. This contributes to the strengthening of sales tax collections. 20 15 10 5 2002 2003 2004 2005 2006 2007 2008 Fiscal Year Ending June 30, 2009 2010 2011 LONG-TERM FINANCIAL PLANNING Yuma Crossing National Heritage Area. Plans to restore, preserve and interpret the Yuma Crossing National Heritage area began more than thirty years ago and work continued throughout 2011. The goal is to gain full economic and recreational benefit from the Colorado River for the Yuma area. The river, once the primary reason for Yuma’s existence, was ignored for years as community growth and new development moved away from the riverfront. Awareness of the river’s importance has re-emerged, culminating in the establishment of the Yuma Crossing National Heritage Area in 2000, the first such National Heritage Area west of the Mississippi River. During fiscal year 2011, city and Federal funds combined to manage and improve both the West and East Wetlands to restore natural vegetation and wildlife habitat, and improve recreational opportunities for area residents. The City will also continue its focus in developing historic and cultural activities in these areas as these are so important in meeting the Council’s goals in enriching the area’s cultural attributes. Progress in providing opportunities for local residents and in attracting employers to the area to diversify the economy is dependent on continuing these plans. Downtown redevelopment. Revitalization of the downtown area is a vital component of management of the Heritage Area. The new hotel and conference center are cornerstones of the public/private partnership that is developing the river area. The new Gateway park continues to be a focal point for the downtown area. Its improved access to the river area and new parking, restroom facilities, and picnic and play facilities makes it a popular destination with local residents. East Mesa Development. The slowing of the housing market has been felt most keenly in the East Mesa area. However, with the completion of both the Desert Dunes wastewater treatment and the Agua Viva water treatment plants, the city is well prepared for a return to the significant growth of the area as the recession comes to its end. These two plants will not only establish the infrastructure necessary to accommodate that growth, but will improve capacity of existing plants in the older Yuma area to accommodate growth elsewhere in the city. A series of rate increases for both the Water Fund and the Wastewater Fund have been completed and the two funds are positioned well financially to meet the needs in growth and in managing historic areas as well. vii FINANCIAL INFORMATION Budgetary Controls. The annual budget serves as the foundation for City financial planning and control. The City maintains budgetary controls with the objectives 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, Debt Service Funds, Capital Projects Fund, Enterprise Funds, and three of the City’s Internal Service Funds are included in the annual appropriated budget. As with the governmental funds, the City’s proprietary funds are presented on a current financial resources basis to account for capital and debt-related expenditures. The City maintains an encumbrance accounting system as one technique of accomplishing budgetary controls. Encumbered amounts lapse at year-end. However, encumbrances generally are re-appropriated as part of the following year’s budget. As demonstrated by the budgetary schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. In addition to budgetary schedules, Note I-D in the Notes to the Financial Statements beginning on page 38 describes in detail the budget process used by the City. AWARDS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended June 30, 2010. This is the twenty-ninth consecutive year the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report. The report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another award. I wish to express my sincere thanks to the employees of the Accounting Division for their dedicated service in preparing this report. Their work, along with those services provided by other members of the Finance Department, has made this report possible. The cooperation and assistance of the accounting firm of Heinfeld, Meech & Co., P.C., also contributed significantly to its production. Finally, I wish to thank the Mayor and Council, City Administrator, and the City Staff for their continued support. Respectfully submitted, Donald (Pat) Wicks, CPA Finance Director viii x FINANCIAL SECTION 1 2 MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information) As management of the City of Yuma, we offer readers of the City of Yuma's financial statements this narrative overview and analysis of the financial activities of the City of Yuma for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal in the introductory section of this report. FINANCIAL HIGHLIGHTS • On a government-wide basis, the City’s net assets grew by $20.2 million for the fiscal year, $10.1 million of which was generated by governmental activities while $10.1 million was due to business-type activities of the City. • The City’s combined net assets total $461.0 million at June 30, 2011. Of this amount, $76.1 million is available (unrestricted) to finance ongoing programs, $44.4 million in governmental programs and $31.7 million in business activities. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City of Yuma's basic financial statements. The City of Yuma'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. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Yuma'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. 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 government'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 (uncollected taxes and earned but unused vacation leave are two examples). Both of the government-wide financial statements distinguish functions of the City of Yuma that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, streets, environmental health and protection, community design and development and parks, recreation and culture. The business-type activities of the City include water, wastewater, solid waste and golf course operations. The government-wide financial statements can be found on pages 20-21 of this report. 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 of Yuma, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary 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 5 MANAGEMENT’S DISCUSSION AND ANALYSIS financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Moreover, these latter statements provide a ready comparison to similar financial statements produced prior to the City’s implementation of GASB Statement No. 34. The City maintains thirteen 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 seven funds considered to be major funds. Data from the other six governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements beginning on page 72. Major Governmental Funds: General Highway User Revenue City Road Tax Grants Community Redevelopment Debt Service Capital Projects Nonmajor Governmental Funds: Local Transportation Assistance Public Safety Tax Radio Communication Recreation Complex Two Percent Tax Yuma Mall Maintenance The City adopts annual appropriated budgets for all of its governmental funds. Budgetary comparison statements have been provided to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found starting on page 24 of this report. Proprietary funds. The City of Yuma 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 of Yuma uses enterprise funds to account for its Water, Sewer and Solid Waste Authority and for its golf courses. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City of Yuma uses internal service funds to account for its equipment replacement and maintenance programs, liability insurance, and for its workers compensation and employee health insurance. Because these services predominantly benefit governmental rather than businesstype functions, they have been included within governmental activities in the government-wide financial statements. Major Enterprise Funds: Water Fund Wastewater Fund Nonmajor Enterprise Funds: Solid Waste Desert Hills Golf Course Arroyo Dunes Golf Course Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements group major and nonmajor proprietary funds in a manner similar to governmental fund statements. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements, beginning on page 96. The City adopts annual appropriated budgets for all of its proprietary funds with the exception of two internal service funds: Employee Benefits Trust and Workers Compensation. Budgetary comparison statements for the remaining proprietary funds are included within the report to demonstrate compliance with these budgets. The basic proprietary fund financial statements can be found on pages 31-33 of this report. 6 MANAGEMENT’S DISCUSSION AND ANALYSIS 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 beginning on page 35 of 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 of Yuma's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found starting on page 60 of this report. The combining statements referred to earlier in connection with nonmajor governmental, proprietary and internal service funds are presented immediately following the required supplementary information on pensions and budgets. Combining and individual fund statements and schedules can be found starting on page 72. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Assets. As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Yuma, assets exceeded liabilities by $461.0 million at the close of the fiscal year. Governmental Activities Business-type Activities June 30, Net Assets (millions) Current and other assets Capital assets $ Total assets Long-term liabilities outstanding Other liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 2010 As restated 2011 $ 107.3 310.5 $ 2011 112.2 307.4 $ 64.8 339.0 Total 2010 As restated $ 61.6 339.3 2011 $ 172.1 649.5 2010 As restated $ 173.8 646.7 417.8 419.6 403.8 400.9 821.6 820.5 138.1 22.7 144.3 28.4 192.2 7.6 200.0 7.0 330.3 30.3 344.3 35.4 160.8 172.7 199.8 207.0 360.6 379.7 196.8 15.8 44.4 257.0 191.9 14.7 40.3 246.9 166.8 5.5 31.7 204.0 161.1 3.8 29.0 193.9 363.6 21.3 76.1 461.0 353.0 18.5 69.3 440.8 $ $ $ $ $ The largest portion of the City of Yuma's net assets reflects its investment in capital assets (e.g., land, buildings, machinery), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to pay these liabilities. The remaining balance of unrestricted net assets may be used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, including the City as a whole, as well as for its separate governmental and business-type activities. The same held true for the previous fiscal year. Net assets rose to $461.0 million, up $20.2 million from the prior year. Governmental activities accounted for $10.1 million of the increase while business-type activities amounted to $10.1 million. Most of the increase would be attributable to capital asset acquisitions, particularly infrastructure, as governmental capital assets increased $3.1 million (net of depreciation), funded in part by the excess of revenues over operating expenses as reported in the Statement of Activities on page 21. These acquisitions are reflected in the portion of net assets shown above as ‘Invested in capital assets, net of related debt.’ Unrestricted net assets are those assets available to finance programs in the upcoming fiscal year and would increase when the portion of taxes and other revenues exceed operating expenses but are not invested in capital assets. Statement of Activities. Already noted was the statement of activities’ purpose in presenting information in how the government's net assets changed during the most recent fiscal year. A chart of changes in net assets follows. 7 MANAGEMENT’S DISCUSSION AND ANALYSIS Changes in Net Assets Fiscal Year Ended June 30, Governmental activities (millions) 2011 Business-type activities 2010 2011 2010 Total 2011 2010 38.4 3.9 $ 54.5 5.0 10.6 $ 49.8 3.7 9.8 Revenues Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Sales taxes Franchise taxes Intergovernmental revenues Unrestricted grants and contributions Unrestricted investment earnings Gain from sale of assets $ Total revenues 12.1 5.0 3.2 $ 11.4 3.7 5.9 $ 42.4 7.4 $ 10.0 34.7 3.0 25.4 5.9 1.0 0.3 9.5 34.2 3.0 28.2 5.8 1.1 - 0.1 - 0.2 - 10.0 34.7 3.0 25.4 5.9 1.1 0.3 9.5 34.2 3.0 28.2 5.8 1.3 - 100.6 102.8 49.9 42.5 150.5 145.3 9.7 40.2 14.6 13.8 1.5 5.0 5.8 - 10.5 39.2 14.0 13.9 4.9 5.0 6.3 - 20.5 13.9 2.9 2.4 20.2 13.7 2.5 9.7 40.2 14.6 13.8 1.5 5.0 5.8 20.5 13.9 2.9 2.4 10.5 39.2 14.0 13.9 4.9 5.0 6.3 20.2 13.7 2.5 90.6 93.8 39.7 36.4 130.3 130.2 0.1 0.1 (0.1) (0.1) Expenses: General government Public safety Streets Parks, recreation and culture Environmental health and protection Community design and development Interest on long-term debt Water Wastewater Solid Waste Golf courses Total expenses Transfers Change in net assets $ 10.1 $ 9.1 $ 10.1 $ 6.0 $ 20.2 $ 15.1 For the fiscal year, net assets increased $20.2 million, with $10.1 of the increase coming from governmental activities. The increase in assets in governmental activities is related in great part to construction of capital assets, rather than accumulation of cash or other liquid assets. The reader should remember that the basis of accounting used in the government-wide statement of activities excludes capital expenditures while its revenues include general taxes whose primary purpose is for the construction of those very assets or their related debt service (i.e., public safety or road sales taxes). Governmental Activities Revenues Governmental activities revenues totaled $100.6 million for fiscal year 2011, down from 2010, mostly in capital grants and intergovernmental revenues. Local sales taxes remain the largest revenue source for the City and are comprised of the 1% general sales tax along with a .5% road tax and a .2% public safety tax. State-shared revenues are the City’s second largest revenue source. State-shared revenues include state sales tax, urban revenue sharing (income tax), auto in-lieu tax and highway user funds (gas tax). Sales taxes and state shared revenues account for 55% of governmental revenues for the year. Charges for services, the third segment of governmental activities revenues, count building permits and inspections, fines, recreation fees, police services and civic center rental fees among its largest sources. The charges for services category amounts to 12% of governmental revenues. Property taxes represent 10% of governmental revenues. The large majority of property taxes are levied for general purposes with a small levy for downtown mall maintenance. No property taxes are 8 MANAGEMENT’S DISCUSSION AND ANALYSIS levied for debt service. Various grants and contributions and franchise taxes account for most of the remaining governmental revenues. Some of the more significant changes in governmental activities revenues are noted: • • • • Sales taxes increased 1.4% from 2010 as the economy has somewhat sustained since 2010. Intergovernmental revenues dropped by $2.8 million or 10.1%. State-shared income taxes declined 24.6% from 2010, as anticipated, while state-shared gas tax slid by 1.7% as the state continues to balance its budget by reducing other entities’ revenue. State-shared sales taxes increased by 4.6% because of the state’s improving economic output. Charges for services increased by $0.7 million (6.5%) as the city recognized revenues related to developer deposits resulting from continued capital projects completions. Operating Grants and Contributions increased by $1.3 million (35.8%) and Capital Grants and Contributions increased by $0.7 million (7.3%) as the city received ARRA funding and completed TEA 21 grant funded projects. RevenuesGovernmental Activities Franchise taxes 3% Sales taxes 35% Intergovernmental revenues 25% Property taxes 10% Capital grants and contributions 3% Operating grants and contributions 5% Unrestricted grants and contributions 6% Unrestricted investment earnings 1% Charges for services 12% Expenses Governmental expenses totaled $90.6 million for the fiscal year. Of the expenses, 44.4% or $40.2 million is related to public safety for police, fire and municipal court services. Parks, recreation and culture expenses amounted to $13.8 million, or 15.2% and environmental health and protection was $1.5 million, 1.7%, while streets and community design and development expenses amounted to 16.0% and 5.5% respectively. Interest on long-term debt was $5.8 million, or 6.4% of governmental expenses. Overall, governmental activities expenses stabilized from 2010, with the exception of environmental health and protection expenses. This decrease in this function reflects the reclassification of the Solid Waste Fund to an enterprise fund and its inclusion in businesstype activities. 9 MANAGEMENT’S DISCUSSION AND ANALYSIS Expenses and Program Revenues-Governmental Activities 45.0 40.0 35.0 Expenses Millions 30.0 Program Revenues 25.0 20.0 15.0 10.0 5.0 General government Public safety Streets Parks, Environmental recreation and health and culture protection Community Interest on longdesign and term debt development The chart above compares governmental activities with their respective program revenues, if any. Because the ultimate beneficiary of services of these types is often difficult to ascertain or the services apply to a broad spectrum of users (such as in fire protection), user fees are not created and general revenues provide the funding support for most of these services. Moreover, where ultimate users of the services are determinable, program revenues may generate only a portion of the funding, such as in recreation programs. Business-type activities Revenues General revenues do not support the City’s business-type activities; thus, the largest source of revenues comes from charges for services. Of the $42.5 million in charges for services, 87.3% comes from the City’s two utility operations, water and wastewater. The remaining charges are from solid waste and the City’s two golf courses, Desert Hills and Arroyo Dunes. The $7.4 million in contributions are payments for capacity charges and development fees as well as constructed additions to the City’s water and wastewater infrastructure by subdivision and other developers. Finally, investment earnings make up less than 1% of revenues for the City’s business activities. Revenues-Business-type Activities Charges for services 85% Capital grants and contributions 14% Investment earnings 1% Expenses Water and wastewater services account for 87.3% of the City’s business-type activities with solid waste and golf courses making up the remaining 12.7%. Water expenses amounted to $20.5 million while wastewater expenses totaled $13.9 million. Solid Waste, Desert Hills Golf Course and Arroyo Dunes Golf Course recorded expenses of $2.9 million, $2.1 million and $.3 million, respectively, for a total of $5.3 million. 10 MANAGEMENT’S DISCUSSION AND ANALYSIS Expenses vs. Program Revenues-Business-type Activities A B C D E Contributions F G H Charges for Services 30 Expenses 25 Millions 20 15 10 5 0 Water Wastewater Solid Waste Golf Because the City’s business-type activities are supported by user charges, the chart above shows more reliance on program revenues. Moreover, for both water and wastewater, program revenues include capacity charges for new service and developer additions to the utility infrastructure. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental funds. The combined fund balances of governmental funds for the fiscal year ended June 30, 2011, is $60.6 million, a slight increase over 2010 of $.03 million. A review of some of the more significant funds follows. General Fund The fund balance of the General Fund grew by $1.6 million for the fiscal year. Revenues decreased by $2.3 million. Sales taxes, the city’s largest source of General Fund revenues, increased $0.2 million (1.0%) to $17.6 million as Yuma has not fully recovered from the recession. State-shared income taxes showed a decline of 24.6%, as anticipated, down $2.8 million to $8.7 million, while state-shared vehicle registration tax (auto lieu tax) decreased 1.7% to $3.3 million. Total expenditures dropped 2.8% to $49.4 million as the city reduced its workforce through attrition and decreased capital and other discretionary expenditures to deal with its declining revenues. Highway User Revenue Fund (HURF) This fund, which accounts for the expenditure of state-shared gasoline taxes, showed a decrease in fund balance of $.4 million for the year. The City’s portion of those taxes dropped by 1.8% for the fiscal year to $6.5 million. The state legislature continues to reduce cities’ share of this important revenue source. All maintenance expenditures for streets and retention basins are made in the HURF Fund. Expenditures increased from 2010 by $.5 million (6.9%) to $7.0 million. City Road Tax Fund This fund accounts for the one-half cent sales tax for use on the City’s roadways in conjunction with HURF. The fund balance grew by $1.3 million for the year. In the same manner as general sales tax in the General Fund, sales taxes slightly increased in 2011 to $8.8 million. Capital expenditures dropped from 2010, as the city funded its project expenditures for streets from bond proceeds. Grants Fund The City continues to receive much needed assistance from both the state and federal levels. During 2011, revenues decreased to $5.9 million, due principally to a $1.8 million decrease in Federal grants. Again this year, 11 MANAGEMENT’S DISCUSSION AND ANALYSIS Homeland Security was the primary source of grants, funding the Yuma Regional Communication System and Operation Stone Garden with continued Bureau of Reclamation funding for the Yuma Heritage Area. Community Redevelopment Fund The City continued to utilize, in part, its Community Development Block Grant funding for eligible street infrastructure improvements and for affordable housing rehabilitation, and its U.S. Department of Justice Weed and Seed Grant Program to help with operating the Martin Luther King Community Center in the Carver revitalization area. Community Development Block Grant revenues increased slightly to $1.3 million for 2011. Debt Service Debt Service Fund expenditures increased to $13.5 million as payments return to their full annual amounts after the 2010 refunding of the 2001 Series Municipal Property Corporation Bond. Fund balance reflects debt service reserves accumulated in accordance with the development agreement for the Yuma Palms regional center. Capital Projects Fund The Capital Projects Fund’s fund balance dropped to $27.2 million this year as the city continued to expend the proceeds of the 2007 bond sale. Capital expenditures decreased in 2011 to $9.5 million since expenditures of impact fees dropped with the completion of a major project in 2010. Proprietary funds. The City’s enterprise funds posted an overall increase in net assets of $10.8 million for the fiscal year ended June 30, 2011. The City’s utility funds, Water and Wastewater, and its Solid Waste Fund accounted for the increase as the utilities have benefited from system growth and rate increases to sustain that growth. The Solid Waste Fund’s operations were positive due to the new collection fee. Water Enterprise Fund Operating revenues for the Water Fund decreased by $.12 million or .6% for the year ending June 30, 2011. This is due to a slight decline in consumption, reflecting the recessionary environment. Operating expenses increased by 3.8% and the fund produced operating income of $7.4 million. A decrease in interest expense helped bolster net assets. Although down by $.3 million due to lower construction activity, capital contributions pushed the fund’s net assets increase to $3.3 million. Wastewater Enterprise Fund The Wastewater Fund operating revenues increased 8.3% over fiscal 2010. Rate-based charges increased 6.6% to $13.0 million while contractual revenues increased primarily because of shared charges from capital expenditures. Operating expenses increased by 2.3% with income from operations improving to $3.5 million. Capital contributions increased by some $3.7 million mostly through capacity charges as the result of the Avenue B to C Colonia improvement district. This infusion led to the fund’s net assets increase of $7.1 million. Solid Waste In the fiscal year ending June 30, 2011, the Solid Waste Special Revenue Fund has been reclassified to the Solid Waste Enterprise Fund. Effective July 2, 2010, the Yuma City Council passed Resolution 2010-35 creating a five dollar per month trash collection fee. With the advent of this collection fee, the fund became fully supported by charges to customers and the General Fund subsidy was eliminated. The first year of operations as an enterprise fund showed an increase in Net Assets of $0.4 million. Golf Courses A small increase in food and beverage sales was not enough to counter slightly larger drops in other operating revenues for Desert Hills Golf Course, and the fund saw a 2.1% decrease in operating revenues. With the city’s movement to lower operating expenses, the fund also dropped operating expenses by almost .7% to $2.1 million but still suffered a small operating loss. Arroyo Dunes Golf Course incurred a 17.3% decrease in operating revenues. Operating expenses dropped for Arroyo Dunes by 16.8% for the year but this was not enough to offset 12 MANAGEMENT’S DISCUSSION AND ANALYSIS the lower revenues, leading to an operating loss of $38,461 for the year. The city will continue to operate the courses and implement strategies to improve their financial outlook. GENERAL FUND BUDGETARY HIGHLIGHTS A detailed budgetary comparison schedule for the fiscal year ended June 30, 2011, can be found starting on page 61. A summary of that schedule follows: Budget Revenues and Transfers In Taxes Intergovernmental Other Transfers In Total Expenditures and Transfers Out Expenditures Final Actual $ 30,601,144 18,392,500 6,618,346 440,200 $ 30,601,144 18,392,500 6,618,346 440,200 $ 30,620,333 18,855,577 5,479,283 571,931 56,052,190 56,052,190 55,527,124 (525,066) 53,143,781 2,793,608 53,143,781 2,793,608 49,373,691 4,535,292 3,770,090 (1,741,684) Transfers Out 55,937,389 55,937,389 Total Change in Fund Balance Variance with Final Original $ 114,801 $ 114,801 $ $ 19,189 463,077 (1,139,063) 131,731 53,908,983 2,028,406 1,618,141 $ 1,503,340 General Fund revenues and transfers in ended the year $.53 million under expectations. During budget preparation for 2011, the City anticipated award of its Certificate of Necessary (CON) application from the state health services department to begin ambulance transport. With the delay of that award, some $2 million in ambulance billings did not materialize. Overall compared to 2010, General Fund revenues ended the year down $2.3 million or 4%, led by the aforementioned CON transport fees. The important revenue sources of city and state sales taxes increased by 1.7% and 4.6%, respectively. Expenditures for the fund came in at $3.8 million under budget with the largest contribution coming from Public Safety at $2.2 million, again due to the delay of expenditures related to CON. General Government expenditures added another $1.1 million, although savings in budget occurred in most departments with the City’s drive to reduce expenditures throughout the year. All areas of expenditure reduction were targeted, primarily personal services expenditures through attrition savings and elimination of merit pay increases. Combined with discretionary spending reductions, such as travel and capital expenditures, the General Fund’s expenditures declined more than the loss of revenues to produce a $1.6 million increase in fund balance for the year. CAPITAL ASSETS At June 30, 2011, the City of Yuma’s investment in capital assets in both governmental and business-type activities amounted to $649.5 million, net of depreciation. This includes land, buildings, equipment, and infrastructure (roadways and bridges). Capital assets for governmental activities increased by 1.0% while business-type capital assets decreased less than one percent. These changes included the following: • • • The first phase of the Public Safety Training Facility was completed at $1 million. A major widening project for Avenue 3E was completed at $2.1 million A number of major water and sewer lines were completed. 13 MANAGEMENT’S DISCUSSION AND ANALYSIS Governmental Activities July 1, 2010 Net Additions/ Deletions (as restated) Land Buildings Improvements Infrastructure Equipment Construction in Progress Accumulated Depreciation $ Total $ 54.5 $ 78.7 40.0 177.9 52.4 73.6 (169.6) 307.5 June 30, 2011 1.1 $ 1.0 6.3 1.1 6.7 (13.2) $ 3.0 Change in Capital Assets (In Millions) Business-type Activities July 1, 2010 Net Additions/ (as restated) Deletions 55.6 $ 78.7 41.0 184.2 53.5 80.3 (182.8) $ 310.5 $ 10.4 $ 7.9 224.7 5.1 189.2 (98.0) 0.1 $ 2.1 0.1 4.0 (6.6) 339.3 (0.3) $ $ Total June 30, 2011 10.5 $ 7.9 226.8 5.2 193.2 (104.6) 339.0 $ 66.1 86.6 267.8 184.2 58.7 273.5 (287.4) 649.5 Additional information on capital assets can be found in Note II-E starting on page 45. DEBT ADMINISTRATION At June 30, 2011, after scheduled debt payments, governmental activity debt decreased to $138.1 million while business activity debt decreased to $192.2 million. The state limits the amount a municipality may issue in general obligation debt to 20% of the City’s secondary assessed valuation for combined water, wastewater, artificial light, parks, open space preserves, playgrounds and recreational facilities. Debt related to other projects is limited to 6% of the valuation. The current debt limitation for the former type is $146.6 million, well above the outstanding general obligation debt of $2.77 million. No debt is outstanding for the other type of issuance. Because all the general obligation debt is related to the water system, and because water revenues are used to pay the debt service requirements of the issues, no secondary property taxes are assessed by the City for debt service. The City’s improvement district bonds were rated by Fitch Ratings as “A+”. All other bonds are rated “AA-”. The underlying ratings of Moody’s Investor Services and Standard and Poor’s are “Aa3” and “AA-“, respectively. With the exception of the improvement district bonds, all City bond issues are insured, and while the city enjoys higher ratings, the guarantors can no longer provide “AAA” rating as a result of ratings downgrades of the insurance companies. A summary of the City’s long-term debt follows. Additional information on the City’s long-term debt can be found in Note II-G on pages 48-52. Summary of Long-Term Debt (Millions) Governmental activities Business-type activities 2010 General Obligation Bonds Yuma Municipal Property Corporation Bonds Net Unamortized Premium/Issuance Costs Improvement Districts Contracts Payable Compensated Absences Total Long-Term Debt 2011 $ - Total 2010 2010 (as restated) 2011 (as restated) 2011 (as restated) $ $ 2.8 $ 4.0 $ 2.8 $ 4.0 125.7 131.0 117.0 120.1 242.7 251.1 1.0 5.7 5.7 1.1 6.8 3.5 3.3 68.2 .8 3.4 72.4 .8 4.2 5.7 68.2 6.5 4.4 6.8 72.4 4.3 142.4 $ 192.2 200.8 $ 330.3 $ 138.1 $ 14 $ $ 343.2 MANAGEMENT’S DISCUSSION AND ANALYSIS ECONOMIC FACTORS Yuma County’s fast growth of the last decade has slowed somewhat with the advent of the recession. The county grew by an estimated 2,452 residents to 195,751 with the City of Yuma representing 47.5% of the county’s population. Since 2000, the City has grown by 31% to an estimated 93,064 for Census 2010. The City’s economy is based on a triad of agriculture, tourism and military/government spending. Agribusiness continues to lead the economy, contributing well over $1 billion annually. The area’s 85,000-plus winter visitors add over $450 million to the mix, while two prominent military installations infuse some $300 million to the economy. Property taxes are limited constitutionally in Arizona, so other local revenues make up the most significant reflectors of the condition of the economy. Sales tax, the City’s primary source of general revenues, posted a 1.4% increase this year, compared to its historic growth rate of 7%. This still compares more than favorably to the large metropolitan areas of the state. For fiscal year 2012, revenues were projected with no further projected reduction in sales taxes. With sales tax statistics improving, the economy continues to strengthen. During 2011, the following major economic events occurred: • • The first construction projects have begun at Marine Corps Air Station-Yuma to house the first squadron of the new F-35 Joint Strike Fighter. The Defense Contractor Complex at Yuma International Airport welcomed the addition of the nationally known aviation fueling franchise Million Air. The company refuels aircrafts for defense contractors, government and military aircraft. Not all economic statistics reflect positive results; however, in that the City continues to suffer what appears to be higher unemployment figures than most of the state, according to the Arizona Department of Economic Security (DES). One significant factor here is the effect of farm employment which skews this statistic. Still a significant issue, the City combats this problem by providing the majority of support to the Greater Yuma Economic Development Corporation in its activities to encourage new employers to the area. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to familiarize our citizens, taxpayers and customers with the City’s finances and to demonstrate the City’s fiscal accountability for its operations. Questions concerning this report, or requests for additional financial information, should be directed to Mr. Donald (Pat) Wicks, Finance Director, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012, telephone (928) 373-5087. The reader may also visit the City’s website at www.yumaaz.gov for an electronic version of this report. 15 16 BASIC FINANCIAL STATEMENTS 17 18 GOVERNMENT-WIDE FINANCIAL STATEMENTS 19 City of Yuma, Arizona Statement of Net Assets June 30, 2011 Governmental Activities Assets Cash and Investments Receivables, Net Internal Balances Inventory, at cost Prepaid Items Capital Assets: Non-depreciable Depreciable, Net Total Assets $ Business-type Activities 91,225,773 $ 14,387,307 274,568 648,141 724,256 Total 57,644,319 $ 148,870,092 7,198,417 21,585,724 (274,568) 182,508 830,649 6,471 730,727 135,868,865 174,635,574 417,764,484 203,667,405 135,369,304 403,793,856 339,536,270 310,004,878 821,558,340 1,604,206 4,015,912 2,908,068 14,139,030 987,290 467,224 4,102,482 2,028,569 2,591,496 4,483,136 7,010,550 16,167,599 2,055,794 7,730,000 256,219 8,932,605 2,312,013 16,662,605 3,646,693 124,697,719 160,797,422 578,330 182,404,161 199,756,880 4,225,023 307,101,880 360,554,302 196,837,531 166,782,555 363,620,086 Liabilities Accounts Payable Accrued Liabilities Accrued Interest Payable Unearned Revenue Noncurrent Liabilities: Due within one year Current portion of Accrued Compensated Absences Current portion of Debt Due in more than one year Accrued Compensated Absences Debt Total Liabilities Net Assets Invested in Capital Assets, Net of Related Debt Restricted for: Debt Service Streets Unrestricted Total Net Assets 542,056 5,555,635 6,097,691 15,230,694 15,230,694 44,356,781 31,698,786 76,055,567 $ 256,967,062 $ 204,036,976 $ 461,004,038 The accompanying notes are an integral part of these financial statements. 20 City of Yuma, Arizona Statement of Activities For the Year Ended June 30, 2011 Net (Expense) Revenue and Changes in Net Assets Program Revenues Functions/Programs Government Activities: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Interest on Long-Term Debt Total Governmental Activities Expenses $ Total $ Operating Grants and Contributions 9,684,381 $ 40,231,924 14,536,473 2,182,119 $ 1,964,645 - 13,804,116 1,397,056 788,227 1,537,536 1,084,874 - 5,006,766 5,480,337 5,802,801 Business-type Activities: Water Wastewater Solid Waste Golf Courses Total Business-type Activities Charges for Services 767,004 $ 2,097,293 - 1,314,989 - 90,603,997 12,109,031 20,555,361 13,882,269 2,902,257 2,376,838 22,174,753 14,897,338 3,151,911 2,226,234 39,716,725 42,450,236 130,320,722 $ 54,559,267 $ Capital Grants and Contributions 4,967,513 Governmental Activities (6,735,258) $ (35,038,137) (14,536,473) - 1,074,643 (10,544,190) - (10,544,190) (452,662) - (452,662) 1,039,000 3,245,492 1,505,667 5,884,947 - - 7,390,614 2,827,560 (5,802,801) - (5,802,801) (70,281,961) - (70,281,961) - 9,986,358 34,644,530 3,001,939 25,379,128 5,928,837 1,000,530 259,000 80,200,322 126,024 80,326,346 10,044,385 246,922,677 $ 21 (6,735,258) (35,038,137) (14,536,473) - (70,281,961) General Revenues: Property taxes Sales taxes Franchise taxes Intergovernmental, unrestricted Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain from sale of assets Total general revenues Transfers Total general revenues and transfers Change in net assets Net assets-beginning (restated) $ 2,827,560 - 4,967,513 $ 10,636,106 The accompanying notes are an integral part of these financial statements. Total $ 1,131,849 - - Net assets-ending Business-type Activities 3,125,059 6,900,016 249,654 (150,604) 3,125,059 6,900,016 249,654 (150,604) 10,124,125 10,124,125 10,124,125 (60,157,836) 129,909 129,909 (126,024) 3,885 10,128,010 193,908,966 9,986,358 34,644,530 3,001,939 25,379,128 5,928,837 1,130,439 259,000 80,330,231 80,330,231 20,172,395 440,831,643 256,967,062 $ 204,036,976 $ 461,004,038 22 FUND FINANCIAL STATEMENTS 23 City of Yuma, Arizona Balance Sheet Governmental Funds June 30, 2011 Major Special Revenue Funds General Assets Cash and Investments Cash with Fiscal Agents Receivables, Net of Allowances for Uncollectibles: Accounts Receivable Intergovernmental Special Assessments Delinquent Property Taxes Accrued Interest Due from Other Funds Inventory, at cost Prepaid Items Total Assets and Other Debits Highway Users Revenue $ $ 20,239,279 348,658 2,155,459 20,169 365,238 15,460 2,213,027 56,486 46,541 25,460,317 $ $ 846,015 3,788 561,719 685 100 1,412,307 City Road Tax $ $ Grants 3,255,214 27,446 451,845 2,298 1,897 3,738,700 $ $ 2,255 1,691,773 1,694,028 Liabilities and Fund Balances Accounts Payable Accrued Payroll, Taxes and Benefits Payable Long-Term Debt - Current Portion Due to Other Funds Accrued Interest Payable Deposits Deferred Revenues Total Liabilities Fund Balances: Nonspendable: Inventory Prepaid Items Restricted for: General government projects Debt Service Streets Public safety equipment and facilities Parks, recreation and cultural facilities Committed to: General government projects Debt Service Streets Radio Communications Network Public safety equipment and facilities Parks, recreation and cultural facilities Mall maintenance Sanitation facilities Public works projects Assigned to: General government projects Community Projects Parks, recreation and cultural facilities Unassigned: Total Fund Balances Total Liabilities and Fund Balances $ 690,680 2,545,787 149,239 440,814 3,826,520 $ 56,486 46,541 1,883,135 - 25,460,317 The accompanying notes are an integral part of these financial statements. 24 $ $ 12,056 52,285 1,401,517 228,170 1,694,028 1,897 - 1,086,602 - 3,610,142 - - - 1,086,702 $ 24,193 65,214 37,254 126,661 100 - 500,269 87,808 19,059,558 21,633,797 $ 122,781 128,154 74,670 325,605 1,412,307 - 3,612,039 $ 3,738,700 $ 1,694,028 Community Redevelopment Debt Service $ $ $ $ $ - 663,227 9,396,735 Capital Projects $ 1,039,533 163,525 1,203,058 5,745,000 347 $ 15,805,309 $ 9,265 16,282 145,027 1,032,484 1,203,058 $ $ 185 6,610,000 2,908,068 5,745,000 15,263,253 - - - 542,056 - 1,203,058 32,959,937 142,581 1,252,044 4,960 34,359,522 295,045 6,910,269 7,205,314 Other Nonmajor Governmental Funds $ $ $ 6,410,085 - $ 64,373,757 9,396,735 27,340 254,391 37,427 3,340 12,513 126,499 6,871,595 1,591,601 6,530,756 5,765,169 402,665 27,090 2,213,027 68,999 175,037 $ 90,544,836 94,583 92,335 73,036 259,954 $ 1,248,788 2,900,057 6,610,000 1,546,544 2,908,068 149,239 14,541,697 29,904,393 12,513 126,499 68,999 175,037 734,920 10,533,950 4,189,044 2,425,236 873,857 4,352,365 734,920 542,056 15,230,694 5,062,901 6,777,601 - 1,258,496 1,896,903 3,060,822 2,335,764 495,130 223,943 144 759,189 124,281 - 1,258,496 1,883,135 1,897,047 759,189 3,060,822 2,335,764 124,281 495,130 223,943 542,056 27,154,208 362,793 6,611,641 500,269 87,808 362,793 19,059,558 60,640,443 6,871,595 $ 90,544,836 $ 15,805,309 - Total $ 34,359,522 $ 25 City of Yuma, Arizona Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Assets June 30, 2011 Amounts reported for governmental activities in the statement of net assets are different because: Total Fund Balances per the Balance Sheet-Governmental Funds: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Property tax revenue deferred to later years recognized in year levied in governmental activities. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: Compensated absences MPC bonds payable Improvement District #67 Improvement District #68 Net unamortized deferred charges or premiums are not recorded in the governmental funds Net assets of internal service funds that are used by management to charge the cost of equipment replacement and employee-related insurance to individual funds are included in governmental activities in the statement of net assets. $ 60,640,443 301,630,572 402,667 (5,603,308) (119,055,000) (2,735,000) (3,010,000) (1,017,719) 25,714,407 $ 256,967,062 The accompanying notes are an integral part of these financial statements. 26 27 City of Yuma, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2011 Major Special Revenue Funds Highway City User Road Revenue Tax Grants General Revenues: Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Special Assessments Use of Money and Property Contributions and Donations Miscellaneous Total Revenues $ Expenditures: Current: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Capital Projects: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Debt Service Principal Interest and Fiscal Agent Fees Issuance Costs Total Expenditures $ 6,503,532 4,917 156,777 6,665,226 Fund Balances - Beginning (restated) 2,347,457 - 5,760,630 265 77,163 21,223 5,859,281 74,879 - 744,714 - - 1,101,125 - 694,330 108,277 688,425 386,218 - 3,150,064 5,944,293 6,969,808 767,002 2,213,030 43,779 5,581,502 (304,582) 6,165,979 (85,012) 571,931 (4,535,292) (3,963,361) 722 (100,968) (100,246) 14,403 (4,895,819) (4,881,416) 85,012 85,012 1,618,141 (404,828) 1,284,563 - 2,327,476 - 20,015,656 $ $ 38,248 49,373,691 Net Change in Fund Balances $ 8,816,228 27,971 466,172 5,672 9,316,043 1,056,689 5,838,240 - - Other Financing Sources/(Uses): Transfers In Transfers Out Total Other Financing Sources/(Uses) $ 6,201,532 32,950,168 6,693,287 3,339,848 150,608 Revenues Over/(Under) Expenditures Fund Balances - Ending 30,620,333 1,292,044 18,855,577 1,591,765 1,484,105 287,420 823,949 54,955,193 21,633,797 1,491,530 $ 1,086,702 The accompanying notes are an integral part of these financial statements. 28 $ 3,612,039 $ - Community Redevelopment $ 1,314,989 17,769 147,913 1,480,671 Debt Service $ 1,039,000 261,795 1,300,795 $ 4,369,465 61,195 1,000,795 5,431,455 $ 8,169,773 75,764 1,094,106 537,188 285,616 10,162,447 Total Governmental Funds $ 47,606,334 1,292,044 32,510,492 7,083,307 1,484,105 1,039,000 1,636,721 77,163 2,441,945 95,171,111 - - - 65,374 3,434,427 6,968,534 36,285,261 8,185,697 10,171,493 - - - 697,819 1,555,660 - - 223,997 548,013 4,898,974 1,807,041 895,660 1,652,977 6,227,316 732,645 20,150 44,797 119,405 144,007 - 940,457 1,652,977 7,729,476 1,401,117 128,427 7,680,000 5,854,065 4,428 13,538,493 9,528,748 5,277,839 7,680,000 5,854,065 4,428 95,263,607 - (12,237,698) (4,097,293) 4,884,608 - 12,239,552 12,239,552 (15,125) (15,125) - 1,854 (4,112,418) 1,647,116 34,428 - 540,202 31,266,626 4,964,525 60,606,015 542,056 $ 27,154,208 1,335,129 7,295 138,247 1,480,671 $ Capital Projects Other Nonmajor Governmental Funds - $ 29 (92,496) 1,764,113 (5,001,605) (3,237,492) $ 6,611,641 14,675,733 (14,548,809) 126,924 $ 60,640,443 City of Yuma, Arizona Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances-Governmental Funds to the Statement of Activities For the Year Ended June 30, 2011 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-governmental funds $ A portion of property tax revenue recorded on the statement of activities does not provide current financial resources and is not recorded as revenues in the funds 34,428 27,696 Governmental funds report capital outlays as expenditures. In the statement of activities, however, the cost of those assets is allocated over their useful lives as depreciation Depreciation recorded in statement of activities Capital outlay expenditures reported as additions to assets: Capital outlay expenditures-governmental funds Infrastructure maintenance expenditures recorded as capital outlay but not capitalized as asset additions (12,458,204) 13,659,495 (2,128,338) Governmental funds report debt principal service payments as expenditures. The reduction in liability is recorded on the statement of net assets in the government-wide statements 7,680,000 Increase in compensated absences expense not recorded in governmental funds (129,286) The net effect of miscellaneous transactions involving capital assets (trades of land for rights-of-way) is to decrease net assets. (454,612) Investment earnings of the internal service funds are general revenues on the statement of activities 68,450 Interest payments accrued in government-wide statements are not recorded in governmental activities until paid 55,692 Net revenues of internal service funds in excess of expenses reduce governmental activities expenses on the statement of activities (2,239,773) 5,928,837 Contributions of infrastructure assets are not recorded as revenues in the governmental funds $ Change in net assets of governmental activities The accompanying notes are an integral part of these financial statements. 30 10,044,385 City of Yuma, Arizona Statement of Net Assets Proprietary Funds June 30, 2011 Governmental Activities Internal Service Funds Business-Type Activities-Enterprise Funds Water Fund Assets Current Assets: Cash and Investments Receivables, Net of Allowance for Uncollectibles: Accounts Receivable Intergovernmental Accrued Interest Inventory, at cost Prepaid Expenses Total Unrestricted Current Assets Restricted Assets: Cash and Investments: Cash with Fiscal Agents Current Debt Service Advancement for Future Expansion Customer Deposits Total Restricted Current Assets Total Current Assets Noncurrent Assets: Capital Assets: Land Buildings Improvements Other than Buildings Equipment Construction In Progress Less Accumulated Depreciation Total Capital Assets Total Noncurrent Assets Total Assets Liabilities Current Liabilities Payable from Current Assets: Accounts Payable Accrued Payroll and Related Taxes Current Portion-Long-Term Contracts-Principal Current Portion-Bonds Payable Current Portion-Accrued Compensated Absences Estimated Claims and Judgements Due to Other Funds Accrued Interest Payable Unearned Revenue Total Current Liabilities Payable from Current Assets Current Liabilities Payable from Restricted Assets: Accounts Payable Deposits Unearned Revenue Current Portion-Long-Term Contracts-Principal Current Portion-Long-Term Contracts-Interest Current Portion-Bonds Payable Accrued Interest Payable Total Current Liabilities Payable from Restricted Assets Total Current Liabilities Noncurrent Liabilities: Long-Term Contracts Payable Bonds Payable Unamortized Premium/Issuance Costs Accrued Compensated Absences Total Noncurrent Liabilities Total Liabilities Net Assets Invested in capital assets, net of related debt Restricted: Debt Service Unrestricted Total Net Assets $ 22,781,253 Wastewater Fund $ 9,153,657 Other Funds $ 818,719 Totals $ 32,753,629 $ 17,455,281 4,115,695 491 8,592 109,357 5,698 27,021,086 2,382,983 245,053 8,414 215 11,790,322 436,634 348 207 73,151 558 1,329,617 6,935,312 245,892 17,213 182,508 6,471 40,141,025 60,057 52 9,917 579,142 549,219 18,653,668 8,978,324 1,412,070 2,438,611 391,352 13,220,357 40,241,443 2,681,837 8,988,496 11,670,333 23,460,655 1,329,617 11,660,161 1,412,070 11,427,107 391,352 24,890,690 65,031,715 18,653,668 1,766,233 2,911,198 121,569,944 2,737,123 129,692,772 (60,869,064) 197,808,206 197,808,206 238,049,649 8,726,156 1,931,133 102,184,736 1,765,332 63,482,244 (39,205,633) 138,883,968 138,883,968 162,344,623 3,102,865 3,066,405 660,423 (4,485,158) 2,344,535 2,344,535 3,674,152 10,492,389 7,945,196 226,821,085 5,162,878 193,175,016 (104,559,855) 339,036,709 339,036,709 404,068,424 219,610 19,251 189,631 27,295,274 (18,849,899) 8,873,867 8,873,867 27,527,535 349,132 232,070 44,430 2,846,450 125,600 2,215,170 5,812,852 108,444 148,761 202,143 749,800 81,651 701,833 1,992,632 99,897 86,393 48,968 58,717 293,975 557,473 467,224 246,573 3,596,250 256,219 2,917,003 58,717 8,099,459 206,179 57,722 31,538 1,058,133 666,483 2,020,055 28,503 391,352 2,061,760 652,281 1,008,750 50,302 4,192,948 10,005,800 9,962 1,969,852 2,019,272 482,896 4,481,982 6,474,614 293,975 38,465 391,352 1,969,852 4,081,032 1,135,177 1,008,750 50,302 8,674,930 16,774,389 2,020,055 34,054,022 89,019,050 2,535,874 253,478 125,862,424 135,868,224 29,867,814 26,165,950 761,451 186,435 56,981,650 63,456,264 138,417 138,417 432,392 63,921,836 115,185,000 3,297,325 578,330 182,982,491 199,756,880 67,641 67,641 2,087,696 82,458,408 81,979,612 2,344,535 166,782,555 8,873,867 4,277,839 15,445,178 $ 102,181,425 1,277,796 15,630,951 $ 98,888,359 897,225 $ 3,241,760 5,555,635 31,973,354 204,311,544 16,565,972 25,439,839 Adjustment to reflect consolidation of internal service fund activities related to enterprise funds (274,568) $ 204,036,976 Net assets of business-type activities The accompanying notes are an integral part of these financial statements. 31 $ City of Yuma, Arizona Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2011 Business-Type Activities-Enterprise Funds Water Fund Operating Revenues: Metered Water Sales Commercial Raw Water Wastewater Charges Meters, Connections and Services Charges for Services Green Fees and Concessions Equipment Rental Miscellaneous Charges Total Operating Revenues Operating Expenses: Operations and Maintenance Depreciation Total Operating Expenses Operating Income/(Loss) Non-Operating Revenues/(Expenses): Interest Gain/(Loss) on Disposal of Assets Interest and Fiscal Agent Fees Miscellaneous Revenues Total Non-Operating Revenues/(Expenses) Income/(Loss) before Contributions and Transfers Capital Contributions Transfers Out Change in Net Assets Net Assets - Beginning (as restated) Net Assets - Ending $ Wastewater Fund 21,597,737 $ $ 178,014 14,853,519 282,665 18,123 22,058,416 Other Funds - Totals $ 21,597,737 178,014 14,853,519 Governmental Activities Internal Service Funds $ - 14,871,642 3,146,724 1,889,776 335,226 5,371,726 300,788 3,146,724 1,889,776 335,226 42,301,784 6,108,149 6,108,149 11,092,304 3,547,187 14,639,491 8,684,160 2,687,909 11,372,069 4,731,705 261,211 4,992,916 24,508,169 6,496,307 31,004,476 6,838,116 2,213,435 9,051,551 7,418,925 3,499,573 378,810 11,297,308 (2,943,402) 66,801 (5,743,664) 116,337 61,408 (2,333,544) 25,696 1,700 6,419 129,909 (8,077,208) 148,452 68,450 68,588 - (5,560,526) (2,246,440) 8,119 (7,798,847) 137,038 1,858,399 1,253,133 386,929 3,498,461 1,505,667 (62,083) 5,884,947 (32,454) (31,487) 7,390,614 (126,024) 3,301,983 7,105,626 355,442 98,879,442 91,782,733 2,886,318 $ 102,181,425 $ 98,888,359 $ 32 (900) (2,807,264) 28,247,103 3,241,760 $ (635,041) $ The accompanying notes are an integral part of these financial statements. (2,806,364) 10,763,051 Adjustment for consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities - 10,128,010 25,439,839 City of Yuma, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2011 Governmental Activities Business-Type Activities-Enterprise Funds Water Fund Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Cash Paid for Operating Expenses Other Operating Activity Revenue Net Cash Provided by Operating Activities Wastewater Fund Other Funds Totals $ 22,060,910 $ 16,467,441 $ 5,230,316 $ 43,758,667 (4,428,022) (2,958,836) (1,621,804) (9,008,662) (6,695,663) (5,792,845) (3,166,139) (15,654,647) 116,337 25,696 7,069 149,102 11,053,562 Cash Flows from Noncapital Financing Activities: Cash Paid to Other Funds Net Cash Provided by/(Used for) Noncapital Financing Activities Cash Flow from Capital and Related Financing Acitivities: Contributions of Capital Acquisition and Construction of Assets Proceeds from Sale of Capital Assets Principal Payments on Bonds WIFA - Contracted Loan Interest and Fiscal Agent Fee Payments Net Cash Provided by/(Used for) Capital and Related Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities 7,741,456 449,442 Internal Service Funds $ 19,244,460 6,115,956 (1,026,111) (2,460,676) (4,342,236) (1,713,067) (62,083) (32,454) (31,487) (126,024) (900) (62,083) (32,454) (31,487) (126,024) (900) 1,095,029 (2,024,240) (3,591,680) (2,106,190) (5,953,151) 5,498,785 (3,571,555) (714,150) (2,150,222) (2,419,683) - 6,593,814 (5,595,795) (4,305,830) (4,256,412) (8,372,834) (763,550) 68,588 - (12,580,232) (3,356,825) - (15,937,057) (694,962) 83,105 83,105 69,363 69,363 1,147 1,147 153,615 153,615 86,750 86,750 Net Increase/(Decrease) in Cash and Cash Equivalents (1,505,648) 4,421,540 419,102 3,334,994 (2,322,179) Cash and Cash Equivalents, July 1 37,507,258 16,402,450 399,617 54,309,325 19,777,460 Cash and Cash Equivalents, June 30 $ 36,001,610 $ 20,823,990 $ 818,719 $ 57,644,319 $ 17,455,281 Reconciliation of Operating Income/(Loss) to Net Cash Provided by Operating Activities: Operating Income/(Loss) $ 378,810 $ 11,297,308 $ (2,943,402) 7,418,925 $ 3,499,573 $ Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense 3,547,187 (Increase)/Decrease in Accounts Receivable 7,251 (Increase)/Decrease in Inventories 11,702 (Increase) in Deposits (3,600) (Increase)/Decrease in Prepaid Items 1,398 Increase/(Decrease) in Accounts Payable (77,185) Increase in Accrued Payroll and Related Taxes 36,305 Increase/(Decrease) in Due from Other Gov't Units (Decrease) in Claims Incurred but Not Reported Increase/(Decrease) in Customer Dep/Unearned Rev (4,758) 116,337 Other Operating Activity Revenue 3,634,637 Total Adjustments $ 11,053,562 $ Net Cash Provided by Operating Activities Noncash Transactions Affecting Financial Position Purchase of Assets with Vendor Provided Financing Contributions of Capital Assets Total Noncash Transactions Affecting Financial Position $ 2,687,909 (355,668) (2,400) 1,295 (101,481) 261,211 (142,259) 9,890 1,641 (14,842) 39,290 1,947,242 25,696 4,241,883 7,741,456 $ 93,876 82 (146,802) 766 7,069 70,632 449,442 $ 6,496,307 (490,676) 21,592 (6,000) 4,334 (193,508) 2,213,437 (83,225) (80,057) (546,255) (283,389) 169,471 82 (146,802) 1,943,250 149,102 7,947,152 19,244,460 16,870 (7,046) 1,230,335 $ (1,713,067) 29,672 $ 410,638 3,960 $ 386,162 - $ 33,632 796,800 $ - 440,310 $ 390,122 $ - $ 830,432 $ - The accompanying notes are an integral part of these financial statements. 33 34 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Yuma (City) was incorporated April 14, 1914 under Arizona Revised Statute Chapter 9, Section 101, and adopted its first charter on June 11, 1914. The City presently operates under a charter that was last amended on January 2, 2002. The Charter provides for a Council-Manager form of government and provides such services as are authorized by the Charter. Among these services are general government services, public safety (police and fire), parks, recreation, culture, streets, environmental health and protection, and community design and development. During the year ended June 30, 2011, the City implemented the provisions of GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. GASB Statement 54 established new fund balance classifications for governmental funds. It changed the previous terminology of Reserved and Unreserved to five new classifications, which are Nonspendable, Restricted, Committed, Assigned, and Unassigned. GASB Statement 54 added additional note disclosures for the new classifications and refined the definitions of the various governmental fund types. Additional information regarding governmental fund balances is contained in Note I-E, Section 9. The accounting policies of the City conform to generally accepted accounting principles (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. With respect to proprietary activities, the City has adopted GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting. The City has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions, issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. The following is a summary of the more significant policies. A. Reporting Entity The City is a municipal entity governed by an elected mayor and council. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations and so data from these units are combined with data of the City, the primary government. The component units presented have a June 30 year-end. Blended Component Units Yuma Municipal Property Corporation. The Yuma Municipal Property Corporation's board members are appointed by the City Council. The Corporation was formed to finance the acquisition of certain improvements such as the Yuma Civic and Convention Center, Baseball Complex and Desert Hills Golf Course. The Corporation was also used to finance the acquisition of three public safety buildings, (the police headquarters, a fire station and the Municipal Court facility) and Public Works facilities, along with a clubhouse for the municipal golf course and the new Municipal Complex. The Corporation conducts no business other than with the City and that business is solely the retirement of debt related to the aforementioned acquisitions. Complete financial statements may be obtained at the City of Yuma, City Clerk’s Office, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012. City of Yuma Employee Benefits Trust. The City of Yuma Employee Benefits Trust is responsible for providing health insurance for the City employees. The City Council appoints the Trust’s Board of Directors. The Trust provides services entirely to the City and therefore has been included as an Internal Service Fund as of June 30, 1997 in accordance with the criteria established in GASB Statement No. 14, The Financial Reporting Entity. Complete financial statements may be obtained at the City of Yuma Employee Benefit Trust’s administrative offices, One City Plaza, PO Box 13012, Yuma, AZ 85366-3012. 35 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 B. Government-wide and fund financial statements The government-wide financial statements report financial information on all the activities of the City of Yuma and its component units. These financial statements include the Statement of Net Assets and the Statement of Activities, a statement showing changes in net assets. Most interfund activities have been removed from these statements to avoid duplicating the information with some exceptions such as proprietary fund sales to governmental funds (i.e., water bills paid by a governmental fund). Eliminating these transactions would distort both the measurement of income generated in serving proprietary customers as well as the direct cost of governmental functions serving the citizenry. In these government-wide statements, governmental activities, normally supported by taxes and intergovernmental revenues, are separated from business-type activities that rely on fees and charges for services. The statement of activities presents direct expenses of a given function or segment and the degree to which these expenses 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 who use or directly benefit from the services of the function; and 2) grants and contributions that are restricted to the operational or capital needs of a particular function. Taxes and other revenues that are identifiable with a particular function or segment are reported as general revenues. In addition to government-wide presentations, fund financial statements are provided for all governmental and proprietary funds. The financial statements are segregated by their respective significance to City operations with individual major governmental and proprietary funds separated from nonmajor funds (aggregate nonmajor financial activity is reported as a column on the major funds presentation for both governmental and proprietary funds). The City uses GASB Statement No. 34 to determine which funds are to be presented as major funds. In addition to those minimum requirements, the City will, from time to time, include within its major funds presentations of other funds, that because of their significance preclude aggregate reporting outside the basic financial statements. The City of Yuma reports the following funds: GOVERNMENTAL FUNDS General Fund – The General Fund is the general operating fund of the City. It is used to account for all financial resources except those for which another fund is required or used. Highway User Revenue Fund – This fund accounts for the receipt and expenditure of the state-shared Highway User Revenue Fund (primarily gas tax) for maintenance and construction of roadways. City Road Tax Fund – This fund accounts for the collection and expenditure of a local one-half percent transaction privilege tax approved by voters in 1994 for maintenance and construction of roadways. Grants Fund – The Grant Fund accounts for all of the federal and state grants provided to the City with the exception of the Community Development Block Grant, the Economic Development grant and the Weed and Seed Grant. Community Redevelopment Fund – This fund accounts for the financial activities of Community Development Block Grant, Economic Development Grant and Weed and Seed Grant funds. Debt Service Fund – This fund accounts for and reports financial resources for, and the payment of, long-term debt principal, interest, and related costs of the City of Yuma Municipal Property Corporation, a blended component unit, and Special Assessment Improvement Districts. Pledged excise tax and other revenues are transferred to this fund along with property owner’s revenue for payments of long-term bonded debt. Capital Projects Fund – The Capital Projects Fund is used to account for and report financial resources to be used for the acquisition or construction of capital facilities and other capital assets (other than those financed by General, Special Revenue, or Proprietary Funds). 36 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 Other Governmental Funds – Other nonmajor governmental funds of the City of Yuma are aggregated and are presented in a combining statement in the Other Supplementary Information section. These include the Local Transportation Assistance; Public Safety Tax; Radio Communication; Recreation Complex; Two Percent Tax; and Yuma Mall Maintenance Special Revenue Funds. PROPRIETARY FUNDS Water Fund – The operations of the City’s drinking water treatment and distribution system are accounted for in this enterprise fund. Wastewater Fund – This enterprise fund accounts for the City’s wastewater collection and treatment system. Other Enterprise Funds – Other nonmajor enterprise funds of the City of Yuma are aggregated along with the major enterprise funds and are also presented in a combining statement in the Other Supplementary Information section. These funds include the Solid Waste, Desert Hills Golf Course, and Arroyo Dunes Golf Course Funds. Internal Service Funds – Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost-reimbursement basis. They are also presented in the aggregate with major enterprise funds and are included in a combining internal service fund presentation in the Other Supplementary Information section. Because they service primarily governmental funds, they are not included within the business-type activities of the Statement of Net Assets. Rather, they are combined with the governmental activities on that statement. Moreover, because of their essentially duplicative nature in accounting for their operations (revenues of the internal service funds are expenses of the operating funds), the operations of the internal service funds have been eliminated from the operations of the Statement of Activities. Internal service funds include the Equipment Replacement, Equipment Maintenance, Insurance Reserve, Workers Compensation and Employee Benefits Trust Funds. C. Measurement focus and basis of accounting The government-wide financial statements, as well as the proprietary fund financial statements, use the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred. Property taxes are recognized as revenue in the year levied. Grants are recognized as revenue when all eligibility requirements are met and the underlying expenses have been recorded. Governmental fund financial statements are presented 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 available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period (within 60 days). Expenditures are recorded when the liability is incurred with the exception of debt service. Debt service expenditures are recorded when the payment is due or when amounts have been accumulated in the debt service fund for payments to made early in the following year. Property taxes, along with franchise taxes, licenses and sales taxes are susceptible to accrual and have been recognized as revenues of the current period. Delinquent property taxes and property taxes for which there is an enforceable legal claim as of the fiscal year, but which were levied to finance operations of the subsequent fiscal year, 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. All other revenue items are considered measurable and available only when cash is received. Proprietary funds classify revenues and expenses as operating or nonoperating items. Operating revenues and expenses relate to the fund’s ongoing operations in providing goods and services. Operating revenues for the City’s proprietary funds are customer charges for sales and services. Operating expenses include the cost of sales or services, administrative expenses and depreciation. All other revenues and expenses are classified as nonoperating revenues and expenses. 37 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 D. Budget Information 1) The City follows these procedures in establishing the budgetary data reflected in the financial statements: i. On or before the first Monday in June, the City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. ii. Two public hearings are held prior to the budget's final adoption in order to obtain taxpayer comments. iii. On or before the third Monday in August, the budget is legally enacted through passage of an ordinance. iv. At any time during the fiscal year, the City Administrator may transfer part or all of any unencumbered appropriation balance among programs within a fund. Upon written request by the City Administrator, the Council may, by ordinance, transfer part or all of any unencumbered appropriation balance from one fund to another. v. Formal budgetary integration is employed as a management control device during the fiscal year for all funds with legally adopted budgets (only the Workers Compensation and Employee Benefits Trust Internal Service Funds are not budgeted). Appropriations not expended at fiscal year end lapse. vi. Budgetary amounts include those as originally adopted, and as amended by Council or City Administrator through the end of the fiscal year. Arizona State Statute does not allow supplemental budgets. vii. Expenditures incurred during the fiscal year may not legally exceed the publicly published budget. The maximum legal expenditure permitted for the fiscal year is the total adopted budget. 2) Budgetary Reporting and Budgetary Basis of Accounting: The City has opted to display budgetary information schedules in a manner similar to its adopted budget; therefore, the information is displayed outside its basic financial statements. Budgetary comparisons are presented for the General Fund and the major Special Revenue Funds in the Required Supplementary Information section. Budgetary comparisons for the Debt Service Fund, the Capital Projects Fund, the nonmajor governmental funds and the proprietary funds are presented in the Other Supplementary Information sections. For proprietary funds, the budgetary comparison includes reconciliation to the accrual-based operating statements. E. Assets, Liabilities and Fund Equity Disclosures 1) Transactions between Funds: Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as a reimbursement reducing expenditures in the fund performing the services. Exceptions to this include: (1) sales of water and wastewater treatment are treated as revenue by the Enterprise Fund, and in-lieu property taxes are recorded as revenues in the General Fund and expenses in the Enterprise Funds; (2) transfers are made in certain other funds to shift resources from a fund legally required to receive revenue to a fund authorized to expend the revenue; and (3) charges for services of the Internal Service Funds are recorded as expenditures in the funds receiving the service. For purposes of government-wide presentation, these latter transactions are eliminated. 2) Cash and Investments: Cash balances of the City’s funds are pooled and invested by the City. The policy of the City is to invest public funds in a manner which will provide the maximum security of principal invested and conform to all applicable State statutes and City ordinances while providing the highest yield and meeting the City’s daily cash flows. Income earned or loss arising from the investment of the pooled cash is allocated on a monthly basis to the 38 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 individual funds based upon average daily balance. The City considers short-term investments (including restricted assets) in the State of Arizona Local Government Investment Pool (LGIP), mutual fund-money market, U.S. Treasury bills and notes with original maturities of three months or less at acquisition date to be cash equivalents. In accordance with GASB Statement 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, the City reports its investments at fair value based on quoted market information obtained from fiscal agents or other sources. 3) Inventories and Prepaid Items: Inventories consist primarily of expendable supplies held for consumption. Prepaid items represent services for which payment is made in advance. Both inventories and prepaid items are accounted for using the consumption method; therefore, expenditures are recorded at the time inventories are used or the services incurred. Inventories are maintained on a perpetual inventory basis, verified through annual physical counts, and valued using the weighted average method. Nonspendable governmental fund balance for both inventories and prepaid items indicate that a portion of fund balance is not available for future expenditures. 4) Grants Revenue: The City follows the policy that, grants and similar items are recognized as revenue or contributed revenue as soon as all eligibility requirements imposed by the provider have been met. 5) Unbilled Accounts Receivable: The City records as receivables and as revenues the amount of water sales, sewer service charges and commercial refuse collection charges accrued but unbilled at fiscal year end. At June 30, 2011, the estimated amounts of unbilled revenues for the Water, Wastewater and Solid Waste Enterprise Funds are $2,429,088, $1,203,159, and $177,749, respectively. 6) Capital Assets: Capital assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets include property, plant, equipment and infrastructure (e.g., roads, bridges and similar items) and are defined as assets with an individual cost of more than $5,000 and a useful life exceeding one year. These assets are valued at cost or estimated historical cost if original cost is not available. Gifts or contributions are stated at fair market value at the date received. Depreciation and amortization have been provided over the estimated useful lives using the group life method on a straightline basis and the following useful lives: Buildings Improvements 33 to 100 years 20 to 50 years Infrastructure Equipment 35 years 2 to 50 years For proprietary fund assets constructed with bond proceeds, interest costs have been capitalized, net of interest revenue. Gains or losses are recognized when assets are retired from service or are otherwise disposed. 7) Contributions: Contributions, as shown in the Enterprise Funds, represent sub-dividers' costs of installing water and sewer mains, water service connections installed at the customers' expense, transfers of equipment from other City funds, and contributions from customers to defray future expansion costs. 8) Long-term obligations: In the government-wide financial statements, and proprietary fund types in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities, 39 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or bond discount. Bond issuance costs are reported as deferred charges and amortized over the life of the debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 9) Fund Balance Policies: In the fund financial statements, fund balance is reported in classifications that comprise a hierarchy based on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The classifications of fund balance are Nonspendable, Restricted, Committed, Assigned, and Unassigned. Nonspendable and Restricted fund balances represent the restricted classifications and Committed, Assigned, and Unassigned represent the unrestricted classifications. Nonspendable fund balance includes amounts that cannot be spent because either 1) it is not in a spendable form, such as inventory or prepaid items or 2) it is legally or contractually required to be maintained intact. Restricted fund balance is comprised of externally (outside the City) enforceable limitations imposed by creditors, grantors, contributors, laws and regulations of other governments, or laws through constitutional provisions or enabling legislation (changes in City Charter). Committed fund balance includes self-imposed limitations adopted at the highest level of decision making authority, namely, City Council. City Council approval is required to commit resources or to rescind the commitment. Assigned fund balance represents limitations imposed by management. Assigned fund balance items are submitted by the Finance Director for approval/nonapproval by the City Administrator. Unassigned fund balance represents the residual net resources in excess of the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance and any governmental fund can report a negative unassigned fund balance. When both restricted and unrestricted resources are available for specific expenditures, unrestricted resources are considered spent before restricted resources. Within unrestricted resources, committed and assigned are considered spent (if available) before unassigned amounts. F. Revenues, Expenditures, Expenses and Other Disclosures 1) Property Tax Revenue Recognition: Yuma County is responsible for billing and collecting property taxes. Collections by the County in one month are remitted to the City in the next month. For government-wide presentation, revenues equal the taxes levied for the fiscal year. No allowance for uncollectible taxes has been recorded as the City’s experience shows that after five years the amount uncollected represents less than one-half percent of the original levy. For governmental fund statement purposes, at fiscal year end, delinquent property taxes expected to be collected within 60 days are recognized as revenue and recorded as receivable. The balance of delinquent taxes is recorded in the property tax receivable account with a corresponding entry to the deferred revenue account. 2) Compensated Absences: The City's administrative regulations provide permanent City employees with general and major illness leave in varying amounts based on years of service. In addition, employees may accrue hours worked on holidays for absences or payment in the future. General leave vests with the employee as it is earned. General and holiday leave with related benefits for the governmental funds, $4,907,370, and for the internal service funds, $82,292, are recorded in the governmental activities column of the government-wide financial statements. The amounts of general and holiday leave pay and related benefits attributable to the Water, Wastewater, Solid Waste, Desert Hills, and Arroyo Dunes Enterprise Funds are $309,116, $217,425, $89,289 $69,952 and 40 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 $4,020 respectively, and are recorded in those funds and in the business-type activities of the governmentwide statements and accrued as earned. Major illness leave benefits provided for ordinary sick pay are not vested with the employee. Unused benefits are payable only upon the death or retirement of the employee. At June 30, 2011, the amount accumulated in sick pay and related benefits is $7,656,640, including $199,738 attributable to Internal Service Funds and $1,208,168 to Enterprise Funds. Under GASB Statement No. 16, Accounting for Compensated Absences, the City uses the “termination payment” method to determine its provision for major illness leave liability. The portion of the major illness leave liability related to governmental fund types, $695,938, is reported within the governmental activities column of the government-wide financial statements, as current amounts of that liability have been determined to be immaterial and are not recorded within the respective governmental funds. The provision for probable future major illness leave and related benefits attributable to the Equipment Maintenance and Insurance Reserve Internal Service Funds is $16,392 and $495 respectively and Water, Wastewater, Solid Waste, and Desert Hills and Arroyo Dunes Golf Course Enterprise Funds of $69,961, $50,661, $14,476, $8,780 and $869 respectively, are recorded in those funds and are accrued as earned. G. Change in Accounting Principle The City’s administrative regulations provide permanent City employees with general and major illness leave in varying amounts based on years of service. In addition, employees may accrue hours worked on holidays for absences or for payment in the future. General leave vests with the employee as it is earned, thus the City has included an accrual of general and holiday leave pay and related benefits in the Governmental Funds that would normally be liquidated with expendable available financial resources. However, other interpretations of GASB Statement No. 16, Accounting for Compensated Absences, suggest that accruals of such benefits be excluded from Governmental Funds. Accordingly, the City is changing the way it applies the accounting principles outlined in the statement. General and holiday leave will no longer be accrued in the Governmental Funds and the balances of prior year accruals will revert to their respective fund balances. The accrual of general and holiday leave of the Governmental Funds will continue to be reflected in the government-wide financial statements. Fund balances of the affected funds, including the change for the Radio Commuications Fund as noted in Note II-L, have been restated from prior years as follow: Fund Balance General Fund Highway User Revenue Fund City Road Tax Fund Radio Communications Fund Public Safety Tax Fund Recreation Complex Fund Yuma Mall Maintenance Fund General and Nonmajor Governmental Funds Radio Comm Change Change Restated Original $ 18,952,071 1,419,559 2,279,171 325,188 1,581,969 - $ 1,825,364 71,971 48,305 8,816 2,260 26,142 2,762 $ (761,779) $ 20,015,656 1,491,530 2,327,476 761,779 770,595 327,448 1,608,111 2,762 $ 24,557,958 $ 1,985,620 $ - $ 26,543,578 H. Investment Income Investment income is composed of interest and net changes in the fair value of applicable investments. I. Use of Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 41 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 II. DETAIL NOTES ON ALL FUNDS A. Cash and Investments The City maintains a cash and investments pool that is available to all funds. Each fund’s portion of the cash and investment pool is shown in the accompanying balance sheet as “Cash and Investments”, including the portion listed under “Restricted Assets”. The City also records cash and investments, held by fiscal agents, which are restricted by bond indenture requirements for the payment of principal and interest at the end of the fiscal year. Deposits At June 30, 2011, the City’s deposits had a carrying value of $335,642 and a bank balance of $1,796,541. The difference represents outstanding checks and other reconciling items. The main City checking accounts sweeps nightly to a collateralized Repurchase Agreement fund and is disclosed with investments. Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City’s deposits may not be covered. The City requires all demand deposits be covered by federal depository insurance or by pledged collateral held by the financial institution’s trust department in the name of the City at 102% of market value. At June 30, 2011, there are no deposits exposed to custodial credit risk. Cash on hand at June 30, 2011 included petty cash and change funds balances of $27,476 and undistributed payroll-related checks totaling $923,964, which are included as money market funds below. Investments The City adheres to State Law and its adopted Investment Policy to invest public funds in a manner which will provide the maximum security of principal invested while providing the highest yield which will also meet the daily cash flow needs of the City. Per GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, the City reports certain money market investments with a remaining maturity of one year or less at time of purchase at amortized cost instead of fair value. The difference between the fair value and amortized value for June 30, 2011 is $2,237. The City’s investment balances at June 30, 2011 were as follows: Investment Type Fair Value US Treasury Notes/Bills $ 7,492,735 Commercial Paper 2,467,931 US Agencies: Federal Farm Credit Bank 1,999,758 Federal Home Loan Bank 26,245,502 Federal Home Loan Mtg. Corp. 29,118,570 Federal National Mtg. Assoc. 6,016,502 Int'l Bank for Recon & Dev 2,000,000 Money Market Funds 45,292,174 Wells Fargo-Bus Market Fund 12,050,873 15,820,692 State Investment Pool 5 $ 148,504,737 Total Value Investment Maturities in Years $ < 1 Year 7,492,735 2,467,931 $ 1-2 Years - $ 2-3 Years - 6,487,644 9,999,560 45,292,174 12,050,873 15,820,692 1,999,758 9,497,698 11,124,880 - 10,260,161 7,994,130 6,016,502 2,000,000 - $ 99,611,608 $ 22,622,336 $ 26,270,793 42 3-5 Years $ $ - City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The City’s investment policy reduces exposure to investment credit risk by limiting authorized securities to the following: 1. Obligations of the United States Government, its agencies and instrumentalities, excluding mortgagebacked securities; 2. Fully insured or collateralized certificates of deposit and other evidence of deposit at banks and savings and loan associations; 3. Bankers acceptances issued by the ten largest domestic banks; 4. Commercial paper rated A-1/P-1; 5. Repurchase agreements whose underlying collateral consists of the foregoing, provided a signed PSA Master Repurchase Agreement is on file with the counter party bank or broker/dealer; 6. Money Market Funds whose portfolio consists of the foregoing; 7. The State of Arizona Local Government Investment Pool. At June 30, 2011, all investments, with the exception of the State Investment Pool, are rated AAA or A-1 by Standard and Poor’s and Aaa or P-1 by Moody’s. The State Investment Pool 5 was rated AAA/s1+ by Standard and Poor’s at year end. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investments in a single issuer. The City reduces this risk by diversifying its investment portfolio. Diversification strategies are established and monitored on a monthly basis. The allowed diversification standard and actual percentage at year end by security type and issuer are as follows: Maximum % Actual % U. S. Treasuries and securities having principal and interest guaranteed by the U.S. Government .......................................................................................... 100% 5.08% U. S. Government agencies, instrumentalities and government sponsored enterprises .......................................................................No more than 80% 44.30% Fully insured or collateralized CD’s ........................................................No more than 30% 0% Banker’s Acceptances ............................................................................No more than 25% 0% A-1/P-1 Commercial Paper.....................................................................No more than 35% 1.67% Maximum per issuer...........................................................................10% of total C. P 2% Repurchase Agreements.............................................................................................. 100% 0% Money Market Funds.................................................................................................... 100% 38.23% State Investment Pool .................................................................................................. 100% 10.72% Interest Rate Risk Interest Rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with State law and its investment policy, the City sets a maximum maturity on any investment of five years. Unless matched to a specific requirement, no more than 25% of the portfolio may have maturities greater than three years. There are no investments with maturities greater than three years, and there are no holdings with a stated maturity beyond five years. The portfolio at June 30, 2011 had a weighted average maturity of 373 days. The policy does not set a maximum for this measurement. Custodial Credit Risk The custodial credit risk for investments is the risk that in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City reduces exposure to custodial credit risk in its safekeeping and collateralization policies. All security transactions are conducted on a delivery versus payment basis and are held by a third party custodian, in the City of Yuma’s name. The custodian is required to issue a safekeeping receipt listing the specific instrument, rate, and maturity. Although there were no certificate of deposit or repurchase agreements at June 30, the collateralization level of at least 102% of market value is required for these securities. 43 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 B. Property Tax The City's property tax is levied by the Yuma County Treasurer on or before the third Monday in August based upon the previous January 1 full cash value as determined by the Yuma County Assessor. Under Arizona law 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). The primary tax levy is limited to a two percent increase over the previous year with adjustments for growth and annexation. Secondary taxes are tied to the annual debt service requirements of voter-approved general obligation bonds. 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. Liens are filed when taxes are delinquent for two years. Assessed values, levies and collections for fiscal year 2009-10 (Tax Year 2009) and fiscal year 2010-11 (Tax Year 2010), follow: Tax Year 2009 Primary Assess ed Valuation Primary Tax Rate Primary Tax Levy Secondary Ass essed Valuation Secondary Tax Rate/Levy Current Tax Collections Delinquent Tax Collections Delinquent Taxes Outstanding as of June 30 $ $ $ $ $ $ 638,301,193 1.4706 9,386,857 747,149,498 None 9,023,484 233,149 374,969 Tax Year 2010 $ $ $ $ $ $ 671,441,312 1.4691 9,864,144 733,033,525 None 9,429,548 311,392 365,238 C. Accounts Receivable Receivable balances are stated net of an allowance for doubtful accounts. Within the Solid Waste Enterprise Fund, an allowance account is established to record the estimated uncollectible refuse collection billings. Within the Water and Wastewater Enterprise Funds, allowance accounts have been established to record estimated uncollectible water and wastewater billings. No allowance account has been made for other types of receivables. The balances of these accounts are as follow: Delinquent Intergovern- Special Property mental Assessments Taxes Accounts General Highway User Revenue City Road Tax Grants Community Redevelopment Debt Service Capital Projects Water Wastewater Other Funds-Governmental Other Funds-Enterprise Internal Service Total $ Interest Total 348,658 3,788 27,446 2,255 1,039,533 142,581 4,115,695 2,382,983 27,340 436,634 59,830 $ 2,155,459 561,719 451,845 1,691,773 163,525 1,252,044 491 245,053 254,391 348 52 $ 20,169 5,745,000 - $ 365,238 37,427 - $ 15,460 685 2,298 347 4,960 8,592 8,414 3,340 207 9,917 $ $ 8,586,743 $ 6,776,700 $ 5,765,169 $ 402,665 $ 54,220 $ 21,585,497 Allowance Amount 2011 Enterprise Funds: Solid Waste W ater W astewater Accrued $ 10,925 155,760 92,038 2010 $ 6,160 146,061 75,744 44 2,904,984 566,192 481,589 1,694,028 1,203,058 5,745,347 1,399,585 4,124,778 2,636,450 322,498 437,189 69,799 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 D. Due from Other Governments (Intergovernmental Receivables) Amounts due from other government units at June 30, 2011, are as follows: Agencies Federal State County Local $ 1,810,433 553,058 451,845 611,207 1,251,955 $ 287,371 8,661 89 8 180,676 - 49,386 24,321 - 49,394 180,676 24,321 491 245,053 Total Governmental Funds Major Funds General Highway User Revenue City Road Tax Grants Community Redevelopment Capital Projects Non-major Funds Radio Communications Public Safety Tax Mall Maintenance Enterprise Funds: Major Funds Water Wastewater Non-major Funds Solid Waste Desert Hills Golf Course Internal Service Funds Equipment Maintenance Total $ 691 1,080,566 163,525 - - $ 56,964 - $ 2,155,459 561,719 451,845 1,691,773 163,525 1,252,044 156,036 491 - - 89,017 - 16 332 - - 16 332 - 52 - - 52 $ 1,400,818 $ 4,860,073 45 $ 369,828 $ 145,981 $ 6,776,700 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 E. Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2011, follows: Balance June 30, 2010 Capital Assets Not Being Depreciated: (as restated) Increases Decreases Land $ 54,484,598 $ 2,056,219 $ 924,034 Construction in Progress 73,598,706 6,653,376 Total Capital Assets 8,709,595 924,034 Not Being Depreciated 128,083,304 Other Capital Assets: Buildings Improvements Infrastructure Equipment Total Other Capital Assets 78,728,055 39,958,715 177,859,610 52,362,220 348,908,600 1,038,296 6,318,861 2,611,890 9,969,047 Less Accumulated Depreciation for: Buildings Improvements Infrastructure Equipment Total Accumulated Depreciation 23,931,404 22,735,073 89,777,323 33,126,632 169,570,432 2,522,320 3,089,520 4,305,868 4,753,933 14,671,641 179,338,168 (4,702,594) Other Capital Assets, Net Total Capital Assets, Governmental Activities $ 307,421,472 $ 4,007,001 1,483,563 1,483,563 1,483,563 1,483,563 $ 924,034 Balance June 30, 2011 $ 55,616,783 80,252,082 135,868,865 78,728,055 40,997,011 184,178,471 53,490,547 357,394,084 26,453,724 25,824,593 94,083,191 36,397,002 182,758,510 174,635,574 $ 310,504,439 Government activities capital assets net of accumulated depreciation at June 30, 2011, include: General Capital Assets, Net Internal Service Fund Capital Assets, Net $ 301,630,572 8,873,867 Total $ 310,504,439 Depreciation was charged to governmental functions as follows: General Government Public Safety Parks, Recreation, and Culture Environmental Health and Protection Community Design and Development Streets Assets held by Internal Service Funds are charged based on usage of assets $ 2,448,641 2,580,413 2,939,899 16,779 41,522 4,430,953 2,213,434 $ 14,671,641 Total The June 30, 2010 capital asset balance above for governmental activities was restated for the reclassification of the Solid Waste Special Revenue fund into an Enterprise fund (decrease of $245,217). The June 30, 2010 capital asset balance for business-type activities below was increased by the same amount. 46 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 Business-type activities: Capital Assets Not Being Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated Balance June 30, 2010 (as restated) $ 10,406,767 189,201,390 199,608,157 Other Capital Assets: Buildings Improvements Equipment Total Other Capital Assets Less Accumulated Depreciation for: Buildings Improvements Equipment Total Accumulated Depreciation Other Capital Assets, Net Total Capital Assets, Business-type activities Increases $ 85,622 3,973,626 4,059,248 Decreases $ Balance June 30, 2011 - $ 10,492,389 193,175,016 203,667,405 7,945,196 224,707,677 5,142,133 237,795,006 2,113,408 20,744 2,134,152 - 7,945,196 226,821,085 5,162,877 239,929,158 4,997,924 89,417,272 3,648,351 98,063,547 192,102 6,020,848 283,357 6,496,307 - 5,190,026 95,438,120 3,931,708 104,559,854 139,731,459 (4,362,155) - 135,369,304 - $ 339,036,709 $ 339,339,616 $ (302,907) $ Depreciation was charged to programs as follows: Water Wastewater Solid Waste Golf courses Total $ 3,547,187 2,687,909 44,338 216,873 $ 6,496,307 Construction in progress is comprised mainly of water projects (a water treatment plant and related transmission facilities) and wastewater projects (wastewater treatment plant upgrades and improvements, and collection facilities). F. Retirement Plans The City has adopted GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers as amended by GASB Statement No. 50, Pension Disclosures, which requires the following disclosures. Plan Descriptions - The City contributes to the three plans described below. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor and health insurance premium benefits. The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefit pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative 47 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 agent, is governed by a five-member board, known as The Fund Manager, and 167 local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The Elected Officials Retirement Plan (EORP) is a cost-sharing multiple-employer defined benefit pension plan that covers elected officials and judges of certain state and local governments. The EORP is governed by The Fund Manager of PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 3. Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by writing or calling the applicable plan. ASRS PSPRS and EORP 3300 North Central Avenue 3010 E Camelback Rd., Ste 200 P.O. Box 33910 Phoenix, AZ 85016 Phoenix, AZ 85067-3910 (602) 240-2200 or (800) 621-3778 (602) 255-5575 Funding Policy - The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rate. Cost-sharing plans - For the year ended June 30, 2011, active ASRS members and the City were required by statute to contribute at the actuarially determined rate of 9.85 percent (9.6 percent retirement and 0.25 percent long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2011, 2010, and 2009 were $2,490,013, $2,471,539, and $2,684,557, respectively, which were equal to the required contributions for the year. In addition, active EORP members and the City were required by statute to contribute 7 percent and 29.79 percent, respectively, of the members’ annual covered payroll. The City’s contributions to EORP for the years ended June 30, 2011, 2010 and 2009 were $70,831, $61,854, and $65,134, respectively, which were equal to the required contributions for the year. Agent plans - For the year ended June 30, 2011 active PSPRS members were required by statute to contribute 7.65 percent of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 20.57 percent for police and 27.79 percent for fire. Funded Status and Funding Progress – Funding progress of the two agent plans as of June 30, 2010, the most recent valuation, appears below. Unfunded Liability POLICE FIRE Actual Value of Actuarial Accrued Funding Liability Funded Annual Covered as Percentage of Plan Assets Liability (Excess) Ratio Payroll Payroll $ 41,763,616 $ 29,389,749 58,600,342 48,361,082 $ 16,836,726 18,971,333 71.3% $ 60.8% 9,412,636 5,913,555 178.9% 320.8% The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Annual Pension Cost - The City’s pension cost for the two agent plans for the year ended June 30, 2010 (the date of the most recent actuarial report) follows: 48 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 Contribution Rates Annual Pension Cost Contributions Made Actuarial Valuation Date Actuarial Cost Method Actuarial Assumptions: Investment Rate of Return Projected Salary Increases Inflation Projection Cost-of-Living Adjustments Amortization Method Remaining Amortization Period Asset Valuation Method Police 20.57% $1,847,772 $1,847,772 June 30, 2010 Projected unit credit Fire 27.79% $1,557,575 $1,557,575 June 30, 2010 Projected unit credit 8.5% 5.5%-8.5% 5.5% None Level Percent-of-pay closed 20 years Smoothed market 8.5% 5.5%-8.5% 5.5% None Level Percent-of-pay closed 20 years Smoothed market Trend Information - Information for each of the agent plans as of the most recent actuarial valuations follows: POLICE FIRE 2008 2009 2010 2008 2009 2010 Annual Pension Cost $ 1,421,698 2,020,501 1,847,772 1,321,441 1,735,338 1,557,575 Percent Contributed 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Net Pension Obligation - G. Noncurrent Liabilities The following changes occurred in noncurrent liabilities during the fiscal year ended June 30, 2011: Governmental activities: Yuma Municipal Property Corporation Improvement District #67 Improvement District #68 Unamortized Discount/Issuance Costs Unamortized Premium Compensated Absences Total Governmental Activity Noncurrent Liabilities Business-type activities: General Obligation Bonds Yuma Municipal Property Corporation Unamortized Discount/Issuance Costs Unamortized Premium Contracts Payable Compensated Absences Total Business-type Activity Noncurrent Liabilities Balance July 1, 2010 (as restated) Additions Retirements Balance June 30, 2011 Due Within One Year $ 130,955,000 $ 3,575,000 3,240,000 (944,491) 2,017,902 5,592,679 322,432 $ 5,290,000 $ 125,665,000 $ 6,610,000 840,000 2,735,000 875,000 230,000 3,010,000 245,000 (66,830) (877,661) 122,522 1,895,380 212,624 5,702,487 2,055,794 $ 144,436,090 $ 322,432 $ 6,628,316 4,040,000 $ 120,130,000 (626,067) 4,053,000 72,431,684 814,509 37,188 $ 1,275,000 $ 2,765,000 $ 1,345,000 3,105,000 117,025,000 3,260,000 (54,619) (571,448) 184,227 3,868,773 4,182,243 68,249,441 4,327,605 17,148 834,549 256,219 $ 37,188 $ 8,708,999 $ $ 200,843,126 $ 138,130,206 $ 192,171,315 $ 9,785,794 $ 9,188,824 The City has adopted GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues. The following disclosures are due in part to that statement. 49 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 Contracts Payable Business-type activities – During fiscal year 2004, the City began construction of major additions to its utility infrastructure, including additional water and wastewater treatment plants. Financing for these additions comes from the Arizona Water Infrastructure Financing Authority (WIFA) in the form of 20-year loan contracts. The city pledged each system’s net revenues as collateral for the debt. Bonded Debt - Excluding Refunded Debt The following is a description of bonded indebtedness at June 30, 2011. In each instance, all bonds have been issued. For each issue, a number of covenants and restrictions are included in the bond indentures. The City is in compliance with these covenants and restrictions. General Obligation Bonds – These bonds are backed by the full faith and credit of the City and may be repaid through the levying of property taxes. However, because the bonds were issued for the construction or expansion of the City’s water treatment and delivery system, the bonds are recorded in the Water Enterprise Fund and are repaid through that fund. Special Assessment Bonds – Special assessment bonds are issued by the City on behalf of improvement districts created by property owners for a specific purpose. Property owners in the designated districts agree to be assessed for the principal and interest costs of repaying the bonds. As trustee for improvement districts, the City is responsible for collecting the assessments levied against the owners of the property within the improvement districts and for disbursing these amounts to retire the bonds issued to finance the improvements. Special assessment bonds are secured by liens against the property within each district. In the event of delinquency, the City may secure payment of the bonds through sale of the property. All activity related to these bonds is recorded in the City’s Debt Service Fund. Municipal Property Corporation Bonds – In 1970, the City created the Municipal Property Corporation to finance the acquisition or construction of various City projects. Bonds are issued by the corporation and are repaid through unrestricted revenues, primarily excise taxes, by the City. For each issue, the City has pledged its excise tax collections as follows: Excise Taxes – transaction privilege taxes, license fees and franchise fees, along with transaction privilege taxes, income taxes and excise taxes imposed by the State and distributed to the City (except public safety and special sales taxes); Public Safety Taxes – a special two-tenths of one percent (.2%) privilege license tax approved by qualified voters in 1994 for public safety and criminal justice facilities and communication equipment; and Special Sales Taxes – a special two percent (2%) privilege license tax approved by qualified voters in 1993 on the gross proceeds of sales or gross income from the business of bars, restaurants and hotels. For each bond series, the corresponding pledged tax was: Issue 2003 – Series A 2003 – Series B 2003 – Series C 2007 – Series B 2007 – Series D 2010 – Series B Pledged Tax Excise and Public Safety Taxes Excise Taxes Excise and Special Sales Taxes Excise and Special Sales Taxes Excise and Special Sales Taxes Excise Taxes Project(s) funded Refunding 1995 issue Art Center/Fire Station construction Refunding 1995 issue Pool/water park/public safety facilities Streets projects Refunding 2001 issue In addition to, or in lieu of, excise taxes, the City may use other operational revenues to repay the debt, as budgeted in each fund. These include payments from the Water, Wastewater, Solid Waste and Desert Hills Golf Course Enterprise Funds, and Highway User Revenue Special Revenue Fund, as determined by the projects acquired or constructed by the debt proceeds. The Municipal Property Corporation issued a Utility Series in 2007. The water and wastewater system’s net revenues were pledged as collateral for this issue as additional parity obligations. Issue 2007 – Series Utilities Pledged Revenues Net Utility System Revenues 50 Project(s) funded Water treatment plant/water distribution City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 For the year ended June 30, 2011 the pledged revenues described above amounted to $60,964,298 for governmental activities and $43,794,114 for business-type activities. The bonded debt collateralized by such revenues is presented below. Total future pledged revenues are not determinable for comparison to total collateralized debt; however, for the year ended June 30, 2011 debt service for governmental activities totaled $13,534,065 and for business-type activities $17,139,420, or 22% and 39% of pledged revenues, respectively. Summary of Bonded Debt Net Interest Rate General Obligation Bonds: 1997 Refunding Yuma Municipal Property Corporation Bonds: 2003 - Series A Refunding 2003 - Series B Refunding 2003 - Series B Addition 2007 - Series B 2007 - Series D 2007 - Series Utilities 2010 - Series B Refunding Total MPC Bonds Issue Date Maturity Date 4.90% 12/1/1997 2012 4.21% 3.67% 4.18% 4.50% 4.50% 4.50% 4.23% 2/18/2003 2/18/2003 2/18/2003 11/20/2007 11/20/2007 11/20/2007 6/29/2010 2015 2015 2022 2027 2027 2032 2025 Total Bonds Authorized and Issued Authorized and Issued $ 8,085,000 Outstanding $ 2,765,000 14,640,000 2,905,000 9,000,000 30,785,000 61,100,000 127,925,000 29,530,000 277,330,000 7,110,000 1,355,000 6,370,000 27,235,000 54,065,000 117,025,000 29,530,000 242,690,000 $ 285,415,000 $ 245,455,000 Unamortized Premium/ (Issue Costs) $ (11,158) (43,092) (398,153) 1,440,560 3,308,483 18,404 4,326,202 $ 4,315,044 Legal Debt Margin Under Arizona's Constitution, outstanding general obligation bonded debt for combined water, sewer, artificial light, parks, open space preserves, playgrounds and recreational facilities may not exceed 20% of a City's net secondary assessed valuation. Outstanding general obligation debt for all other purposes may not exceed 6% of a City's net secondary assessed valuation. The legal borrowing capacity of the City of Yuma at June 30, 2011 follows: Water, Etc. (20%) Secondary Assessed Valuation All Other (6%) Legal Limit Outstanding G.O. Debt $ $733,033,525 146,606,705 $ 2,765,000 43,982,012 - Available Debt Margin $ 143,841,705 43,982,012 51 $ City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 Annual Debt Service Requirements to Maturity BONDS AND IMPROVEMENT DISTRICTS 1997 Refunding Bonds July 1 2011 Principal $ 1,345,000 2012 1,420,000 2013 - Interest $ Improvement District No. 67 Bonds Total Principal 875,000 $ 101,196 Total 134,140 $ 1,479,140 69,580 1,489,580 910,000 68,820 978,820 - 950,000 35,150 985,150 205,166 $ 2,940,166 - $ Interest $ 976,196 $ 2,765,000 $ 1,300,000 $ 1,227,865 $ 2,527,865 2012 1,340,000 1,188,581 2,528,581 435,000 257,507 692,507 255,000 129,955 384,955 2013 1,375,000 1,155,081 2,530,081 450,000 241,847 691,847 265,000 117,970 382,970 2014 1,425,000 1,100,082 2,525,082 470,000 224,973 694,973 280,000 105,515 385,515 2015 1,465,000 1,057,331 2,522,331 490,000 207,347 697,347 290,000 92,355 382,355 2016 1,840,000 1,013,381 2,853,381 515,000 182,847 697,847 305,000 78,725 383,725 2017 1,910,000 939,781 2,849,781 535,000 157,098 692,098 320,000 64,390 384,390 $ 203,720 $ 2,968,720 $ 2,735,000 $ 420,000 MPC Bonds 2010 Refunding 2001 2011 $ MPC Bonds 2003 Series $ 272,207 $ Improvement District No. 68 Bonds 692,207 $ 245,000 $ 141,470 $ 386,470 2018 2,010,000 844,282 2,854,282 560,000 134,628 694,628 335,000 49,350 384,350 2019 2,110,000 743,781 2,853,781 585,000 110,828 695,828 350,000 33,605 383,605 382,155 2020 2,210,000 638,281 2,848,281 610,000 85,672 695,672 365,000 17,155 2021 2,305,000 549,881 2,854,881 635,000 58,833 693,833 - - - 2022 2,400,000 454,800 2,854,800 665,000 30,258 695,258 - - - 2023 2,500,000 352,800 2,852,800 - - - - - - 2024 2,610,000 240,300 2,850,300 - - - - - - 2025 2,730,000 122,850 2,852,850 - - - - - - $ 29,530,000 $ 11,629,077 $ 41,159,077 $ 1,285,000 $ MPC Bonds 2003 Refunding 1995A 2011 2012 $ 1,350,000 304,953 $ 1,589,953 240,703 1,590,703 6,370,000 $ 1,964,045 $ 8,334,045 MPC Bonds 2003 Refunding 1995B $ 250,000 $ 260,000 53,485 44,735 $ 303,485 304,735 2013 1,425,000 173,203 1,598,203 270,000 35,375 305,375 2014 1,490,000 119,765 1,609,765 280,000 25,250 305,250 2015 1,560,000 62,400 1,622,400 295,000 14,750 309,750 901,024 $ 8,011,024 173,595 $ 1,528,595 $ 7,110,000 $ $ 1,355,000 $ 52 $ 3,010,000 $ 830,490 $ 3,840,490 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 BONDS AND IMPROVEMENT DISTRICTS MPC Bonds 2007 Series B July 1 2011 Interest Principal $ MPC Bonds 2007 Series D Total Principal $ Interest 2,230,000 $ MPC Bonds 2007 Series Utility Total Principal $ Interest 3,260,000 $ Total 1,125,000 $ 1,168,220 $ 2,293,220 2,553,525 $ 4,783,525 2012 1,175,000 1,111,970 2,286,970 2,330,000 2,442,025 4,772,025 3,425,000 5,519,538 5,682,538 $ 8,944,538 8,942,538 2013 1,230,000 1,064,970 2,294,970 2,435,000 2,348,825 4,783,825 3,585,000 5,382,538 8,967,538 2014 1,280,000 1,015,770 2,295,770 2,540,000 2,251,425 4,791,425 3,750,000 5,239,138 8,989,138 2015 1,335,000 964,570 2,299,570 2,655,000 2,149,825 4,804,825 3,920,000 5,089,138 9,009,138 2016 1,390,000 911,170 2,301,170 2,760,000 2,043,625 4,803,625 4,095,000 4,893,138 8,988,138 2017 1,445,000 855,570 2,300,570 2,870,000 1,905,625 4,775,625 4,270,000 4,688,388 8,958,388 2018 1,505,000 797,770 2,302,770 2,985,000 1,762,125 4,747,125 4,440,000 4,453,538 8,893,538 2019 1,565,000 737,570 2,302,570 3,110,000 1,612,875 4,722,875 4,620,000 4,231,538 8,851,538 2020 1,630,000 674,970 2,304,970 3,240,000 1,457,375 4,697,375 4,810,000 4,000,538 8,810,538 2021 1,700,000 606,510 2,306,510 3,375,000 1,323,725 4,698,725 5,015,000 3,802,125 8,817,125 2022 1,770,000 534,260 2,304,260 3,520,000 1,154,975 4,674,975 5,225,000 3,551,375 8,776,375 2023 1,850,000 458,150 2,308,150 3,670,000 978,975 4,648,975 5,450,000 3,290,125 8,740,125 2024 1,930,000 365,650 2,295,650 3,825,000 795,475 4,620,475 5,685,000 3,017,625 8,702,625 2025 2,010,000 281,212 2,291,212 3,995,000 604,225 4,599,225 5,930,000 2,733,375 8,663,375 2026 2,100,000 193,275 2,293,275 4,170,000 404,475 4,574,475 6,190,000 2,436,875 8,626,875 2027 2,195,000 98,775 2,293,775 4,355,000 195,975 4,550,975 6,460,000 2,127,375 8,587,375 2028 - - - - - - 6,745,000 1,844,750 8,589,750 2029 - - - - - - 7,050,000 1,507,500 8,557,500 2030 - - - - - - 7,365,000 1,155,000 8,520,000 2031 - - - - - - 7,695,000 786,750 8,481,750 2032 - - - - - - 8,040,000 402,000 8,442,000 27,235,000 $ 11,840,382 $ 39,075,382 $117,025,000 $ 75,834,905 $ 192,859,905 $ July Principal $ Interest 485,359 $ Total 232,141 $ $ 25,985,075 $ 80,050,075 CONTRACTS PAYABLE WIFA Loan #910043-03 WIFA Loan #920069-03 1 2011 $ 54,065,000 Principal 717,500 $ Interest 2,221,416 $ WIFA Loan #920088-04 Total Principal 1,062,474 $ 3,283,890 $ 1,620,819 Interest $ 1,063,265 Total $ 2,684,084 2012 501,429 216,071 717,500 2,294,967 988,923 3,283,890 1,681,632 1,001,311 2,682,943 2013 518,032 199,468 717,500 2,370,953 912,937 3,283,890 1,744,727 937,033 2,681,760 2014 535,184 182,316 717,500 2,449,455 834,435 3,283,890 1,810,189 870,342 2,680,532 2015 552,904 164,596 717,500 2,530,557 753,333 3,283,890 1,878,108 801,150 2,679,258 2016 571,210 146,290 717,500 2,614,343 669,547 3,283,890 1,948,574 729,361 2,677,936 2017 590,123 127,377 717,500 2,700,904 582,986 3,283,890 2,021,685 654,879 2,676,564 2018 609,662 107,838 717,500 2,790,331 493,559 3,283,890 2,097,539 577,603 2,675,141 2019 629,848 87,652 717,500 2,882,719 401,171 3,283,890 2,176,238 497,427 2,673,665 2020 650,702 66,798 717,500 2,978,166 305,724 3,283,890 2,257,891 414,242 2,672,133 2021 672,247 45,253 717,500 3,076,773 207,117 3,283,890 2,342,607 327,937 2,670,544 2022 694,505 22,995 717,500 3,178,645 105,245 3,283,890 2,430,501 238,393 2,668,895 2023 - - - - - - 2,521,694 145,490 2,667,184 2024 - - - - - - 2,616,802 49,092 2,665,894 7,011,205 $ 1,598,796 $ 8,610,001 $ 32,089,229 7,317,450 $ 39,406,679 $ 29,149,007 8,307,524 $ 37,456,531 $ $ $ Defeased Debt Defeased Bonds – In fiscal year 2010, the City defeased its 2001 Municipal Property Corporation Bonds through the sale of refunding bonds, a part of which was an advance refunding of the 2001 Series bonds maturing July 1, 2011, as the bonds were not callable until that date. A portion of the proceeds of the new refunding bonds was placed in an irrevocable trust to provide for the debt service payment due on July 1, 2011. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. At year end, $1,130,000 of defeased bonds are outstanding. 53 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 H. Interfund Transfers INTERFUND TRANSFERS Transfers Out Transfers In Governmental funds - major funds: General Fund Radio Comm $ 131,750 HURF Mall Maintenance 120,863 Road Tax Grants 1,106 Grants Debt Service 4,281,573 Debt Service 100,968 Debt Service Grants 83,906 Debt Service 4,811,913 HURF 722 Road Tax 14,403 General Fund HURF Road Tax Capital Projects Public Safety Tax Two Percent Tax Debt Service Recreation Complex General Fund Total Governmental Activities Solid Waste Debt Service Radio Comm Debt Service Debt Service Water Wastewater Total Enterprise Funds Equipment Maint Radio Comm Total Internal Service Funds Funds Two Percent Tax $ Capital Projects Capital Projects General Fund Road Tax General Fund HURF Road Tax Public Safety Tax Solid Waste Wastewater Water 571,931 722 14,403 1,106 83,906 4,281,573 100,968 4,811,913 2,929,674 20,887 32,454 62,083 General Fund Solid Waste Equipment Maint Two Percent Tax General Fund 131,750 10,600 900 1,500,000 120,863 Total Governmental Activities 14,675,733 Nonmajor funds: Radio Comm 2,929,674 1,500,000 571,931 Recreation Complex Mall Maintenance 14,548,809 Enterprise funds: 20,887 10,600 62,083 32,454 126,024 - Total Enterprise Funds - Total Internal Service Funds Funds - Internal Service funds: 900 900 Total Transfers Out $ 14,675,733 Total Transfers In $ 14,675,733 The majority of the transfers listed above are for debt service requirements and are recognizable by the fund from which the transfer is made. This includes Enterprise Fund transfers to debt service as the majority of the related bond debt service is governmental in nature and is recorded in the Debt Service Fund rather than within the Enterprise Funds. As for the remaining transfers, they include operating subsidies from the General Fund to Mall Maintenance ($120,863); and from the Two Percent Tax Fund to the General Fund ($571,931 per a riverfront development agreement) and to the Recreation Complex Fund ($1,500,000). Interfund activity is eliminated within the governmental activities column of the Statement of Activities. Only transfers between governmental and business-type activities appear on that statement. The net transfers of $126,024 are for debt service. 54 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 I. Interfund Receivables and Payables Interfund balances at June 30, 2011, follow: Interfund Receivable Major Funds Interfund Payable Major Governmental Funds: Community Redevelopment Fund Grants Fund Internal Service Funds: Equipment Maintenance Workers Compensation General $ Total 145,027 1,401,517 $ 145,027 1,401,517 396,483 270,000 $ Total Receivable 2,213,027 396,483 270,000 $ 2,213,027 Because they serve primarily governmental funds, the interfund activity noted above in the Internal Service Equipment Maintenance and Workers Compensation funds are combined within the governmental activities for government-wide reporting. As such, the interfund activity is eliminated in the governmental activities column of the Statement of Net Assets. The internal balances amount appearing on that statement, $274,568, represents net balances allocated to business-type activities for consolidation of internal service funds net profits. J. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; job-related illnesses and injuries to employees; and natural disasters. The City purchases commercial insurance for Property Insurance, Public Employee Fidelity Bonds, Crime Insurance, Excess Workers Compensation, and Miscellaneous Insurance (i.e. surety bonds, special event insurance as needed, and fine arts coverage.) The City retains all the risk not covered by commercial carriers and has effectively managed risk through various employee education and prevention programs. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. The City uses two Internal Service Funds, Insurance Reserve Fund and Workers Compensation Fund, to account for the financing of its risk of loss relating to claims. Charges assessed to the funds are based on historical claims, exposure to risk, and funding necessary reserves. Annually, the City estimates the liabilities for unpaid claims using a historical cost information method. Claims and expenses are recognized when it is probable that a loss has been incurred, and the amount of the loss can be reasonably estimated. Claims accounted for include, reported and paid claims, reported but unpaid claims, and incurred but not reported (IBNR) claims. The funds’ claims liabilities are presented below. Insurance Reserve Fund Fiscal Year 2010-11 2009-10 2008-09 $ Beginning of Year Claims and Changes In Liability Estimates 48,058 24,140 30,347 $ 437,591 456,306 109,096 Workers Compensation Fund Claim End of Year Beginning of Year Claims and Changes In Claim End of Year Payments Liability Liability Estimates Payments Liability $ 425,537 432,388 115,303 $ 60,112 48,058 24,140 55 $ 1,017,121 851,083 635,985 $ 545,050 1,006,908 1,032,587 $ 564,150 $ 998,021 840,870 1,017,121 817,489 851,083 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 K. Construction Commitments The City has active construction projects as of June 30, 2011. At year-end the government’s commitments with contractors for specific projects are as follows: Construction Original Remaining Commitments Contract Spent to Date Commitment Public Safety $ 257,767 $ 203,877 $ 53,891 Parks & Recreation 583,590 232,273 351,317 Streets 1,277,220 956,275 320,945 Water System 4,523,046 3,733,914 789,131 Wastewater 3,021,810 2,288,564 733,246 $ 9,663,433 $ 7,414,903 $ 2,248,530 L. Radio Communications Special Revenue Fund Since its inception in 2006, the Radio Communication Fund has been reported as a component of the General Fund. The fund was created to account for the expenditures of the Yuma Regional Communications System Council which was created in 2005 to oversee the county-wide communication project. Various Yuma County entities pay into this fund for the maintenance and replacement of their radios, thus creating a fund balance. Since these funds may only be used toward the Yuma Regional Communication System (YRCS), the Radio Communications Fund has been extracted from the General Fund and reclassified as a Special Revenue Fund. In the fiscal year ending June 30, 2011, the Radio Communications Special Revenue Fund was created to account more appropriately for the proceeds and expenditures of the YRCS. Prior year balances have been restated as follows: General Fund Change Nonmajor Governmental Funds Original Change Restated Balance Sheet Assets Cash and Investments Accounts Receivable Intergovernmental Special Assessments Delinquent Property Taxes Accrued Interest Due from Other Funds Inventory, at cost Prepaid Items $ 18,419,617 486,017 2,560,082 20,169 374,969 43,033 2,256,293 91,353 64,225 $ (646,446) $ 17,773,171 (8,491) 477,526 (145,782) 2,414,300 20,169 374,969 (1,094) 41,939 2,256,293 91,353 64,225 $ 4,030,738 307,715 249,513 7,890 9,894 405 $ 646,446 8,491 145,782 1,094 - $ 4,677,184 316,206 395,295 8,984 9,894 405 Total Assets $ 24,315,758 $ (801,813) $ 23,513,945 $ 4,606,155 $ 801,813 $ 5,407,968 789,517 3,861,329 169,263 503,544 18,190,292 151,047 131,915 146,802 13,625 4,162,766 22,921 17,113 761,779 173,968 149,028 146,802 13,625 4,924,545 $ (801,813) $ 23,513,945 $ 4,606,155 $ 801,813 $ 5,407,968 Liabilities and Fund Balances Accounts Payable Accrued Payroll Due to Other Funds Deposits Deferred Revenues Fund Balance Total Liabilities and Fund Balance Original 812,438 3,878,442 169,263 503,544 18,952,071 $ 24,315,758 (22,921) (17,113) (761,779) 56 Restated City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 M. Solid Waste Enterprise Fund In prior years, the Solid Waste fund was classified as a Special Revenue Fund. Expenditures in excess of fees were financed by a transfer from the General Fund. Effective July 2, 2010, the Yuma City Council passed Resolution 2010-35 creating a five dollar per month trash collection fee. With the advent of this collection fee, the fund became fully supported by charges to customers and the General Fund subsidy eliminated. Accordingly, in the fiscal year ending June 30, 2011, the Solid Waste Special Revenue Fund has been reclassified to the Solid Waste Enterprise fund. Prior year balances have been restated as follows (includes a column for the Radio Communication Fund change): Nonmajor Governmental Funds Radio Change Original Change Restated Balance Sheet Other Enterprise Funds Original Change Restated Current Assets Cash and Investments $ 646,446 $ 4,677,184 Accounts Receivable $ 4,030,738 307,715 $ (292,207) - 8,491 23,999 2,167 292,207 Intergovernmental 249,513 (17) 145,782 395,278 414 17 1,094 8,984 302 - 9,894 405 83,043 2,200 - 83,043 2,200 5,115,744 Accrued Interest 7,890 - Inventory, at cost Prepaid Items 9,894 405 - - Total Unrestricted Current Assets 4,606,155 Total Current Assets $ 399,617 $ - $ 399,617 294,374 431 302 (292,224) 801,813 487,743 292,224 779,967 - - - - 487,743 292,224 779,967 Noncurrent Assets Buildings - - - - 3,102,865 Improvements Other than Buildings - - - - 3,015,667 50,738 3,066,405 Equipment - - - - 328,900 331,523 660,423 Construction in Progress Less Accumulated Depreciation - - - - Total Noncurrent Assets Total Assets - - $ - $ $ 151,047 $ - $ - $ (4,086,904) 3,102,865 (4,223,948) (137,044) - 2,360,528 245,217 2,605,745 - $ 2,848,271 $ 537,441 $ 3,385,712 $ $ Current Liabilities Payable from Current Assets (90,174) $ 22,921 83,794 30,894 $ 90,174 Accrued Payroll Accounts Payable 131,915 (55,248) 17,113 93,780 124,656 55,248 179,904 Due to Other Funds 146,802 (146,802) - - - 146,802 146,802 Unearned Revenue Deferred Revenues 13,625 - - 13,625 51,620 - - 51,620 - Total Current Liabilities Payable fr Current Assets 121,068 443,389 (292,224) 40,034 191,199 207,170 292,224 499,394 Total Current Liabilities 443,389 (292,224) 40,034 191,199 207,170 292,224 499,394 Total Liabilities 443,389 (292,224) 40,034 191,199 207,170 292,224 499,394 - 761,779 4,924,545 $ (292,224) $ 801,813 $ 5,115,744 2,360,528 280,573 245,217 - 2,605,745 280,573 $ 2,641,101 $ 245,217 $ 2,886,318 Fund Balance Total Liabilities and Fund Balance 4,162,766 $ 4,606,155 Enterprise Funds Net Assets Invested in capital assets, net of related debt Unrestricted Total Net Assets N. Deficits in Fund Equity At June 30, 2011, no funds, as shown in the basic financial statements, were in a deficit position. The Workers Compensation Internal Service Fund, as shown in the Combining Statement of Net Assets in Other Supplementary Information, has a deficit balance of $98,666 at June 30, 2011. The City intends to remedy this situation in the next fiscal year. 57 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2011 III. CONTINGENT LIABILITIES A. Pending Litigation The City is contingently liable in respect to lawsuits and other claims incidental to the ordinary course of its operations. It is the opinion of the City management, based on the advice of the City Attorney, that such matters will not have a material adverse effect on the City's financial position at June 30, 2011. B. Compliance The City participates in federally-funded and state-funded programs administered by various government agencies. The programs included in these financial statements may be subject to program compliance and/or financial monitoring by the granting agency or its representatives. The amount, if any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time. 58 REQUIRED SUPPLEMENTARY INFORMATION 59 Schedule of Funding Progress Public Safety Personnel Retirement System Unfunded POLICE 2008 2009 2010 FIRE 2008 2009 2010 Actual Value Actuarial Funding of Plan Accrued Liability Assets Liability (Excess) $ 40,781,540 41,337,090 41,763,616 27,991,354 29,459,868 29,389,749 $ 54,019,158 55,583,097 58,600,342 $ 13,237,618 14,246,007 16,836,726 43,200,182 46,691,521 48,361,082 15,208,828 17,231,653 18,971,333 Note: 2010 is the most recent actuarial valuation report available. 60 Annual Liability as Funded Covered Percentage Ratio Payroll of Payroll 75.5% $ 9,619,242 74.4% 9,873,498 71.3% 9,412,636 137.6% 144.3% 178.9% 64.8% 63.1% 60.8% 250.1% 280.4% 320.8% 6,081,510 6,144,945 5,913,555 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Budget Budgetary Fund Balance, July 1 (as restated) Resources (inflows): Taxes: Property Tax - Primary Property Tax - Delinquent City Sales Tax Public Enterprise In-Lieu Franchise Tax Total Taxes Licenses: Business Licenses Liquor Licenses Building Permits Alcohol Permits Total Licenses Intergovernmental: Sales Tax - State State Revenue Sharing Auto Lieu Tax Other Governmental Charges Total Intergovernmental Charges for Services: Building Inspection Fees Developer Charges Recreation Fees Police Services Other Charges Total Charges for Services Fines and Forfeitures: City Court Fines Total Fines and Forfeitures Use of Money and Property: Interest Rental Receipts Total Use of Money and Property Miscellaneous Sales of Surplus Property Other Total Miscellaneous Total Revenues Transfers In Amounts Available for Appropriation Variance with Final Budget Actual Positive Amounts (Negative) $ 20,015,656 $ 8,499,625 Original $ 11,516,031 Final $ 11,516,031 9,864,144 140,000 17,300,000 242,000 3,055,000 30,601,144 9,864,144 140,000 17,300,000 242,000 3,055,000 30,601,144 9,429,548 311,392 17,635,454 242,000 3,001,939 30,620,333 (434,596) 171,392 335,454 (53,061) 19,189 320,000 33,600 758,000 9,000 1,120,600 320,000 33,600 758,000 9,000 1,120,600 302,668 35,131 940,187 14,058 1,292,044 (17,332) 1,531 182,187 5,058 171,444 6,500,000 8,647,500 3,200,000 45,000 18,392,500 6,500,000 8,647,500 3,200,000 45,000 18,392,500 6,856,996 8,692,400 3,250,436 55,745 18,855,577 356,996 44,900 50,436 10,745 463,077 307,327 517,350 753,968 2,271,501 3,850,146 307,327 517,350 753,968 2,271,501 3,850,146 333,137 46,183 609,192 471,308 131,945 1,591,765 1,219,500 1,219,500 1,219,500 1,219,500 1,484,105 1,484,105 131,900 133,200 265,100 131,900 133,200 265,100 108,396 179,024 287,420 (23,504) 45,824 22,320 163,000 163,000 55,611,990 440,200 163,000 163,000 55,611,990 440,200 67,568,221 667,709 156,240 823,949 54,955,193 571,931 75,542,780 667,709 (6,760) 660,949 (656,797) 131,731 7,974,559 67,568,221 25,810 46,183 91,842 (282,660) (2,139,556) (2,258,381) 264,605 264,605 Continued on next page See accompanying notes to this schedule 61 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Budget Original Charges to Appropriations (outflows): General Government: Mayor and Council Elections City Administrator Strategic Communications Economic Development Facilities Maintenance General Government City Clerk City Attorney City Prosecutor Finance-Administration Accounting Customer Services Information Technology Services Purchasing Human Resources Intragovernmental Charges Total General Government Operating Expenditures Capital Outlay Total General Government Expenditures Public Safety: Police Administration - Field Operations Police Support Services Police Communication Center Police 911 Administration Fire Administration Fire Training Fire Suppression Community Risk Reduction Facilities Maintenance Fire Special Operations Fire Emergency Medical Services Fire Emergency Management Municipal Court Total Public Safety Operating Expenditures Capital Outlay Total Public Safety Expenditures Final Actual Amounts Variance with Final Budget Positive (Negative) 249,203 592,472 636,180 111,834 767,374 2,426,343 241,592 1,025,164 211,254 289,714 860,864 95,396 2,526,003 399,789 742,227 (4,120,680) 7,054,729 289,364 7,344,093 249,203 392,472 636,180 311,834 767,374 2,474,613 241,592 1,025,164 211,254 289,714 860,864 95,396 2,526,003 399,789 742,227 (4,120,680) 7,102,999 289,364 7,392,363 247,006 40,059 386,018 605,120 329,028 806,779 2,078,288 273,642 832,969 237,295 241,819 767,675 90,603 2,272,795 391,065 722,051 (4,120,680) 6,201,532 113,162 6,314,694 2,197 (40,059) 6,454 31,060 (17,194) (39,405) 396,325 (32,050) 192,195 (26,041) 47,895 93,189 4,793 253,208 8,724 20,176 901,467 176,202 1,077,669 16,245,658 2,415,298 1,840,161 12,577 720,128 433,056 10,856,164 714,767 35,936 208,320 (40,000) 1,498,003 34,940,068 237,000 16,359,181 2,273,618 1,840,161 12,577 720,128 433,056 10,856,164 714,767 35,936 208,320 (40,000) 1,498,003 34,911,911 249,000 16,151,077 2,369,938 1,845,819 34,566 747,718 323,398 9,268,518 604,175 12,888 19,977 117,354 1,454,740 32,950,168 36,236 208,104 (96,320) (5,658) (21,989) (27,590) 109,658 1,587,646 110,592 (12,888) 15,959 90,966 (40,000) 43,263 1,961,743 212,764 35,177,068 35,160,911 32,986,404 2,174,507 Continued on next page See accompanying notes to this schedule 62 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Budget Original Parks, Recreation and Culture: Parks and Recreation Administration Parks Maintenance Parks Development Recreation Administration Senior Adult Activities Adult Activities Youth Activities Aquatics Yuma Readiness Center Intragovernmental Charges Total Parks, Recreation and Culture Operating Expenditures Total Parks, Recreation and Culture Expenditures Environmental Health and Protection: Environmental Management Intragovernmental Charges Environmental Health and Protection Operating Expenditures Community Design and Development: Community Development Administration Development Engineering Planning and Neighborhood Services Heritage Area Development Total Community Design and Development Operating Expenditures Capital Outlay Total Community Design and Development Expenditures Total Operating Expenditures Capital Outlay Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Final Actual Amounts Variance with Final Budget Positive (Negative) 503,594 4,183,324 149,968 577,477 191,498 214,396 241,779 1,072,137 141,571 (129,365) 503,594 4,199,481 149,968 577,477 191,498 214,396 241,779 1,072,137 141,571 (129,365) 538,906 3,951,115 130,834 543,688 140,264 185,076 166,340 1,042,711 123,718 (129,365) (35,312) 248,366 19,134 33,789 51,234 29,320 75,439 29,426 17,853 - 7,146,379 7,146,379 7,162,536 7,162,536 6,693,287 6,693,287 469,249 469,249 658,647 (620,397) 658,647 (620,397) 658,645 (620,397) 2 38,250 38,250 38,248 503,275 374,755 2,157,299 402,662 503,275 374,755 2,157,299 354,392 487,745 392,062 2,040,775 419,266 15,530 (17,307) 116,524 (64,874) 3,437,991 - 3,389,721 - 3,339,848 1,210 49,873 (1,210) 3,437,991 52,617,417 526,364 53,143,781 2,793,608 55,937,389 3,389,721 52,605,417 538,364 53,143,781 2,793,608 55,937,389 3,341,058 49,223,083 150,608 49,373,691 4,535,292 53,908,983 48,663 3,382,334 387,756 3,770,090 (1,741,684) 2,028,406 2 $ 11,630,832 $ 11,630,832 $ 21,633,797 $ 10,002,965 Concluded See accompanying notes to this schedule 63 City of Yuma, Arizona Budgetary Comparison Schedule Highway User Revenue Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Gasoline Tax Use of Money and Property Interest Miscellaneous Engeneering Oversight Fees Other Total Revenues Budget Original Final $ 1,237,980 $ 1,237,980 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Public Safety Traffic Signals, Signs, and Striping Streets Street Maintenance Street Lighting Street Sweeping Storm Drain Maintenance Curbs, Gutters, and Sidewalks Retention Basin Maintenance Environmental Health Lot Cleaning Capital Outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 6,875,000 6,875,000 6,503,532 (371,468) 6,000 6,000 4,917 (1,083) 100,000 6,981,000 8,218,980 100,000 6,981,000 8,218,980 407 156,370 6,665,226 8,157,478 407 56,370 (315,774) (61,502) 1,046,082 1,046,082 1,056,689 (10,607) 3,011,436 719,620 434,126 333,977 276,474 1,193,876 3,011,436 719,620 434,126 333,977 276,474 1,193,876 2,690,414 919,213 417,723 231,023 311,266 1,268,601 321,022 (199,593) 16,403 102,954 (34,792) (74,725) 130,880 134,000 130,880 134,000 7,280,471 100,787 7,381,258 74,879 6,969,808 100,968 7,070,776 56,001 134,000 310,663 (181) 310,482 7,280,471 100,787 7,381,258 Total Expenditures Transfers Out $ Actual Amounts $ 1,491,530 Variance with Final Budget Positive (Negative) $ 253,550 837,722 See accompanying notes to this schedule 64 $ 837,722 $ 1,086,702 $ 248,980 City of Yuma, Arizona Budgetary Comparison Schedule City Road Tax Fund For the Year Ended June 30, 2011 Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Streets Engineering Street Maintenance Pathways and Trails Right-Of-Way Management Capital Projects Streets Environmental, Health and Safety Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 163,563 Original $ 2,034,472 Final $ 2,034,472 Actual Amounts $ 2,327,476 8,652,665 8,652,665 8,816,228 398,556 40,000 398,556 40,000 445,456 20,716 46,900 (19,284) 10,000 10,000 27,971 17,971 9,101,221 9,101,221 5,672 9,316,043 5,672 214,822 11,135,693 11,135,693 14,403 11,657,922 14,403 522,229 1,166,772 930,182 153,846 101,250 1,166,772 930,182 153,846 101,250 1,164,517 744,887 320,181 117,872 2,255 185,295 (166,335) (16,622) 2,044,000 100,000 4,496,050 4,783,525 9,279,575 1,944,000 200,000 4,496,050 4,783,525 9,279,575 694,330 108,277 3,150,064 4,895,819 8,045,883 1,249,670 91,723 1,345,986 (112,294) 1,233,692 $ 1,856,118 $ 1,856,118 $ 3,612,039 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Special Road Sales Tax Use of Money and Property Rent Interest Charges For Services Developer Charges Miscellaneous Other Total Revenues Variance with Final Budget Positive (Negative) $ 293,004 See accompanying notes to this schedule 65 $ 1,755,921 City of Yuma, Arizona Budgetary Comparison Schedule Grants Fund For the Year Ended June 30, 2011 Budget Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government State Government Budget Authority Reserve Use of Money and Property Interest Contributions/Donations Other - Rebates Total Revenues Original $ - Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current: General Government Public Safety Parks, Recreation and Culture Environmental Health and Protection Community Design & Development Capital Outlay Capital Projects General Government Public Safety Streets Parks, Recreation and Culture Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Final $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 3,495,152 109,022 28,727,454 3,475,002 114,902 24,206,971 5,122,635 637,995 - 1,647,633 523,093 (24,206,971) 98,119 32,429,747 100,084 27,896,959 265 77,163 21,223 5,859,281 265 (22,921) 21,223 (22,037,678) 32,429,747 27,896,959 85,012 5,944,293 85,012 (21,952,666) 1,110 4,162,254 381,169 2,510,903 855,700 187,848 4,505,399 381,169 2,168,868 855,700 187,848 767,002 2,213,030 43,779 744,714 1,101,125 (767,002) 2,292,369 337,390 1,424,154 855,700 (913,277) 3,550,000 9,432,000 10,648,763 700,000 32,429,747 32,429,747 3,399,153 9,517,342 6,129,790 751,690 27,896,959 27,896,959 688,425 386,218 5,944,293 5,944,293 $ - See accompanying notes to this schedule 66 $ - $ - 3,399,153 9,517,342 5,441,365 365,472 21,952,666 21,952,666 $ - City of Yuma, Arizona Budgetary Comparison Schedule Community Redevelopment Fund For the Year Ended June 30, 2011 Actual Amounts Budget Original Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Federal Government Use of Money and Property Rental Receipts Miscellaneous Loan Repayments Other $ $ 1,718,448 Charges to Appropriations (outflows): Current: Community Design and Development Capital Outlay Capital Projects Parks, Recreation and Culture $ $ - $ 1,314,989 - - (836,247) 17,769 17,769 31,665 1,750,113 1,750,113 31,665 2,182,901 2,182,901 142,657 5,256 1,480,671 1,480,671 142,657 (26,409) (702,230) (702,230) 1,571,215 4,000 2,004,003 4,000 1,335,129 7,295 668,874 (3,295) 174,898 174,898 2,182,901 2,182,901 138,247 1,480,671 1,480,671 36,651 702,230 702,230 1,750,113 1,750,113 Total Expenditures Total Charges to Appropriations - 2,151,236 - Total Revenues Amounts Available for Appropriation Budgetary Fund Balance, June 30 - Final Variance with Final Budget Positive (Negative) - See accompanying notes to this schedule 67 $ - $ - $ - City of Yuma, Arizona NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2011 A. Budgetary Reporting and Budgetary Basis of Accounting Budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP), with the exception of the Enterprise Funds and Internal Service Funds for which budgets are adopted. As such, reconciliations between budgetary schedules and financial statements are not necessary for governmental funds. For Enterprise Funds and Internal Service Funds, expenditures related to debt service and to capital acquisition are budgeted in the same manner as governmental funds. Depreciation is not budgeted. Reconciliations from budgetary schedules and financial statements of these funds are presented on the face of the respective budgetary statements. B. Excess of Expenditures Over Appropriations The City’s expenditures exceeded appropriations in five funds. The Debt Service Fund had expenditures exceed appropriations by $1,503,062 due to the refunding of the 2001 issue. Increased entities being serviced by the Radio Communications Fund caused expenditures within the fund to exceed appropriations by $294,562. Recreation Complex expenditures exceeded appropriations by $9,914 because of a failed air conditioner at the Civic Center. Local Transportation Assistance Fund expenditures exceeded appropriations by $200 as the result of an unbudgeted expenditure for a small portion of a capital project. The Equipment Maintenance Fund had expenditures exceed appropriations by $78,242 due to electrical repairs and replacing a three tank manway access. Outside counsel and a large settlement claim caused expenditures within the Insurance Reserve fund to exceed appropriations by $465,522. In each case, the fund was not significantly impaired by the excess expenditures. 68 OTHER SUPPLEMENTARY INFORMATION 69 70 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds account for the proceeds of special revenue sources that are used to finance projects or activities as required by law or contractual agreements. Local Transportation Assistance To record the receipts and uses of monies originating from Arizona Lottery sales. These monies are restricted to transportation uses. Public Safety Tax To account for the two-tenths percent sales tax designated for public safety and criminal justice facilities and equipment. Radio Communication Communication fund. Recreation Complex Baseball Complex. To record the financial activities of the Radio To record the financial activities of the Civic Center and Two Percent Tax To record the financial activities of the Two Percent Special Revenue Excise Tax on hotel, motel, restaurant and bar sales. This tax can finance the operations of the Civic and Convention Center, Baseball Complex, Golf Courses, the Yuma Crossing Area and Convention and Tourism. Yuma Mall Maintenance To record the special maintenance levy for the Yuma Downtown Mall District. The assessment supports cleaning, maintenance, landscaping and utility costs of common areas. Costs in excess of the assessment are financed by a transfer from the General Fund. 71 City of Yuma, Arizona Combining Balance Sheet Nonmajor Governmental Funds June 30, 2011 Special Revenue Assets Cash and Investments Receivables (Net of Allowances for Uncollectibles): Accounts Receivable Intergovernmental Delinquent Property Taxes Accrued Interest Inventory, at cost Prepaid Items Total Assets Local Transportation Assistance $ 148 Public Safety Tax $ 696,506 Radio Communication $ Recreation Complex 804,622 $ 1,938,467 - 180,676 1,299 49,394 8,408 - $ 13 75,764 75,925 $ 879 878,061 $ 50,080 905,395 1,198 10,109 485 $ 1,958,667 $ 17 $ 792 $ 85,535 Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Payroll and Related Taxes Deferred Revenues Total Liabilities 17 Fund Balances: Nonspendable: Inventory Prepaid Items Restricted for: Public safety equipment and facilities Recreation facilities Committed to: Radio Communications Network Mall maintenance Streets Assigned to: Recreation facilities Total Fund Balances Total Liabilities and Fund Balance 3,412 4,204 5,238 10,591 96,126 44,433 35,609 85,280 10,109 485 75,764 - 50,080 - 873,857 - - - 759,189 - 873,857 809,269 362,793 1,873,387 905,395 $ 1,958,667 144 75,908 $ $ 75,925 72 $ 878,061 $ 1,500,000 - Special Revenue Two Percent Tax Yuma Mall Maintenance Total Nonmajor Governmental Funds $ 2,865,814 $ 104,528 $ 6,410,085 1,250 2,404 170 $ 2,886,810 $ 461 24,321 37,427 166,737 $ 27,340 254,391 37,427 3,340 12,513 126,499 6,871,595 $ $ 517 $ 94,583 17,172 - 2,484 29,387 31,871 4,512 37,427 42,456 92,335 73,036 259,954 2,404 170 - 12,513 126,499 2,852,365 - 873,857 4,352,365 2,854,939 $ 2,886,810 $ 124,281 - 759,189 124,281 144 124,281 362,793 6,611,641 166,737 $ 6,871,595 73 City of Yuma, Arizona Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2011 Special Revenue Public Safety Radio Recreation Tax Communication Complex Local Transportation Assistance Revenues: Taxes Intergovernmental Charges for Services Use of Money and Property Miscellaneous Total Revenues $ Expenditures: Current: Public Safety Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Capital Projects General Government Streets Parks, Recreation and Culture Total Expenditures Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Transfers In Transfers Out Total Other Financing Sources/(Uses) $ 3,525,292 $ 75,764 9,232 63 6,933 75,827 3,541,457 $ 1,084,874 3,897 598 1,089,369 516,818 5,716 522,534 - 65,374 - - 1,705,371 - - 697,819 - - - 496,126 51,887 1,193,945 1,757,258 200 200 65,374 75,627 3,476,083 (104,576) (1,234,724) - (2,929,674) 143,250 - 1,500,000 - - (2,929,674) 143,250 1,500,000 Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses 75,627 546,409 38,674 265,276 Fund Balances, Beginning (restated) 281 327,448 770,595 1,608,111 873,857 $ 809,269 $ 1,873,387 Fund Balances, Ending $ 75,908 $ 74 Special Revenue Yuma Two Percent Mall Tax Maintenance Total Nonmajor Governmental Funds $ 4,425,556 $ 9,477 274,299 4,709,332 218,925 5,003 223,928 $ 1,729,056 - 65,374 3,434,427 - 697,819 725 - 223,272 - 223,997 548,013 44,797 119,205 144,007 2,037,790 223,272 44,797 119,405 144,007 5,277,839 2,671,542 656 4,884,608 - 8,169,773 75,764 1,094,106 537,188 285,616 10,162,447 (2,071,931) 120,863 - 1,764,113 (5,001,605) (2,071,931) 120,863 (3,237,492) 599,611 121,519 1,647,116 2,255,328 2,762 4,964,525 $ 2,854,939 $ 124,281 $ 6,611,641 75 City of Yuma, Arizona Budgetary Comparison Schedule Debt Service Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Special Assessments: Principal Payments Use of Money and Property: Interest Total Revenues Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Debt Service: Bond Principal Bond Interest Fiscal Agent Fees Issuance Costs Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Original Final $ 553,548 $ 553,548 Actual Amounts $ 540,202 Variance with Final Budget Positive (Negative) $ (13,346) 1,025,000 1,025,000 1,039,000 311,788 1,336,788 10,696,415 12,586,751 311,788 1,336,788 10,696,415 12,586,751 261,795 1,300,795 12,239,552 14,080,549 (49,993) (35,993) 1,543,137 1,493,798 6,760,000 5,275,431 12,035,431 12,035,431 6,760,000 5,275,431 12,035,431 12,035,431 7,680,000 5,843,865 10,200 4,428 13,538,493 13,538,493 (920,000) (568,434) (10,200) (4,428) (1,503,062) (1,503,062) $ 551,320 $ $ 542,056 76 551,320 14,000 $ (9,264) City of Yuma, Arizona Budgetary Comparison Schedule Capital Projects Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Charges for Services Developer Charges Use of Money and Property Interest Miscellaneous Total Revenues Amounts Available for Appropriation Variance with Final Budget Budget Actual Positive Original Final Amounts (Negative) $ 32,656,741 $ 32,656,741 $ 31,266,626 $ (1,390,115) Charges to Appropriations (outflows): Capital Outlay: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 5,148,253 5,148,253 4,369,465 (778,788) 44,500 11,204,250 16,397,003 49,053,744 44,500 11,204,250 16,397,003 49,053,744 61,195 1,000,795 5,431,455 36,698,081 16,695 (10,203,455) (10,965,548) (12,355,663) 11,185,500 2,915,000 20,137,876 1,078,000 4,370,000 39,686,376 39,686,376 13,538,331 2,965,011 21,665,034 1,248,000 4,370,000 43,786,376 43,786,376 895,660 1,652,977 6,227,316 732,645 20,150 9,528,748 15,125 9,543,873 12,642,671 1,312,034 15,437,718 515,355 4,349,850 34,257,628 (15,125) 34,242,503 9,367,368 77 $ 5,267,368 $ 27,154,208 $ 21,886,840 City of Yuma, Arizona Budgetary Comparison Schedule Local Transportation Assistance Special Revenue Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Lottery Distribution Use of Money and Property Interest Total Revenues Budget Original Final $ $ - Amounts Available for Appropriation Charges to Appropriations (outflows): Capital Projects: Streets Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 281 Variance with Final Budget Positive (Negative) $ 281 - - 75,764 75,764 - - 63 75,827 76,108 63 75,827 76,108 - - 200 200 200 - $ 75,908 - $ 78 (200) (200) (200) $ 75,908 City of Yuma, Arizona Budgetary Comparison Schedule Public Safety Tax Special Revenue Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Public Safety Sales Tax Charges for Services Use of Money and Property Interest Total Revenues Budget Original Final $ 233,822 $ 233,822 Amounts Available for Appropriation Actual Amounts $ 327,448 Variance with Final Budget Positive (Negative) $ 93,626 3,459,800 - 3,459,800 - 3,525,292 9,232 65,492 3,459,800 3,693,622 3,459,800 3,693,622 6,933 3,541,457 3,868,905 6,933 72,425 175,283 65,528 65,528 65,528 65,528 65,374 65,374 154 154 3,156,522 3,222,050 3,156,522 3,222,050 2,929,674 2,995,048 226,848 227,002 Charges to Appropriations (outflows): Current: Public Safety Police Support Services Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 471,572 79 $ 471,572 $ 873,857 $ 402,285 City of Yuma, Arizona Budgetary Comparison Schedule Radio Communication Special Revenue Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Charges for Service Radio Equipment Fees Use of Money and Property Interest Miscellaneous Other Total Revenues Transfers In Budget Original Final $ 548,077 $ 548,077 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Environmental Health Radio Communications Capital Outlay Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 770,595 Variance with Final Budget Positive (Negative) $ 222,518 786,674 298,200 298,200 1,084,874 4,000 4,000 3,897 (103) 302,200 130,200 980,477 302,200 260,400 1,110,677 598 1,089,369 143,250 2,003,214 598 787,169 (117,150) 892,537 399,383 500,000 899,383 899,383 399,383 500,000 899,383 899,383 697,819 496,126 1,193,945 1,193,945 (298,436) 3,874 (294,562) (294,562) 81,094 80 $ 211,294 $ 809,269 $ 597,975 City of Yuma, Arizona Budgetary Comparison Schedule Recreation Complex Special Revenue Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Use of Money and Property Rents and Concessions Interest Miscellaneous Other Total Revenues Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Parks, Recreation and Culture Civic and Convention Center Baseball Complex Facilities Maintenance Capital Outlay Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Original Final $ 1,466,360 $ 1,466,360 Actual Amounts $ 1,608,111 Variance with Final Budget Positive (Negative) $ 141,751 444,800 4,000 444,800 4,000 507,849 8,969 63,049 4,969 4,020 452,820 1,500,000 3,419,180 4,020 452,820 1,500,000 3,419,180 5,716 522,534 1,500,000 3,630,645 1,696 69,714 211,465 1,187,849 559,495 1,747,344 1,747,344 1,187,849 559,495 1,747,344 1,747,344 1,193,792 509,167 2,412 51,887 1,757,258 1,757,258 (5,943) 50,328 (2,412) (51,887) (9,914) (9,914) $ 1,671,836 $ 1,671,836 $ 1,873,387 81 $ 201,551 City of Yuma, Arizona Budgetary Comparison Schedule Two Percent Tax Special Revenue Fund For the Year Ended June 30, 2011 Final 2,343,400 Actual Amounts $ 2,255,328 4,244,635 4,425,556 180,921 9,477 9,477 274,299 464,697 376,625 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Two PercentTax Use of Money and Property Interest Miscellaneous Other Total Revenues $ $ 4,244,635 - Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Parks, Recreation and Culture Administration Outside Agencies Art Center Facilities Maintenance Community Design and Development Capital Projects: General Government Parks, Recreation and Culture Streets Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Original 2,343,400 $ Variance with Final Budget Positive (Negative) $ (88,072) - 4,244,635 6,588,035 4,244,635 6,588,035 274,299 4,709,332 6,964,660 63,553 912,500 756,692 - 63,553 912,500 756,692 - 64,427 918,083 745,961 585 725 (874) (5,583) 10,731 (585) (725) 190,000 1,492,000 172,000 3,586,745 1,940,200 5,526,945 140,760 1,547,018 166,222 3,586,745 1,940,200 5,526,945 44,797 144,007 119,205 2,037,790 2,071,931 4,109,721 95,963 1,403,011 47,017 1,548,955 (131,731) 1,417,224 1,061,090 $ 2,854,939 1,061,090 82 $ $ 1,793,849 City of Yuma, Arizona Budgetary Comparison Schedule Yuma Mall Maintenance Special Revenue Fund For the Year Ended June 30, 2011 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Mall Assessments Property Tax - Delinquent Total Taxes Miscellaneous Other Total Revenues Transfers In Budget Original Final $ $ - Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Mall Maintenance Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 2,762 Variance with Final Budget Positive (Negative) $ - 110,000 110,000 110,000 110,000 170,807 48,118 218,925 60,807 48,118 108,925 1,500 111,500 120,863 232,363 1,500 111,500 120,863 232,363 5,003 223,928 120,863 347,553 3,503 112,428 115,190 232,363 232,363 232,363 232,363 232,363 232,363 223,272 223,272 223,272 9,091 9,091 9,091 - 83 $ - $ 124,281 $ 124,281 . 84 NONMAJOR ENTERPRISE FUNDS Enterprise funds are used to account for activities that are financed and operated in a manner similar to private businesses. The intent of the City Council is that the costs of providing the goods or services be recovered primarily through user charges. Enterprise funds are designed so that creditors, legislators and the general public can evaluate the performance of the municipal enterprise on the same basis as commercial enterprises in the same industry. Solid Waste To record the financial activities of the city-owned and operated residential garbage collection service. Desert Hills Golf Course To account for the financial activity of the operation of the Desert Hills Municipal Golf Course. Arroyo Dunes Golf Course To account for the financial activity of the operation of the Arroyo Dunes Municipal Golf Course. 85 City of Yuma, Arizona Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2011 Enterprise Funds Solid Waste Assets Current Assets: Cash and Investments Receivables, Net of Allowance for Uncollectibles: Accounts Receivable Intergovernmental Accrued Interest Inventory, at cost Prepaid Expenses Total Current Assets $ Noncurrent Assets: Capital Assets: Buildings Improvements Other than Buildings Equipment Gross Capital Assets Less Accumulated Depreciation Captial Assets Net of Depreciation Total Noncurrent Assets Total Assets 289,995 Desert Hills Golf Course $ 349,167 Arroyo Dunes Golf Course $ 179,557 Total Nonmajor Proprietary Funds $ 818,719 432,398 16 39 50 722,498 4,236 332 63 69,767 508 424,073 105 3,384 183,046 436,634 348 207 73,151 558 1,329,617 50,738 331,523 3,102,865 2,370,096 307,034 645,571 21,866 3,102,865 3,066,405 660,423 382,261 (181,382) 5,779,995 (3,713,953) 667,437 (589,823) 6,829,693 (4,485,158) 200,879 200,879 923,377 2,066,042 2,066,042 2,490,115 77,614 77,614 260,660 2,344,535 2,344,535 3,674,152 Liabilities Current Liabilities: Accounts Payable Accrued Payroll and Related Taxes Current Portion-Accrued Compensated Absences Unearned Revenue Total Current Liabilities Payable from Current Assets 87,639 40,265 23,892 - 11,573 42,957 24,272 58,717 685 3,171 804 - 99,897 86,393 48,968 58,717 151,796 137,519 4,660 293,975 Noncurrent Liabilities: Accrued Compensated Absences Total Long-Term Liabilities Total Liabilities 79,872 79,872 231,668 54,460 54,460 191,979 4,085 4,085 8,745 138,417 138,417 432,392 200,879 490,830 2,066,042 232,094 77,614 174,301 2,344,535 897,225 691,709 $ 2,298,136 251,915 $ 3,241,760 Net Assets Invested in capital assets Unrestricted Total Net Assets $ 86 $ City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Nonmajor Proprietary Funds For the Year Ended June 30, 2011 Total Nonmajor Proprietary Funds Enterprise Funds Operating Revenues: Charges for Services Green Fees Cart and Club Rental Pro Shop Sales Restaurant Sales Total Operating Revenues $ Operating Expenses: Operations and Maintenance Depreciation and Amortization Total Operating Expenses Solid Waste Desert Hills Golf Course Arroyo Dunes Golf Course 3,146,724 3,146,724 $ $ 2,629,913 44,338 2,674,251 1,883,817 188,404 2,072,221 472,473 Operating Income/(Loss) Non-Operating Revenues/(Expenses): Interest Miscellaneous Revenues Net Non-Operating Revenues 198,855 7,923 1,205 207,983 $ 217,975 28,469 246,444 (55,202) 319 5,187 5,506 Income/(Loss) before Contributions and Transfers 960,500 327,303 203,029 526,187 2,017,019 4,731,705 261,211 4,992,916 (38,461) 649 347 996 3,146,724 1,159,355 335,226 204,234 526,187 5,371,726 378,810 732 885 1,617 1,700 6,419 8,119 477,979 (54,206) (36,844) 386,929 (31,487) - - (31,487) Change in Net Assets 446,492 (54,206) (36,844) 355,442 Net Assets-beginning (restated) 245,217 Transfers Out Net Assets-ending $ 87 691,709 2,352,342 $ 2,298,136 288,759 $ 251,915 2,886,318 $ 3,241,760 City of Yuma, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Year Ended June 30, 2011 Solid Waste Cash Flow from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Other Operating Activity Revenue Net Cash Provided by Operating Activities $ Cash Flows from Noncapital Financing Activities: Cash Paid to Other Funds Net Cash Provided (Used for) Noncapital Financing Activities Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities 3,006,534 $ (754,268) (1,936,251) 5,187 321,202 2,015,800 $ (775,863) (1,092,438) 996 148,495 (31,487) - - (31,487) (31,487) - - (31,487) 280 280 Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, July 1 Cash and Cash Equivalents, June 30 Reconciliation of Operating Income/(Loss) to Net Cash Provided by Operating Activities: Operating (Loss) Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense (Increase)Decrease in Accounts Receivables (Increase)/Decrease in Inventories (Increase)Decrease in Prepaid Items Increase/(Decrease) in Accounts Payable Increase(decrease) in Accrued Wages and Taxes Payable Increase(Decrease) in Due from Other Gov't Units Increase(Decrease) in Due to Other Funds Increase(decrease) in Unearned Revenue Other Operating Activity Revenue Total Adjustments (63) (63) 88 930 930 1,147 1,147 148,432 (19,325) 419,102 - 200,735 198,882 399,617 $ 289,995 $ 349,167 $ 472,473 $ (55,202) $ $ 207,982 $ 5,230,316 (91,673) (1,621,804) (137,450) (3,166,139) 886 7,069 (20,255) 449,442 289,995 44,338 (140,190) (50) (2,536) 88,782 (146,802) 5,187 (151,271) Net Cash Provided by Operating Activities Total Nonmajor Proprietary Funds Enterprise Funds Desert Hills Arroyo Dunes Golf Course Golf Course 321,202 $ 188,404 (2,069) 11,856 1,691 (9,390) 11,361 82 766 996 203,697 $ 148,495 179,557 $ 818,719 (38,461) $ 378,810 28,469 (1,966) (2,916) (6,267) 886 18,206 $ (20,255) $ 261,211 (142,259) 9,890 1,641 (14,842) 93,876 82 (146,802) 766 7,069 70,632 449,442 City of Yuma, Arizona Budgetary Comparison Schedule Water Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Budget Original Resources (inflows): Inside City Outside City Commercial Raw Water Meters, Connections and Services Capital Contributions: System Development Capacity Rights Interest Miscellaneous Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Administration Treatment Water Transmission Customer Services Water Transfer Laboratory Capital Outlay: Capital Outlay Capital Projects Debt Service: Principal Retirement Interest and Fiscal Agent Fees Total Expenditures Transfers Out Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ $ Final Actual Amounts Variance with Final Budget Positive (Negative) 20,262,350 $ 2,707,840 250,000 328,704 20,262,350 $ 19,316,590 $ 2,707,840 2,281,147 250,000 178,014 328,704 282,665 75,000 1,000,000 111,000 30,000 24,764,894 24,764,894 75,000 1,000,000 111,000 30,000 24,764,894 24,764,894 110,112 984,917 66,801 116,337 23,336,583 23,336,583 35,112 (15,083) (44,199) 86,337 (1,428,311) (1,428,311) 2,477,381 7,551,267 1,420,409 1,293,806 40,263 284,105 2,477,381 7,551,267 1,420,409 1,293,806 40,263 284,105 2,430,693 5,722,065 1,444,058 1,250,257 27,477 217,754 46,688 1,829,202 (23,649) 43,549 12,786 66,351 12,183,500 12,183,500 20,744 1,855,959 (20,744) 10,327,541 5,891,378 5,867,575 37,009,684 61,972 37,071,656 5,891,378 5,867,575 37,009,684 61,972 37,071,656 5,961,390 5,837,012 24,767,409 62,083 24,829,492 (70,012) 30,563 12,242,275 (111) 12,242,164 (1,492,909) $ 10,813,853 (12,306,762) $ Reconciliation to Change in Net Assets: Capital Outlay Capital Projects Principal Retirement Capital Contributions for Developer Additions to System Amortization of Debt Issuance Costs Amortization of Bond Premium Depreciation and Amortization Change in Net Assets (12,306,762) (945,760) (426,693) (71,986) (46,039) 20,744 1,855,959 5,961,390 410,638 141,855 (48,507) (3,547,187) $ 3,301,983 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 89 City of Yuma, Arizona Budgetary Comparison Schedule Wastewater Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Budget Original Resources (inflows): Inside City Outside City Contractual/Industrial Services Meters, Connections and Services Capital Contributions: Capacity Rights Wastewater Interceptor Wastewater Trunk Line Charges Interest Miscellaneous $ Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Administration Treatment Pretreatment Collection Laboratory Capital Outlay: Capital Projects Debt Service: Principal Retirement Interest and Fiscal Agent Fees Total Expenditures Transfers Out Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ Final Actual Amounts Variance with Final Budget Positive (Negative) 11,412,900 $ 868,350 1,297,000 26,700 11,412,900 $ 12,155,578 $ 868,350 837,211 1,297,000 1,860,730 26,700 18,123 1,500,000 115,000 15,000 54,800 5,515,378 20,805,128 20,805,128 1,500,000 115,000 15,000 54,800 5,515,378 20,805,128 20,805,128 5,104,897 378,888 15,000 61,408 25,696 20,457,531 20,457,531 1,397,978 6,145,508 413,383 967,125 298,244 1,397,978 6,145,508 413,383 967,125 298,244 1,375,189 5,834,221 392,110 883,190 199,450 22,789 311,287 21,273 83,935 98,794 7,691,600 7,691,600 3,519,901 4,171,699 2,971,216 2,369,458 22,254,512 23,915 22,278,427 2,971,216 2,369,458 22,254,512 23,915 22,278,427 2,971,215 2,369,803 17,545,079 32,454 17,577,533 1 (345) 4,709,433 (8,539) 4,700,894 (1,473,299) $ (1,473,299) Reconciliation to Change in Net Assets: Capital Projects Principal Retirement Amortization of Debt Issuance Costs Capital Contributions for Subdivider Additions to System Depreciation and Amortization Change in Net Assets 2,879,998 $ 742,678 (31,139) 563,730 (8,577) 3,604,897 263,888 6,608 (5,489,682) (347,597) (347,597) 4,353,297 3,519,901 2,971,215 36,259 386,162 (2,687,909) $ 7,105,626 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 90 City of Yuma, Arizona Budgetary Comparison Schedule Solid Waste Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Actual Amounts Budget Original Resources (inflows): Charges for Service Collection Fees Interest Miscellaneous Other Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Environmental Health and Protection Residential Services Uncontained Waste Recycling Total Expenditures Transfers Out Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ Final Variance with Final Budget Positive (Negative) 3,037,000 - 3,037,000 - 3,146,724 319 109,724 319 5,000 3,042,000 3,042,000 5,000 3,042,000 3,042,000 5,187 3,152,230 3,152,230 187 110,230 110,230 2,389,528 323,251 66,670 2,779,449 26,249 2,805,698 2,389,528 323,251 66,670 2,779,449 26,249 2,805,698 2,232,000 345,648 52,265 2,629,913 31,487 2,661,400 157,528 (22,397) 14,405 149,536 (5,238) 144,298 236,302 490,830 236,302 $ Reconciliation to Change in Net Assets: Depreciation and Amortization $ 254,528 (44,338) $ Change in Net Assets 446,492 NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 91 City of Yuma, Arizona Budgetary Comparison Schedule Desert Hills Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Actual Amounts Budget Original Resources (inflows): Green Fees Cart and Club Rental Pro Shop Sales Restaurant Sales Interest Miscellaneous $ Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Maintenance Concession Restaurant Total Expenditures Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 962,598 352,727 239,935 613,647 2,168,907 2,168,907 Final $ 962,598 352,727 239,935 613,647 2,168,907 2,168,907 $ 960,500 327,303 203,029 526,187 649 347 2,018,015 2,018,015 Variance with Final Budget Positive (Negative) $ (2,098) (25,424) (36,906) (87,460) 649 347 (150,892) (150,892) 979,090 421,632 546,867 1,947,589 979,090 421,632 546,867 1,947,589 887,209 488,986 507,622 1,883,817 91,881 (67,354) 39,245 63,772 1,947,589 1,947,589 1,883,817 63,772 221,318 134,198 221,318 $ Reconciliation to Change in Net Assets: Depreciation and Amortization $ (87,120) (188,404) $ Change in Net Assets (54,206) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 92 City of Yuma, Arizona Budgetary Comparison Schedule Arroyo Dunes Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Actual Amounts Budget Original Final Resources (inflows): Green Fees Cart and Club Rental Pro Shop Sales Interest Miscellaneous $ Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Maintenance Concession Total Expenditures Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations 272,517 11,108 1,744 750 286,119 286,119 $ 212,096 39,402 251,498 251,498 $ 34,621 272,517 11,108 1,744 750 286,119 286,119 $ 212,096 39,402 251,498 251,498 $ 198,855 7,923 1,205 732 885 209,600 209,600 Variance with Final Budget Positive (Negative) $ 192,388 25,587 217,975 217,975 (8,375) $ 34,621 Reconciliation to Change in Net Assets: Depreciation and Amortization (73,662) (3,185) (539) (18) 885 (76,519) (76,519) 19,708 13,815 33,523 33,523 (42,996) (28,469) $ Change in Net Assets (36,844) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 93 94 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments of the City and to other governmental units, on a costreimbursement basis. Equipment Replacement To account for the associated costs of purchasing vehicles and equipment for rental to other departments. Equipment Maintenance maintenance operations. To record the financial activity of fleet Insurance Reserve To record the financial activity related to insurance and risk retention for liability and casualty issues. Employee Benefits Trust To record the financial activity of a self funded insurance trust fund that covers eligible employees and dependent health, life, and dental claims. Workers Compensation To record the financial activity of a selffunded worker’s compensation insurance trust fund. 95 City of Yuma, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2011 Assets Current Assets: Cash and Investments Accounts Receivable Intergovernmental Receivable Accrued Interest Inventory, at cost Prepaid Items Total Current Assets Noncurrent Assets: Capital Assets: Land Buildings Improvements Other than Buildings Equipment Less Accumulated Depreciation Total Noncurrent Assets Total Assets Liabilities Liabilities: Current Liabilities: Accounts Payable Accrued Payroll, Taxes and Benefits Payable Current Portion-Accrued Compensated Absences Estimated Claims and Judgements Due to Other Funds Total Current Liabilities Payable Noncurrent Liabilities: Accrued Compensated Absences Total Long-Term Liabilities Total Liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total Net Assets Equipment Equipment Replacement Maintenance $ 15,710,646 9,064 15,719,710 $ $ Employee Benefits Trust Workers Compensation $ 358,154 231 358,385 631,245 358,385 2,524 195,374 127 - 206,179 54,212 3,510 - - 57,722 8,154 29,104 396,483 482,323 2,434 60,112 261,430 127 998,021 270,000 1,268,021 31,538 1,058,133 666,483 2,020,055 8,154 67,146 67,146 549,469 495 495 261,925 127 1,268,021 67,641 67,641 2,087,696 8,393,961 15,711,556 $ 24,105,517 479,906 225,504 705,410 369,320 369,320 358,258 $ 358,258 219,610 19,251 189,631 205,484 (154,070) 479,906 1,254,879 8,154 - $ 96 $ $ 1,163,874 5,481 1,169,355 Totals 39,951 41,664 411 549,219 631,245 27,089,790 (18,695,829) 8,393,961 24,113,671 182,656 12,912 52 211 579,142 774,973 Insurance Reserve $ 1,169,355 $ (98,666) (98,666) $ 17,455,281 60,057 52 9,917 579,142 549,219 18,653,668 219,610 19,251 189,631 27,295,274 (18,849,899) 8,873,867 27,527,535 8,873,867 16,565,972 25,439,839 City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Year Ended June 30, 2011 Equipment Replacement Operating Revenues: Charges For Services Contributions City Property Damage Restitution Miscellaneous Total Operating Revenues $ 9,720 2,190,279 2,199,999 (2,191,916) Non-Operating Revenue/(Expenses): Interest Gain on the Sale of Assets Total Non-Operating Revenues 64,009 68,588 132,597 Income/(Loss) before Operating Transfers (2,059,319) Operating Transfers: Transfers Out Net Operating Transfers Change in Net Assets Net Assets, Beginning $ Insurance Reserve $ 3,253,989 $ 1,909,821 8,083 8,083 Operating Expenses: Claims Incurred Premiums to Insurance Carriers Administration Depreciation Total Operating Expenses Operating Income/(Loss) Net Assets, Ending - Equipment Maintenance Employee Benefits Trust $ - Workers Compensation $ - Totals $ 5,163,810 7,281 3,261,270 10,239 102,974 2,023,034 2,924 2,924 788,192 24,646 812,838 788,192 10,239 145,908 6,108,149 3,430,077 23,156 3,453,233 (191,963) 425,537 519,705 1,653,401 2,598,643 (575,609) 58,500 8,609 67,109 (64,185) 564,150 132,959 35,458 732,567 80,271 989,687 711,164 5,137,265 2,213,435 9,051,551 (2,943,402) 1,428 1,428 1,383 1,383 (190,535) - (900) - (900) 1,486 1,486 144 144 68,450 68,588 137,038 (574,226) (62,699) 80,415 (2,806,364) - - - (900) - - (900) (2,059,319) (191,435) (574,226) (62,699) 80,415 (2,807,264) 26,164,836 896,845 943,546 420,957 (179,081) 28,247,103 24,105,517 $ 705,410 97 $ 369,320 $ 358,258 $ (98,666) $ 25,439,839 City of Yuma, Arizona Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2011 Equipment Replacement Cash Flows from Operating Activities: Cash Received from Customers Cash Paid to Employees Cash Paid to Suppliers Cash Paid For Operating Expenses Net Cash Flows Provided by/(Used for) Operating Activities $ Cash Flows from Noncapital Financing Activities: Cash Paid to Other Funds Net Cash Flows Provided by/(Used for) Noncapital Financing Activities Equipment Maintenance Employee Benefits Trust Insurance Reserve Workers Compensation $ 3,281,674 $ (1,026,111) (2,393,531) (207,954) (1,635) 2,020,724 $ 2,924 $ (67,145) (3,380,754) - (1,635) (1,360,030) (345,922) Totals 810,634 $ (751,893) (64,221) 58,741 6,115,956 (1,026,111) (2,460,676) (4,342,236) (1,713,067) - (900) - - - (900) - (900) - - - (900) Cash Flows from Capital and Related Financing Activities: Proceeds from Sale of Capital Assets Payments for Capital Acquisitions Net Cash Flows Used for Capital and Related Financing Activities 68,588 (763,550) - - - - 68,588 (763,550) (694,962) - - - - (694,962) Cash Flows from Investing Activities Receipt of Interest Net Cash Flows Provided by Investing Activities Net Increase/(Decrease) in Cash and Cash Equivalents 79,000 79,000 (617,597) 1,834 1,834 (344,988) 3,676 3,676 (1,356,354) 2,015 2,015 (62,206) 225 225 58,966 1,396,305 16,328,243 527,644 $ 15,710,646 $ 182,656 $ $ (2,191,916) $ (191,963) $ Cash and Cash Equivalents, July 1, 2010 Cash and Cash Equivalents, June 30, 2011 1,104,908 19,777,460 1,163,874 $ 17,455,281 (575,609) $ (64,185) $ 80,271 (2,943,402) 39,951 420,360 86,750 86,750 (2,322,179) $ 358,154 $ 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 Expense (Increase)/Decrease in Accounts Receivable (Increase)/Decrease in Inventory (Increase)/Decrease in Prepaid Items Increase/(Decrease) in Accounts Payable Increase/(Decrease) in Payroll Liabilities Increase/(Decrease) in Claims Incurred but Not Reported Total Adjustments Net Cash Provided by/(Used for) Operating Activities $ $ 2,190,281 - 23,156 (78,713) (80,057) 225 (29,001) 10,431 (2,309) (546,480) (254,125) 6,439 (36) - (2,430) - 2,213,437 (83,452) (80,057) (546,255) (283,162) 16,870 2,190,281 (153,959) 12,054 (784,421) (36) (19,100) (21,530) (7,046) 1,230,335 (1,635) $ 98 (345,922) $ (1,360,030) $ (64,221) $ 58,741 $ (1,713,067) City of Yuma, Arizona Budgetary Comparison Schedule Equipment Replacement Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Actual Amounts Budget Original Resources (inflows): Interest Miscellaneous Total Revenues Amounts Available for Appropriation Charges to Appropriations (outflows): Current Administration Capital Outlay Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations $ 200,000 200,000 Final $ 200,000 9,718 2,750,000 2,759,718 200,000 200,000 200,000 9,718 2,750,000 2,759,718 2,759,718 2,759,718 $ (2,559,718) $ (2,559,718) Reconciliation to Change in Net Assets: Capital Outlay Gain on Sale of Assets Depreciation and Amortization Change in Net Assets $ 64,009 8,083 72,092 72,092 Variance with Final Budget Positive (Negative) $ 9,720 748,330 758,050 758,050 (685,958) $ (135,991) 8,083 (127,908) (127,908) (2) 2,001,670 2,001,668 2,001,668 1,873,760 748,330 68,588 (2,190,279) $ (2,059,319) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 99 City of Yuma, Arizona Budgetary Comparison Schedule Equipment Maintenance Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Actual Amounts Budget Original Resources (inflows): Charges for Services Miscellaneous Interest Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current Administration Total Expenditures Transfers Out Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 3,076,830 3,076,830 Final $ 3,076,830 3,076,830 3,262,698 177,159 7,281 1,428 185,868 185,868 3,351,835 3,351,835 900 3,351,835 3,351,835 900 3,352,735 3,430,077 3,430,077 900 3,430,977 (78,242) (78,242) (78,242) 3,352,735 $ (275,905) $ Reconciliation to Change in Net Assets: Depreciation and Amortization Change in Net Assets 3,076,830 3,076,830 $ 3,253,989 7,281 1,428 3,262,698 Variance with Final Budget Positive (Negative) $ (168,279) $ (275,905) $ 107,626 (23,156) (191,435) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 100 City of Yuma, Arizona Budgetary Comparison Schedule Insurance Reserve Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2011 Actual Amounts Budget Original Resources (inflows): Charges for Services Property Damage Restitution Miscellaneous Interest Total Revenues $ $ 1,942,320 Amounts Available for Appropriation Charges to Appropriations (outflows): Current Premiums to Insurance Carriers Claims Incurred Administration Total Expenditures Total Charges to Appropriations Excess of Resources Over Charges to Appropriations 1,909,820 2,500 25,000 5,000 1,942,320 Final 585,116 545,000 1,003,005 2,133,121 2,133,121 $ (190,801) $ Reconciliation to Change in Net Assets: Change in Net Assets 1,909,820 2,500 25,000 5,000 1,942,320 1,942,320 $ 585,116 545,000 1,003,005 2,133,121 2,133,121 1,909,821 10,239 102,974 1,383 2,024,417 2,024,417 Variance with Final Budget Positive (Negative) $ 519,705 425,537 1,653,401 2,598,643 2,598,643 (190,801) $ $ (574,226) $ 1 7,739 77,974 (3,617) 82,097 82,097 65,411 119,463 (650,396) (465,522) (465,522) (383,425) (574,226) NOTE: This exhibit is prepared on the modified accrual basis to correspond with the City's budget practices. It is not intended to present the operations in accordance with generally accepted accounting principles. 101 102 STATISTICAL SECTION 103 104 STATISTICAL SECTION This part of the City of Yuma's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial condition. Contents Page Financial Trends 106 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 114 These schedules contain information to help the reader assess the City's most significant local revenue source - sales tax. Debt Capacity 116 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and it's ability to issue additional debt in the future. Demographic and Economic Information 122 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 124 These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the respective year. 105 City of Yuma, Arizona Net Assets by Component Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2006 2007 106 2002 2003 2004 2005 2008 2009 2010 2011 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activites net assets $ 69,300 1,484 44,208 $ 114,993 $ 81,689 50,234 $ 131,922 $ 95,005 55,748 $ 150,752 $ 111,268 330 57,707 $ 169,305 $ 130,176 24,820 42,605 $ 197,601 $ 160,214 12,991 43,638 $ 216,844 $ 169,403 17,952 45,354 $ 232,709 $ 129,228 70,389 38,439 $ 238,056 $ 192,145 14,762 40,261 $ 247,168 $ 196,837 15,773 44,357 $ 256,967 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activites net assets $ 80,224 23,251 $ 103,475 $ 85,380 22,511 $ 107,891 $ 86,266 31,537 $ 117,803 $ 105,944 27,122 $ 133,067 $ 119,734 26,569 $ 146,303 $ 154,054 7,587 $ 161,641 $ 151,032 151 24,079 $ 175,262 $ 158,367 1,952 27,344 $ 187,663 $ 160,883 3,754 29,027 $ 193,664 $ 166,782 5,556 31,699 $ 204,037 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 149,524 1,484 67,460 $ 218,468 $ 167,069 72,744 $ 239,813 $ 181,271 87,284 $ 268,555 $ 217,212 330 84,829 $ 302,372 $ 249,910 24,820 69,174 $ 343,904 $ 314,268 12,991 51,225 $ 378,485 $ 320,435 18,103 69,433 $ 407,971 $ 287,595 72,341 65,783 $ 425,719 $ 353,028 18,516 69,288 $ 440,832 $ 363,619 21,329 76,056 $ 461,004 City of Yuma, Arizona Changes in Net Assets Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2002 107 Expenses Governmental activities: General government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Interest on Long-Term Debt Total governmental activites expenses Business-type activities: Water Wastewater Solid Waste Golf Courses Total business-type activites expenses Total primary government expenses Program Revenues Governmental activities: Charges for Services Building Inspection Fees Police Services Other Charges Developer Charges Operating Grants and Contributions Capital Grants and Contributions Total governmental activities program revenues Business-type activities: Charges for Services Metered Water Sales Wastewater Charges Solid Waste Charges Green Fees and Concessions Other Charges Operating Grants and Contributions Capital Grants and Contributions Total business-type activities program revenues Total primary government program revenues $ 3,478 23,567 9,098 8,526 3,251 5,246 3,227 56,393 2003 $ 9,836 6,484 2,490 18,810 6,950 25,455 7,944 8,862 2,936 6,369 2,878 61,393 2004 $ 10,326 7,024 2,524 19,874 7,059 26,988 8,654 9,475 2,994 5,551 2,972 63,692 2005 $ 10,884 7,341 2,493 20,719 7,117 30,707 9,061 9,841 3,608 5,438 3,042 68,815 2006 $ 9,124 33,057 12,326 12,173 3,410 6,529 2,899 79,519 11,456 8,750 2,514 22,720 13,010 10,403 2,641 26,053 2007 $ 10,919 36,067 13,384 15,400 2,098 6,791 2,948 87,606 2008 $ 14,562 11,538 2,676 28,777 11,875 38,511 18,943 14,353 4,604 5,807 5,331 99,424 2009 $ 18,389 13,270 2,889 34,548 11,559 41,080 15,966 16,282 4,969 5,486 6,592 101,934 2010 $ 20,754 13,859 2,819 37,432 10,563 39,224 13,969 13,863 4,905 4,981 6,291 93,796 2011 $ 9,684 40,232 14,536 13,804 1,538 5,007 5,803 90,604 20,277 13,673 2,496 36,446 20,555 13,882 2,902 2,377 39,716 $ 130,320 $ 75,204 $ 81,267 $ 84,411 $ 91,536 $ 105,572 $ 116,383 $ 133,971 $ 139,366 $ 130,242 $ 356 460 4,735 545 2,795 1,650 10,539 $ 612 644 5,709 129 3,684 1,398 12,175 $ 926 488 7,374 365 3,290 3,703 16,145 $ 1,023 605 8,768 3,995 3,568 1,747 19,705 $ $ 985 805 8,407 4,517 2,661 5,341 22,718 $ 710 764 8,916 6,657 2,294 5,000 24,342 $ 390 865 7,607 4,911 1,807 4,783 20,363 $ 384 821 7,491 2,674 3,659 5,944 20,973 22,463 13,372 2,027 1,098 9,924 48,884 69,247 21,651 21,598 13,699 14,854 3,147 1,964 1,890 1,041 961 3,969 7,391 42,324 49,841 $ 63,297 $ 70,163 Continued on next page $ 8,821 5,583 2,123 681 6,260 23,468 34,008 $ 9,458 6,578 1,937 890 5,439 24,302 36,477 $ 10,481 7,613 1,992 1,023 8,923 30,032 46,177 $ 12,297 8,000 1,994 1,221 11,657 35,169 54,874 $ 1,019 698 8,968 3,520 2,840 5,679 22,723 14,797 9,081 2,191 1,393 11,025 38,487 61,210 $ 17,522 10,387 2,189 1,390 11,249 42,736 65,454 $ 21,027 13,126 2,140 1,181 8,874 46,348 70,690 $ $ 333 471 6,936 4,369 4,968 3,245 20,322 City of Yuma, Arizona Changes in Net Assets Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2002 Net (expense)/revenue Governmental activities Business-type activities Total primary government net expense 108 General Revenues and Other Changes in Net Assets Governmental activities: Property taxes Sales taxes Franchise taxes Shared revenues Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain from sale of fixed assets Transfers Total governmental activities Business-type activities: Investment earnings Special Item - Litigation Transfers Total business-type activities Total primary government Change in Net Assets Governmental activities Business-type activities Total primary government $ (45,854) $ 4,658 $ (41,196) $ $ $ $ $ 5,338 25,039 1,836 23,258 - $ 2003 2004 (49,218) $ 4,428 (44,790) $ (47,547) $ (49,110) $ (56,795) $ 9,313 12,449 12,434 (38,234) $ (36,661) $ (44,361) $ 5,678 25,484 1,719 24,225 7,577 $ 5,953 28,529 1,936 24,021 5,198 2005 $ 6,076 32,795 2,105 25,462 1,673 2006 $ 6,832 36,557 3,116 28,226 7,826 2007 $ 2008 (64,889) $ 13,959 (50,929) $ 7,430 39,616 2,678 30,558 115 $ 2009 (75,082) $ 11,800 (63,281) $ 8,250 39,478 2,893 32,788 2,600 $ 2010 (81,571) $ 11,452 (70,119) $ 8,856 36,857 3,013 31,330 3,895 $ 2011 (72,823) $ 5,878 (66,945) $ 9,498 34,177 3,010 28,239 5,776 $ (70,282) 10,125 (60,157) 9,986 34,644 3,002 25,379 5,929 2,227 382 58,079 877 587 66,148 292 920 (473) 66,377 1,370 307 (2,124) 67,663 2,190 348 (4) 85,091 4,097 (363) 84,132 4,842 (96) 90,755 2,872 95 86,919 1,139 95 81,934 1,001 259 126 80,326 999 (1,220) (382) (603) 57,476 $ 575 (587) (12) 66,136 $ 125 473 599 66,976 691 2,124 2,815 70,478 798 4 802 85,894 1,016 363 1,379 85,511 1,916 96 2,012 92,767 1,045 (95) 950 87,869 $ 217 (95) 122 82,056 $ 130 (126) 4 80,330 12,225 4,055 16,280 16,930 4,416 21,346 18,830 9,912 28,742 5,347 12,402 17,749 9,112 6,000 15,112 $ $ $ $ $ $ $ 18,553 15,264 33,816 $ $ $ 28,296 13,236 41,532 $ $ $ 19,243 15,338 34,582 $ $ $ 15,865 13,620 29,486 $ $ $ $ $ $ 10,044 10,128 $ 20,172 Concluded City of Yuma, Arizona Fund Balances of Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2003 2002 General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund 109 All other Governmental funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Debt service funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds $ 539 13,012 - $ 489 15,087 - 2004 $ 101 17,436 - Fiscal Year 2006 2007 2005 $ 296 19,704 - $ 614 21,125 - $ 309 19,893 - 2008 $ 277 18,608 - 2009 $ 262 15,493 - 2010 $ 156 18,796 - 2011 $ 103 2,383 88 19,060 $ 13,551 $ 15,576 $ 17,537 $ 20,000 $ 21,739 $ 20,202 $ 18,885 $ 15,756 $ 18,952 $ 21,634 $ 1,567 $ $ $ $ $ $ $ $ $ 85 63 339 535 513 543 552 553 - 9,424 3,355 - 10,495 5,967 - 13,407 6,920 - 17,036 1,104 - 19,908 5,976 - 12,892 926 - 8,791 67,732 - 6,876 47,349 - 7,848 31,267 - 141 2,388 34,441 2,037 - $ 14,346 $ 16,548 $ 20,391 $ 18,479 $ 26,418 $ 14,331 $ 77,066 $ 54,777 $ 39,668 $ 39,007 Notes: For FY 2011 GASB Statement No 54 was implemented. See Note I-E, Sec 9 of the Notes to Basic Financial Statements. City of Yuma, Arizona Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2003 2004 2005 2006 2007 2002 2008 2009 2010 2011 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special Assessments Use of money and property Contributions and donations Miscellaneous Total revenues $ 32,132 1,439 27,699 2,876 671 2,494 26 259 67,594 $ 32,812 2,063 29,298 2,983 801 1,429 28 336 69,750 $ 36,411 3,016 31,041 3,905 726 1,154 33 480 76,766 $ 41,078 3,416 30,729 7,937 806 1,971 84 1,152 87,173 $ 46,474 3,836 36,044 7,737 863 649 2,809 80 548 99,041 $ 49,686 2,845 37,915 8,804 1,039 679 4,374 78 624 106,045 $ 50,503 2,068 39,237 11,599 1,143 914 5,358 65 633 111,521 $ 48,570 1,363 37,065 8,913 1,238 949 3,309 97 1,646 103,148 $ 46,561 1,413 36,984 7,007 1,437 817 1,752 85 763 96,819 $ 47,606 1,292 32,510 7,055 1,484 1,039 1,665 77 2,442 95,170 $ $ $ $ 5,033 29,296 4,899 8,534 3,014 5,344 21,151 $ 7,185 31,863 5,626 9,727 3,365 6,422 22,688 $ 7,641 35,014 7,155 11,022 3,551 6,698 41,450 $ $ $ 7,740 35,233 8,195 10,619 4,480 4,870 25,249 $ 6,969 36,285 8,186 10,171 1,556 4,899 13,659 3,447 3,032 83,750 4,209 2,890 93,975 3,837 2,939 119,306 6,315 6,764 109,465 7,680 5,858 95,263 3,423 $ 5,066 Expenditures 110 General government Public Safety Streets Parks, Recreation and Culture Environmental Health and Protection Community Design and Development Capital Outlay Debt Service Principal Interest and fiscal agent fees Total expenditures Excess of revenues over (under) expenditures 4,001 22,660 4,393 7,428 3,175 5,331 37,311 4,346 3,227 91,872 $ (24,277) $ 4,732 24,364 4,884 7,765 3,000 6,338 19,198 5,409 25,752 4,767 7,828 3,062 5,429 19,656 5,248 2,872 78,402 3,825 2,962 78,689 (8,651) $ (1,922) $ 9,723 37,874 8,913 11,547 4,757 5,726 51,149 8,312 5,885 143,885 9,575 37,908 9,716 11,857 4,781 5,370 35,734 7,075 6,646 128,662 $ (13,261) $ (32,364) $ (25,514) $ (12,646) $ (93) Other financing sources (uses) Proceeds from long-term debt Sale of real property Payment to Refunded Bond Escrow Transfers in Transfers out Total other financing sources (uses) $ Net change in fund balances $ (22,993) $ Debt service as a percentage of noncapital expenditures 909 $ 31,490 $ 7,280 $ $ 3,875 $ $ 93,686 $ $ 30,017 $ 455 (19,199) 920 307 742 (29,378) 21,423 21,117 21,609 20,219 25,016 38,410 29,685 16,213 14,564 14,675 (21,501) (20,530) (22,082) (23,398) (25,021) (38,773) (29,589) (16,118) (14,468) (14,548) 1,285 12,878 7,727 (2,872) 4,612 (363) 93,782 95 735 127 13.9% 4,226 13.7% $ 5,805 11.5% $ 551 10.4% $ 9,678 10.0% $ 13,624 8.7% $ 61,418 15.3% $ 25,419 14.8% $ (11,912) $ 15.5% 34 16.6% City of Yuma, Arizona Governmental Funds Tax Revenues by Source Last Ten Fiscal Years City Road Sales Tax Public Safety Two Percent Sales Tax Tax Utility Franchise Public Enterprise In-Lieu Mall District Levy Total 111 Fiscal Year General Sales Tax Property Tax 2002 $ 5,193,075 $ 13,116,950 $ 6,448,954 $ 2,578,704 $ 2,652,152 $ 1,835,810 $ 242,000 $ 64,172 $32,131,817 2003 5,525,546 13,237,042 6,617,396 2,646,059 2,741,989 1,719,272 242,000 83,184 32,812,488 2004 5,857,825 14,849,984 7,423,730 2,968,482 3,044,645 1,935,952 242,000 88,411 36,411,029 2005 6,084,442 17,165,647 8,581,364 3,431,379 3,374,350 2,105,116 242,000 93,863 41,078,161 2006 6,699,038 19,087,873 9,542,314 3,815,628 3,866,902 3,116,225 244,610 101,821 46,474,411 2007 7,278,233 20,672,520 10,334,503 4,132,396 4,232,008 2,678,454 244,610 113,345 49,686,069 2008 8,026,861 20,479,641 10,238,080 4,093,839 4,424,358 2,893,077 242,000 105,394 50,503,250 2009 8,545,562 18,961,780 9,479,279 3,790,422 4,383,419 3,013,453 242,000 154,174 48,570,089 2010 9,256,633 17,461,635 8,729,333 3,490,546 4,253,079 3,009,794 242,000 117,798 46,560,818 2011 9,740,940 17,635,454 8,816,228 3,525,292 4,425,556 3,001,939 242,000 218,925 47,606,334 City of Yuma, Arizona Governmental Funds Intergovernmental Shared Revenues Last Ten Fiscal Years Local Transportion Assistance Grants and Others* Total $ 440,004 $ 4,440,943 $ 27,698,796 112 Fiscal Year Sales Tax Revenue Sharing 2002 $ 5,973,339 $ 8,084,914 $ 2,345,195 2003 6,062,278 8,250,011 2,746,086 6,732,659 434,212 5,072,923 29,298,169 2004 6,535,654 7,002,250 2,852,832 7,198,891 431,754 7,019,763 31,041,144 2005 7,196,762 7,141,392 3,067,961 7,627,177 428,520 5,230,199 30,692,011 2006 8,292,930 8,133,573 3,391,236 7,980,673 427,528 7,818,092 36,044,032 2007 8,437,831 10,079,129 3,476,885 8,137,895 425,850 7,357,643 37,915,233 2008 8,183,395 12,518,215 3,518,863 8,144,889 423,058 6,448,868 39,237,288 2009 7,105,468 13,355,612 3,445,491 7,029,312 394,161 5,734,617 37,064,661 2010 6,553,759 11,530,342 3,302,490 6,626,027 226,308 8,744,867 36,983,793 2011 6,856,996 8,692,400 3,250,436 6,503,532 75,764 7,131,364 32,510,492 Auto In-Lieu Highway Users $ 6,414,401 *See 'Intergovernmental Revenues - Grants and Others' for detail information. City of Yuma, Arizona Intergovernmental Revenues - Grants and Other Last Ten Fiscal Years State of Arizona Federal Fiscal Year Justice Interior 2002 $ 1,010,764 $ 405,198 2003 1,309,351 2004 Housing/Urban Development Other HUD (CDBG) $ Other 113 640,280 $ 229,712 $ 507,488 1,398,560 991,044 169,579 3,462,972 575,124 1,349,178 2005 1,233,650 465,209 2006 925,898 2007 Parks $ Commerce 753,502 $ 264,684 413,527 96,498 441,101 405,814 896,311 87,359 - 594,924 80,301 2,485,908 79,123 - 1,404,369 1,044,705 251,898 3,264,509 120,555 524,591 417,782 1,334,775 - 4,090,532 2008 1,001,408 621,480 899,272 - 2009 583,702 1,469,327 1,121,334 2010 252,169 1,446,751 2011 271,296 741,740 Transportation $ 240,890 31,059 Other $ 366,161 Local Government $ Total 22,264 $ 4,440,943 233,831 19,432 5,072,923 151,489 60,457 7,019,763 - 291,084 13,000 376,323 388,547 28,288 7,818,092 432,498 130,213 233,689 59,422 134,141 7,357,643 1,335,165 505,838 1,844,645 214,649 26,411 - 6,448,868 - 2,176,628 - 297,024 5,393 81,210 - 5,734,617 1,167,310 - 5,336,400 1,059,135 255,855 4,165,343 5,607 - 1,840 - - 5,230,199 - 533,859 931 8,744,867 - 637,996 - 7,131,364 City of Yuma, Arizona Taxable Sales by Category Last Ten Fiscal Years (amounts expressed in thousands) 2003 2002 Mining Construction $ - $ 2004 3 $ - Fiscal Years 2006 2007 2005 $ 1 $ 3 $ 2008 25 $ 155 2009 $ 2010 6 $ 2011 82 $ 6 123,550 132,387 166,117 228,801 235,643 254,740 249,315 207,592 118,996 121,132 26,315 23,128 28,969 53,176 60,054 57,632 59,931 48,964 44,764 50,676 142,496 126,623 121,936 145,454 173,224 186,420 207,693 206,089 207,112 197,764 26,615 27,587 23,625 29,635 35,498 34,732 22,480 33,785 35,334 42,580 730,255 760,867 823,785 925,936 1,024,886 1,088,053 1,089,001 1,001,579 962,699 973,426 Restaurants and Bars 99,965 103,690 110,633 123,683 143,594 157,866 162,560 162,404 157,024 160,742 Finance, Insurance and Real Estate 42,494 42,376 69,235 97,875 117,161 143,725 132,593 115,857 116,046 123,876 Hotels and Other Lodging 25,328 26,789 30,785 34,930 37,333 39,360 33,642 36,093 29,502 29,507 Services 78,342 79,392 66,721 44,921 48,639 58,050 52,012 50,858 43,356 45,208 1,216 717 43,029 31,963 32,542 46,423 38,503 32,743 31,055 18,434 $ 1,296,576 $ 1,323,559 $ 1,484,835 $ 1,716,376 $ 1,908,577 $ 2,067,025 $ 2,047,885 $ 1,895,969 $ 1,745,971 $ 1,763,351 Manufacturing Transportation, Communications, and Utilities Wholesale Trade Retail Trade 114 Arts, Entertainment, Government and All Others Not Specified City direct sales tax rate 1.70% 1.70% 1.70% 1.70% 1.70% 1.70% 1.70% Source: Arizona Department of Revenue Note: During fiscal 2004, the Department of Revenue implemented a new collection system with a revised reporting scheme. Accordingly, certain classifications have been combined for comparison purposes. 1.70% 1.70% 1.70% City of Yuma, Arizona Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years Fiscal Year City Sales Tax Rate City Hospitality Sales Tax Rate Yuma County Arizona State 115 2002 1.70% 2.00% 1.50% 5.60% 2003 1.70% 2.00% 1.50% 5.60% 2004 1.70% 2.00% 1.50% 5.60% 2005 1.70% 2.00% 1.60% 5.60% 2006 1.70% 2.00% 1.60% 5.60% 2007 1.70% 2.00% 1.10% 5.60% 2008 1.70% 2.00% 1.10% 5.60% 2009 1.70% 2.00% 1.10% 5.60% 2010 1.70% 2.00% 1.10% 6.60% 2011 1.70% 2.00% 1.10% 6.60% Source: Arizona Department of Revenue City of Yuma, Arizona Ratio of Outstanding Debt by Type Last Nine Fiscal Years Business-Type Activities Governmental Activities Fiscal Year General Obligation Bonds Municipal Property Corporation Bonds 2002 $ - $62,315,000 2003 - 66,240,000 2004 - 63,440,000 2005 - 2006 Special Assessment Bonds Long-term Contracts Payable $ - $ 573,334 - Municipal Property Corporation Bonds General Obligation Bonds Long-term Contracts Payable Percentage Total Primary of Personal Government Income* Per Capita* $ 75,098,334 2.26% $ 116 - $12,210,000 3,320,000 - 11,385,000 10,408,191 91,353,191 2.80% 535 7,280,000 2,515,000 - 10,505,000 33,790,746 117,530,746 3.30% 667 60,420,000 7,280,000 1,723,000 - 9,575,000 61,072,113 140,070,113 3.67% 773 - 57,765,000 10,475,000 924,000 - 8,585,000 74,110,111 151,859,111 3.73% 810 2007 - 55,035,000 9,765,000 117,000 - 7,535,000 84,154,117 156,606,117 3.63% 822 2008 - 144,100,000 8,820,000 - 127,925,000 6,420,000 80,379,511 367,644,511 7.89% 1,892 2009 - 136,850,000 7,840,000 - 123,090,000 5,250,000 76,473,462 349,503,462 7.22% 1,808 2010 - 130,955,000 6,815,000 - 120,130,000 4,040,000 72,431,684 334,371,684 6.69% 1,698 125,665,000 5,745,000 117,025,000 2,765,000 68,249,441 319,449,441 NA 2011 $ $ - Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. *See the Schedule of Demographic and Economic Statistics on page 122 for personal income and population data. 450 NA City of Yuma, Arizona Ratio of General Bonded Debt to Assessed Value and General Bonded Debt Per Capita Last Ten Fiscal Years Fiscal Year Population Assessed Value General Bonded Debt Ratio of General Bonded Debt to Assessed Value General Bonded Debt per Capita 117 2002 81,380 278,555,470 - - - 2003 80,300 305,708,909 - - - 2004 83,330 322,623,524 - - - 2005 86,070 329,526,546 - - - 2006 88,775 367,376,807 - - - 2007 92,160 468,531,273 - - - 2008 93,212 572,280,942 - - - 2009 93,719 699,754,765 - - - 2010 94,361 747,149,498 - - - 2011 93,064 * 733,033,525 Source: Yuma County Assessor Arizona Department of Economic Security Arizona Department of Commerce *2011 Population from 2010 Census City of Yuma, Arizona Computation of Direct and Overlapping Debt June 30, 2011 Debt Jurisdiction City of Yuma Outstanding $ Yuma County - Allocable to City of Yuma Percent Amount 100.00% $ - 118 7,885,000 48.39% 3,815,414 Yuma County Library District 47,875,000 48.39% 23,165,875 Yuma County Community College District 71,005,000 48.39% 34,358,078 Yuma Union High School District No. 70 38,175,000 54.04% 20,629,770 Yuma School District No. 1 8,585,000 56.13% 4,819,149 Yuma School District No. 13 13,725,000 64.49% 8,851,290 Total Overlapping Debt Source: Yuma County Finance Department Arizona Western College (Computation reflects 2010 outstanding debt as 2011 debt amounts were not available) Note: School district valuation applicable percentage estimated $ 95,639,576 City of Yuma, Arizona Legal Debt Margin Information June 30, 2011 (amounts expressed in thousands) 2002 Debt Limit Water, Sewer, Lights, Parks (20%) $ 56,049 All Others (6%) 16,815 2003 2004 2005 2006 Fiscal Year 2007 2008 2009 2010 2011 $ 61,142 18,343 $ 64,525 19,357 $ 65,905 19,772 $ 73,475 22,043 $ 572,281 114,456 $ 114,456 34,337 $ 139,951 41,985 $ 149,430 44,829 $ 146,607 43,982 12,210 - 11,385 - 10,505 - 9,575 - 8,585 - 7,535 - 6,420 - 5,250 - 4,040 - 2,765 - Legal debt margin Water, Sewer, Lights, Parks (20%) $ 44,664 All Others (6%) 16,815 $ 50,637 18,343 $ 54,950 19,357 $ 57,320 19,772 $ 67,890 22,043 $ 86,171 28,112 $ 108,036 34,337 $ 134,701 41,985 $ 145,390 44,829 $ 143,842 43,982 Total net debt applicable to limit Water, Sewer, Lights, Parks (20%) All Others (6%) 119 Total net debt applicable to the limit as a percentage of debt limit Water, Sewer, Lights, Parks (20%) All Others (6%) 21.78% 0.00% 18.62% 0.00% 16.28% 0.00% 14.53% 0.00% 11.68% 0.00% 1.32% 0.00% 5.61% 0.00% 3.75% 0.00% 2.70% 0.00% 1.89% 0.00% Legal Debt Margin Calculation for Fiscal Year 2011 General Obligation Bonds 2010 Tax Year Secondary Assessed Valuation Outstanding General Obligation Debt: Project 1997 Total General Obligation Debt $ 733,034 Water, Sewer, Lights, Parks (20%) All Others (6%) $ 146,607 $ - 2,765 2,765 $ 143,842 $ (1) Under the Arizona Constitution, cities may issue General Obligation Bonds for purposes of water, sewer, artificial light and parks, open space preserves, playgrounds and recreational facilities up to an amount not exceeding 20% of secondary assessed valuation. (2) Under the Arizona Constitution, cities may issue General Obligation Bonds for all purposes other than those listed in (1) above up to an amount not to exceed 6% of secondary assessed valuation. 43,982 43,982 City of Yuma, Arizona Schedule of Municipal Property Corporation Debt Service Requirements to Maturity and Coverage Series 2007, 2003 Refunding 1995, and 2010 Refunding 2001 Covenants 2003 Ref 2003 Ref 2010B Ref 2007 2007 1995A 1995B 2001B Series B Series D 2010-11 Pledged Taxes 2010-11 Net Revenue Total Taxes/Net Revenue 120 2011-12 Debt related to pledge: 2003 Ref 1995 Series A 2003 Ref 1995 Series B 2003 Series B 2007 Series B 2010 Series B Total Series A-B 2007 Series D (highest year) WIFA Loans (Parity Obligations) 2007 Series Utilities Total Debt Coverage Required Coverage Collective Coverage Total 2010-11 Taxes/Net Revenue Total 2011-12 Debt Coverage Required Coverage $ 47,722,514 47,722,514 $ $ 1,590,703 1,590,703 30.0 4.0 $ 47,722,514 $ 7,402,836 6.4 4.0 $ 44,197,222 44,197,222 $ 304,735 691,847 - $ 44,197,222 44,197,222 $ $ 996,582 44.3 3.0 $ 44,197,222 $ 7,402,836 6.0 3.0 2,528,581 $ $ $ 44,197,222 44,197,222 2,286,970 - $ $ - 2007 Series Utilities 53,013,450 53,013,450 4,804,825 - 2,528,581 17.5 3.0 $ 2,286,970 19.3 3.0 $ 4,804,825 11.0 1.5 $ 44,197,222 $ 7,402,836 6.0 3.5 $ $ 44,197,222 7,402,836 6.0 3.0 $ $ 53,013,450 12,207,661 4.3 3.0 $ Total $ 1,590,703 304,735 691,847 2,286,970 2,528,581 7,402,836 4,804,825 $ 12,207,661 $ 24,008,909 24,008,909 6,684,333 8,944,538 $ 15,628,871 1.5 1.2 $ $ 24,008,909 15,628,871 1.5 1.2 2003A, 2003B, 2007B, 2003B Refunding and 2010B Refunding Series: Bond covenants require that each series cover both its related debt and the collective debt for the succeeding year. For 2007D Series, coverage requirements are measured against the maximum annual debt service. 2007 Series Utilities: Net Revenue is comprised of all income, monies, and receipts from ownership and operation of utility system to include interest income minus operation and maintenance expenses. City of Yuma, Arizona Pledged Tax Collections 2002 121 Local Taxes Sales Tax (1%) $ 13,116,950 Franchise Fee 2,077,810 Intergovernmental Revenues: State Revenue Sharing 8,084,914 State Sales Tax 5,973,339 Auto In-Lieu Tax 2,345,195 Emergency Services and Other 22,264 Licenses: Business Licenses 210,565 Liquor Licenses 27,185 Fees for Services: Building Permits and Inspection Fees 1,550,072 Recreation Fees 341,523 482,394 Police Services and Other Public Safety Fees Use of Money and Property: Investment Income 461,606 Fines, Forfeitures and Penalties: City Court Fines 670,837 35,364,654 Total Series B Pledged Taxes Additional Series A Pledged Taxes City Public Safety Taxes (.2%) 2,578,704 37,943,358 Total Series A Pledged Taxes Additional Series C Pledged Taxes City Special Taxes (2%) 2,652,152 Fiscal Year 2006 2007 2003 2004 2005 2008 2009 2010 2011 $ 13,237,042 1,961,272 $ 14,849,984 2,177,952 $ 17,165,647 2,347,116 $ 19,087,873 3,360,835 $ 20,672,520 2,923,064 $ 20,479,641 3,135,077 $ 18,961,780 3,255,453 $ 17,461,635 3,251,794 $ 17,635,454 3,243,939 8,250,011 6,062,278 2,746,086 19,432 7,002,250 6,535,654 2,852,832 36,132 7,141,392 7,196,762 3,067,961 36,573 8,133,573 8,292,930 3,391,236 28,288 10,079,129 8,437,831 3,476,885 112,747 12,518,215 8,183,395 3,518,863 133,560 13,355,612 7,105,468 3,445,491 189,929 11,530,342 6,553,759 3,302,490 44,700 8,692,400 6,856,996 3,250,436 55,745 297,643 27,765 291,080 32,115 300,290 32,965 300,596 36,600 315,968 38,880 332,122 34,700 319,631 35,715 315,580 34,130 302,668 35,131 2,343,219 355,658 705,976 3,608,965 381,442 544,869 4,096,137 431,931 647,381 4,508,571 453,273 774,246 3,465,837 485,647 1,335,542 2,401,049 546,680 1,852,400 1,386,593 563,437 1,226,013 1,435,276 628,264 1,447,064 1,319,507 609,192 603,253 243,955 70,322 318,886 556,095 1,038,848 1,021,862 504,146 166,500 108,396 801,121 37,051,458 725,948 39,109,545 805,772 43,588,813 863,316 49,787,432 1,038,871 53,421,769 1,143,006 55,300,570 1,237,672 51,586,940 1,436,928 47,608,462 1,484,105 44,197,222 2,646,059 39,697,517 2,968,482 42,078,027 3,431,379 47,020,192 3,815,628 53,603,060 4,132,396 57,554,165 4,093,839 59,394,409 3,790,422 55,377,362 3,490,546 51,099,008 3,525,292 47,722,514 2,741,989 3,044,645 3,374,350 3,866,902 4,232,008 4,424,358 4,383,419 4,253,079 4,425,556 38,016,806 39,793,447 42,154,190 46,963,163 53,654,334 57,653,777 59,724,928 55,970,359 51,861,541 48,622,778 Additional Series D Pledged Taxes City Road Tax (.5%) 6,448,956 Total Series D Pledged Taxes $ 41,813,610 6,617,396 $ 43,668,854 7,423,730 $ 46,533,275 8,581,364 $ 52,170,177 9,542,314 $ 59,329,746 10,334,503 $ 63,756,272 10,238,080 $ 65,538,650 9,479,279 $ 61,066,219 8,729,333 $ 56,337,795 8,816,228 $ 53,013,450 Gross Excise Tax Pledged Revenues $ 47,044,466 $ 49,056,902 $ 52,546,402 $ 58,975,906 $ 67,012,276 $ 72,120,676 $ 74,056,847 $ 69,240,060 $ 64,081,420 $ 60,964,298 Total Series C Pledged Taxes The Series C Pledged Taxes consist of the Excise Taxes and the City Special Taxes. The Series D Pledged Taxes consist of the Excise Taxes and the City Road Tax. City of Yuma, Arizona Demographic and Economic Statistics Last Ten Calendar Years Building Permits 122 Year Population Personal Income Per Capita Personal Income 2001 163,477 $ 2,976,395 $18 16.50% 343 $ 42,381,125 568 $ 60,363,660 2002 166,715 3,324,309 20 16.90% 313 29,383,982 576 66,248,737 2003 170,604 3,268,426 19 17.00% 999 141,020,407 685 98,696,100 2004 176,083 3,563,282 20 15.60% 1,300 146,866,298 942 153,018,563 2005 181,277 3,814,418 21 16.00% 1,022 97,832,497 1,655 202,887,750 2006 187,555 4,074,587 22 14.70% 1,057 229,391,979 1,568 148,285,471 2007 190,557 4,320,000 23 13.90% 1,141 105,194,398 801 61,578,063 2008 194,322 4,661,000 24 17.10% 740 101,217,617 972 50,218,987 2009 193,299 4,840,484 25 21.30% 510 17,348,000 748 48,260,000 2010 195,751 4,994,489 26 25.30% 546 33,118,172 759 40,924,654 Note: Source: Commercial Residential Unemployment Rate No. Value No. Value Unemployment rate and population presented represents the Yuma Metropolitan Statistical Area and it reflects revised inputs, reestimation, and new statewide controls through 2010. Data for 2011 is not available. U.S. Department of Commerce Bureau of Economic Analysis U.S. Department of Labor Bureau of Labor Statistics Building permits: Department of Community Development (calendar year basis) City of Yuma, Arizona Principal Employers Current Year and Seven Years Ago 123 Employer Marine Corps Air Station U. S. Army Yuma Proving Ground Yuma Regional Medical Center Yuma School District #1 Yuma County Yuma Union High School District United States Border Patrol Walmart City of Yuma Quechan Paradise Casino Growers Company Salyer American Fresh Total 2004 2010 Percentage of Total Employees Rank Employment Percentage of Total Employees Rank Employment 6,126 1 8.94% 3,000 2 4.38% 2,040 3 2.98% 1,357 4 1.98% 1,340 5 1.96% 1,100 6 1.60% 1,061 7 1.55% 1,054 8 1.54% 890 9 1.30% 800 10 1.17% 0.00% 0.00% 27.38% 6,043 1,176 1,500 1,200 1,100 690 864 1,500 1,000 1 5 2 4 6 10 9 2 7 9.67% 1.88% 2.40% 1.92% 1.76% 1.10% 1.38% 2.40% 1.60% 24.11% Source: Greater Yuma Economic Development Corporation Note: Figures presented represent the Yuma Metropolitan Statistical Area. Data for 2011 is not available. Data from nine years prior as required for this table is not available. United States Border Patrol data not available for 2004. Salyer American Fresh data not available for 2010. Per Greater Yuma Employers and Investors listing (GYEDC) - Growers Company is no longer a top 10 Employeer. Walmart and Quechan Paradise Casino added in for 2010 do to Salyer and Growers dropping from list. City of Yuma, Arizona Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Function General government 182 188 195 195 208 226 228 241 235 192 124 Public Safety Police Fire Streets Engineering Maintenance Solid Waste Parks and recreation Water Wastewater 212 113 228 103 229 105 237 105 252 110 267 122 269 122 266 122 267 133 239 129 22 48 13 124 48 36 22 48 13 125 54 37 25 48 13 129 55 41 30 50 15 128 59 45 32 52 15 136 64 48 37 51 16 141 73 52 44 47 16 145 75 52 44 56 17 133 76 47 41 56 17 133 80 51 33 46 13 116 73 49 Total 798 818 840 864 917 985 998 1,002 1,013 890 City of Yuma, Arizona Operating Indicators by Function Last Ten Fiscal Years 2002 2003 2004 2005 Fiscal Year 2006 2007 81,691 14,057 84,738 15,075 87,770 15,804 86,802 16,644 88,013 17,019 87,797 15,281 81,347 13,746 84,332 13,740 83,226 13,434 NA NA 8,443 1,747 8,774 1,121 9,205 1,182 10,032 1,774 10,094 1,850 10,862 2,030 11,455 2,059 11,045 2,322 11,565 745 NA NA 22 23 19 24 19 9 22 11 2 15 29,358 33,993 27,781 33,003 33,965 34,938 34,919 33,996 33,288 32,638 4,482 5,308 5,519 3,285 3,122 3,247 3,160 2,673 2,519 2,554 22,129 41.0 8.0 22,723 41.0 9.3 23,622 45.0 9.3 24,831 45.0 9.1 25,971 48.0 9.3 26,686 48.0 9.5 27,174 48.0 9.5 27,622 60.0 8.2 28,058 64.0 7.5 28,984 65.0 8.4 12.2 12.2 12.3 15.6 15.6 15.6 15.6 15.6 15.6 15.6 2008 2009 2010 2011 Function 125 Police Calls for service* Case reports* Fire Number of calls answered* Inspections* Streets Streets slurry sealed (miles) Solid Waste Refuse collected (tons) Parks and recreation Ramada rentals Water Connections Daily treatment capacity (million gallons) Annual quantity processed (billion gallons) Wastewater Daily processing capacity (million gallons) Source: Various city departments. Note: Indicators are not available for the general government function. *Numbers presented are for calendar year. City of Yuma, Arizona Capital Asset Statistics by Function Last Ten Fiscal Years 2002 2003 2004 2005 Fiscal Year 2006 2007 2008 2009 2010 2011 Function 126 Public Safety Police stations Police vehicles Fire stations Streets Streets (miles) Streetlights Traffic Signals Solid Waste Collection trucks Parks and Recreation Parks acreage Parks/Athletic Fields Swimming pools Tennis courts Community centers Water Water mains (miles) Fire hydrants Wastewater Sanitary sewers (miles) 1 127 5 1 123 5 1 123 5 1 127 6 1 134 6 1 143 6 1 150 6 1 163 6 1 164 6 1 163 6 300 4,250 29 300 4,250 32 300 4,500 32 361 5,042 36 361 5,298 38 361 5,303 40 361 5,375 42 384 5,463 42 389 5,606 49 395 5,750 50 10 10 10 10 12 13 13 13 13 13 553 25 3 1 7 553 25 3 1 7 553 25 3 1 7 553 25 3 1 9 578 25 3 1 9 592 27 3 1 9 607 32 3 1 9 607 79* 4 2 9 607 79* 4 9 9 607 79 4 9 9 416 2,300 427 2,400 437 2,600 448 2,850 470 3,000 493 3,150 501 3,267 501 3,400 507 3,438 520 3,450 255 261 266 275 290 310 320 320 342 340 Sources: Various city departments. Note: No capital asset indicators are available for the general government function. *Change in the inventory of athletic fields from counting athletic complexes versus individual fields.