Comprehensive Annual Financial Report City of Yuma, Arizona For the Fiscal Year Ended June 30, 2012 City of Yuma Arizona Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 Prepared by: CITY COUNCIL Alan L. Krieger, Mayor Paul B. Johnson, Deputy Mayor Cody Beeson Bobbi Lewis Leslie L. McClendon Jerry Stuart Edward C. Thomas ___________________________________________ City Administration Gregory K. Wilkinson City Administrator City Departments City Attorney Steven W. Moore City Clerk Lynda L. Bushong Finance Department Community Development Laurie L. Lineberry Donald (Pat) Wicks, CPA Field Operations Joel Olea Director Wendy Wrenn, CPA Accounting Manager Sharon Willoughby Budget Manager Dana Alexander Minda Federmeyer Czarina Gallegos Linda Johnson Accountants About the Cover: The restored, original City of YUMA plane (bottom photo) found a home when it was installed in the lobby of City Hall in 2012, along with a replica 1948 Buick fuel car. In 1949, pilots Woody Jongeward and Bob Woodhouse flew a record-setting 1,124 hours to attract attention to Yuma’s year-round flying weather. The top photo, taken during the flight, shows the ground crew speeding along the runway and passing supplies and fuel to the pilots during the grueling, nearly 47-day flight. The stunt was successful in drawing the interest of the military and it resulted in the re-opening in 1951 of what is now Marine Corps Air StationYuma, the home of the first operational Marine squadrons of the new F-35 Joint Strike Fighter. Top photo courtesy of Shirley Woodhouse Murdock Finance Donald (Pat) Wicks Fire Department Jack McArthur, Chief Human Resources Jack Dodd Information Technology Laura S. Neinast Municipal Court Douglas S. Stanley, Judge Parks and Recreation Rebecca J. Chavez Police Department John J. Lekan, Chief Utilities Jay Simonton 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, 2012 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 58 59 62 63 64 65 66 70 72 74 75 76 77 78 79 80 81 City of Yuma, Arizona COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2012 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 84 85 86 87 88 89 90 91 94 95 96 97 98 99 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 - Last Ten Fiscal Years Demographic and Economic Statistics - Last Ten Calendar Years Principal Employers - Current Year and Eight Fiscal Years Ago 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 104 105 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 INTRODUCTORY SECTION iii iv FINANCE DEPARTMENT One City Plaza Yuma, Arizona 85364-1436 (928) 373-5087 Fax: (928) 373-5084 City of YUMA October 16, 2012 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, 2012. 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, 2012, 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, 2012, 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 continue to be cornerstones in the military’s flight training and equipment testing programs. Both 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. General sales tax saw an increase of 4.7% for fiscal year 2012. Tax data show that construction, an important segment of the sales tax measure, jumped 150% over 2011, largely due to sizeable construction projects at Marine Corps Air Station-Yuma (MCAS) and the new Federal courthouse downtown. Sales taxes are anticipated conservatively to grow 3% for fiscal year 2013. s n o il il M 25 General Sales Tax 20 15 10 5 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fiscal Year Ending June 30, Yuma’s continued as a regional retail and services center during 2012. The retail classification of the sales tax showed a 1.4% increase, showing that retail sales continue to be relatively strong. 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. 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 2012. 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 2012, 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. A new Federal courthouse under construction will add to the economic vitality of the area. East Mesa Development. The Yuma area is beginning to show some improvement in residential building activity. One area primed for this development is the East Mesa, with its two new water and wastewater facilities. These two plants not only establish the infrastructure necessary to accommodate that growth, but improve capacity of existing plants in the older Yuma area to accommodate growth elsewhere in the city. 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, 2011. This is the thirtieth 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 3033 N. Central Ave., Suite 300 Phoenix, Arizona 85012 Tel (602) 277-9449 Fax (602) 277-9297 INDEPENDENT AUDITORS’ REPORT The Honorable Mayor and Members of the City Council City of Yuma, Arizona We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Yuma, Arizona (the City), as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Yuma, Arizona, as of June 30, 2012, and the respective changes in financial position and cash flows where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 16, 2012, on our consideration of City of Yuma, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 3 TUCSON • PHOENIX • FLAGSTAFF • ALBUQUERQUE www.heinfeldmeech.com Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5 through 15 and pension and budgetary comparison information on pages 58 through 66 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The accompanying supplementary information such as the introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants October 16, 2012 4 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, 2012. 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 $19.6 million for the fiscal year, $14.1 million of which was generated by governmental activities while $5.5 million was due to businesstype activities of the City. • The City’s combined net assets total $480.6 million at June 30, 2012. Of this amount, $87.9 million is available (unrestricted) to finance ongoing programs, $37.5 million in governmental programs and $50.4 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 70. 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 94. 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 58 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 70. 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 $480.6 million at the close of the fiscal year. Governmental Business-type Activities Activities Total 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 2012 2011 2012 2011 2012 2011 $ 97.8 320.9 418.7 $ 107.3 310.5 417.8 $ 67.2 330.8 398.0 $ 64.8 339.0 403.8 $ 165.0 651.7 816.7 $ 172.1 649.5 821.6 130.3 17.3 138.1 22.7 183.1 5.4 192.2 7.6 313.4 22.7 330.3 30.3 147.6 160.8 188.5 199.8 336.1 360.6 209.4 24.8 36.9 196.8 15.8 44.4 164.3 7.4 37.8 166.8 5.5 31.7 373.7 32.2 74.7 363.6 21.3 76.1 $ 271.1 $ 257.0 $ 209.5 $ 204.0 $ 480.6 $ 461.0 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 $480.6 million, up $19.6 million from the prior year. Governmental activities accounted for $14.1 million of the increase while business-type activities amounted to $5.5 million. Most of the increase would be attributable to capital asset acquisitions, particularly infrastructure, as governmental capital assets increased $10.4 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. 7 MANAGEMENT’S DISCUSSION AND ANALYSIS 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. Changes in Net Assets Fiscal Year Ended June 30, Governmental activities (millions) 2012 Business-type activities 2011 2012 2011 Total 2012 2011 42.4 7.4 $ 49.8 3.9 28.2 $ 54.5 5.0 10.6 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 8.7 3.9 19.1 $ 12.1 5.0 3.2 $ 41.1 9.1 $ 10.1 36.3 3.1 23.9 0.9 - 10.0 34.7 3.0 25.4 5.9 1.0 0.3 0.1 - 0.1 - 10.1 36.3 3.1 23.9 1.0 - 10.0 34.7 3.0 25.4 5.9 1.1 0.3 106.0 100.6 50.3 49.9 156.3 150.5 12.5 41.7 12.8 14.2 0.8 4.5 5.5 - 9.7 40.2 14.6 13.8 1.5 5.0 5.8 - 23.4 16.2 2.9 2.4 20.5 13.9 2.9 2.4 12.5 41.7 12.8 14.2 0.8 4.5 5.5 23.4 16.2 2.9 2.4 9.7 40.2 14.6 13.8 1.5 5.0 5.8 20.5 13.9 2.9 2.4 92.0 90.6 44.9 39.7 136.9 130.3 0.1 0.1 0.1 (0.1) 0.2 10.1 $ 19.6 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 $ 14.1 $ 10.1 $ 5.5 $ $ 20.2 For the fiscal year, net assets increased $19.6 million, with $14.1 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 $106 million for fiscal year 2012, up from 2011, mostly in capital grants and contributions. 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 8 MANAGEMENT’S DISCUSSION AND ANALYSIS 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 57% of governmental revenues for the year. Capital grants and contributions, the third segment of governmental activities revenues, include donations and capital asset contributions. Charges for services 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 11% 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 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 4.7% from 2011 as the economy continues to improve. Capital grants and contributions increased $15.9 million or 496% due primarily to a contribution of $12.7 million from the Arizona Department of Transportation (ADOT) as the city recorded the value of the transfer of streets, traffic signals and street lights. Intergovernmental revenues dropped by $1.4 million or 5.7%. State-shared income taxes declined 9.6% from 2011, as anticipated, while state-shared gas tax slid by 12.3% as the state continues to balance its budget by reducing other entities’ revenue. State-shared sales taxes increased by 6.1% because of the state’s improving economic output. Charges for services decreased by $2.6 million (21.4%) primarily from reductions in building permits and developer fees from the continued weak construction economy. Operating Grants and Contributions decreased by $1.0 million (20.2%) and Capital Grants and Contributions increased by $2.4 million or 72% with the reduction in ARRA funding and recognition of ADOT funding for the Avenue 3E project. RevenuesGovernmental Activities Sales taxes 34% Property taxes 9% Franchise taxes 3% Intergovernmental revenues 23% Capital grants and contributions 18% Unrestricted investment earnings 1% Operating grants and contributions 4% Charges for services 8% Expenses Governmental expenses totaled $92 million for the fiscal year. Of the expenses, 45.4% or $41.7 million is related to public safety for police, fire and municipal court services. Parks, recreation and culture expenses amounted to $14.2 million, or 15.5% and environmental health and protection was $0.8 million, 0.9%, while streets and community design and development expenses amounted to 13.8% and 4.9% respectively. General government expenses came to $12.5 million, or 13.6%. Interest on long-term debt was $5.5 million, or 5.9% of governmental expenses. Overall, governmental activities expenses increased $1.4 million over 2011, led by an increase in General Government expenditures of $2.9 million, the result of a declining allocation of internal costs more than a real increase in expenses. Public safety expenses increased by $1.5 million with the City’s assumption of animal control services in the Police Department and with ambulance services in the Fire Department. 9 MANAGEMENT’S DISCUSSION AND ANALYSIS Expenses and Program Revenues-Governmental Activities 45.0 40.0 35.0 Expenses 30.0 Millions 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 $41.2 million in charges for services, 86.7% 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 $9.1 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 Capital grants and contributions 18% Charges for services 81% Investment earnings 1% Expenses Water and wastewater services account for 88.1% of the City’s business-type activities with solid waste and golf courses making up the remaining 11.9%. Water expenses amounted to $23.4 million while wastewater expenses totaled $16.2 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, 2012, is $55.3 million, a decrease from 2011 of $5.4 million. A review of some of the more significant funds follows. General Fund The fund balance of the General Fund decreased by $3.1 million for the fiscal year. Revenues increased by $0.3 million. Sales taxes, the city’s largest source of General Fund revenues, increased $0.8 million (4.7%) to $18.5 million as the local economy continues to improve after the recession. State-shared income taxes showed a decline of 9.6%, as anticipated, down $0.8 million to $7.9 million, while state-shared vehicle registration tax (auto lieu tax) decreased 0.1% to $3.1 million. State-shared sales taxes, on the other hand, increased $.4 million or 6%. Total expenditures increased $4.9 million, or 9.9%, to $54.3 million. Most of the increase occurred in General Government and in Public Safety expenditures. General Government expenditures rose as a result of a decreasing internal allocation of central service department expenditures. Public Safety expenditures increased in part due to the City assuming operation of animal control services and ambulance services. Highway User Revenue Fund (HURF) This fund, which accounts for the expenditure of state-shared gasoline taxes, showed a decrease in fund balance of $0.4 million for the year. The City’s portion of those taxes dropped by 12.3% for the fiscal year to $5.7 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 decreased from 2011 by $.9 million (13.3%) to $6.0 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 million for the year. In the same manner as general sales tax in the General Fund, sales taxes increased in 2012 to $9.2 million. Operational expenditures increased from 2011, as the fund absorbed more operational street maintenance costs, forced by the reduction of gasoline tax in the HURF Fund where these expenditures were paid historically. 11 MANAGEMENT’S DISCUSSION AND ANALYSIS Grants Fund The City continues to receive much needed assistance from both the state and federal levels. During 2012, revenues decreased to $5.2 million, due principally to a $1.6 million decrease in Federal grants. Again this year, 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 Housing and Urban Development Home Grant Programs to help with housing rehabilitation in the Yuma High revitalization area. Community Development Block Grant revenues decreased to $0.9 million for 2012. Debt Service Debt Service Fund expenditures remained at $13.5 million per debt retirement schedules. Fund balance reflects debt service reserves accumulated in accordance with the development agreement for the Yuma Palms regional center. Because the related issue has been fully reserved through its maturity, this reserve will be released in fiscal 2013 and transferred to the General Fund. Capital Projects Fund The Capital Projects Fund’s fund balance dropped to $22.5 million this year as the city continued to expend the proceeds of the 2007 bond sale. Capital expenditures increased slightly in 2012 to $9.6 million. Proprietary funds. The City’s enterprise funds posted an overall increase in net assets of $6 million for the fiscal year ended June 30, 2012. Results were mixed between the various funds with the Wastewater, Solid Waste and Arroyo Dunes Golf Course Funds posting increases in net assets while the Water Fund and Desert Hills Golf Course Fund showed the reverse. Water Enterprise Fund Operating revenues for the Water Fund decreased by $1.1 million or 4.8% for the year ending June 30, 2012. This is due to a decline in consumption, reflecting both the recessionary environment and a likely reaction to rate increases of the last few years. Operating expenses increased by 21% with the advent of depreciation with the Aqua Viva Water Treatment Plant and attendant improvements coming on line. With these changes, operating income fell 56% to 3.3 million. Capital contributions, declining to $.9 million with the slowing of construction, still helped mitigate the fund’s decline in net assets. Wastewater Enterprise Fund The Wastewater Fund operating revenues decreased 2.5% from fiscal 2011. Rate-based charges decreased 2.0% to $12.7 million as a portion of these charges are based on water consumption which recorded a decline. Operating expenses increased by 21.4% with income from operations decreasing to $0.7 million. Again, depreciation more than doubled as the new Desert Dunes treatment plant was brought on line. Capital contributions increased by some $2.3 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 $6.7 million. Solid Waste Operating revenues for the Solid Waste Fund increased by $0.12 million or 3.8% for the year ending June 30, 2012. Operating expenses increased slightly at 0.2% and the fund produced operating income of $0.5 million. The fund’s net assets increased to $1.2 million. 12 MANAGEMENT’S DISCUSSION AND ANALYSIS Golf Courses A 4% increase in Greens Fees revenue was not enough to offset decreases in other concession revenues and operating revenues for Desert Hills Golf Course declined 1% to $2 million. A concurrent 1.3% increase in operating expenses registered a $.1 million operating loss for the year. Operating revenues for Arroyo Dunes Golf Course increased 5% for the year but this was not enough to offset the increased expenses, leading to an operating loss of $33,963 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, 2012, can be found starting on page 59. A summary of that schedule follows: Budget Original Revenues and Transfers In Taxes Intergovernmental Other Transfers In Total Expenditures and Transfers Out Expenditures $ Transfers Out Total Change in Fund Balance $ Final 31,557,160 $ 31,557,160 17,757,882 17,757,882 6,726,900 6,726,900 557,323 557,323 Actual Variance with Final $ 31,716,089 $ 158,929 18,269,533 511,651 5,228,618 (1,498,282) 517,873 (39,450) 56,599,265 56,599,265 55,732,113 (867,152) 58,199,148 4,393,672 62,592,820 58,187,148 4,393,672 62,580,820 54,273,720 4,536,276 58,809,996 3,913,428 (142,604) 3,770,824 (5,993,555) $ (5,981,555) $ (3,077,883) $ 2,903,672 General Fund revenues and transfers in ended the year $0.87 million under expectations. During budget preparation for 2012, 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 until February 2012, some $1.5 million in ambulance billings did not materialize. Overall compared to 2011, General Fund revenues ended the year up $259,047, led by increases in city and state sales taxes. The important revenue sources of city and state sales taxes increased by 4.7% and 6.1%, respectively. Expenditures for the fund came in at $3.9 million under budget with the largest contribution coming from General Government at $2.3 million. Public Safety expenditures added another $0.6 million, although savings in budget occurred in most departments with the City’s drive to reduce expenditures throughout the year. The City continued to target all areas of expenditure reduction, 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 anticipated reduction of fund balance was reduced from $6 million to $3.1 million. CAPITAL ASSETS At June 30, 2012, the City of Yuma’s investment in capital assets in both governmental and business-type activities amounted to $651.7 million, net of depreciation. This includes land, buildings, equipment, and infrastructure (roadways and bridges). Capital assets for governmental activities increased by 3.3% while business-type capital assets decreased by 2.4%. These changes included the following: • • • nd The 32 Street widening project neared completion. A number of major water and sewer lines were completed. The Fire Station #1 replacement project was started. 13 MANAGEMENT’S DISCUSSION AND ANALYSIS Change in Capital Assets (In Millions) Business-type Activities Governmental Activities July 1, Net Additions/ June 30, July 1, Net Additions/ June 30, Deletions 2012 2011 Deletions 2012 2011 Land Buildings Improvements Infrastructure Equipment Construction in Progress Accumulated Depreciation $ Total $ 55.6 $ 78.9 40.8 184.2 53.5 80.3 (182.8) 310.5 1.2 $ 0.5 39.1 0.9 (17.6) (13.7) $ 10.4 56.8 $ 78.9 41.3 223.3 54.4 62.6 (196.4) $ 320.9 $ 10.5 $ 7.9 226.8 5.2 193.2 (104.6) $ 156.8 1.5 (153.4) (13.1) 339.0 $ (8.2) $ Total 10.5 $ 164.7 228.3 5.2 39.8 (117.7) 330.8 67.3 243.6 269.6 223.3 59.6 102.4 (314.1) $ 651.7 Additional information on capital assets can be found in Note II-E starting on page 45. DEBT ADMINISTRATION At June 30, 2012, after scheduled debt payments, governmental activity debt decreased to $130.3 million while business activity debt decreased to $183.1 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 $133.4 million, well above the outstanding general obligation debt of $1.42 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) Business-type activities Governmental activities 2012 General Obligation Bonds Yuma Municipal Property Corporation Bonds Net Unamortized Premium/Issuance Costs Improvement Districts Contracts Payable Compensated Absences Total Long-Term Debt $ - 2011 $ 2012 - 119.1 125.7 1.0 4.6 5.7 $ 130.3 1.0 5.7 5.7 138.1 $ 14 $ 1.4 $ 113.8 3.2 63.9 .8 $ 183.1 $ 2011 2.8 $ 117.0 Total 2012 1.4 2011 $ 2.8 232.8 242.7 3.3 4.0 4.6 68.2 63.9 .8 6.5 192.2 $ 313.4 4.2 5.7 68.2 6.5 330.3 $ MANAGEMENT’S DISCUSSION AND ANALYSIS ECONOMIC FACTORS Yuma County’s growth is sluggish but improving. The county grew by an estimated 1,079 residents to 196,830 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 4.8% 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 2013, revenues were projected with a 3% increase. With sales tax statistics improving, the economy continues to strengthen. During 2012, the following major economic events occurred: • • Major construction projects continue at Marine Corps Air Station-Yuma as it prepares for the arrival of the first squadron of the new F-35 Joint Strike Fighter. The Yuma County Airport Authority worked with a number of local partners to propose to the Federal Aviation Administration for the Yuma area to become one of the nation’s main testing areas for unmanned aircraft systems. The area’s established contractor complex, its testing and aerial gunnery ranges and its infrastructure make it a prime candidate. Not all economic statistics reflect positive results; however, in that Yuma County continues to suffer what appear to be higher unemployment figures than most of the state, according to the Arizona Department of Economic Security (DES). Farm employment continues to skew this statistic. The City combats this problem as the largest contributor to the Greater Yuma Economic Development Corporation whose mission is 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, 2012 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 80,470,079 $ 14,953,001 853,231 782,259 709,513 Total 60,908,683 $ 141,378,762 6,878,794 21,831,795 (853,231) 275,592 1,057,851 2,588 712,101 119,439,434 201,460,004 418,667,521 50,281,537 280,553,888 398,047,851 169,720,971 482,013,892 816,715,372 2,093,798 2,112,222 2,742,148 10,316,865 1,252,014 114,518 3,913,485 172,082 3,345,812 2,226,740 6,655,633 10,488,947 2,199,960 8,055,000 263,777 9,323,041 2,463,737 17,378,041 3,498,069 116,587,028 147,605,090 577,915 172,936,807 188,553,639 4,075,984 289,523,835 336,158,729 209,376,842 164,295,185 373,672,027 Liabilities Accounts Payable and Deposits 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: General government projects Debt Service Streets Public safety equipment and facilities Parks, recreation and cultural facilties Unrestricted Total Net Assets 692,423 692,423 542,739 7,357,462 7,900,201 11,940,661 11,940,661 5,864,193 5,864,193 5,794,497 5,794,497 36,851,076 37,841,565 74,692,641 $ 271,062,431 $ 209,494,212 $ 480,556,643 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, 2012 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 12,534,475 $ 41,735,296 12,740,625 1,349,347 $ 3,333,915 - 14,225,614 1,015,611 803,646 518,081 4,520,583 2,498,189 5,460,749 Business-type Activities: Water Wastewater Solid Waste Golf Courses Total Business-type Activities Charges for Services 8,715,143 23,353,205 16,191,158 2,947,622 2,403,023 21,123,326 14,544,922 3,271,561 2,214,832 44,895,008 41,154,641 136,915,996 $ 49,869,784 $ Governmental Activities 143,334 $ $ 2,294,571 1,511,423 15,988,848 686,796 522,817 - - 840,522 - 92,020,988 Capital Grants and Contributions 3,965,223 1,121,890 19,144,978 - 916,629 8,154,759 - - 9,071,388 General Revenues: Property taxes Sales taxes Franchise taxes Intergovernmental, unrestricted Unrestricted investment earnings Total general revenues Transfers Total general revenues and transfers Change in net assets Net assets-beginning Net assets-ending The accompanying notes are an integral part of these financial statements. 21 - (12,000,390) - (12,000,390) (285,565) - (285,565) (59,982) - (59,982) (5,460,749) - (5,460,749) (60,195,644) - (60,195,644) (60,195,644) $ Total (11,041,794) $ (34,595,387) 3,248,223 - 3,965,223 $ 28,216,366 Business-type Activities (1,313,250) 6,508,523 323,939 (188,191) $ (11,041,794) (34,595,387) 3,248,223 (1,313,250) 6,508,523 323,939 (188,191) 5,331,021 5,331,021 5,331,021 (54,864,623) 10,099,307 10,099,307 36,304,437 36,304,437 3,058,634 3,058,634 23,935,709 23,935,709 88,740 1,019,141 930,401 88,740 74,417,228 74,328,488 37,475 (37,475) 126,215 74,417,228 74,291,013 14,095,369 5,457,236 19,552,605 204,036,976 461,004,038 256,967,062 271,062,431 $ 209,494,212 $ 480,556,643 22 FUND FINANCIAL STATEMENTS 23 City of Yuma, Arizona Balance Sheet Governmental Funds June 30, 2012 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 $ $ 14,907,171 1,587,159 2,228,211 20,169 391,213 12,281 1,888,004 57,705 111,262 21,203,175 $ $ 444,882 10,981 553,575 343 1,009,781 City Road Tax $ $ Grants 4,122,984 38,190 553,996 1,907 1,815 4,718,892 $ $ 5,400 1,827,469 69 1,832,938 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 PEG - Public Education Government Unassigned: Total Fund Balances Total Liabilities and Fund Balances $ $ 674,033 696,838 132,961 1,143,429 2,647,261 $ 193,267 33,502 49,780 276,549 57,705 111,262 - - 733,232 - 1,864,210 - - 500,269 88,114 279,960 15,654,394 18,555,914 733,232 21,203,175 The accompanying notes are an integral part of these financial statements. 24 $ 1,009,781 $ 103,886 11,476 32,093 147,455 $ 1,815 - 4,569,622 - - - - 4,571,437 $ 677,072 12,493 869,100 274,273 1,832,938 4,718,892 $ 1,832,938 Community Redevelopment $ $ $ $ 14,100 - Capital Projects Debt Service $ 640,505 9,532,760 $ 1,023,301 140,809 1,178,210 1,523 4,625,000 325 350 $ 14,800,463 $ 51,109 3,825 105,434 1,017,842 1,178,210 $ $ 226 6,890,000 2,742,148 4,625,000 14,257,374 - 350 - 542,739 - 1,178,210 25,347,608 134,879 1,252,625 4,891 26,740,003 84,045 4,186,351 4,270,396 Other Nonmajor Governmental Funds $ $ $ 8,141,964 - $ 53,619,214 9,532,760 146,011 299,732 20,134 3,945 15,036 820 8,627,642 2,947,444 6,856,417 4,645,169 411,347 23,761 1,888,004 72,741 114,247 $ 80,111,104 65,877 19,245 139,671 224,793 $ 1,849,515 777,379 6,890,000 974,534 2,742,148 132,961 11,468,439 24,834,976 15,036 820 72,741 114,247 692,423 6,637,807 4,285,957 692,423 1,578,236 5,102,074 692,423 542,739 11,940,661 5,864,193 5,794,497 - 1,342,033 2,475,828 2,852,356 2,718,619 524,980 247,181 143 1,003,571 70,186 - 1,342,033 1,864,210 2,475,971 1,003,571 2,852,356 2,718,619 70,186 524,980 247,181 543,089 22,469,607 632,783 8,402,849 500,269 88,114 632,783 279,960 15,654,394 55,276,128 8,627,642 $ 80,111,104 $ 14,800,463 - Total $ 26,740,003 $ 25 City of Yuma, Arizona Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Assets June 30, 2012 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. Net assets - Governmental Activities per the Statement of Net Assets The accompanying notes are an integral part of these financial statements. 26 $ 55,276,128 313,891,170 1,151,574 (5,596,029) (112,165,000) (2,765,000) (1,860,000) (962,028) 24,091,616 $ 271,062,431 27 City of Yuma, Arizona Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2012 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 Total Expenditures Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Transfers In Transfers Out Total Other Financing Sources/(Uses) Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending $ 31,716,089 1,288,008 18,269,533 1,926,874 1,549,889 211,409 252,438 55,214,240 Major Special Revenue Funds Highway City User Road Revenue Tax Grants $ 5,700,428 1,327 92,271 5,794,026 $ 9,233,899 358 433,093 2,437 9,669,787 8,377,756 34,980,862 7,267,794 1,107,691 4,862,199 - 3,082,984 - 184,318 76,223 - - - - 699,435 9,165 119,287 518,559 - 3,910,871 5,255,432 3,201,768 261,222 54,273,720 6,046,113 940,520 $ 5,083,471 56 46,976 28,494 5,158,997 1,061,721 2,322,963 124,036 114,840 1,113,313 (252,087) 5,758,916 (96,435) 517,873 (4,536,276) (4,018,403) (101,383) (101,383) (4,799,518) (4,799,518) 100,694 (4,259) 96,435 (3,077,883) (353,470) 959,398 - 21,633,797 1,086,702 3,612,039 $ 18,555,914 $ 733,232 $ 4,571,437 The accompanying notes are an integral part of these financial statements. 28 $ - Community Redevelopment Debt Service $ $ 873,412 18,105 23,821 915,338 1,089,000 219,256 1,308,256 $ 3,246,062 1,589,229 32,519 48,070 4,915,880 Total Governmental Funds $ $ 8,499,751 643,337 449,977 45,312 9,638,377 49,449,739 1,288,008 33,172,906 4,159,798 1,549,889 1,089,000 1,365,742 46,976 492,843 92,614,901 - - - 12,042 64,122 3,295,883 9,451,519 38,475,638 7,945,183 10,687,713 - - - 472,229 732,770 865,107 17,341 - - 275,826 60,491 4,457,541 1,452,367 278,540 2,022,303 7,031,606 262,652 5,380 56,340 177,492 - 367,770 2,022,303 7,731,041 967,868 124,667 32,890 - $ Capital Projects Other Nonmajor Governmental Funds 915,338 8,010,000 5,516,441 13,526,441 9,600,481 4,414,425 8,010,000 5,516,441 97,942,821 - (12,218,185) (4,684,601) 5,223,952 (5,327,920) - 12,219,218 12,219,218 1,684,333 (5,117,077) (3,432,744) 14,522,118 (14,558,513) (36,395) - 1,033 (4,684,601) 1,791,208 (5,364,315) - 542,056 27,154,208 6,611,641 60,640,443 543,089 $ 22,469,607 8,402,849 $ 55,276,128 - $ - 29 $ 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, 2012 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-governmental funds $ (5,364,315) Portions of revenues recorded on the statement of activities do not provide current financial resources and are not recorded as revenues in the funds: Property taxes revenue Public safety ambulance revenue 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 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 Increase in compensated absences expense not recorded in governmental funds The net effect of miscellaneous transactions involving capital assets (trades of land for rights-of-way) is to decrease net assets. 8,683 740,224 (12,457,829) 12,866,016 (678,696) 8,010,000 7,279 (12,760) Investment earnings of the internal service funds are general revenues on the statement of activities 43,284 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 (1,664,995) Contributions of infrastructure assets are not recorded as revenues in the governmental funds 12,742,786 $ 14,095,369 Change in net assets of governmental activities The accompanying notes are an integral part of these financial statements. 30 City of Yuma, Arizona Statement of Net Assets Proprietary Funds June 30, 2012 Totals Governmental Activities Internal Service Funds 30,229,747 $ 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 $ $ 18,829,905 Wastewater Fund $ 10,066,816 Other Funds $ 1,333,026 $ 17,318,105 3,783,543 761 7,761 209,802 757 22,832,529 2,281,865 278,778 10,290 1,692 12,639,441 514,610 616 570 65,790 139 1,914,751 6,580,018 280,155 18,621 275,592 2,588 37,386,721 60,257 8,606 709,518 595,266 18,691,752 10,430,511 1,454,790 2,188,496 410,529 14,484,326 37,316,855 3,115,607 13,079,003 16,194,610 28,834,051 1,914,751 13,546,118 1,454,790 15,267,499 410,529 30,678,936 68,065,657 18,691,752 1,803,508 106,000,530 122,842,290 2,755,034 28,064,574 (68,184,975) 193,280,961 193,280,961 230,597,816 8,726,156 55,545,009 102,430,825 1,830,765 11,517,317 (44,762,730) 135,287,342 135,287,342 164,121,393 3,102,865 3,066,405 660,423 169,982 (4,732,553) 2,267,122 2,267,122 4,181,873 10,529,664 164,648,404 228,339,520 5,246,222 39,751,873 (117,680,258) 330,835,425 330,835,425 398,901,082 219,610 19,251 222,733 26,713,720 (20,167,046) 7,008,268 7,008,268 25,700,020 456,304 55,356 45,901 2,992,250 130,457 2,143,610 5,823,878 234,530 36,845 208,836 787,750 84,268 679,742 2,031,971 134,933 22,317 49,052 69,169 275,471 825,767 114,518 254,737 3,780,000 263,777 2,823,352 69,169 8,131,320 111,322 14,290 34,263 1,320,553 913,470 2,393,898 2,866 410,529 2,137,173 614,574 1,065,000 26,092 4,256,234 10,080,112 12,852 102,913 2,086,131 449,467 2,651,363 4,683,334 275,471 15,718 410,529 102,913 4,223,304 1,064,041 1,065,000 26,092 6,907,597 15,038,917 2,393,898 31,870,948 84,961,800 2,427,821 270,111 119,530,680 129,610,792 27,572,847 25,378,200 725,191 190,602 53,866,840 58,550,174 117,202 117,202 392,673 59,443,795 110,340,000 3,153,012 577,915 173,514,722 188,553,639 67,737 67,737 2,461,635 81,217,075 80,810,988 2,267,122 164,295,185 7,008,268 5,665,246 14,104,703 100,987,024 1,692,216 23,068,015 $ 105,571,219 1,522,078 3,789,200 7,357,462 38,694,796 210,347,443 16,230,117 23,238,385 $ (853,231) Adjustment to reflect consolidation of internal service fund activities related to enterprise funds $ Net assets of business-type activities The accompanying notes are an integral part of these financial statements. 31 209,494,212 $ City of Yuma, Arizona Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2012 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 Net Assets - Ending 290,229 21,000,109 13,976 14,498,923 3,266,063 1,919,363 293,315 5,478,741 304,205 3,266,063 1,919,363 293,315 40,977,773 5,678,854 1,088,813 6,767,667 10,423,214 7,315,918 17,739,132 8,250,002 5,557,098 13,807,100 4,838,210 247,395 5,085,605 23,511,426 13,120,411 36,631,837 7,148,529 1,909,864 9,058,393 3,260,977 691,823 393,136 4,345,936 (2,290,726) $ 20,544,374 165,506 14,484,947 $ - 38,299 (5,462,005) 123,217 47,399 (2,222,503) 45,999 3,042 7,652 88,740 (7,684,508) 176,868 43,284 47,068 - (5,300,489) (2,129,105) 10,694 (7,418,900) 90,352 (2,039,512) (1,437,282) 403,830 (3,072,964) (2,200,374) 916,629 (71,518) 8,154,759 (34,617) 169,982 (26,372) 9,071,388 169,982 (132,507) (1,080) 6,682,860 547,440 6,035,899 98,888,359 3,241,760 102,181,425 $ - Totals $ 14,484,947 (1,194,401) Net Assets - Beginning Other Funds 20,544,374 $ 165,506 - Capital Contributions Transfers In Transfers Out Change in Net Assets Wastewater Fund Governmental Activities Internal Service Funds 100,987,024 $ 105,571,219 $ 25,439,839 3,789,200 $ (578,663) Adjustment for consolidation of internal service fund activities related to enterprise funds $ Change in net assets of business-type activities The accompanying notes are an integral part of these financial statements. 32 (2,201,454) 5,457,236 23,238,385 City of Yuma, Arizona Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2012 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 $ 21,342,770 $ 12,693,150 $ 5,404,778 $ 39,440,698 (4,666,897) (3,203,308) (1,797,337) (9,667,542) (5,887,447) (5,021,765) (3,077,087) (13,986,299) 45,999 7,649 176,865 123,217 10,911,643 Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds 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 4,514,076 $ 15,963,722 6,767,151 (1,086,114) (2,583,120) (3,357,202) (259,285) (71,518) (34,617) (26,373) (132,508) 70,651 (1,080) (71,518) (34,617) (26,373) (132,508) 69,571 871,429 (2,773,138) (3,778,316) (2,183,074) (5,703,535) 8,109,009 (1,911,055) (749,800) (2,221,416) (2,314,283) (13,566,634) Cash Flows from Investing Activities: Receipt of Interest Net Cash Provided by Investing Activities 538,003 Internal Service Funds 39,130 39,130 - 8,980,438 (4,684,193) (4,528,116) (4,404,490) (8,017,818) (51,772) 59,714 - 912,455 - (12,654,179) 7,942 45,522 45,522 2,677 2,677 87,329 87,329 44,596 44,596 Net Increase/(Decrease) in Cash and Cash Equivalents (2,687,379) 5,437,436 514,307 3,264,364 Cash and Cash Equivalents, July 1 36,001,610 20,823,990 818,719 57,644,319 17,455,281 Cash and Cash Equivalents, June 30 $ 33,314,231 $ 26,261,426 $ 1,333,026 $ 60,908,683 $ 17,318,105 Reconciliation of Operating Income/(Loss) to Net Cash Provided by Operating Activities: Operating Income/(Loss) $ $ $ $ 4,345,936 $ 3,260,977 691,823 Adjustments to Reconcile Operating Income/(Loss) Depreciation and Amortization Expense 7,315,918 5,557,098 (Increase)/Decrease in Accounts Receivable 323,483 65,390 (Increase)/Decrease in Inventories (100,445) (Increase) in Deposits 8,400 2,000 (Increase)/Decrease in Prepaid Items 4,941 (1,476) Increase/(Decrease) in Accounts Payable 111,207 125,313 Increase in Accrued Payroll and Related Taxes (155,232) (105,132) Increase/(Decrease) in Due from Other Gov't Units (Decrease) in Claims Incurred but Not Reported 19,177 (1,866,939) Increase/(Decrease) in Customer Dep/Unearned Rev 45,999 123,217 Other Operating Activity Revenue 3,822,253 7,650,666 Total Adjustments $ 10,911,643 $ 4,514,076 $ 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 $ 393,136 (137,176) (2,290,726) 247,395 (77,960) 7,363 419 40,681 13,120,411 310,913 (93,082) 10,400 3,884 277,201 1,909,864 175,962 (130,377) (46,047) (102,514) (85,210) (284) 4,814 7,649 144,867 (345,574) (284) (1,842,948) 176,865 11,617,786 (37,866) 262,419 2,031,441 538,003 $ 15,963,722 $ (259,285) 45,200 $ 7,625 45,750 $ - $ 7,625 90,950 $ - 45,200 $ 53,375 $ - $ 98,575 $ - 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, 2012 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. 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. 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. 35 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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). 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. 36 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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). Grant revenues are recognized when all eligibility requirements are met, not necessarily when received. Grant monies that have been received but are as yet unearned are carried forward as deferred revenue. However, earned but not yet received grant monies are recognized as revenue and carried forward as receivables. This practice is defined and supported by GASB Statement 33, as it pertains to “government-mandated nonexchange transactions,” paragraphs 19-25. 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, 2012 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 individual funds based upon average daily balance. The City considers short-term investments (including 38 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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, 2012, the estimated amounts of unbilled revenues for the Water, Wastewater and Solid Waste Enterprise Funds are $2,262,146, $1,253,366, and $298,187, 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, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as 39 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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, revenues are recorded as received with the exception of taxes collected within 60 days by the County Treasurer and reported as current year revenues (County Treasurer collections for June of the current fiscal year). Delinquent property taxes (collections of noncurrent years) are recorded similarly. 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, $4,845,813, and for the internal service funds, $84,389, 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 $325,093, $219,524, $78,524, $54,070 and 40 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 $8,504 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, 2012, the amount accumulated in sick pay and related benefits is $7,701,627, including $211,257 attributable to Internal Service Funds and $1,239,725 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, $750,214, 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 $75,473, $55,347, $15,095, $7,571 and $2,492 respectively, are recorded in those funds and are accrued as earned. G. Investment Income Investment income is composed of interest and net changes in the fair value of applicable investments. H. 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. 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, 2012, the City’s deposits had a carrying value of $7,284,129 and a bank balance of $10,067,480. The difference represents outstanding checks and other reconciling items. The main City checking account is fully collateralized and is disclosed with investments. All pledged bank collateral for demand deposits was held by an independent institution outside the bank’s holding company. 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, 2012, there are no deposits exposed to custodial credit risk. Cash on hand at June 30, 2012 included petty cash and change funds balances of $27,551 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 41 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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, 2012 is $1,530. The City’s investment balances at June 30, 2012 were as follows: Investment Type US Treasury Notes/Bills Commercial Paper US Agencies: Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mtg. Corp. Federal National Mtg. Assoc. Money Market Funds Wells Fargo-Bus Market Fund State Investment Pool 5 Total Value Investment Maturities in Years Fair Value $ 13,090,118 $ < 1 Year 9,094,413 12,502,173 16,631,430 10,996,336 15,774,344 36,945,245 12,069,908 16,055,998 $ 134,065,552 1,136,078 36,945,245 12,069,908 16,055,998 $ 75,301,642 $ 1-2 Years 3,995,705 - 5,501,822 10,496,377 8,994,580 3,302,576 $ 32,291,060 $ 2-3 Years - 3-5 Years $ - 7,000,351 4,998,975 2,001,756 12,471,768 $ 26,472,850 - $ - 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, 2012, 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 % U. S. Treasuries and securities having principal and interest guaranteed by the U.S. Government .......................................................................................... 100% U. S. Government agencies, instrumentalities and government sponsored enterprises .......................................................................No more than 80% Fully insured or collateralized CD’s ........................................................No more than 30% 42 Actual % 9.28% 39.64% 0% City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 Banker’s Acceptances ............................................................................No more than 25% A-1/P-1 Commercial Paper.....................................................................No more than 35% Maximum per issuer...........................................................................10% of total C. P Repurchase Agreements .............................................................................................. 100% Money Market Funds .................................................................................................... 100% State Investment Pool .................................................................................................. 100% 0% 0% 0% 0% 39.70% 11.38% 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, 2012 had a weighted average maturity of 396 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. 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 2010-11 (Tax Year 2010) and fiscal year 2011-12 (Tax Year 2011), follow: Tax Year 2010 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 $ $ $ $ $ $ 671,441,312 1.4691 9,864,144 733,033,525 None 9,429,548 311,392 365,238 Tax Year 2011 $ $ $ $ $ $ 636,293,155 1.5787 10,045,160 666,827,282 None 9,640,017 343,027 391,213 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: 43 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 Delinquent Intergovern- Special Property Accrued mental Assessm ents Taxes Interest 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 Total $ 1,587,159 10,981 38,190 5,400 1,023,301 1,523 134,879 3,783,543 2,281,865 146,011 514,610 60,257 $ 2,228,211 $ 553,575 553,996 1,827,469 140,809 1,252,625 761 278,778 299,732 616 - 20,169 4,625,000 - $ 391,213 20,134 - $ 12,281 343 1,907 69 325 4,891 7,761 10,290 3,945 570 8,606 $ $ 9,587,719 $ 7,136,572 $ 4,645,169 $ 411,347 $ 50,988 $ 21,831,795 Allowance Amount 2012 Enterprise Funds: Solid Waste Water Wastewater $ 2011 13,046 152,946 94,768 $ 10,925 155,760 92,038 D. Due from Other Governments (Intergovernmental Receivables) Amounts due from other government units at June 30, 2012, are as follows: Agencies Federal State County Local 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 Desert Hills Golf Course Total $ 680 $ 1,837,599 547,452 553,996 1,733,724 93,745 140,809 899,955 - 1,451 221,523 - $ 245,784 $ 144,148 6,123 352,670 36,419 23,675 16,664 - 54,534 221,523 23,675 761 278,778 196,271 761 - - 82,507 - 616 - - $ 2,071,484 $ 4,157,098 44 $ 2,228,211 553,575 553,996 1,827,469 140,809 1,252,625 $ 312,001 $ 595,989 616 $ 7,136,572 4,239,033 564,899 594,093 1,832,938 1,164,110 4,626,848 1,392,395 3,792,065 2,570,933 469,822 515,796 68,863 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 E. Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2012, follows: * A FY2011 Building-addition capital improvement project of $138,254 was misclassified as an Improvement. Beginning balances have been restated accordingly. Government activities capital assets net of accumulated depreciation at June 30, 2012, include: General Capital Assets, Net Internal Service Fund Capital Assets, Net Total $ $ 313,891,170 7,008,268 320,899,438 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 $ 2,641,026 2,339,116 2,873,661 14,156 37,302 4,552,568 1,909,864 $ Total 45 14,367,693 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 Business-type activities: Balance June 30, 2011 Capital Assets Not Being Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated $ 10,492,389 193,175,016 Increases $ 37,275 3,280,064 $ Decreases Balance June 30, 2012 156,703,207 $ 10,529,664 39,751,873 156,703,207 50,281,537 203,667,405 3,317,339 Other Capital Assets: Buildings Improvements Equipment 7,945,196 226,821,085 5,162,877 156,703,208 1,518,435 83,345 - 164,648,404 228,339,520 5,246,222 Total Other Capital Assets 239,929,158 158,304,988 - 398,234,146 Less Accumulated Depreciation for: Buildings Improvements Equipment Total Accumulated Depreciation 5,190,026 95,438,120 3,931,708 3,034,657 9,712,350 373,397 - 8,224,683 105,150,470 4,305,105 104,559,854 13,120,404 - 117,680,258 Other Capital Assets, Net 135,369,304 145,184,584 - 280,553,888 $ 339,036,709 $ 148,501,923 Total Capital Assets, Business-type activities $156,703,207 $ 330,835,425 Depreciation was charged to programs as follows: Water Wastewater Solid Waste Golf courses Total $ 7,315,911 5,557,097 40,798 206,598 $ 13,120,404 Construction in progress is comprised mainly of water projects (waterline replacements and water transmission lines) 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 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. 46 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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, 2012, active ASRS members and the City were required by statute to contribute at the actuarially determined rate of 10.74 percent (10.5 percent retirement and 0.24 percent long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2012, 2011, and 2010 were $2,929,058, $2,490,013, and $2,471,539, 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 10 percent and 32.99 percent, respectively, of the members’ annual covered payroll. The City’s contributions to EORP for the years ended June 30, 2012, 2011 and 2010 were $80,694, $70,831, and $61,854, respectively, which were equal to the required contributions for the year. Agent plans - For the year ended June 30, 2012 active PSPRS members were required by statute to contribute 8.65 percent of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 22.76 percent for police and 30.34 percent for fire. Funded Status and Funding Progress – Funding progress of the two agent plans as of June 30, 2011, 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 $ 43,968,517 $ 30,253,905 64,818,702 52,542,833 $ 20,850,185 22,288,928 67.8% $ 57.6% 9,350,250 5,973,174 223.0% 373.2% 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, 2011 (the date of the most recent actuarial report) follows: 47 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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 Fire 22.76% $2,115,546 $2,115,546 June 30, 2011 Individual entry age 30.34% $1,787,905 $1,787,905 June 30, 2011 Individual entry age 8.25% 5.0%-8.0% 5% None Level Percent-of-pay closed 20 years Smoothed market 8.25% 5.5%-8.5% 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: Annual Pension Net Pension Percent Contributed Cost POLICE FIRE 2009 2010 2011 2009 2010 2011 $ 1,937,002 1,847,772 2,115,546 1,771,820 1,557,575 1,787,905 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Obligation $ - G. Noncurrent Liabilities The following changes occurred in noncurrent liabilities during the fiscal year ended June 30, 2012: 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, 2011 Additions Retirements Balance June 30, 2012 Due Within One Year $ 125,665,000 $ 2,735,000 3,010,000 (877,661) 1,895,380 5,702,487 318,329 $ 6,610,000 $ 119,055,000 $ 875,000 1,860,000 245,000 2,765,000 (66,831) (810,830) 122,522 1,772,858 322,787 5,698,029 $ 318,329 $ 8,108,478 53,635 $ 1,345,000 $ 1,420,000 $ 3,260,000 113,765,000 (39,915) (531,533) 184,228 3,684,545 4,327,605 63,921,836 46,492 841,692 1,420,000 3,425,000 4,478,041 263,777 53,635 $ 9,123,410 9,586,818 $ 138,130,206 $ 2,765,000 $ 117,025,000 (571,448) 3,868,773 68,249,441 834,549 $ 192,171,315 $ 48 $ 130,340,057 $ 183,101,540 6,890,000 910,000 255,000 2,199,960 $ 10,254,960 $ City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 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. 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, 2012. 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 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 Taxes Project(s) funded Refunding 1995 issue Art Center/Fire Station construction 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 49 Project(s) funded Water treatment plant/water distribution City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 For the year ended June 30, 2012 the pledged revenues described above amounted to $62,074,352 for governmental activities and $44,734,384 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, 2012 debt service for governmental activities totaled $13,526,441 and for business-type activities $17,151,861, or 22% and 38% 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 $ 1,420,000 14,640,000 2,905,000 9,000,000 30,785,000 61,100,000 127,925,000 29,530,000 277,330,000 5,825,000 1,105,000 5,950,000 26,110,000 51,835,000 113,765,000 28,230,000 232,820,000 $ 285,415,000 $ 234,240,000 Unamortized Premium/ (Issue Costs) $ - (32,319) (373,269) 1,350,525 3,153,013 17,090 4,115,040 $ 4,115,040 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, 2012 follows: Water, Etc. (20%) Secondary Assessed Valuation All Other (6%) Legal Limit Outstanding G.O. Debt $ $666,827,282 133,365,456 $ 1,420,000 40,009,637 - Available Debt Margin $ 131,945,456 $ 40,009,637 50 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 Annual Debt Service Requirements to Maturity BONDS AND IMPROVEMENT DISTRICTS 1997 Refunding Bonds Improvement District No. 67 Bonds Interest Total Principal Interest Total Principal July 1 2012 2013 1,420,000 $ $ 69,580 1,489,580 $ 1,489,580 910,000 950,000 $ 1,860,000 Improvement District No. 68 Bonds 255,000 129,955 384,955 265,000 117,970 382,970 280,000 105,515 385,515 290,000 92,355 382,355 305,000 78,725 383,725 320,000 64,390 384,390 335,000 49,350 384,350 350,000 33,605 383,605 365,000 17,155 382,155 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ 2,765,000 $ 689,020 $ 3,454,020 $ 5,825,000 $ 596,071 $ 6,421,071 MPC Bonds 2007 Series Utility 3,425,000 5,519,538 8,944,538 3,585,000 5,382,538 8,967,538 3,750,000 5,239,138 8,989,138 3,920,000 5,089,138 9,009,138 4,095,000 4,893,138 8,988,138 4,270,000 4,688,388 8,958,388 4,440,000 4,453,538 8,893,538 4,620,000 4,231,538 8,851,538 4,810,000 4,000,538 8,810,538 5,015,000 3,802,125 8,817,125 5,225,000 3,551,375 8,776,375 5,450,000 3,290,125 8,740,125 5,685,000 3,017,625 8,702,625 5,930,000 2,733,375 8,663,375 8,626,875 6,190,000 2,436,875 6,460,000 2,127,375 8,587,375 6,745,000 1,844,750 8,589,750 7,050,000 1,507,500 8,557,500 7,365,000 1,155,000 8,520,000 7,695,000 786,750 8,481,750 8,040,000 402,000 8,442,000 $ 113,765,000 $ 70,152,367 $ 183,917,367 68,820 35,150 $ 103,970 978,820 985,150 $ MPC Bonds 2003 Series 435,000 257,507 450,000 241,847 470,000 224,973 490,000 207,347 515,000 182,847 535,000 157,098 560,000 134,628 585,000 110,828 610,000 85,672 635,000 58,833 665,000 30,258 $ MPC Bonds 2003 Refunding 1995A 1,350,000 240,703 1,590,703 1,425,000 173,203 1,598,203 1,490,000 119,765 1,609,765 1,560,000 62,400 1,622,400 2012 2013 2014 2015 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 1,420,000 69,580 - 5,950,000 $ 1,691,838 $ 1,963,970 692,507 691,847 694,973 697,347 697,847 692,098 694,628 695,828 695,672 693,833 695,258 7,641,838 MPC Bonds 2003 Refunding 1995B 260,000 44,735 304,735 270,000 35,375 305,375 280,000 25,250 305,250 295,000 14,750 309,750 $ 1,105,000 $ 120,110 $ 1,225,110 MPC Bonds 2007 Series B 1,175,000 1,111,970 2,286,970 1,230,000 1,064,970 2,294,970 1,280,000 1,015,770 2,295,770 1,335,000 964,570 2,299,570 1,390,000 911,170 2,301,170 1,445,000 855,570 2,300,570 1,505,000 797,770 2,302,770 1,565,000 737,570 2,302,570 1,630,000 674,970 2,304,970 1,700,000 606,510 2,306,510 1,770,000 534,260 2,304,260 1,850,000 458,150 2,308,150 1,930,000 365,650 2,295,650 2,010,000 281,212 2,291,212 2,100,000 193,275 2,293,275 2,195,000 98,775 2,293,775 $ 26,110,000 $ 10,672,162 $ 36,782,162 51 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 BONDS AND IMPROVEMENT DISTRICTS MPC Bonds 2007 Series D MPC Bonds 2010 Refunding 2001 Interest Total Principal Interest Total Principal July 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2,330,000 2,435,000 2,540,000 2,655,000 2,760,000 2,870,000 2,985,000 3,110,000 3,240,000 3,375,000 3,520,000 3,670,000 3,825,000 3,995,000 4,170,000 4,355,000 2,442,025 2,348,825 2,251,425 2,149,825 2,043,625 1,905,625 1,762,125 1,612,875 1,457,375 1,323,725 1,154,975 978,975 795,475 604,225 404,475 195,975 4,772,025 4,783,825 4,791,425 4,804,825 4,803,625 4,775,625 4,747,125 4,722,875 4,697,375 4,698,725 4,674,975 4,648,975 4,620,475 4,599,225 4,574,475 4,550,975 1,340,000 1,375,000 1,425,000 1,465,000 1,840,000 1,910,000 2,010,000 2,110,000 2,210,000 2,305,000 2,400,000 2,500,000 2,610,000 2,730,000 - 1,188,581 1,155,081 1,100,082 1,057,331 1,013,381 939,781 844,282 743,781 638,281 549,881 454,800 352,800 240,300 122,850 - 2,528,581 2,530,081 2,525,082 2,522,331 2,853,381 2,849,781 2,854,282 2,853,781 2,848,281 2,854,881 2,854,800 2,852,800 2,850,300 2,852,850 - $ 51,835,000 $ 23,431,550 $ 75,266,550 $ 28,230,000 $ 10,401,212 $ 38,631,212 CONTRACTS PAYABLE WIFA Loan #920069-03 WIFA Loan #910043-03 Principal Interest Total Principal Interest Total July 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 501,429 518,032 535,184 552,904 571,210 590,123 609,662 629,848 650,702 672,247 694,505 $ 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 6,525,846 216,071 199,468 182,316 164,596 146,290 127,377 107,838 87,652 66,798 45,253 22,995 $ 1,366,655 $ WIFA Loan #920088-04 1,681,632 1,001,311 1,744,727 937,033 1,810,189 870,342 1,878,108 801,150 1,948,574 729,361 2,021,685 654,879 2,097,539 577,603 2,176,238 497,427 2,257,891 414,242 2,342,607 327,937 2,430,501 238,393 2,521,694 145,490 49,092 2,616,802 $ 27,528,187 $ 7,244,259 717,500 717,500 717,500 717,500 717,500 717,500 717,500 717,500 717,500 717,500 717,500 2,294,967 2,370,953 2,449,455 2,530,557 2,614,343 2,700,904 2,790,331 2,882,719 2,978,166 3,076,773 3,178,645 988,923 912,937 834,435 753,333 669,547 582,986 493,559 401,171 305,724 207,117 105,245 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 3,283,890 7,892,501 $ 29,867,814 $ 6,254,976 $ 36,122,789 2,682,943 2,681,760 2,680,532 2,679,258 2,677,936 2,676,564 2,675,141 2,673,665 2,672,133 2,670,544 2,668,895 2,667,184 2,665,894 $ 34,772,447 52 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 H. Interfund Transfers Transfers Out Transfers In Governmental funds - major funds: Radio Comm $ 162,074 General Fund Grants Grants 100,695 Debt Service 4,273,507 Debt Service Debt Service 101,383 Debt Service 4,799,518 Two Percent Tax 4,259 General Fund HURF Road Tax Grants Debt Service Recreation Complex General Fund Arroyo Dunes Public Safety Tax Two Percent Tax Nonmajor funds: 2,929,222 Radio Comm 1,500,000 517,873 169,982 - Total Governmental Activities Solid Waste Debt Service Radio Comm Debt Service Radio Comm Debt Service Radio Comm Water Wastewater Total Enterprise Funds Equipment Maint Radio Comm Total Internal Service Funds Funds Two Percent Tax $ General Fund General Fund HURF Road Tax Public Safety Tax Solid Waste Wastewater Water General Fund Solid Waste Water Wastewater Equipment Maint Two Percent Tax Grants 1,080 1,500,000 4,259 Total Governmental Activities 14,522,118 Recreation Complex Two Percent Tax 14,558,513 Enterprise funds: Arroyo Dunes 20,972 5,400 62,338 9,180 32,277 2,340 132,507 517,873 100,695 4,273,507 101,383 4,799,518 2,929,221 20,973 32,277 62,338 162,074 5,400 9,180 2,340 Two Percent Tax 169,982 Total Enterprise Funds 169,982 - Internal Service funds: 1,080 1,080 Total Transfers Out $ 14,692,100 Total Internal Service Funds Funds - Total Transfers In $ 14,692,100 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 Two Percent Tax Fund to the General Fund ($517,873 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 $37,475 are for debt service ($115,587), Radio Maintenance ($16,920) and $169,982 for CIP projects. 53 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 I. Interfund Receivables and Payables Interfund balances at June 30, 2012, follow: Interfund Receivable Major Funds Interfund Payable General Major Governmental Funds: Community Redevelopment Fund Grants Fund Internal Service Funds: Equipment Maintenance Insurance Reserve Workers Compensation $ 105,434 869,100 572,819 70,651 270,000 $ 1,888,004 Total Receivable Because they serve primarily governmental funds, the interfund activity noted above in the Internal Service Equipment Maintenance, Insurance Reserve 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, $853,231, 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 provides health benefits to its employees and their dependents through the Yuma Area Benefit Consortium (trust). The trust is comprised of four participating entities and provides benefits through a selffunding trust agreement with its members. The consortium purchases insurance for claims in excess of $100,000 per individual per plan year. A third-party administrator provides claim processing and record keeping services. The City is responsible for paying premiums while employees must contribute for costs of dependent coverage. The trust sets rates through projection of claims cost and administrative expenses, along with a determination of sufficient fund balance to maintain rate stability and trust integrity. Should the consortium become insolvent or otherwise unable to discharge its liabilities, the participating entities shall be assessed a pro rata share. This assessment may not exceed the amount of each participating entity’s annual contribution. Benefit payments to beneficiaries are limited to the amount in the trust. Should the assessment not yield sufficient funds to pay outstanding claims, the trust’s obligation to pay claims is limited to the amount in the trust after assessment and the trustees and the participating entities have no further obligation of any type. 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. 54 City of Yuma, Arizona NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2012 Workers Compensation Fund Insurance Reserve Fund Beginning of Year Liability Fiscal Year 2011-12 2010-11 2009-10 $ Claims and Changes In Estimates 60,112 $ 48,058 24,140 528,959 437,591 456,306 End of Year Liability Claim Payments $ 516,594 425,537 432,388 $ Beginning of Year Liability 72,477 60,112 48,058 $ Claims and Changes In Estimates 998,021 $ 1,234,436 1,017,121 545,050 851,083 1,006,908 Claim Payments End of Year Liability $ 984,381 564,150 840,870 $ 1,248,076 998,021 1,017,121 K. Construction Commitments The City has active construction projects as of June 30, 2012. At year-end the government’s commitments with contractors for specific projects are as follows: Construction Commitments Public Safety Parks & Recreation Environmental Health Streets Water System Wastewater $ Original Contract 4,607,654 251,804 75,793 4,251,228 126,821 - $ 9,313,300 Spent to Date $ 1,217,941 2,343 26,771 3,329,493 115,254 - Remaining Commitment $ 3,389,713 249,461 49,022 921,735 11,566 - $ $ 4,691,803 4,621,498 L. Deficits in Fund Equity At June 30, 2012, 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 $228,862 at June 30, 2012. The City intends to adjust its internal charges in future fiscal years to mitigate this deficit. 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, 2012. 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. 55 56 REQUIRED SUPPLEMENTARY INFORMATION 57 Schedule of Funding Progress Public Safety Personnel Retirement System POLICE 2009 2010 2011 FIRE 2009 2010 2011 Actual Value of Plan Assets Actuarial Accrued Liability Funding Liability (Excess) $ 41,337,090 41,763,616 43,968,517 $ 55,583,097 58,600,342 64,818,702 $ 14,246,007 16,836,726 20,850,185 74.4% 71.3% 67.8% 29,459,868 29,389,749 30,253,905 46,691,521 48,361,082 52,542,833 17,231,653 18,971,333 22,288,928 63.1% 60.8% 57.6% Note: 2011 is the most recent actuarial valuation report available. 58 Annual Covered Payroll Funded Ratio $ Unfunded Liability as Percentage of Payroll 9,873,498 9,412,636 9,350,250 144.3% 178.9% 223.0% 6,144,945 5,913,555 5,973,174 280.4% 320.8% 373.2% City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 Budget Budgetary Fund Balance, July 1 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 Animal Licenses Total Licenses Intergovernmental: Sales Tax - State State Revenue Sharing Auto Lieu Tax Other Governmental Charges Total Intergovernmental Charges for Services: Building Inspection Fees Recreation Fees Police Services Fire Ambulance 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 Positive (Negative) $ 4,473,327 Original $ 17,160,470 Final $ 17,160,470 Actual Amounts $ 21,633,797 10,045,160 250,000 17,985,000 242,000 3,035,000 31,557,160 10,045,160 250,000 17,985,000 242,000 3,035,000 31,557,160 9,640,017 304,500 18,470,938 242,000 3,058,634 31,716,089 (405,143) 54,500 485,938 23,634 158,929 320,000 35,000 880,400 13,200 1,248,600 320,000 35,000 880,400 13,200 1,248,600 288,133 31,670 863,219 11,956 93,030 1,288,008 (31,867) (3,330) (17,181) (1,244) 93,030 39,408 7,040,887 7,854,995 2,810,000 52,000 17,757,882 7,040,887 7,854,995 2,810,000 52,000 17,757,882 7,272,049 7,854,670 3,108,562 34,252 18,269,533 231,162 (325) 298,562 (17,748) 511,651 305,100 560,800 594,000 2,000,000 50,700 3,510,600 305,100 560,800 594,000 2,000,000 50,700 3,510,600 306,818 546,940 566,633 477,169 29,314 1,926,874 1,718 (13,860) (27,367) (1,522,831) (21,386) (1,583,726) 1,480,000 1,480,000 1,480,000 1,480,000 1,549,889 1,549,889 100,200 163,500 263,700 100,200 163,500 263,700 53,277 158,132 211,409 (46,923) (5,368) (52,291) 5,000 219,000 224,000 56,041,942 557,323 5,000 219,000 224,000 56,041,942 557,323 73,759,735 30,339 222,099 252,438 55,214,240 517,873 77,365,910 25,339 3,099 28,438 (827,702) (39,450) 3,606,175 73,759,735 69,889 69,889 Continued on next page See accompanying notes to this schedule 59 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 Budget Original Charges to Appropriations (outflows): General Government: Mayor and Council Elections City Administrator Strategic Communications Neighborhood Services 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 Animal Control Police Support Services Police Communication Center Police 911 Administration Fire Administration Fire Training Fire Suppression Fire Suppression - Ambulance Community Risk Reduction Facilities Maintenance Fire Special Operations Municipal Court Total Public Safety Operating Expenditures Capital Outlay Total Public Safety Expenditures Final Actual Amounts Variance with Final Budget Positive (Negative) 250,524 150,000 451,484 657,890 211,235 301,562 941,116 3,727,292 262,074 1,066,994 222,549 317,342 949,118 96,716 2,310,434 405,667 891,049 (2,560,991) 10,652,055 303,231 10,955,286 270,524 150,000 451,484 657,890 211,235 301,562 941,116 3,707,292 262,074 1,064,594 224,949 317,342 949,118 96,716 2,351,613 405,667 891,049 (2,560,991) 10,693,234 303,231 10,996,465 259,959 127,689 464,479 585,771 126,412 308,879 934,338 1,937,053 235,737 1,005,342 224,705 308,237 830,823 101,963 2,210,141 417,622 859,597 (2,560,991) 8,377,756 9,256 8,387,012 10,565 22,311 (12,995) 72,119 84,823 (7,317) 6,778 1,770,239 26,337 59,252 244 9,105 118,295 (5,247) 141,472 (11,955) 31,452 2,315,478 293,975 2,609,453 15,798,500 650,000 2,256,559 1,891,476 31,355 771,860 344,054 10,787,786 208,320 676,727 581,857 50,946 1,532,254 35,581,694 347,305 15,782,900 640,000 2,250,707 1,891,476 31,355 771,860 344,054 9,937,786 1,058,320 410,619 894,905 50,946 1,485,314 35,550,242 391,957 16,143,058 676,943 2,034,778 1,835,743 45,430 774,603 348,155 9,246,940 1,120,824 372,458 953,765 27,174 1,400,991 34,980,862 251,966 (360,158) (36,943) 215,929 55,733 (14,075) (2,743) (4,101) 690,846 (62,504) 38,161 (58,860) 23,772 84,323 569,380 139,991 35,928,999 35,942,199 35,232,828 709,371 Continued on next page See accompanying notes to this schedule 60 City of Yuma, Arizona Budgetary Comparison Schedule General Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 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 Facilities Maintenance Intragovernmental Charges Total Parks, Recreation and Culture Operating Expenditures Total Parks, Recreation and Culture Expenditures Environmental Health and Protection: Environmental Management Facilities Maintenance Intragovernmental Charges Total Environmental Health and Protection Total 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 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) 509,396 4,158,619 153,788 572,124 122,883 216,864 244,965 492,438 125,744 1,040,681 (137,938) 509,396 4,158,619 153,788 573,724 122,883 216,864 254,038 483,338 120,671 1,044,181 (137,938) 508,984 4,117,849 160,877 548,534 58,868 178,052 225,314 334,474 65,892 1,206,888 (137,938) 412 40,770 (7,089) 25,190 64,015 38,812 28,724 148,864 54,779 (162,707) - 7,499,564 7,499,564 7,499,564 7,499,564 7,267,794 7,267,794 231,770 231,770 433,269 225,378 (294,096) 364,551 433,269 225,378 (294,096) 364,551 320,713 157,701 (294,096) 184,318 112,556 67,677 180,233 364,551 364,551 184,318 180,233 515,338 395,309 2,182,178 357,923 460,959 395,309 2,182,178 357,923 410,874 391,492 2,039,098 360,304 50,085 3,817 143,080 (2,381) 3,450,748 3,396,369 3,201,768 194,601 3,450,748 57,548,612 650,536 58,199,148 4,393,672 62,592,820 3,396,369 57,503,960 695,188 58,199,148 4,393,672 62,592,820 3,201,768 54,012,498 261,222 54,273,720 4,536,276 58,809,996 194,601 3,491,462 433,966 3,925,428 (142,604) 3,782,824 $ 11,166,915 $ 11,166,915 $ 18,555,914 $ 7,388,999 Concluded See accompanying notes to this schedule 61 City of Yuma, Arizona Budgetary Comparison Schedule Highway User Revenue Fund For the Year Ended June 30, 2012 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental State Gasoline Tax Use of Money and Property Interest Miscellaneous Other Total Revenues Budget Original Final $ 712,789 $ 712,789 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 Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 1,086,702 Variance with Final Budget Positive (Negative) $ 373,913 5,863,023 5,863,023 5,700,428 (162,595) 8,000 8,000 1,327 (6,673) 62,000 5,933,023 6,645,812 62,000 5,933,023 6,645,812 92,271 5,794,026 6,880,728 30,271 (138,997) 234,916 1,041,070 1,041,070 1,107,691 (66,621) 2,199,425 719,623 420,353 311,756 354,142 989,020 2,199,425 719,623 420,353 311,756 354,142 989,020 2,006,389 849,541 375,632 307,099 297,303 1,026,235 193,036 (129,918) 44,721 4,657 56,839 (37,215) 78,430 134,000 78,430 134,000 76,223 - 6,247,819 101,202 6,349,021 6,247,819 101,202 6,349,021 6,046,113 101,383 6,147,496 2,207 134,000 201,706 (181) 201,525 296,791 See accompanying notes to this schedule 62 $ 296,791 $ 733,232 $ 436,441 City of Yuma, Arizona Budgetary Comparison Schedule City Road Tax Fund For the Year Ended June 30, 2012 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 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Streets Engineering Street Maintenance Pathways and Trails Right-Of-Way Management Capital Projects Parks, Recreation and Culture Streets Environmental, Health and Safety Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Positive (Negative) $ (202,268) Original $ 3,814,307 Final $ 3,814,307 Actual Amounts $ 3,612,039 8,991,000 8,991,000 9,233,899 242,899 355,000 8,500 355,000 8,500 419,747 13,346 64,747 4,846 5,000 5,000 358 9,359,500 13,173,807 9,359,500 13,173,807 2,437 9,669,787 13,281,826 2,437 310,287 108,019 1,258,381 856,626 909,054 101,250 1,258,381 856,626 909,054 101,250 1,151,475 950,426 879,245 101,838 106,906 (93,800) 29,809 (588) 1,648,467 560,000 5,333,778 4,797,109 10,130,887 2,053,885 148,014 5,327,210 4,797,109 10,124,319 9,165 699,435 119,287 3,910,871 4,799,518 8,710,389 (9,165) 1,354,450 28,727 1,416,339 (2,409) 1,413,930 $ 3,042,920 $ 3,049,488 $ 4,571,437 See accompanying notes to this schedule 63 (4,642) $ 1,521,949 City of Yuma, Arizona Budgetary Comparison Schedule Grants Fund For the Year Ended June 30, 2012 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 Streets Parks, Recreation and Culture Environmental Health and Protection Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 Final $ - Actual Amounts $ - Variance with Final Budget Positive (Negative) $ - 4,784,490 29,587 32,076,175 6,764,356 29,446 21,097,000 3,475,253 1,608,218 - (3,289,103) 1,578,772 (21,097,000) 77,983 36,968,235 9,077,433 36,968,235 56 46,976 28,494 5,158,997 56 (9,030,457) 28,494 (31,809,238) 36,968,235 36,968,235 100,694 5,259,691 100,694 (31,708,544) 9,581,751 386,868 1,851,953 511,500 1,214,163 782,313 9,460,354 1,968,008 125,000 1,210,560 1,061,721 2,322,963 124,036 114,840 1,113,313 (279,408) 7,137,391 1,843,972 10,160 97,247 7,482,000 14,400,000 925,000 615,000 36,968,235 36,968,235 10,889,070 10,650,000 1,267,930 615,000 36,968,235 36,968,235 518,559 5,255,432 4,259 5,259,691 10,889,070 10,650,000 749,371 615,000 31,712,803 (4,259) 31,708,544 $ - See accompanying notes to this schedule 64 $ - $ - $ - City of Yuma, Arizona Budgetary Comparison Schedule Community Redevelopment Fund For the Year Ended June 30, 2012 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 $ $ 1,684,943 Charges to Appropriations (outflows): Current: Community Design and Development Capital Outlay Capital Projects General Government Total Expenditures Total Charges to Appropriations $ - $ 1,684,943 - Total Revenues Amounts Available for Appropriation Budgetary Fund Balance, June 30 - Final - - Variance with Final Budget Positive (Negative) $ - 873,412 (811,531) 18,105 18,105 25,000 1,709,943 1,709,943 25,000 1,709,943 1,709,943 17,647 6,174 915,338 915,338 17,647 (18,826) (794,605) (794,605) 1,675,943 4,000 1,660,943 19,000 865,107 17,341 795,836 1,659 30,000 1,709,943 1,709,943 30,000 1,709,943 1,709,943 32,890 915,338 915,338 (2,890) 794,605 794,605 - See accompanying notes to this schedule 65 $ - $ - $ - City of Yuma, Arizona NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2012 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 expenditures exceeded appropriations by $5,965 due to fiscal agent fees not being budgeted. Local Transportation Assistance Fund expenditures exceeded appropriations by $765 as receipts exceeded original estimates. The Equipment Maintenance Fund had expenditures exceed appropriations by $87,950 after providing unplanned repair services during the year with attendant auto parts purchases. Outside counsel caused expenditures within the Insurance Reserve fund to exceed appropriations by $147,092. In each case, the fund was not significantly impaired by the excess expenditures. 66 OTHER SUPPLEMENTARY INFORMATION 67 68 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. 69 City of Yuma, Arizona Combining Balance Sheet Nonmajor Governmental Funds June 30, 2012 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 Public Safety Tax $ 143 $ 1,356,823 $ 143 $ - Radio Communication Recreation Complex $ 861,175 $ 2,179,068 221,523 549 $ 1,578,895 $ 94,896 54,534 445 1,011,050 14,167 1,095 12,594 730 $ 2,207,654 $ $ 4,012 Liabilities and Fund Balances Liabilities: Accounts Payable Accrued Payroll and Related Taxes Deferred Revenues Total Liabilities 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 - 40 659 - - 143 $ 70 619 3,467 7,479 1,578,236 - 143 1,578,236 143 $ 1,578,895 19,195 7,811 34,541 61,547 - 12,594 730 - 1,500,000 1,003,571 - $ $ - 1,003,571 632,783 2,146,107 1,011,050 $ 2,207,654 Special Revenue Two Percent Tax Yuma Mall Maintenance Total Nonmajor Governmental Funds $ 3,696,729 $ 48,026 $ 8,141,964 36,322 1,856 2,442 90 $ 3,737,439 $ 626 23,675 20,134 92,461 $ 146,011 299,732 20,134 3,945 15,036 820 8,627,642 $ $ 1,088 $ 65,877 40,963 6,874 84,996 132,833 1,053 20,134 22,275 19,245 139,671 224,793 2,442 90 - 15,036 820 3,602,074 - 1,578,236 5,102,074 70,186 - 1,003,571 70,186 143 70,186 632,783 8,402,849 3,604,606 $ 3,737,439 $ 92,461 $ 8,627,642 71 City of Yuma, Arizona Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2012 Local Transportation Assistance Revenues: Taxes 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 Parks, Recreation and Culture Total Expenditures Revenues Over/(Under) Expenditures Other Financing Sources/(Uses): Transfers In Transfers Out Total Other Financing Sources/(Uses) Net Changes in Fund Balances Fund Balances, Beginning Fund Balances, Ending $ - Special Revenue Public Safety Radio Recreation Tax Communication Complex $ 3,692,304 $ 5,419 3,697,723 $ 518,081 2,440 468 520,989 433,523 9,390 442,913 - 64,122 - - 1,655,589 - - 472,229 - 75,765 - - 34,532 14,604 75,765 64,122 506,761 1,670,193 (75,765) 3,633,601 14,228 (1,227,280) - (2,929,222) 180,074 - 1,500,000 - - (2,929,222) 180,074 1,500,000 (75,765) 704,379 194,302 272,720 75,908 873,857 809,269 1,873,387 143 72 $ 1,578,236 $ 1,003,571 $ 2,146,107 Special Revenue Yuma Two Percent Mall Tax Maintenance Total Nonmajor Governmental Funds $ 4,665,296 $ 125,256 8,595 31,639 4,830,786 142,151 3,815 145,966 $ 1,652,336 - 64,122 3,307,925 - - 472,229 11,355 200,061 - 275,826 60,491 56,340 177,492 1,897,523 200,061 56,340 177,492 4,414,425 2,933,263 (54,095) 5,223,952 4,259 (2,187,855) - 1,684,333 (5,117,077) (2,183,596) - (3,432,744) (54,095) 1,791,208 2,854,939 124,281 6,611,641 $ 3,604,606 $ 70,186 749,667 $ 8,499,751 643,337 449,977 45,312 9,638,377 8,402,849 73 City of Yuma, Arizona Budgetary Comparison Schedule Debt Service Fund For the Year Ended June 30, 2012 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 Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Original Final $ 540,201 $ 540,201 Actual Amounts $ 542,056 Variance with Final Budget Positive (Negative) $ 1,855 1,099,000 1,099,000 1,089,000 (10,000) 212,058 1,311,058 12,209,418 14,060,677 212,058 1,311,058 12,209,418 14,060,677 219,256 1,308,256 12,219,218 14,069,530 7,198 (2,802) 9,800 8,853 8,020,000 5,500,476 13,520,476 13,520,476 8,020,000 5,500,476 13,520,476 13,520,476 8,010,000 5,506,241 10,200 13,526,441 13,526,441 10,000 (5,765) (10,200) (5,965) (5,965) $ 540,201 $ $ 543,089 74 540,201 $ 2,888 City of Yuma, Arizona Budgetary Comparison Schedule Capital Projects Fund For the Year Ended June 30, 2012 Budgetary Fund Balance, July 1 Resources (inflows): Intergovernmental Arizona Department of Transportation Yuma School District #1 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) $ 28,584,850 $ 28,584,850 $ 27,154,208 $ (1,430,642) - Charges to Appropriations (outflows): Capital Outlay: General Government Public Safety Streets Parks, Recreation and Culture Environmental Health and Safety Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ - 2,893,392 352,670 2,893,392 352,670 5,302,575 5,302,575 1,589,229 (3,713,346) 29,850 20,000,000 25,332,425 53,917,275 29,850 20,000,000 25,332,425 53,917,275 32,519 48,070 4,915,880 32,070,088 2,669 (19,951,930) (20,416,545) (21,847,187) 8,475,000 7,815,000 15,512,780 2,247,032 10,421,294 44,471,106 44,471,106 8,648,936 7,765,064 15,172,468 2,463,032 10,427,174 44,476,674 44,476,674 278,540 2,022,303 7,031,606 262,652 5,380 9,600,481 9,600,481 8,370,396 5,742,761 8,140,862 2,200,380 10,421,794 34,876,193 34,876,193 9,446,169 75 $ 9,440,601 $ 22,469,607 $ 13,029,006 City of Yuma, Arizona Budgetary Comparison Schedule Local Transportation Assistance Special Revenue Fund For the Year Ended June 30, 2012 Budgetary Fund Balance, July 1 Budget Final Original $ 76,045 $ 76,045 Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Community Design and Development Outside Agencies - Cultural Activities Total Expenditures Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Actual Amounts $ 75,908 Variance with Final Budget Positive (Negative) $ (137) 76,045 76,045 75,908 (137) 75,000 75,000 75,000 75,000 75,000 75,000 75,765 75,765 75,765 (765) (765) (765) 1,045 $ 76 1,045 $ 143 $ (902) City of Yuma, Arizona Budgetary Comparison Schedule Public Safety Tax Special Revenue Fund For the Year Ended June 30, 2012 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Public Safety Sales Tax Use of Money and Property Interest Total Revenues Amounts Available for Appropriation Budget Original Final $ 929,321 $ 929,321 Actual Amounts $ 873,857 Variance with Final Budget Positive (Negative) $ (55,464) 3,595,256 3,595,256 3,692,304 97,048 5,000 3,600,256 4,529,577 5,000 3,600,256 4,529,577 5,419 3,697,723 4,571,580 419 97,467 42,003 72,140 72,140 72,140 72,140 64,122 64,122 8,018 8,018 2,925,347 2,997,487 2,925,347 2,997,487 2,929,222 2,993,344 $ 1,532,090 $ 1,532,090 $ 1,578,236 Charges to Appropriations (outflows): Current: Public Safety Police Support Services Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 77 (3,875) 4,143 $ 46,146 City of Yuma, Arizona Budgetary Comparison Schedule Radio Communication Special Revenue Fund For the Year Ended June 30, 2012 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 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 Budget Original Final $ 244,886 $ 244,886 Actual Amounts $ 809,269 Variance with Final Budget Positive (Negative) $ 564,383 518,081 216,581 2,440 2,440 301,500 301,500 - - 301,500 380,200 926,586 301,500 380,200 926,586 468 520,989 180,074 1,510,332 468 219,489 (200,126) 583,746 384,544 230,000 614,544 614,544 384,544 230,000 614,544 614,544 472,229 34,532 506,761 506,761 (87,685) 195,468 107,783 107,783 312,042 $ 1,003,571 $ 312,042 78 $ $ 691,529 City of Yuma, Arizona Budgetary Comparison Schedule Recreation Complex Special Revenue Fund For the Year Ended June 30, 2012 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 $ 1,841,487 $ 1,841,487 Actual Amounts $ 1,873,387 Variance with Final Budget Positive (Negative) $ 31,900 480,000 7,500 480,000 7,500 427,642 5,881 (52,358) (1,619) 4,000 491,500 1,500,000 3,832,987 4,000 491,500 1,500,000 3,832,987 9,390 442,913 1,500,000 3,816,300 5,390 (48,587) (16,687) 983,479 513,359 324,635 16,000 1,837,473 1,837,473 983,479 513,359 324,635 16,000 1,837,473 1,837,473 822,575 505,128 327,886 14,604 1,670,193 1,670,193 160,904 8,231 (3,251) 1,396 167,280 167,280 $ 1,995,514 $ 1,995,514 $ 2,146,107 79 $ 150,593 City of Yuma, Arizona Budgetary Comparison Schedule Two Percent Tax Special Revenue Fund For the Year Ended June 30, 2012 Final 2,523,893 Actual Amounts $ 2,854,939 Variance with Final Budget Positive (Negative) $ 331,046 4,407,000 4,407,000 4,665,296 258,296 10,000 10,000 125,256 8,595 4,417,000 6,940,893 4,417,000 6,940,893 31,639 4,830,786 4,259 7,689,984 31,639 413,786 4,259 749,091 125,595 831,500 577,523 81,000 209,762 - 125,595 831,500 575,123 70,500 209,762 12,900 45,223 828,875 534,109 52,563 191,566 11,355 80,372 2,625 41,014 17,937 18,196 1,545 390,000 1,763,000 3,978,380 2,057,323 6,035,703 317,093 1,640,907 3,783,380 2,057,323 5,840,703 56,340 177,492 1,897,523 2,187,855 4,085,378 1,100,190 $ 3,604,606 Budget Budgetary Fund Balance, July 1 Resources (inflows): Taxes Two PercentTax Use of Money and Property Recreation Fees Interest Miscellaneous Other Total Revenues Transfers In $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Parks, Recreation and Culture Administration Outside Agencies Art Center Heritage Events Facilities Maintenance Capital Outlay Capital Projects: General Government Parks, Recreation and Culture Total Expenditures Transfers Out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ Original 2,523,893 905,190 80 $ $ (1,405) 260,753 1,463,415 1,885,857 (130,532) 1,755,325 $ 2,504,416 City of Yuma, Arizona Budgetary Comparison Schedule Yuma Mall Maintenance Special Revenue Fund For the Year Ended June 30, 2012 Budgetary Fund Balance, July 1 Resources (inflows): Taxes Mall Assessments Property Tax - Delinquent Total Taxes Miscellaneous Other Total Revenues Budget Original Final $ 97,893 $ 97,893 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 $ 124,281 Variance with Final Budget Positive (Negative) $ 26,388 125,000 125,000 125,000 125,000 102,589 39,562 142,151 (22,411) 39,562 17,151 1,500 126,500 224,393 1,500 126,500 224,393 3,815 145,966 270,247 2,315 19,466 45,854 224,393 224,393 224,393 224,393 224,393 224,393 200,061 200,061 200,061 24,332 24,332 24,332 - 81 $ - $ 70,186 $ 70,186 82 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. 83 City of Yuma, Arizona Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2012 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 Construction In Progress Gross Capital Assets Less Accumulated Depreciation Captial Assets Net of Depreciation Total Noncurrent Assets Total Assets 740,258 Desert Hills Golf Course $ 408,079 Arroyo Dunes Golf Course $ 184,689 - Total Nonmajor Proprietary Funds $ 1,333,026 504,686 276 1,245,220 9,924 616 196 65,790 139 484,744 98 184,787 514,610 616 570 65,790 139 1,914,751 50,738 331,523 - 3,102,865 2,370,096 307,034 - 645,571 21,866 169,982 3,102,865 3,066,405 660,423 169,982 382,261 (222,180) 5,779,995 (3,892,078) 837,419 (618,295) 6,999,675 (4,732,553) 160,081 160,081 1,405,301 1,887,917 1,887,917 2,372,661 219,124 219,124 403,911 2,267,122 2,267,122 4,181,873 Liabilities Current Liabilities: Accounts Payable Accrued Payroll and Related Taxes Current Portion-Accrued Compensated Absences Unearned Revenue Total Current Liabilities Payable from Current Assets 95,484 11,438 23,659 - 35,262 10,466 23,619 69,169 4,187 413 1,774 - 134,933 22,317 49,052 69,169 130,581 138,516 6,374 275,471 Noncurrent Liabilities: Accrued Compensated Absences Total Long-Term Liabilities Total Liabilities 69,959 69,959 200,540 38,021 38,021 176,537 9,222 9,222 15,596 117,202 117,202 392,673 160,081 1,044,680 1,887,917 308,207 219,124 169,191 2,267,122 1,522,078 $ 1,204,761 $ 2,196,124 388,315 $ 3,789,200 Net Assets Invested in capital assets Unrestricted Total Net Assets 84 $ City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Nonmajor Proprietary Funds For the Year Ended June 30, 2012 Solid Waste 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 3,266,063 3,266,063 $ 2,693,038 40,798 2,733,836 Non-Operating Revenues/(Expenses): Interest Miscellaneous Revenues Net Non-Operating Revenues $ 202,729 12,138 3,428 218,295 $ 224,323 28,472 252,795 (104,591) 1,699 5,498 7,197 Income/(Loss) before Transfers 1,000,694 281,177 222,093 490,419 1,994,383 1,920,849 178,125 2,098,974 532,227 Operating Income/(Loss) Total Nonmajor Proprietary Funds Enterprise Funds Desert Hills Arroyo Dunes Golf Course Golf Course 4,838,210 247,395 5,085,605 (34,500) 926 1,653 2,579 3,266,063 1,203,423 293,315 225,521 490,419 5,478,741 393,136 417 501 918 3,042 7,652 10,694 539,424 (102,012) (33,582) 403,830 (26,372) - 169,982 - 169,982 (26,372) Change in Net Assets 513,052 (102,012) 136,400 547,440 Net Assets-beginning 691,709 251,915 3,241,760 Transfers In Transfers Out Net Assets-ending $ 1,204,761 85 2,298,136 $ 2,196,124 $ 388,315 $ 3,789,200 City of Yuma, Arizona Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Year Ended June 30, 2012 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 Total Enterprise Funds Nonmajor Desert Hills Arroyo Dunes Proprietary Golf Course Golf Course Funds $ 3,193,792 $ 1,993,225 $ (810,429) (909,190) (1,913,686) (1,027,569) 5,498 1,654 475,175 58,120 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 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 Unearned Revenue Other Operating Activity Revenue Total Adjustments 86 (26,373) - - (26,373) (26,373) - - (26,373) 1,461 1,461 792 792 424 424 2,677 2,677 450,263 58,912 5,132 514,307 289,995 349,167 179,557 818,719 184,689 $ 1,333,026 $ 740,258 $ $ 532,227 $ (104,591) $ 40,798 (72,272) 50 7,852 (38,978) 5,498 (57,052) 178,125 (5,688) 3,978 369 29,327 (49,584) (284) 4,814 1,654 162,711 $ Net Cash Provided by Operating Activities 217,761 $ 5,404,778 (77,718) (1,797,337) (135,832) (3,077,087) 497 7,649 4,708 538,003 475,175 $ 408,079 58,120 $ (34,500) $ 28,472 3,385 3,502 3,352 497 39,208 $ 4,708 393,136 247,395 (77,960) 7,363 419 40,681 (85,210) (284) 4,814 7,649 144,867 $ 538,003 City of Yuma, Arizona Budgetary Comparison Schedule Water Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 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) 19,445,000 $ 2,355,900 215,000 303,312 19,445,000 $ 18,329,057 $ 2,355,900 2,215,317 215,000 165,506 303,312 290,229 (1,115,943) (140,583) (49,494) (13,083) 75,000 1,000,000 116,000 51,500 23,561,712 23,561,712 75,000 1,000,000 116,000 51,500 23,561,712 23,561,712 74,860 796,569 38,299 123,217 22,033,054 22,033,054 (140) (203,431) (77,701) 71,717 (1,528,658) (1,528,658) 2,018,477 7,469,257 1,481,612 1,301,851 40,809 285,326 2,011,501 7,469,257 1,481,612 1,292,851 40,809 285,326 1,946,655 5,954,743 1,239,891 1,056,861 38,597 186,467 64,846 1,514,514 241,721 235,990 2,212 98,859 10,340 10,866,640 26,316 10,866,640 17,911 2,725,552 8,405 8,141,088 6,240,311 5,537,006 35,251,629 62,227 35,313,856 6,240,311 5,537,006 35,251,629 62,227 35,313,856 6,240,324 5,570,058 24,977,059 71,518 25,048,577 (13) (33,052) 10,274,570 (9,291) 10,265,279 (11,752,144) $ 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 (11,752,144) (3,015,523) $ 8,736,621 17,911 2,725,552 6,240,324 45,200 141,855 (33,802) (7,315,918) $ (1,194,401) 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. 87 City of Yuma, Arizona Budgetary Comparison Schedule Wastewater Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 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 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) 11,827,900 $ 865,000 1,380,000 24,700 11,827,900 $ 11,758,775 $ 865,000 936,249 1,380,000 1,789,923 24,700 13,976 1,500,000 200,000 15,000 21,500 16,178 15,850,278 15,850,278 1,500,000 200,000 15,000 21,500 16,178 15,850,278 15,850,278 7,734,514 359,214 15,281 47,399 45,999 22,701,330 22,701,330 921,887 6,495,419 425,413 935,543 303,391 921,887 6,495,419 425,413 935,543 303,391 942,183 5,876,049 359,438 888,943 183,389 103,146 6,158,100 103,146 6,158,100 65,433 1,849,286 37,713 4,308,814 3,082,717 2,258,417 20,684,033 32,826 20,716,859 3,082,717 2,258,417 20,684,033 32,826 20,716,859 3,082,717 2,258,762 15,506,200 34,617 15,540,817 (345) 5,177,833 (1,791) 5,176,042 (4,866,581) $ (4,866,581) 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 (69,125) 71,249 409,923 (10,724) 6,234,514 159,214 281 25,899 29,821 6,851,052 6,851,052 (20,296) 619,370 65,975 46,600 120,002 7,160,513 $ 12,027,094 1,849,286 3,082,717 36,259 45,750 (5,557,098) $ 6,682,860 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. 88 City of Yuma, Arizona Budgetary Comparison Schedule Solid Waste Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 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) 3,106,000 - 3,106,000 - 3,266,063 1,699 160,063 1,699 5,000 3,111,000 3,111,000 5,000 3,111,000 3,111,000 5,498 3,273,260 3,273,260 498 162,260 162,260 2,343,728 317,214 66,428 2,727,370 276,335 3,003,705 2,343,728 317,214 66,428 2,727,370 276,335 3,003,705 2,345,468 301,060 46,510 2,693,038 26,372 2,719,410 (1,740) 16,154 19,918 34,332 249,963 284,295 107,295 553,850 107,295 $ Reconciliation to Change in Net Assets: Depreciation and Amortization $ 446,555 (40,798) $ Change in Net Assets 513,052 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 Desert Hills Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 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 $ Final 970,000 $ 968,000 336,400 336,400 214,000 214,000 523,000 523,000 (2,000) 2,041,400 2,041,400 2,041,400 2,041,400 $ 1,000,694 281,177 222,093 490,419 926 1,653 1,996,962 1,996,962 Variance with Final Budget Positive (Negative) $ 32,694 (55,223) 8,093 (32,581) 926 1,653 (44,438) (44,438) 965,360 503,991 583,359 2,052,710 965,360 503,991 583,359 2,052,710 832,087 553,101 535,661 1,920,849 133,273 (49,110) 47,698 131,861 2,052,710 2,052,710 1,920,849 131,861 (11,310) $ 76,113 (11,310) Reconciliation to Change in Net Assets: Depreciation and Amortization $ 87,423 (178,125) $ Change in Net Assets (102,012) 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 Arroyo Dunes Golf Course Enterprise Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 Actual Amounts Budget Original Final Resources (inflows): Green Fees Cart and Club Rental Pro Shop Sales Interest Miscellaneous $ Total Revenues Transfers In Amounts Available for Appropriation Charges to Appropriations (outflows): Current: Maintenance Concession Capital Outlay: Capital Projects Total Expenditures Total Charges to Appropriations Excess/(Deficiency) of Resources Over Charges to Appropriations $ 259,000 9,429 1,000 750 270,179 270,179 $ 259,000 9,429 1,000 750 270,179 270,179 $ 202,729 12,138 3,428 417 501 219,213 169,982 389,195 Variance with Final Budget Positive (Negative) $ (56,271) 2,709 2,428 (333) 501 (50,966) 169,982 119,016 238,159 39,824 234,659 43,324 187,326 36,997 47,333 6,327 277,983 277,983 195,000 472,983 472,983 169,982 394,305 394,305 25,018 78,678 78,678 (5,110) $ (7,804) $ (202,804) Reconciliation to Change in Net Assets: Capital Projects Depreciation and Amortization 197,694 169,982 (28,472) $ Change in Net Assets 136,400 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 92 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. 93 City of Yuma, Arizona Combining Statement of Net Assets Internal Service Funds June 30, 2012 Assets Current Assets: Cash and Investments Accounts 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 Liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total Net Assets Equipment Equipment Replacement Maintenance $ 15,754,915 8,428 15,763,343 $ 26,508,236 (19,991,293) 6,516,943 22,280,286 8,576 709,518 5,015 723,109 Insurance Reserve $ 219,610 19,251 222,733 205,484 (175,753) 491,325 1,214,434 Employee Benefits Trust Workers Compensation $ 1,256,712 2,378 69,384 1,328,474 Totals 49,303 520,867 570,170 $ 306,478 178 306,656 $ 17,318,105 60,257 8,606 709,518 595,266 18,691,752 570,170 306,656 1,328,474 108 39,260 111,322 - 14,290 219,610 19,251 222,733 26,713,720 (20,167,046) 7,008,268 25,700,020 13,293 11,036 47,625 - 14,290 - 13,293 31,086 572,819 629,231 3,177 72,477 70,651 193,930 108 1,248,076 270,000 1,557,336 34,263 1,320,553 913,470 2,393,898 13,293 67,219 696,450 518 194,448 108 1,557,336 67,737 2,461,635 6,516,943 15,750,050 $ 22,266,993 491,325 26,659 517,984 375,722 375,722 306,548 $ 306,548 $ 94 $ - $ (228,862) (228,862) $ 7,008,268 16,230,117 23,238,385 City of Yuma, Arizona Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Year Ended June 30, 2012 Equipment Replacement Operating Revenues: Charges For Services Contributions City Property Damage Restitution Miscellaneous Total Operating Revenues $ 37,202 1,888,181 1,925,383 (1,925,240) Non-Operating Revenue/(Expenses): Interest Gain on the Sale of Assets Total Non-Operating Revenues 39,648 47,068 86,716 Income/(Loss) before Transfers (1,838,524) - Transfers Out Change in Net Assets Net Assets, Beginning $ Insurance Reserve $ 3,447,612 $ 2,231,242 143 143 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 $ 5,678,854 1,805 3,449,417 414 55,861 2,287,517 14,231 14,231 949,169 67,190 1,016,359 949,169 414 139,230 6,767,667 3,614,080 21,683 3,635,763 (186,346) 516,594 506,022 1,258,499 2,281,115 6,402 59,340 7,385 66,725 (52,494) 984,381 132,034 32,992 1,149,407 (133,048) 1,500,975 697,396 4,950,158 1,909,864 9,058,393 (2,290,726) - - (186,346) 6,402 (1,080) (1,838,524) (187,426) 24,105,517 705,410 22,266,993 $ 517,984 95 784 784 6,402 369,320 $ 375,722 $ 2,852 2,852 43,284 47,068 90,352 (51,710) (130,196) - - (51,710) (130,196) (2,201,454) 358,258 (98,666) 25,439,839 306,548 $ (228,862) $ (2,200,374) (1,080) 23,238,385 City of Yuma, Arizona Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2012 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 $ $ 3,453,806 $ (1,086,114) (2,516,376) (37,059) (37,059) Cash Flows from Noncapital Financing Activities: Cash Received from Other Funds Cash Paid to Other Funds Net Cash Flows Provided by/(Used for) Noncapital Financing Activities 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 Cash Flows from Investing Activities: Receipt of Interest Net Cash Flows Provided by Investing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, July 1, 2011 Cash and Cash Equivalents, June 30, 2012 Equipment Maintenance (148,684) Insurance Reserve Employee Benefits Trust Workers Compensation 2,279,879 $ 14,231 $ (66,744) (2,390,892) - 1,019,235 $ (929,251) (111,013) (52,513) 89,984 Totals 6,767,151 (1,086,114) (2,583,120) (3,357,202) (259,285) - (1,080) 70,651 - - - 70,651 (1,080) - (1,080) 70,651 - - 69,571 59,714 (18,670) (33,102) - - - 59,714 (51,772) 41,044 (33,102) - - - 7,942 40,284 40,284 44,269 210 210 (182,656) 411 411 (39,951) 837 837 (51,676) 2,854 2,854 92,838 44,596 44,596 (137,176) $ 15,710,646 15,754,915 $ 182,656 $ 39,951 - 358,154 $ 306,478 $ 1,163,874 1,256,712 $ 17,455,281 17,318,105 $ (1,925,240) $ (186,346) $ 6,402 $ (52,494) $ (133,048) $ (2,290,726) $ 1,888,181 1,888,181 (37,059) $ 21,683 180,725 (130,377) (5,015) 8,512 (37,866) 37,662 (148,684) $ (7,639) 28,352 (150,492) (19) 12,364 (117,415) (19) (111,013) $ (52,513) $ 2,876 (69,384) 39,485 250,055 223,032 89,984 $ 1,909,864 175,962 (130,377) (46,047) (102,514) (37,866) 262,419 2,031,441 (259,285) 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 but Not Reported Total Adjustments Net Cash Provided by/(Used for) Operating Activities 96 City of Yuma, Arizona Budgetary Comparison Schedule Equipment Replacement Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 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 $ 60,000 60,000 Final $ 60,000 37,202 2,750,000 2,787,202 60,000 60,000 60,000 37,202 2,750,000 2,787,202 2,787,202 2,787,202 $ (2,727,202) $ (2,727,202) Reconciliation to Change in Net Assets: Capital Outlay Gain on Sale of Assets Depreciation and Amortization Change in Net Assets $ 39,648 143 39,791 39,791 Variance with Final Budget Positive (Negative) $ 37,202 23,808 61,010 61,010 (21,219) $ (20,352) 143 (20,209) (20,209) 2,726,192 2,726,192 2,726,192 2,705,983 23,808 47,068 (1,888,181) $ (1,838,524) 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. 97 City of Yuma, Arizona Budgetary Comparison Schedule Equipment Maintenance Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 Actual Amounts Budget Original Resources (inflows): Charges for Services Miscellaneous Interest Total Revenues $ Amounts Available for Appropriation Charges to Appropriations (outflows): Current Administration Capital Outlay Total Expenditures Transfers Out Total Charges to Appropriations Excess of Resources Over Charges to Appropriations $ 3,297,000 1,500 3,298,500 Final $ 3,297,000 1,500 3,298,500 $ 3,447,612 1,805 3,449,417 3,298,500 3,298,500 3,449,417 3,455,232 104,000 3,559,232 900 3,457,232 102,000 3,559,232 900 3,614,080 33,102 3,647,182 1,080 3,560,132 3,560,132 3,648,262 (261,632) $ Reconciliation to Change in Net Assets: Capital Outlay Depreciation and Amortization Change in Net Assets Variance with Final Budget Positive (Negative) $ (198,845) $ (261,632) $ 150,612 1,805 (1,500) 150,917 150,917 (156,848) 68,898 (87,950) (180) (88,130) 62,787 33,102 (21,683) (187,426) 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. 98 City of Yuma, Arizona Budgetary Comparison Schedule Insurance Reserve Internal Service Fund (Non-GAAP Budgetary Basis) For the Year Ended June 30, 2012 Actual Amounts Budget Original Resources (inflows): Charges for Services Property Damage Restitution Miscellaneous Interest Total Revenues $ $ 2,248,741 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 2,231,241 5,000 11,000 1,500 2,248,741 Final 585,116 545,000 1,003,907 2,134,023 114,718 Reconciliation to Change in Net Assets: Change in Net Assets $ 585,116 545,000 1,003,907 2,134,023 2,134,023 2,134,023 $ 2,231,241 5,000 11,000 1,500 2,248,741 2,248,741 $ 114,718 2,231,242 414 55,861 2,287,517 2,287,517 Variance with Final Budget Positive (Negative) $ 506,022 516,594 1,258,499 2,281,115 2,281,115 $ 6,402 $ 6,402 1 (4,586) 44,861 (1,500) 38,776 38,776 79,094 28,406 (254,592) (147,092) (147,092) $ (108,316) 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. 99 100 STATISTICAL SECTION 101 102 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 104 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 112 These schedules contain information to help the reader assess the City's most significant local revenue source - sales tax. Debt Capacity 114 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 120 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 123 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. 103 City of Yuma, Arizona Net Assets by Component Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2007 2008 104 2003 2004 2005 2006 2009 2010 2011 2012 Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activites net assets $ 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 $ 209,377 24,835 36,851 $ 271,063 Business-type activities Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activites net assets $ 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 $ 164,295 7,357 37,842 $ 209,494 Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets $ 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 $ 373,672 32,192 74,693 $ 480,557 City of Yuma, Arizona Changes in Net Assets Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2003 105 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 Capital Grants and Contributions Total business-type activities program revenues Total primary government program revenues $ 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 2007 $ 10,919 36,067 13,384 15,400 2,098 6,791 2,948 87,606 11,456 8,750 2,514 22,720 13,010 10,403 2,641 26,053 14,562 11,538 2,676 28,777 2008 $ 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 $ 20,277 13,673 2,496 36,446 9,684 40,232 14,536 13,804 1,538 5,007 5,803 90,604 $ 136,916 $ 84,411 $ 91,536 $ 105,572 $ 116,383 $ 133,971 $ 139,366 $ 130,242 $ 130,320 $ 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 $ $ $ 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 $ 333 471 6,936 4,369 4,968 3,245 20,322 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 $ 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 $ 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 $ 12,534 41,735 12,741 14,226 803 4,521 5,461 92,021 23,353 16,191 2,948 2,403 44,895 81,267 985 805 8,407 4,517 2,661 5,341 22,718 $ 20,555 13,882 2,902 2,377 39,716 $ 1,019 698 8,968 3,520 2,840 5,679 22,723 2012 $ $ 307 567 6,694 4,393 3,965 19,144 35,070 20,710 14,485 3,266 1,919 775 9,071 50,226 85,296 City of Yuma, Arizona Changes in Net Assets Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2003 Net (expense)/revenue Governmental activities Business-type activities Total primary government net expense $ (49,218) $ 4,428 $ (44,790) $ 106 General Revenues and Other Changes in Net Assets Governmental activities: Property taxes $ 5,678 $ Sales taxes 25,484 Franchise taxes 1,719 Shared revenues 24,225 Grants and contributions not restricted to 7,577 specific programs Unrestricted investment earnings 877 Gain from sale of fixed assets Transfers 587 Total governmental activities 66,148 Business-type activities: Investment earnings 575 Transfers (587) Total business-type activities (12) Total primary government $ 66,136 $ Change in Net Assets Governmental activities Business-type activities Total primary government $ $ 16,930 4,416 21,346 $ $ 2004 2005 (47,547) $ 9,313 (38,234) $ (49,110) $ (56,795) $ (64,889) $ 12,449 12,434 13,959 (36,661) $ (44,361) $ (50,929) $ 5,953 28,529 1,936 24,021 5,198 $ 6,076 32,795 2,105 25,462 1,673 2006 $ 6,832 36,557 3,116 28,226 7,826 2007 $ 7,430 39,616 2,678 30,558 115 2008 $ 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 $ 2012 (70,282) $ 10,125 (60,157) $ 9,986 34,644 3,002 25,379 5,929 $ (56,951) 5,331 (51,620) 10,099 36,304 3,059 23,936 - 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 80,326 930 (37) 74,291 125 473 599 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 $ 89 37 126 74,417 5,347 12,402 17,749 9,112 6,000 15,112 10,044 10,128 20,172 18,830 9,912 28,742 $ $ $ 18,553 15,264 33,816 $ $ $ 28,296 13,236 41,532 $ $ $ 19,243 15,338 34,582 $ $ $ 15,865 13,620 29,486 $ $ $ $ $ $ $ $ 13,828 5,725 $ 19,553 Concluded City of Yuma, Arizona Fund Balances of Governmental Funds Last Ten Fiscal Years (amounts expressed in thousands) 2004 2003 General Fund Reserved Unreserved Nonspendable Committed Assigned Unassigned Total General Fund 107 All other Governmental funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds $ 489 15,087 - $ 101 17,436 - 2005 $ 296 19,704 - Fiscal Year 2007 2008 2006 $ 614 21,125 - $ 309 19,893 - $ 277 18,608 - 2009 $ 262 15,493 - 2010 $ 156 18,796 - 2011 $ 103 2,383 88 19,060 2012 $ 169 1,864 868 15,655 $ 15,576 $ 17,537 $ 20,000 $ 21,739 $ 20,202 $ 18,885 $ 15,756 $ 18,952 $ 21,634 $ 18,556 $ $ $ $ $ $ $ $ $ $ 85 63 339 535 513 543 552 553 - - 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 - 18 24,834 11,235 633 - $ 16,548 $ 20,391 $ 18,479 $ 26,418 $ 14,331 $ 77,066 $ 54,777 $ 39,668 $ 39,007 $ 36,720 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 2004 2005 2006 2007 2008 2003 2009 2010 2011 2012 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 $ 32,812 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 $ 49,450 1,288 33,173 4,160 1,550 1,089 1,365 47 493 92,615 $ $ $ $ 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 $ 9,723 37,874 8,913 11,547 4,757 5,726 51,149 $ $ $ $ 4,209 2,890 93,975 3,837 2,939 119,306 8,312 5,885 143,885 Expenditures 108 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 $ 4,732 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) $ 5,033 29,296 4,899 8,534 3,014 5,344 21,151 3,447 3,032 83,750 3,423 $ 5,066 9,575 37,908 9,716 11,857 4,781 5,370 35,734 7,075 6,646 128,662 7,740 35,233 8,195 10,619 4,480 4,870 25,249 6,315 6,764 109,465 $(13,261) $ (32,364) $ (25,514) $ (12,646) $ 6,969 36,285 8,186 10,171 1,556 4,899 13,659 7,680 5,858 95,263 9,451 38,476 7,945 10,688 733 4,458 12,666 8,010 5,516 97,943 (93) $ (5,328) 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) $ 31,490 $ 7,280 $ $ 3,875 $ $ 93,686 $ $ 30,017 $ $ (19,199) 920 307 742 (29,378) 21,117 21,609 20,219 25,016 38,410 29,685 16,213 14,564 14,675 14,522 (20,530) (22,082) (23,398) (25,021) (38,773) (29,589) (16,118) (14,468) (14,548) (14,559) 12,878 7,727 (2,872) 4,612 (363) 93,782 95 735 127 (37) Net change in fund balances $ Debt service as a percentage of noncapital expenditures 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% $ (5,652) 15.9% 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 109 Fiscal Year General Sales Tax Property Tax 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 2012 9,944,517 18,470,938 9,233,899 3,692,304 4,665,296 3,058,634 242,000 142,151 49,449,739 City of Yuma, Arizona Governmental Funds Intergovernmental Shared Revenues Last Ten Fiscal Years Grants and Others* Total $ 434,212 $ 5,072,923 $ 29,298,169 110 Fiscal Year Sales Tax Revenue Sharing 2003 $ 6,062,278 $ 8,250,011 $ 2,746,086 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 2012 7,272,049 7,854,670 3,108,562 5,700,428 - 9,237,197 33,172,906 Auto In-Lieu Highway Users Local Transportion Assistance $ 6,732,659 *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 2003 $ 1,309,351 $ 1,398,560 2004 3,462,972 2005 Housing/Urban Development Other HUD (CDBG) $ Other Parks Commerce Transportation $ 441,101 $ 111 991,044 $ 169,579 $ 413,527 $ 96,498 575,124 1,349,178 405,814 896,311 87,359 - 1,233,650 465,209 594,924 80,301 2,485,908 79,123 - 2006 925,898 1,404,369 1,044,705 251,898 3,264,509 120,555 2007 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 2012 373,294 31,059 Other $ 233,831 151,489 Local Government $ Total 19,432 $ 5,072,923 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 - 5,336,400 741,740 1,059,135 255,855 4,165,343 635,092 786,120 87,292 2,501,119 5,607 5,125 1,840 - - 5,230,199 - 533,859 931 8,744,867 - 637,996 - 7,131,364 2,893,392 1,588,327 367,436 9,237,197 City of Yuma, Arizona Taxable Sales by Category Last Ten Fiscal Years (amounts expressed in thousands) 2004 2003 Mining Construction $ 3 $ - 2005 $ Fiscal Years 2007 2008 2006 1 $ 3 $ 25 $ 155 2009 $ 2010 6 $ 2011 82 $ 2012 6 $ 44 132,387 166,117 228,801 235,643 254,740 249,315 207,592 118,996 121,132 190,490 23,128 28,969 53,176 60,054 57,632 59,931 48,964 44,764 50,676 38,167 126,623 121,936 145,454 173,224 186,420 207,693 206,089 207,112 197,764 194,646 27,587 23,625 29,635 35,498 34,732 22,480 33,785 35,334 42,580 38,720 Retail Trade 760,867 823,785 925,936 1,024,886 1,088,053 1,089,001 1,001,579 962,699 973,426 987,416 Restaurants and Bars 103,690 110,633 123,683 143,594 157,866 162,560 162,404 157,024 160,742 168,358 Finance, Insurance and Real Estate 42,376 69,235 97,875 117,161 143,725 132,593 115,857 116,046 123,876 129,208 Hotels and Other Lodging 26,789 30,785 34,930 37,333 39,360 33,642 36,093 29,502 29,507 33,368 Services 79,392 66,721 44,921 48,639 58,050 52,012 50,858 43,356 45,208 45,804 717 43,029 31,963 32,542 46,423 38,503 32,743 31,055 18,434 20,670 $ 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 $ 1,846,891 Manufacturing Transportation, Communications, and Utilities Wholesale Trade 112 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 113 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% 2012 1.70% 2.00% 1.10% 6.60% Source: Arizona Department of Revenue City of Yuma, Arizona Ratio of Outstanding Debt by Type Last Ten Fiscal Years Fiscal Year General Obligation Bonds Governmental Activities Municipal Special Property Assessment Corporation Bonds Bonds 2003 $ - $ 66,240,000 2004 - 63,440,000 7,280,000 2005 - 60,420,000 2006 - 2007 $ - Long-term Contracts Payable $ 3,320,000 Business-Type Activities Municipal General Long-term Property Obligation Contracts Corporation Bonds Payable Bonds $ Total Primary Government Percentage of Personal Income* Per Capita* 114 - $ 11,385,000 $ 10,408,191 $ 91,353,191 2.75% 2,515,000 - 10,505,000 33,790,746 117,530,746 3.30% 667 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 - 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% 1,708 2011 - 125,665,000 5,745,000 - 117,025,000 2,765,000 68,249,441 319,449,441 6.03% 1,623 2012 - 119,055,000 4,625,000 - 113,765,000 1,420,000 63,921,846 302,786,846 NA 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 120 for personal income and population data. $ 548 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 2003 80,300 2004 83,330 2005 Assessed Value 305,708,909 $ Ratio of General Bonded Debt to Assessed Value General Bonded Debt per Capita 115 11,385,000 3.7% 142 322,623,524 10,505,000 3.3% 126 86,070 329,526,546 9,575,000 2.9% 111 2006 88,775 367,376,807 8,585,000 2.3% 97 2007 92,160 468,531,273 7,535,000 1.6% 82 2008 93,212 572,280,942 6,420,000 1.1% 69 2009 93,719 699,754,765 5,250,000 0.8% 56 2010 93,064 747,149,498 4,040,000 0.5% 43 2011 94,536 733,033,525 2,765,000 0.4% 29 2012 94,536 * 666,827,282 1,420,000 0.2% 15 Source: $ General Obligation Debt (Business-type Activities) Yuma County Assessor U.S. Department of Commerce *2012 Population not available; used 2011 population figures NOTE: General obligation debt issued for utility system improvements is paid through user charges. No property taxes are levied for this purpose. City of Yuma, Arizona Computation of Direct and Overlapping Debt June 30, 2012 Debt Jurisdiction City of Yuma Outstanding Allocable to City of Yuma Percent Amount $ 302,786,847 100.00% $ 302,786,847 9,640,000 48.39% 4,664,627 Yuma County Library District 46,710,000 48.39% 22,602,152 Yuma County Community College District 64,760,000 48.39% 31,336,232 Yuma Union High School District No. 70 29,920,000 54.04% 16,168,768 Yuma School District No. 1 22,885,000 56.13% 12,846,386 Yuma School District No. 13 12,505,000 64.49% 8,064,509 Yuma County 116 Total Overlapping Debt Source: Yuma County Finance Department Arizona Western College Note: Valuation applicable percentage obtained from Yuma County Treasurer's Office $ 95,682,674 City of Yuma, Arizona Legal Debt Margin Information June 30, 2012 (amounts expressed in thousands) 2003 Debt Limit Water, Sewer, Lights, Parks (20%) $ 61,142 All Others (6%) 18,343 2004 2005 2006 2007 Fiscal Year 2008 2009 2010 2011 2012 $ 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 $ 133,365 40,010 11,385 - 10,505 - 9,575 - 8,585 - 7,535 - 6,420 - 5,250 - 4,040 - 2,765 - 1,420 - Legal debt margin Water, Sewer, Lights, Parks (20%) $ 50,637 All Others (6%) 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 $ 143,842 131,945 $ 131,945 40,010 Total net debt applicable to limit Water, Sewer, Lights, Parks (20%) All Others (6%) 117 Total net debt applicable to the limit as a percentage of debt limit Water, Sewer, Lights, Parks (20%) All Others (6%) 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% 1.06% 0.00% Legal Debt Margin Calculation for Fiscal Year 2012 General Obligation Bonds 2011 Tax Year Secondary Assessed Valuation Outstanding General Obligation Debt: Project 1997 Total General Obligation Debt $ 666,827 Water, Sewer, Lights, Parks (20%) All Others (6%) $ 133,365 $ 1,420 1,420 $ 131,945 $ (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. 40,010 40,010 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 2011-12 Pledged Taxes 2011-12 Net Revenue Total Taxes/Net Revenue 118 2012-13 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 2011-12 Taxes/Net Revenue Total 2012-13 Debt Coverage Required Coverage $ 48,175,157 48,175,157 $ $ 1,598,203 1,598,203 30.1 4.0 $ 48,175,157 $ 7,420,476 6.5 4.0 $ 44,482,853 44,482,853 $ 305,375 691,847 - $ 44,482,853 44,482,853 $ $ 997,222 44.6 3.0 $ 44,482,853 $ 7,420,476 6.0 3.0 2,530,081 $ $ $ 44,482,853 44,482,853 2,294,970 - $ $ - 2007 Series Utilities 53,716,752 53,716,752 4,804,825 - 2,530,081 17.6 3.0 $ 2,294,970 19.4 3.0 $ 4,804,825 11.2 1.5 $ 44,482,853 $ 7,420,476 6.0 3.5 $ $ 44,482,853 7,420,476 6.0 3.0 $ $ 53,716,752 12,225,301 4.4 3.0 $ Total $ 1,598,203 305,375 691,847 2,294,970 2,530,081 7,420,476 4,804,825 $ 12,225,301 $ 26,263,928 26,263,928 6,683,150 8,967,538 $ 15,650,688 1.7 1.2 $ $ 26,263,928 15,650,688 1.7 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 Last Ten Fiscal Years 2003 119 Local Taxes Sales Tax (1%) $ 13,237,042 Franchise Fee 1,961,272 Intergovernmental Revenues: State Revenue Sharing 8,250,011 State Sales Tax 6,062,278 Auto In-Lieu Tax 2,746,086 Emergency Services and Other 19,432 Licenses: Business Licenses 297,643 Liquor Licenses 27,765 Fees for Services: Building Permits and Inspection Fees 2,343,219 Recreation Fees 355,658 Police Services and Other Public Safety Fees 705,976 Use of Money and Property: Investment Income 243,955 Fines, Forfeitures and Penalties: City Court Fines 801,121 37,051,458 Total Series B Pledged Taxes Additional Series A Pledged Taxes City Public Safety Taxes (.2%) 2,646,059 39,697,517 Total Series A Pledged Taxes Additional Series C Pledged Taxes City Special Taxes (2%) 2,741,989 Fiscal Year 2007 2008 2004 2005 2006 2009 2010 2011 2012 $ 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 $ 18,470,938 3,058,634 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 7,854,670 7,272,049 3,108,562 34,252 291,080 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 35,131 288,133 31,670 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 1,170,037 546,940 1,043,802 70,322 318,886 556,095 1,038,848 1,021,862 504,146 166,500 108,396 53,277 725,948 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 1,549,889 44,482,853 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 3,692,304 48,175,157 3,044,645 3,374,350 3,866,902 4,232,008 4,424,358 4,383,419 4,253,079 4,425,556 4,665,296 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 49,148,149 Additional Series D Pledged Taxes City Road Tax (.5%) 6,617,396 Total Series D Pledged Taxes $ 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 9,233,899 $ 53,716,752 Gross Excise Tax Pledged Revenues $ 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 $ 62,074,352 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 Per Capita Personal Income Unemployment Rate No. Value No. Value Commercial Residential 120 Year Population Personal Income 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 26.30% 546 33,118,172 759 40,924,654 2011 196,830 5,300,165 27 27.10% 610 52,240,172 670 26,660,688 Note: Source: Unemployment rate and population presented represents the Yuma Metropolitan Statistical Area and it reflects revised inputs, reestimation, and new statewide controls through 2010. 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 Eight Years Ago 2004 121 Employer Marine Corps Air Station U. S. Army Yuma Proving Ground Yuma Regional Medical Center Yuma County Yuma School District #1 United States Border Patrol Walmart Yuma Union High School District City of Yuma Quechan Paradise Casino Growers Company Salyer American Fresh Total 2011 Percentage of Total Employees Rank Employment 6,043 1,176 1,500 1,100 1,200 690 864 1,500 1,000 1 5 2 6 4 10 9 2 7 9.67% 1.88% 2.40% 1.76% 1.92% 1.10% 1.38% 2.40% 1.60% 24.11% Employees Rank 6,599 1 2,800 2 2,078 3 1,661 4 1,260 5 1,033 6 1,001 7 965 8 890 9 850 10 Source: Greater Yuma Economic Development Corporation Note: Figures presented represent the Yuma Metropolitan Statistical Area. Data for 2012 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 and Growers Company data not available for 2011. Walmart and Quechan Paradise Casino added in for 2010 due to Salyer and Growers dropping from list. Percentage of Total Employment 10.12% 4.29% 3.19% 2.55% 1.93% 1.58% 1.53% 1.48% 1.36% 1.30% 29.33% City of Yuma, Arizona Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Function General government 188 195 195 208 226 228 241 235 192 201 122 Public Safety Police Fire Streets Engineering Maintenance Solid Waste Parks and recreation Water Wastewater 228 103 229 105 237 105 252 110 267 122 269 122 266 122 267 133 239 129 249 131 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 32 46 13 116 73 49 Total 818 840 864 917 985 998 1,002 1,013 890 910 City of Yuma, Arizona Operating Indicators by Function Last Ten Fiscal Years 2003 2004 2005 2006 Fiscal Year 2007 2008 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 76,232 13,535 NA NA 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 12,067 864 NA NA 23 19 24 19 9 22 11 2 15 10 33,993 27,781 33,003 33,965 34,938 34,919 33,996 33,288 32,638 32,177 5,308 5,519 3,285 3,122 3,247 3,160 2,673 2,519 2,554 2,327 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 29,009 65.0 8.3 12.2 12.3 15.6 15.6 15.6 15.6 15.6 15.6 15.6 15.6 2009 2010 2011 2012 Function 123 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 2003 2004 2005 2006 Fiscal Year 2007 2008 2009 2010 2011 2012 Function 124 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) 1 123 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 1 198 6 300 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 50 420 5,753 50 10 10 10 12 13 13 13 13 13 11 553 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 9 607 79 4 9 9 427 2,400 437 2,600 448 2,850 470 3,000 493 3,150 501 3,267 501 3,400 507 3,438 520 3,450 525 3,573 261 266 275 290 310 320 320 342 340 341 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.