CITY OF GOODYEAR, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2010 CITY OF GOODYEAR, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2010 Prepared by the Finance Department Larry A. Lange, Finance Director TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement City of Goodyear Officials Organizational Chart Acknowledgements Page vii xii xiii xiv xv II. FINANCIAL SECTION Independent Auditors’ Report 1 A. Management’s Discussion & Analysis 5 B. Basic Financial Statements 15 Government-wide Financial Statements Statement of Net Assets Statement of Activities 17 18 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet 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 Balances of Governmental Funds to the Statement of Activities Budgetary Comparison Statements – General Fund 20 23 24 27 28 Proprietary Fund Financial Statements Statement of Net Assets Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows 30 31 32 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets 34 35 Notes to Financial Statements 1. 2. 3. 4. 5. 6. 7. 8. Summary of Significant Accounting Policies Cash and Investments Receivables Capital Assets Loans Payable Contract Payable General Obligation Bonds Payable Revenue Bonds Payable 39 46 48 49 50 51 51 53 i Notes to Financial Statements (continued) 9. 10 11. 12. 13. 14. 15. 16. 17. 18. 19. Community Facilities Districts Bonds Payable Amortization of Bond Costs Water Rights Obligations Changes in Long-term Liabilities Interfund Receivables, Payables, and Transfers Contingent Liabilities Risk Management Retirement Plans Deficit Fund Balance Commitments Subsequent Events Page 54 56 57 57 58 58 58 59 61 62 62 C. Other Supplementary Information- Combining Fund Financial Statements Combining Fund Financial Statements Non-Major Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 64 68 Fiduciary Funds Combining Statement of Fiduciary Net Assets-Agency Funds Combining Statement of Changes in Assets and Liabilities-Agency Funds 72 73 D. Other Supplementary Information Budgetary Comparison Schedules - Other Major Governmental Funds Community Facilities Districts - Debt Service McDowell Road Commercial Corridor Improvement District - Debt Service Capital Improvement Projects McDowell Road Commercial Corridor Improvement District - Capital Projects Community Facilities Districts - Capital Projects 76 77 78 79 80 Budgetary Comparison Schedules - Non-Major Governmental Funds Highway User Revenue Fund Grants Community Facilities Districts – General Community Facility Impact Fees General Government Impact Fees Public Works Impact Fees Fire Impact Fees Police Impact Fees Transportation Impact Fees Library Impact Fees Regional Transportation Impact Fees Debt Service 82 83 84 85 86 87 88 89 90 91 92 93 ii Schedule of Operations- Budget and Actual-Proprietary Funds, Enterprise Funds Water and Sewer Sanitation Stadium 94 95 96 Combining Financial Statements – Internal Service Funds Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Combining Statement of Cash Flows 98 99 100 Capital Assets Used in the Operation of Governmental Activities Schedule by Source Schedule by Function and Activity Schedule of Changes by Function and Activity III. STATISTICAL SECTION 103 104 106 Table Net Assets by Component Changes in Net Assets Governmental Activities Tax Revenues by Source Sale & Use Taxes Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Governmental Activities Tax Revenues by Source Property Tax Rates Principal Property Tax Payers Assessed Value and Estimated Actual Value of Taxable Property Property Tax Levies and Collections Utility Statistical Data Ten Largest Water Users Utility Statistical Data Ten Largest Wastewater Users Schedule of Existing and Adopted Monthly Water & Sewer Service Charges Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Pledged Revenue Coverage Demographic and Economic Statistics Principle Employers Full-time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function Page 1 2 3 4 5 6 7 8 9 10 11 12 13 110 112 119 120 122 124 129 130 135 136 138 139 141 14 15 16 17 18 19 20 21 22 23 24 142 144 146 147 148 149 150 151 153 154 156 IV. SINGLE AUDIT SECTION Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 159 Independent Auditors’ Report on Compliance with Requirements that could have a Direct and Material Effect on each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 161 Schedule of Expenditures of Federal Awards 164 Notes to the Schedule of Expenditures of Federal Awards 166 Schedule of Findings and Questioned Costs 167 iii INTRODUCTORY SECTION PROFILE OF THE GOVERNMENT The City of Goodyear, incorporated in 1946, and chartered in 1988, has a Council/Manager form of government consisting of the Mayor and six Council Members. The Mayor and Council members are elected at-large to four-year terms. The City Council is vested with policy and legislative authority and is responsible for passing ordinances, adopting the budget, appointing committee, commission, and board members, and appointing the positions of City Manager, City Attorney, and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City encompasses approximately 188 square miles in the western portion of Maricopa County, and is approximately 17 miles west of the downtown Phoenix business district. The City of Goodyear grew at approximately a 16% growth rate each year from 2000-2006, and was also the fourth fastest growing suburban city under 100,000 population in the U.S. for the years 2000-2006. The estimated population as of July 1, 2010 is 64,927. The City's tremendous growth is attributable to excellent housing, small-town atmosphere, convenient access to the central Valley, and excellent school districts. Current economic conditions have caused the City to reduce its growth estimates. The City’s population is expected to grow from 64,927 to 78,908 from 2010 to 2014. This slower growth rate has significantly reduced the City’s growth related revenue base resulting in significantly lower revenues. The City provides a full range of municipal services, including police and fire protection, sanitation services, water and sewer services, construction and maintenance of streets, recreational programs, parks, and cultural events, public transportation, planning and zoning services, and general administrative services. Goodyear offers a wide range of community facilities including a community center, a swimming pool, and seventeen parks encompassing 204 acres. FINANCIAL CONTROLS Internal Controls The management of the City of Goodyear is responsible for establishing and maintaining a system of internal control. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City's financial statements. All internal control evaluations occur within the above framework. The City's internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. viii Budgetary Controls The City of Goodyear, like all cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the City's legal budget capacity. At a general election held in March 11, 2003 the citizens of Goodyear approved a permanent adjustment of the 1979 expenditure base for population and inflation growth. The City may utilize the additional expenditure authority for any local budgetary purposes. The permanent adjustment eliminates the need for voter approval every four years. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Mayor and Council. Activities of the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds and internal service fund are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal yearend and are re-encumbered as needed in the next fiscal year. LOCAL ECONOMIC CONDITION AND OUTLOOK The weak economy continues to contribute to reduced sales tax collections at both state and local levels, considerable slowing of residential building permits, and prolonged declines in development related revenues. While some aspects of the local economy, such as retail sales tax seem to be holding steady since last budget year, the city continues to estimate conservatively, as the growth and stability of the economy’s future is unknown. The city continues to not only balance the budget, but also strives to position the city for future success. The City continues to monitor the changes taking place in the national and local economies, as adaptation is imperative to the City’s future. The City has implemented alternative services, enacted cost saving adjustments, reorganized where cost savings would be produced, and renegotiated contracts. These cost saving measures will continue into the future until such time economic conditions improve. While the City of Goodyear continues to face challenging economic times, fiscal-year 2011 focuses on preserving the community’s outstanding quality of life by incorporating a number of projects and initiatives that range from recreation to public safety. Goodyear continues to be attractive to large business. Two solar-related manufacturers are opening locally, which will create jobs for our community. A key City Council goal is to bring jobs into the city and make Goodyear one of the largest employment bases in the West Valley. There are three major corridors that are forming that will have a great influence on the future of the city: Airport Gateway Center – 1,200 acres of mixed development, Palm Valley 303 – 2,000 acre master planned business park, and the 801/85 Employment Center – 1,700 acre employment corridor for manufacturing and industrial business. ix Economic Outlook The economic slowdown at the national level has had a direct impact at the state and local level economy. The recovery is slowly beginning. Goodyear has experienced an increase in new residential building permits of approximately 13.9% from FY 2009. Goodyear’s General Fund revenues for FY 2011 are projected to decrease by approximately 5.8% from $60.2 million for FY 2010 to $56.7 million for FY 2011. Sales Tax: The City of Goodyear, like all Arizona cities, places significant reliance on City sales tax revenues. Overall, City sales tax revenues for FY 2011 are expected to equal 55.8% of General Fund revenues. State Shared Revenue. The City of Goodyear receives revenue allocations from the State. These “State Shared Revenues” include allocations of the state-collected income tax, sales tax, gas tax, motor vehicle in-lieu taxes, and state lottery proceeds. A significant portion of this revenue is placed in the City’s General Fund, where it is used to support the City’s day-to-day activities. The City anticipates a 13.7% reduction in state shared revenues in FY 2011 due primarily to a reduction in state income tax receipts. Property Tax. The City's combined (secondary and primary) property tax rate is $1.60 per $100 of assessed valuation for fiscal year 2010. Of this, $0.97 is for the secondary levy. The secondary levy can only be used for voter approved debt service on general obligation bonded indebtedness. The voter approved general obligation bond proceeds are used for construction of public facilities (parks, public safety, streets, etc.). For FY11, City Council voted to lower the total property taxes to a combined rate of $1.42 from $1.60 per $100 of assessed value. The primary property tax rate is $.63 for FY 2010. The primary levy can be used for any general government purpose (such as supplies, personnel, maintenance, utilities, etc.) but is limited in size by State statute. The primary tax raised $5.4 million in FY 2010. The primary property tax rate will be $.76 for FY 2011. The primary property tax revenues are expected to be $6.0 million dollars in FY 2011. While this amount is less than 10.6 % of the operating revenues, it is nonetheless an important component for the stability and revenue diversity of the City's operating revenues. Total primary assessed property value within the City has increased by approximately 11% over FY 2010. Because of the increasing assessed value of the City, primary property tax revenues continue to grow. Based on current development patterns, as well as expected economic conditions, primary property tax revenue is expected to increase at lower rates over the next few years. The secondary property taxes will decease due to decline in assessed valuation. Labor Force. Goodyear has a well-educated and available labor force. Educational level of Goodyear heads of household: 85% are college educated with 56% obtaining college degrees. The estimated median income level is $77,606 for FY 2009 – one of the highest in the state and higher than that of the metro area’s four largest cities: Phoenix, Mesa, Glendale and Scottsdale. The City is a member of the Greater Phoenix Economic Council (GPEC) which has been successful at introducing new businesses to the City. The City maintains an economic development department "in-house" which has been very instrumental in locating retail, hospitality, office, and industrial businesses to the City. In addition, the economic development department has also been proactively recruiting public and private institutions of higher education. x For The Future The City's financial and operational plans will continue to support basic government services including roads, police, fire, water, sewer, solid waste management, building safety, code enforcement, and parks and recreation. In addition, the City Council continues its process to assist in the identification, prioritization, and management of emerging strategic issues that, by virtue of their scope, complexity, and/or potential impact, requires a coordinated multi-departmental action plan and budget. The City Council works closely with City management to implement specific objectives and tasks designed to meet these goals. 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 of Goodyear, Arizona for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009. This is the second year the City of Goodyear has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. That report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting this report to the GFOA to determine its eligibility for a certificate for fiscal year ended June 30, 2010. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document dated 2009-10. This is the fifteenth year in a row that the City has received the highest form of recognition in governmental budgeting. Acknowledgments The preparation of this CAFR could not have been accomplished without the efficient and dedicated services of the staff of the Finance Department, especially the Accounting, Community Facilities District, and Utility Customer Service Divisions. We also wish to thank the Mayor and members of the City Council, and the City Manager's Office for their interest and support in planning and conducting the financial affairs of the City in a responsible and progressive manner. Sincerely, Larry A. Lange Finance Director LAL/ts xi Certificate of Achievement for Excellence in Financial Reporting Presented to City of Goodyear Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2009 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President Executive Director xii CITY OF GOODYEAR LIST OF PRINCIPAL OFFICIALS MAYOR James M. Cavanaugh VICE MAYOR Georgia Lord COUNCIL MEMBERS Frank Cavalier Sheri Launitano Joanne Osborne Joe Pizzillo Richard A. Sousa SENIOR MANAGEMENT STAFF John Fischbach City Manager Michael Simonson Presiding Judge Roric Massey City Attorney Brian Dalke Deputy City Manager Mark Gaillard Interim Deputy City Manager Lynn Mulhall City Clerk Kay Wilkinson Human Resources Director Paula Ilardo Economic Development Director Mark Brown Police Chief Paul Luizzi Interim Fire Chief Harvey Krauss Community Development Director Larry Lange Finance Director Kathleen Fernandez Information Technology Director Charles McDowell Public Works Director David Ramirez Engineering Director Mike Svetz Park & Recreation Director Mario Saldamando Assistant to the City Manager Romina Korkes Intergovernmental Programs Manager xiii xiv Municipal Court Jeff Fine Administrator Presiding Judge Michael Simonson Parks & Recreation Mike Svetz Information Technology Services Kathy Fernandez Director Integovernmental Programs Romina Korkes Manager Assistant to the City Manager Mario Saldamando Intergovermental & Grant Programs Mayor/Council Support Police Mark Brown Chief Economic Development Paula Ilardo Director Human Resources Kay Wilkinson Director Engineering David Ramirez Director Public Works Charles McDowell Director Community Development Harvey Krauss Director Fire Paul Luizzi Interim Chief City Clerk Lynn Mulhall Interim Deputy City Manager Mark Gaillard Finance Larry Lange Director Deputy City Manager Brian Dalke City Manager John Fischbach Mayor & City Council Citizens of Goodyear Legal Services City Attorney Roric Massey ACKNOWLEDGEMENTS The Comprehensive Annual Financial Report was prepared by the staff of the Finance Department – Accounting, Community Facilities District and Utility Customer Service Divisions: Theresa Simms, MBA, CGFM, CPA Michelle Gammage, CPA MaryKae Struck, MBA Kathy Painter Regina Mullaney Sheila Mills Carmelita Evans Marty Eckstaine xv FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Council City of Goodyear, 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 City of Goodyear (the City), Arizona, as of and for the year ended June 30, 2010, 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 of America. 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 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 Goodyear, Arizona, as of June 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In connection with our audit, nothing came to our attention that caused us to believe that the City of Goodyear failed to use highway user revenue fund monies received by the City of Goodyear pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2 and any other dedicated state transportation revenues received by the City of Goodyear solely for the authorized transportation purposes. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. www.henryandhorne.com The Honorable Mayor and Council City of Goodyear, Arizona Page Two In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2010 on our consideration of the City’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. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5 through 14 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the 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 an opinion on the financial statements that collectively comprise the City of Goodyear, Arizona’s basic financial statements. The introductory section, the accompanying financial information listed as other supplementary information in the financial section, and the statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The financial information listed as other supplementary information in the financial section has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. The accompanying schedule of expenditures of federal awards (required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Government, and Non-Profit Organizations) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Casa Grande, Arizona November 17, 2010 2 FINANCIAL SECTION MANAGEMENT’S DISCUSSION & ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS For The Year Ended June 30, 2010 As management of the City of Goodyear, Arizona (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2010 (2010). This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the financial plan (the approved annual budget), and (5) identify individual fund issues or concerns. The management’s discussion and analysis (MD&A) has different focus and purpose than the letter of transmittal presented on pages vii-xi of this report and is designed to be read in conjunction with the transmittal letter as well as the financial statements beginning on pages 17 and the accompanying notes to the financial statements. FINANCIAL HIGHLIGHTS ♦ The City’s total net assets increased $12.2 million (1.9%) in fiscal year 2010, $4.5 million (a 1.0% increase) in governmental activities and a $7.7 million (4.1% increase) in business-type activities. This increase is reflected in invested in capital asset, net of related debt is due primarily to debt principal retirement of $10.9 million. ♦ The governmental activities program revenues decreased by $84.9 million (75.0%) from the previous year, primarily because of decline in capital grants and contributions in the amount of $85.6 million (83.9%) for capital assets. ♦ The business-type activities program revenues decreased by $33.7 million (53.1%) from the previous year, primarily because of decline in capital grants and contributions in the amount of $35.4 million (85.1%) due to completion of the Goodyear Ballpark Spring Training facility. ♦ The business-type activities general revenues increased by $4.3 million (over 100%) from the previous year, primarily from the sale of water rights. ♦ At June 30, 2010, total fund balance of the governmental funds was $65.3 million, a decrease of $6.1 million (8.5%) from the previous year. The majority of this decrease can be attributed to the CFD completion of capital projects of $4.9 million. Of this $65.3 million fund balance, $30.9 million was unreserved (available for spending at the government’s discretion). ♦ At June 30, 2010, the General Fund balance was $28.6 million, a decrease of $.6 million (1.9%) from the prior fiscal year. This decrease is due to transfers to grant funds that will be reimbursed in the following year. The City’s unreserved fund balance is $10.7 million and reserved fund balance is $17.8 million, $16.9 million is set aside as a rainy day fund. ♦ The General Fund budgetary revenues were $63.9 million and the actual revenues were $61.3 million, an unfavorable variance of $2.6 million (4.1%), while budgetary total revenues decreased by $13.5 million (17.5%) and actual revenues decreased by $2.3 million (3.6%) from the previous year. The budgetary expenditures of the General Fund were $90.4 million and the actual expenditures were $61.9 million, a favorable variance of $28.5 million (31.6%) and actual expenditures decreased by $14.9 million (19.4%) from the previous year. The decrease in budgetary and actual expenditures was due to reduction in capital projects construction. 5 OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are shown in two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. • Governmental activities – Most of the City’s basic services are included here, such as general government (administration), public safety (police, fire and court), highways and streets, public works, culture and recreation, and community development. These activities are generally supported by taxes and general revenues. • Business-type activities – The services provided by the City included here are stadium, water, wastewater, and sanitation services. These activities are primarily supported through user charges or fees. The statement of net assets presents information on all of the City’s assets and liabilities, both current and long-term, with the difference between the assets and liabilities reported as net assets. The focus on net assets is designated to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City may be changing. Increases in net assets may indicate an improved financial position; however, even decreases in net assets may reflect a changing manner in which the City may have previously accumulated funds (i.e. cash funding of capital projects). To assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of its infrastructure, should also be considered. The statement of activities presents information showing how the City’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time of the underlying event, giving rise to the change, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). The government-wide financial statements can be found on pages 17-19 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 uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on pages 23 and 27, respectively. 6 The City maintains 18 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Community Facilities Districts – Debt Service, McDowell Road Improvements District – Debt Service, Capital Improvement Projects, McDowell Road Improvements Capital Projects, and Community Facilities Districts – Capital Projects Funds, all of which are considered to be major funds. Data from the other 12 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules beginning on page 64 of this report. The governmental fund financial statements can be found on pages 20 - 29 of this report. Proprietary funds. The City maintains five proprietary funds. Proprietary funds (enterprise and internal service) utilize full accrual accounting, the same method used by private sector business. The City uses separate enterprise funds to account for its stadium, water and sewer services and its sanitation services. These funds are considered to be major funds of the City. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The city has two internal service funds – Fleet Inter-Department Service Fund and the Health Insurance Reserve Fund. The Fleet Fund reports activities that provide preventative maintenance, repairs and safety inspections for City vehicles and equipment. The Health Insurance Reserve Fund is used for the City’s wellness initiative and to build up a reserve for when the City becomes self funding. The Internal service fund activities are reported as governmental activities on the government-wide statements. The proprietary fund financial statements can be found on pages 30 – 33 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund financial statements can be found on pages 34 – 35 of this report. 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 on pages 39 – 62 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’s budget process. The City adopts an annual budget for all governmental funds. A budgetary comparison statement has been provided for the General Fund as part of the basic financial statements. The required supplementary information can be found on pages 64 – 80 of this report. The combining statements referred to earlier in connection with non-major governmental funds is presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 64 – 71 and 76 - 93 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position of the City as a whole as of the year ended June 30, 2010 with comparative information for the previous year. 7 Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets of the City as of June 30, 2010 compared to the prior year. Statement of Net Assets as of June 30 Governmental Business-type Total Activities Activities Primary Government 2009 2010 Current and other assets $ $ 164,600,987 $ 2009 37,973,357 $ 2010 25,852,461 $ 191,564,783 Percent 2009 $ Change 190,453,448 0.6% Capital assets 532,037,489 522,245,869 408,882,016 394,510,883 940,919,505 916,756,752 2.6% Total assets 685,628,915 686,846,856 446,855,373 420,363,344 1,132,484,288 1,107,210,200 2.3% Other liabilities 153,591,426 2010 21,277,011 24,060,673 15,879,364 16,037,825 37,156,375 40,098,498 -7.3% 212,035,847 214,984,459 235,027,670 216,038,500 447,063,517 431,022,959 3.7% 233,312,858 239,045,132 250,907,034 232,076,325 484,219,892 471,121,457 2.8% 317,162,459 309,491,989 191,582,614 199,624,649 508,745,073 509,116,638 -0.1% Courts 149,991 - - - 149,991 - 100.0% Law enforcement 263,686 - - - 263,686 - 100.0% Highways and streets 209,080 242,444 - - 209,080 242,444 -13.8% 1,095,057 1,400,330 - - 1,095,057 1,400,330 -21.8% Debt service 91,442,376 88,487,852 - - 91,442,376 88,487,852 3.3% Capital projects 22,720,860 27,656,689 - - 22,720,860 27,656,689 -17.8% 9,184,790 157.4% 636,088,743 1.9% Long-term liabilities outstanding Total liabilities Net assets: Invested in capital assets, net of related debt Restricted for: Community facilities Unrestricted Total net assets 19,272,548 $ 452,316,057 20,522,420 $ 447,801,724 4,365,725 $ 195,948,339 (11,337,630) $ 188,287,019 23,638,273 $ 648,264,396 $ For fiscal year 2010 the net assets of the City increased by $12.2 million (1.9%). Of this increase, $4.5 million was in governmental activities, a 1.0% increase and $7.7 million was in business-type activities, a 1.9% increase over the previous year. Net assets consist of three components, the largest portion of which is invested in capital assets, net of related debt ($508.7 million or 78.5%) reflects the City’s investment in capital assets net of accumulated depreciation and any related outstanding debt used to acquire or construct those assets. The City uses these assets to provide services to its citizens. Consequently, it is not the City’s intention to sell these assets and they are therefore not available for future spending. Although the capital assets are 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 are not intended to be used to liquidate these liabilities. This category of Net Assets decreased by $.4 million (0.1%) in fiscal year 2010 due to the repayment of debt principal. The City’s second largest net assets category are net assets restricted for debt service amounting to $91.4 million (14.1%), which represent resources that are subject to external restrictions on how they may be used. This category includes the General Obligation Bonds (GO) of $33.6 million, the McDowell Road Corridor Improvement District debt of $46.1 million and the Public Improvement Corporation (PIC) bonds of $5.2 million. The secondary property taxes and excise taxes are used to pay the GO and PIC debt, whereas the property owners are assessed for the McDowell Road Corridor Improvement District debt, however, the City is liable for it in the event the property owners default on the debt. The City’s third largest net assets category is Unrestricted Net Assets of $23.6 million (3.6%). These net assets may be used to meet the City’s ongoing obligations to citizens and creditors. This category increased $14.5 million (over 100%) from the previous fiscal year. Unrestricted net assets are the balance of net assets remaining after calculating the other two categories discussed above. Unrestricted net assets of governmental activities decreased by $1.2 million, while unrestricted net assets of the business-type activities increased $15.7 million. Much of this increase in unrestricted net assets was from the Water and Sewer $14.6 million refunding of debt. 8 Changes in Net Assets. The following table compares the revenues and expenses for the current and previous fiscal year. Changes in Net Assets for Year End June 30 Governmental Business-type Total Activities Activities Primary Government 2010 2009 2010 2009 2010 Percent 2009 Change REVENUES: Program revenues: Charges for services $ 6,276,022 $ 6,429,184 $ 23,579,235 $ 21,908,988 $ 29,855,257 $ 28,338,172 5.4% Operating grants and contributions 5,648,867 4,843,140 - 25,000 5,648,867 4,868,140 16.0% 16,436,375 102,028,190 6,211,533 41,595,562 22,647,908 143,623,752 -84.2% Sales taxes 31,448,399 34,205,905 - - 31,448,399 34,205,905 -8.1% Property taxes 21,941,576 22,602,319 - - 21,941,576 22,602,319 -2.9% 2,233,909 2,195,747 - - 2,233,909 2,195,747 1.7% 10,907,518 12,236,437 - - 10,907,518 12,236,437 -10.9% 179,114 148,687 57,527 121,900 236,641 270,587 -12.5% Capital grants and contributions General revenues: Franchise taxes State shared revenue Investment income Proceeds from sale of water rights Miscellaneous Total revenues - - 4,352,000 - 4,352,000 - 100.0% 2,026,285 911,254 100,698 78,586 2,126,983 989,840 114.9% 97,098,065 185,600,863 34,300,993 63,730,036 131,399,058 249,330,899 -47.3% EXPENSES: Program activities: Governmental activities: General government 14,767,660 13,759,085 - - 14,767,660 13,759,085 7.3% Public safety 28,960,907 29,467,141 - - 28,960,907 29,467,141 -1.7% Highways and streets 12,179,531 8,436,341 - - 12,179,531 8,436,341 44.4% Public works 11,070,853 14,370,096 - - 11,070,853 14,370,096 -23.0% Culture and recreation 4,023,639 5,435,750 - - 4,023,639 5,435,750 -26.0% Community development 2,555,353 9,583,326 - - 2,555,353 9,583,326 -73.3% Interest on long-term debt 11,210,504 12,001,714 - - 11,210,504 12,001,714 -6.6% -2.8% Business activities: Water and sewer - - 18,124,893 18,655,263 18,124,893 18,655,263 Sanitation - - 4,782,565 5,090,150 4,782,565 5,090,150 -6.0% Stadium - - 11,547,500 6,475,960 11,547,500 6,475,960 100.0% 84,768,447 93,053,453 34,454,958 30,221,373 119,223,405 123,274,826 -3.3% before transfers 12,329,618 92,547,410 33,508,663 12,175,653 126,056,073 -90.3% Transfers (7,815,285) (7,751,307) 7,815,285 7,751,307 - - 4,514,333 84,796,103 7,661,320 41,259,970 12,175,653 126,056,073 447,801,724 363,005,621 188,287,019 145,907,448 636,088,743 508,913,069 25.0% - - - 1,119,601 - 1,119,601 100.0% 452,316,057 $ 447,801,724 $ 195,948,339 $ 188,287,019 $ 648,264,396 $ 636,088,743 1.9% Total expenses Increase in net assets Increase in net assets Net assets, July 1 Prior period adjustment Net assets, June 30 $ (153,965) -90.3% The general revenues of governmental activities decreased by $3.6 million (4.9%) from the previous year. The decline in revenues are a direct result of the current recession and the areas effected the most are sales taxes, which decreased by $2.8 million (8.1%) and state shared revenue, which decreased by $1.3 million (10.9%). Program revenues of governmental activities decreased by $84.9 million (75.0%), primarily for capital grants and contributions, which decreased $85.6 million (83.9%), operating grants and contribution increased $.8 million (16.6%) and charges for services decreased $.2 million (2.4%). As stated earlier the decrease in capital grants and contributions resulted from a decline in capital projects. The business-type activities program revenues increased by $15.1 million (31.1%) from the previous fiscal year. The business-type program revenues decreased by $33.7 million (53.1%) from the previous fiscal year. This decrease is attributed to capital grants and contributions of $35.4 million (85.1%), due to completion of the Goodyear Ballpark Spring Training facility. 9 For fiscal year 2010, total governmental revenues decreased by $88.5 million (47.7%) and total businesstype revenues increased by $29.4 million (46.2%). Expenses decreased for the governmental activities by $8.3 million (8.9%) and increased for the business-type by $4.2 million (14.0%). Expenses decreased for all governmental activities except General Government. This decline is directly a reduction in capital construction. The increase in business-type expenses resulted from an increase in interest expense for debt service and an increase in the cost of administration for additional staffing due to the addition of the Ballpark second spring training team. Government-Wide Revenue Sources Fiscal Year 2010 Operating grants and contributions 4.3% State shared revenue 8.3% Proceeds from sale of water rights 3.3% Miscellaneous 1.6% Charges for services 22.7% Investment income 0.2% Franchise taxes 1.7% Capital grants and contributions 17.2% Sales taxes 24.0% Property taxes 16.7% As seen in the graph above for Government-Wide Revenue Sources, the largest source of revenues are sales taxes of $31.4 million (24.0%), charges for services $29.9 million (22.7%), capital grants and contributions $22.6 million (17.2%) and property taxes $21.9 million (16.7%). Charges for services increased by $1.5 million (5.4% from the previous year). This increase is due primarily to the businesstype activities, a water rate increase and increase ticket sales from the Stadium operations. This year the City sold 34,000 acre feet of water rights which resulted in $4.4 (3.3%) million in additional revenues, which will be used later to retire the debt to the Gila River. Taxes revenues decreased by $3.4 million (5.7%) from the prior year. Sales taxes decreased $2.8 million (8.1%) due to the downturn in the economy. Property taxes decreased $.7 million (2.9%) and franchise taxes increased 1.7%. 10 Government-Wide Functional Expenses Fiscal 2010 General government 12.4% Business activities 28.9% Public safety 24.3% Interest on longterm debt 9.4% Community development 2.1% Culture and recreation 3.4% Public works 9.3% Highways and streets 10.2% As seen in the graph above for Government-Wide Functional Expenses, business-type activities account for $34.4 million (28.9%), while governmental activities account for $84.8 million (71.1%). For the governmental activities, the largest users of resources are public safety $29.0 million, (24.3% of total expenses, 34.2% of governmental expenses), general government $14.8 million (12.4% total expenses, 17.4% of governmental expenses), highways and streets $12.2 million (10.2% of total expenses, 14.4% of governmental expenses), and public works $11.1 million (9.3% of total expenses, 13.1% of governmental expenses). Total government-wide expenses (not including transfers out) of the City decreased by $4.1 million (3.3%) in fiscal year 2010. This decrease is a direct result of a number of belt tightening measures by the City to reduce expenses during this down turn in the economy. FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental funds The focus of the City’s governmental funds (pages 20 - 29) is to provide information on near-term inflows, outflows, and balances of spendable resources. All major governmental funds are discreetly presented on these financial statements, while non-major funds are combined into a single column. Combining statement for non-major funds may be found on pages 64 - 71. The fund balance of the governmental funds is $65.3 million, a decrease of $6.1 million, or 8.5% from the previous year. Of this, $65.3 million, $34.1 million is classified as “Reserved”, it is segregated for a rainy day fund $16.9 million, debt service $14.9 million, capital projects $1.4 million and the remaining $.9 for various purposes. The remaining $31.2 million of governmental fund balance is classified as “Unreserved” and is classified as follows: General Fund - $10.7 million and Special Revenue Funds $20.4 million. This balance may serve as a useful indicator of a government’s net resources available for spending at the end of the year. The unreserved fund balance decreased by $22.5 million (36.3%) in fiscal year 2010 due to reclassification of rainy day fund as reserved ($16.9 million) and completion of capital expenditures for Community Facilities District Capital Projects fund ($4.9 million). 11 The General Fund is the chief operating fund of the City and accounts for many of the major functions of the government, including general government (administration), public safety (police, fire and courts), public works, highways and streets, culture and recreation and community development. General Fund revenues decreased by $5.3 million (8.5%) from the previous year. General Fund revenues decreased in all categories except for charges for services $4.8 million (81.0% increase) and fines and forfeits $.8 (23.2% increase). The increase in charges for services is due to increased activity for permits and inspections for construction. The largest decreases were licenses and permits of $2.5 million (79.6%), taxes $2.2 million (5.4%), contributions $1.5 million (68.7%) and intergovernmental $1.3 (10.7%). The overall decrease is due to the recession. General Fund expenditures decreased by $12.0 million (18.2%). The majority of this decrease were capital outlay expenditures $5.4 million (78.3%) and community development $5.0 million (51.9%). The City has reduced its capital projects and community development expenditures due to the downturn in the economy. Proprietary funds The proprietary fund financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statement, but provide additional detail since each major enterprise fund is shown discretely. The proprietary funds statements can be found on pages 30 - 33. The net assets of the enterprise fund increased by $7.7 million (4.1%) from the previous year. The Water & Sewer Fund had the largest growth in net assets of $9.8 million (6.1%) primarily from the sale of water rights for $4.4 million, capital contribution of $2.9 million and charges for services increase of $1.7 million. The Stadium Fund net assets decreased by $2.2 million (8.7%) due primarily to an increase in interest expense on debt service. The enterprise funds unrestricted assets increased by $15.7 million (72.2%) from the previous year due to a decrease in net assets reserved for invested in capital assets, net of related debt and new debt issuance. BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. The schedules filed with the Auditor General’s office list the original budget adopted for the prior year, estimated expenditures through the end of the fiscal year and the adopted current year’s budget. Budgetary comparison schedules are required for the General Fund, all major funds, non-major funds and enterprise funds. The General Fund budgetary comparison statement can be found on pages 28 - 29. The other budgetary comparison schedules can be found in the Other Supplementary Information section on pages 76 - 96. The City has reduced both the budgeted inflows and outflows due to the downturn in the economy. General Fund inflows (revenues and other financing sources) of $61.3 million, on a budgetary basis, was less than budget inflows of $63.9 million by $2.6 million (4.1%), while expenditures and other financing uses of $61.9 million was only 31.6% of final budgeted outflows of $90.4 million. The decline in the economy has resulted in a decrease in revenues for license and permits fees for commercial and residential construction and construction sales taxes. The reserved contingency of $16.9 million is set aside for unplanned or unforeseen expenditures. The $9.5 million variance in capital outlay also is attributed to reduction in capital project expenditures. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As of June 30, 2010, the City had $508.7 million invested in various capital assets, net of accumulated depreciation and related debt, down .1% from the previous year. The capital assets of the City (net of depreciation, but not capital debt) are $940.9 million. This is a net increase of $16.4 million (3.1%) from previous fiscal year. Of this increase, $2.0 million (.4%) was from governmental activities and $14.4 million (3.6%) resulted from business-type activities. 12 The following schedule presents capital asset balances and accumulated depreciation for the fiscal year ended June 30, 2010. (Net of depreciation) Governmental Activities 2010 Land Construction in progress Right of way Water rights Streetscape Infrastructure Building and improvements Vehicles, furniture and equipment Total Business-type Activities 2009 2010 Total Primary Government 2009 2010 2009 Percent Change $ 19,426,644 13,835,365 90,128,522 8,749,608 271,020,650 116,945,719 11,930,981 $ 19,426,644 17,306,030 90,128,522 8,305,608 272,266,801 110,479,760 12,088,132 $ 14,754,260 90,159,417 16,097,695 282,303,324 5,567,320 $ 14,754,260 103,820,478 17,862,634 252,022,930 6,050,581 $ 34,180,904 103,994,782 90,128,522 16,097,695 8,749,608 271,020,650 399,249,043 17,498,301 $ 34,180,904 121,126,508 90,128,522 17,862,634 8,305,608 272,266,801 362,502,690 18,138,713 0.0% -14.1% 0.0% -9.9% 5.3% -0.5% 10.1% -3.5% $ 532,037,489 $ 530,001,497 $ 408,882,016 $ 394,510,883 $ 940,919,505 $ 924,512,380 1.8% Major additions to capital assets during the fiscal year included the following: ¾ The City completed construction of the Goodyear Ballpark Spring Training facility with an additional $9.5 million in cost. ¾ The City invested $1.5 million in acquisition of information technology assets. ¾ The City invested $7.0 million in construction of multiple street and engineering projects. ¾ The City invested $5.4 million in construction of multiple water projects. ¾ The City invested $3.3 million in construction of multiple wastewater projects. ¾ The City governmental assets increased by $6.7 million and business-type assets increased by $2.9 million for contributed capital. Additional information on the City’s capital assets can be found in Note 4 on pages 49 - 50 and in the schedules on pages 103 - 106 of this report. Debt Administration The City’s outstanding non-current long-term debt, including bonds, loans, contracts payable and compensated absences, was $449.5 million at June 30, 2010. Of this total $216.7 million was in governmental activities and $232.8 million was in business-type activities. The City’s outstanding noncurrent debt increased by $8.7 million from the previous fiscal year. The City refunded a number of general obligation bonds that were issued previously for water and wastewater projects to extend principal retirement date. The following schedule shows the outstanding debt obligation (both current and long-term) as of June 30, 2010 and 2009. 13 Outstanding Debt as of June 30 Governmental Activities 2010 General obligation debt Community Facilities District bonds Loan payable Revenue bonds Water rights Contracts payable Compensated absences Total outstanding bonds $ 33,601,981 $ 122,313,000 51,290,000 5,755,628 3,790,807 2009 35,842,739 $ 127,125,000 53,075,000 7,755,628 3,645,701 Business-type Activities 2010 92,753,020 $ 9,925,289 119,340,000 10,314,041 419,694 2009 Total Primary Government 2010 2009 88,282,261 $ 126,355,001 $ 124,125,000 8,866,108 104,670,000 11,173,544 379,731 122,313,000 9,925,289 170,630,000 10,314,041 5,755,628 4,210,501 Percent Change 1.8% 127,125,000 8,866,108 157,745,000 11,173,544 7,755,628 4,025,432 -3.8% 11.9% 8.2% -7.7% -25.8% 4.6% $ 216,751,416 $ 227,444,068 $ 232,752,044 $ 213,371,644 $ 449,503,460 $ 440,815,712 2.0% $ 207,204,981 $ 216,042,739 $ 222,018,309 $ 201,818,369 $ 429,223,290 $ 417,861,108 -10.3% Of the total outstanding bonds of $429.2 million, $126.4 million is general obligation bonds backed by the full faith and credit of the City. The outstanding debt also includes $122.3 million in Community Facilities District bonds where the City has no obligation for payment. In addition to these are $170.6 million in revenue bonds that include $102.3 million in Public Improvement Corporation bonds for the Stadium and, $46.1 million in McDowell Road Corridor Improvement District that are secured by pledges of specific revenue sources of the City. The State constitution limits the amount of general obligation debt a city may issue to 6 percent of its total assessed valuation. The current 6% debt limitation for the City is $59.0 million. In addition, the State constitution limits allows a city to issue an additional 20 percent of its total assessed valuation for water, sewer, lights, transportation, public safety, open space preserves, parks, playgrounds and recreational facilities. The current 20% debt limitation for the City is $196.6 million. The City has $126.1 million outstanding general obligation debt for these purposes. The City’s assigned underlying ratings on its general obligation debt are “Aa2” and “AA-”, water and sewer revenue bonds are “A3” and “A-” and public improvement corporation bonds are “AA3” and “AA-” from Moody’s Investors Service, Inc., and Standard & Poor’s respectively. Additional information on the City’s long-term debt can be found in Notes 5 – 7 on pages 50 – 57 of this report. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The unemployment rate for Goodyear in June 2010 was 6.4%, which remains below both the State (9.6%) and national average (9.5%). Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. Due to a downturn in the economy, the City has adjusted its outlook and projected changes are reflected in the current fiscal year 2011 budget. To ensure the City remains financially strong, the adopted fiscal year 2011 budget is $255.0 million (a decrease of 32.0% from fiscal year 2010). It includes a $71.0 million operating budget (a decrease of 1.3% from fiscal year 2010), a $59.5 million capital improvement projects (CIP) budget (a decrease of 61.1% from fiscal year 2010) and sales taxes revenues of $31.6 (a decrease of 2.5% from fiscal 2010). CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the resources it receives. A copy of the City's Comprehensive Annual Financial Report is available on-line at http://www.goodyearaz.gov/index.asp?NID=22. If you have questions about this report or need additional information, contact the City’s Controller, City of Goodyear, 190 N. Litchfield Road, or by mail at P.O. Box 5100, Goodyear, Arizona 85338. 14 FINANCIAL SECTION BASIC FINANCIAL STATEMENTS CITY OF GOODYEAR, ARIZONA STATEMENT OF NET ASSETS June 30, 2010 ASSETS Cash and cash equivalents Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Due from fiduciary fund Inventories Prepaid items Deferred charges Restricted cash and cash equivalents Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other current liabilities Accrued payroll and employee benefits Accrued interest payable Deposits held for others Unearned revenue Noncurrent liabilities: Due within one year: Compensated absences Current portion of water rights obligations Bonds payable Due in more than one year: Compensated absences Water rights obligations Loans payable Bonds payable Interest payable Deferred amount on refunding Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Courts Law enforcement Highways and streets Community facilities Debt service Capital projects Unrestricted Total net assets See accompanying notes. Governmental Activities $ 64,311,677 77,699,819 2,298,649 961,840 411,828 529,757 5,278,890 2,098,966 Business-type Activities $ 14,698,569 2,949,958 944,851 (961,840) 34,307 602,529 2,609,065 17,095,918 Total $ 79,010,246 80,649,777 3,243,500 34,307 1,014,357 529,757 7,887,955 19,194,884 132,140,138 104,913,677 237,053,815 399,897,351 685,628,915 303,968,339 446,855,373 703,865,690 1,132,484,288 2,070,812 2,125,210 3,216,983 271,795 6,962,221 3,498,213 295,557 3,176,763 703,782 7,169,903 5,569,025 2,420,767 6,393,746 975,577 14,132,124 1,289,990 5,340,000 175,643 859,503 - 1,465,633 859,503 5,340,000 2,500,817 5,755,628 203,990,695 (211,293) 233,312,858 244,051 9,454,538 9,925,289 214,564,309 1,247,802 (408,319) 250,907,034 2,744,868 9,454,538 15,680,917 418,555,004 1,247,802 (619,612) 484,219,892 317,162,459 191,582,614 508,745,073 149,991 263,686 209,080 1,095,057 91,442,376 22,720,860 19,272,548 $ 452,316,057 4,365,725 $ 195,948,339 149,991 263,686 209,080 1,095,057 91,442,376 22,720,860 23,638,273 $ 648,264,396 17 CITY OF GOODYEAR, ARIZONA STATEMENT OF ACTIVITIES Year Ended June 30, 2010 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Expenses Functions/Programs Primary government: Governmental activities: General government Public safety Highways and streets Public works Culture and recreation Community development Interest on long-term debt Total governmental activities $ 14,767,660 28,960,907 12,179,531 11,070,853 4,023,639 2,555,353 11,210,504 84,768,447 Business-type activities: Water and sewer Sanitation Stadium Total business-type activities 18,124,893 4,782,565 11,547,500 34,454,958 16,258,079 5,790,357 1,530,799 23,579,235 $ 119,223,405 $ 29,855,257 Total primary government $ 863,192 1,509,770 287,805 3,615,255 6,276,022 $ 159,087 1,587,191 3,906,248 (3,659) 5,648,867 - $ 5,648,867 $ 250,420 6,653,000 9,532,955 16,436,375 6,211,533 6,211,533 $ 22,647,908 General revenues: Sales taxes Property taxes Franchise taxes State shared revenues-not restricted to specific programs Investment income Proceeds from the sale of water rights Miscellaneous Transfers in (out) Total general revenues and transfers Changes in net assets Net assets, beginning of year Net assets, end of year See accompanying notes. 18 Net (Expense) Revenue and Changes in Net Assets Governmental Activities $ (13,494,961) (25,863,946) (1,620,283) (1,537,898) (3,735,834) 1,056,243 (11,210,504) (56,407,183) (56,407,183) 31,448,399 21,941,576 2,233,909 Business-type Activities $ - Totals $ (13,494,961) (25,863,946) (1,620,283) (1,537,898) (3,735,834) 1,056,243 (11,210,504) (56,407,183) 4,344,719 1,007,792 (10,016,701) (4,664,190) 4,344,719 1,007,792 (10,016,701) (4,664,190) (4,664,190) (61,071,373) - 31,448,399 21,941,576 2,233,909 10,907,518 179,114 2,026,285 57,527 4,352,000 100,698 10,907,518 236,641 4,352,000 2,126,983 (7,815,285) 60,921,516 7,815,285 12,325,510 73,247,026 4,514,333 7,661,320 12,175,653 447,801,724 188,287,019 636,088,743 $ 452,316,057 $ 195,948,339 $ 648,264,396 - - 19 CITY OF GOODYEAR, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2010 ASSETS Cash and cash equivalents Taxes receivable Interest receivable Accounts receivable Special assessments receivable Due from other governments Due from other funds Inventories Prepaid items Restricted cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits held for others Due to other funds Deferred revenue Liabilities payable from restricted assets Total liabilities Fund balances: Reserved: Inventories Prepaid items Courts Law enforcement Operations Debt service Capital improvements Unreserved: Designated for capital replacement Unreserved, reported in: General fund Special revenue funds Total fund balances Total liabilities and fund balances General $ 25,138,336 5,674,266 156 897,709 3,313,363 16,903 482,039 420,187 $ 35,942,959 Community Facilities DistrictsDebt Service $ 13,957,519 273,802 24,049,800 47,213 $ 38,328,334 McDowell Road Commercial Corridor Improvement District Debt Service $ 19,117 46,060,000 $ 46,079,117 $ $ $ 921,742 2,057,018 266,795 4,135,498 6,510 7,387,563 16,903 482,039 149,991 263,686 16,900,000 - - 14,091,308 $ 38,328,334 46,060,000 46,060,000 19,117 - - 10,487,622 28,555,396 - See accompanying notes. 47,213 14,044,095 - 255,155 $ 35,942,959 24,237,026 24,237,026 19,117 $ 46,079,117 - 20 Capital Improvement Projects $ 392,054 296,583 $ 688,637 McDowell Road Commercial Corridor Improvement District Capital Projects $ 1,382,196 $ 1,382,196 Community Facilities DistrictsCapital Projects $ $ - Non-Major Governmental Funds $ 24,479,213 743,936 150 2,298,649 307,240 505 $ 27,829,693 Total Governmental Funds $ 63,986,239 6,692,004 156 897,859 70,109,800 2,298,649 3,313,363 324,143 529,757 2,098,966 $ 150,250,936 $ $ $ $ $ 13,990 663,294 677,284 11,353 1,382,196 - 688,637 - - 1,382,196 $ 1,382,196 - - 11,353 $ - $ 1,133,081 63,681 11,460 5,000 2,263,837 3,072,439 6,549,498 828,016 - 2,068,813 2,120,699 11,460 271,795 2,263,837 78,168,257 6,510 84,911,371 16,903 529,252 149,991 263,686 16,900,000 14,891,228 1,393,549 255,155 - 20,452,179 21,280,195 10,487,622 20,452,179 65,339,565 - $ 27,829,693 $ 150,250,936 - - - 21 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS June 30, 2010 Total governmental fund balances $ 65,339,565 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets Less accumulated depreciation $ 622,302,001 (90,264,512) 532,037,489 Certain revenues earned but not received within 60 days of year-end are deferred for the governmental statements, but are recognized as revenue for the government-wide statements. Grants Property taxes Special assessments 416,544 683,529 70,105,963 Interest payable on long-term debt is not reported in the governmental funds. 71,206,036 (3,205,523) Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated absences payable Bond issuance cost Bond refunding amount Loan payable Bonds payable Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service fund are reported with governmental activities. Net assets of governmental activities See accompanying notes. (3,790,807) 5,278,890 211,293 (5,755,628) (209,330,695) (213,386,947) 325,437 $ 452,316,057 23 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended June 30, 2010 REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Investment income (loss) Special assessments Contributions Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Highways and streets Public works Culture and recreation Community development Capital outlay Debt service: Principal retirement Interest and debt cost Total expenditures Excess (deficiency) of revenues over (under) expenditures 12,610,131 25,464,491 207,397 3,075,759 3,750,117 4,654,052 1,500,597 OTHER FINANCING SOURCES (USES) Debt issuance Debt premium Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances, beginning of year Fund balances , end of year See accompanying notes. General 38,974,044 629,979 10,907,518 4,790,274 846,143 39,077 701,022 101,067 56,989,124 Community Facilities Districts Debt Service $ 6,656,740 46,302 2,970,177 2,341,829 12,015,048 - - 2,680,000 247,548 54,190,092 4,812,000 6,901,373 11,713,373 1,105,000 2,447,906 3,552,906 2,799,032 301,675 148 4,342,839 (7,704,350) (3,361,511) 805,097 805,097 - (562,479) 1,106,772 148 12,984,536 18,969 29,117,875 $ McDowell Road Commercial Corridor Improvement District Debt Service $ 307 3,552,747 3,553,054 28,555,396 $ 14,091,308 $ 19,117 24 Capital Improvement Projects $ 972 972 McDowell Road Commercial Corridor Improvement District Capital Projects $ 12,628 1,259,776 1,272,404 Community Facilities Districts Capital Projects $ 2,039 2,039 Non-Major Governmental Funds $ 9,959,746 5,557,013 2,611,809 77,390 581,175 18,787,133 Total Governmental Funds $ 55,590,530 629,979 16,464,531 7,402,083 846,143 178,715 6,522,924 3,042,851 1,942,018 92,619,774 156,256 697,866 4,103,438 1,208,780 400,713 3,891,589 132,504 7,035,991 13,818,911 25,865,204 4,098,986 3,075,759 3,882,621 4,654,052 13,494,148 8,190 164,446 697,866 4,103,438 2,345,758 1,553,113 16,568,448 10,942,758 11,158,130 90,990,569 (163,474) 574,538 (4,101,399) 2,218,685 1,629,205 (805,097) (805,097) 871,012 (5,557,149) (4,686,137) 105,000 5,733 6,376,290 (14,191,575) (7,704,552) 105,000 5,733 357,342 (124,979) 343,096 $ - 179,622 574,538 (4,906,496) (2,467,452) (6,075,347) (168,269) 807,658 4,906,496 23,747,647 71,414,912 11,353 $ 1,382,196 $ - $ 21,280,195 $ 65,339,565 25 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended June 30, 2010 Net change in fund balances - total governmental funds $ (6,075,347) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives as depreciation expense. Contributions Expenditures for capitalized assets Less current year depreciation $ 6,653,000 8,996,875 (13,613,884) 2,035,991 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds and revenues received in the current year that were accrued in the Statement of Activities in prior years are reported as revenues in the funds. Grants Property taxes Special assessments 98,812 33,353 (2,391,541) Bond proceeds provide current financial resources to the governmental funds, but issuing debt increases long-term liabilities in the Statement of Activities. (105,000) Interest expense in the Statement of Activities differs from the amount reported in governmental funds because accrued interest was calculated for bonds and notes payable for the Statement of Activities, but is expensed when due for the governmental fund statements. 123,905 Governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. (138,012) Repayment of long-term debt are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Debt principal retirement Internal service funds are used by management to charge the costs of Fleet service to individual funds. The net income of certain activities of internal service funds is reported with governmental activities. 10,942,758 134,520 Compensated absences expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in net assets of governmental activities See accompanying notes. (145,106) $ 4,514,333 27 CITY OF GOODYEAR, ARIZONA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Investment income Contributions Miscellaneous Total revenues EXPENDITURES Current General government Mayor and council City clerk City manager City attorney Finance Information technology Human resources Reserved contingency Public safety Police Fire Municipal court City prosecutor Highways and streets Administration Public works Administration Building services Culture and recreation Parks Recreation and aquatics Community development Economic development Community development Engineering Capital outlay Debt service Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures See accompanying notes. Variance with Final Budget Positive (Negative) $ (1,331,514) (3,417,121) (175,847) 1,613,847 427,849 (390,923) 697,656 (147,892) (2,723,945) Original $ 40,305,558 4,047,100 11,083,365 2,909,085 685,636 430,000 3,366 248,959 59,713,069 Final $ 40,305,558 4,047,100 11,083,365 2,909,085 685,636 430,000 3,366 248,959 59,713,069 Actual $ 38,974,044 629,979 10,907,518 4,522,932 1,113,485 39,077 701,022 101,067 56,989,124 290,050 612,010 6,016,996 1,066,550 2,089,046 2,616,659 2,280,686 16,900,000 290,050 612,010 5,415,115 1,066,550 2,089,046 2,616,659 2,280,686 16,900,000 178,971 502,134 4,731,470 742,689 2,051,904 2,472,990 1,929,973 - 13,813,414 10,117,434 1,009,449 507,441 13,813,414 10,602,434 1,009,449 507,441 13,453,500 10,569,987 1,055,235 385,769 359,914 32,447 (45,786) 121,672 203,041 203,041 207,397 (4,356) 868,245 2,729,216 868,245 2,729,216 409,758 2,666,001 458,487 63,215 2,675,273 1,168,469 2,705,168 1,168,469 2,738,719 1,011,398 (33,551) 157,071 601,030 4,945,055 10,827,943 601,030 5,007,041 10,852,943 452,737 4,189,472 11,843 1,500,597 148,293 817,569 (11,843) 9,352,346 680,000 238,725 82,256,732 680,000 238,725 82,256,732 2,680,000 247,548 54,190,092 (2,000,000) (8,823) 28,066,640 (22,543,663) (22,543,663) 2,799,032 25,342,695 111,079 109,876 683,645 323,861 37,142 143,669 350,713 16,900,000 28 Original 4,217,860 (8,189,925) Final 4,217,860 (8,189,925) Actual 4,342,839 (7,704,350) Variance with Final Budget Positive (Negative) 124,979 485,575 (3,972,065) (3,972,065) (3,361,511) 610,554 (26,515,728) (26,515,728) (562,479) 25,953,249 29,117,875 29,117,875 29,117,875 $ 2,602,147 $ 2,602,147 $ 28,555,396 Budgeted Amounts OTHER FINANCING Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ 25,953,249 29 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2010 Business-type Activities-Enterprise Funds ASSETS Current assets: Cash and cash equivalents Interest receivable Accounts receivable Due from other governments Due from other funds Inventories Total current assets Noncurrent assets: Deferred charges Restricted cash and cash equivalents Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Due to other funds Deposits held for others Unearned revenue Liabilities payable from restricted assets Compensated absences payable Water rights obligations Total current liabilities Noncurrent liabilities: Accrued interest payable Compensated absences payable Water rights obligations Loan payable Bonds payable Revenue bonds payable Deferred amount on refunding Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets See accompanying notes. Water & Sewer Sanitation $ 12,054,139 13 2,119,716 944,851 34,307 602,529 15,755,555 $ 909,933 823,820 1,733,753 1,572,023 - Stadium $ Total 1,734,497 76 6,333 1,740,906 $ 14,698,569 89 2,949,869 944,851 34,307 602,529 19,230,214 1,037,042 2,609,065 Governmental Activities Internal Service Funds $ 325,438 119,488 444,926 - 7,776,526 94,188,621 186,144,415 289,681,585 305,437,140 752,098 752,098 2,485,851 9,319,392 10,725,056 117,071,826 138,153,316 139,894,222 17,095,918 104,913,677 303,968,339 428,586,999 447,817,213 444,926 325,777 346,756 121,553 794,086 2,309 170,061 493,619 703,782 7,135,237 36,949 - 88,547 2,683,144 961,840 34,666 295,557 3,176,763 961,840 703,782 7,169,903 29,494 87,686 - 2,704,127 - 2,704,127 119,489 105,399 859,503 12,497,505 1,247,802 151,999 9,454,538 9,925,289 84,919,452 17,040,000 (408,319) 122,330,761 134,828,266 166,319,099 4,289,775 $ 170,608,874 23,070 406,775 44,791 44,791 451,566 752,098 1,282,187 $ 2,034,285 47,174 3,936,924 47,261 8,880,392 103,724,465 112,652,118 116,589,042 175,643 859,503 16,841,204 1,247,802 - 244,051 9,454,538 9,925,289 93,799,844 120,764,465 (408,319) 235,027,670 251,868,874 24,511,417 191,582,614 (1,206,237) 4,365,725 $ 23,305,180 $ 195,948,339 119,489 $ 325,437 325,437 30 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Year Ended June 30, 2010 Water & Sewer Sanitation Stadium Total Governmental Activities Internal Service Funds $ 16,258,079 120,598 16,378,677 $ 5,790,357 620 5,790,977 $ 1,530,799 21,260 1,552,059 $ 23,579,235 142,478 23,721,713 $ 1,354,854 84,268 1,439,122 3,068,187 5,282,401 5,142,869 13,493,457 708,784 3,927,574 145,054 4,781,412 2,021,582 1,698,607 2,045,589 5,765,778 5,798,553 10,908,582 7,333,512 24,040,647 569,048 785,807 1,354,855 2,885,220 1,009,565 (4,213,719) (318,934) 84,267 3,259,108 7,425 40,130 4,352,000 (4,626,823) 1,692 - 15,705 (5,779,416) 3,259,108 7,425 57,527 4,352,000 (10,406,239) 400 - 3,031,840 1,692 (5,763,711) (2,730,179) 400 5,917,060 1,011,257 (9,977,430) (3,049,113) 84,667 Business-type Activities-Enterprise Funds Operating revenues: Charges for service Miscellaneous Total operating revenue Operating expenses: Administration Costs of sales and services Depreciation and amortization Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Impact fees Intergovernmental Investment income Proceeds from sale of water rights Interest expense Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers Capital contributions Transfers in Transfers out 2,945,000 4,267,476 (3,292,860) (925,000) 7,765,669 - 2,945,000 12,033,145 (4,217,860) - Change in net assets 9,836,676 86,257 (2,211,761) 7,711,172 84,667 160,772,198 1,948,028 25,516,941 188,237,167 240,770 $ 170,608,874 $ 2,034,285 $ 23,305,180 Net assets, beginning of year Net assets, end of year $ Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds Change in net assets of business-type activities See accompanying notes. 325,437 (49,852) $ 7,661,320 31 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2010 Business-type Activities Enterprise Funds Water & Sewer Cash flows from operating activities: Received from customers $ 16,240,260 Payments to vendors (9,894,764) Payments to employees (3,100,447) Net cash provided (used) by operating activities Cash flows from noncapital financing activities: Interfund transfers Net cash provided (used) for noncapital and related financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Capital debt proceeds Principal paid on long-term debt Interest paid on long-term debt Proceeds from the sale of water rights Development impact fees received Net cash provided (used) for capital and related financing activities Cash flows from investing activities: Investment income received 3,245,049 Sanitation $ 5,762,472 (3,601,556) (711,081) 1,449,835 Stadium Total Governmental Activities Internal Service Funds $ 1,592,201 $ 23,594,933 $ 1,489,868 (2,361,396) (15,857,716) (837,574) (1,914,739) (5,726,267) (568,026) (2,683,934) 2,010,950 84,268 982,041 (925,000) 7,765,669 7,822,710 - 982,041 (925,000) 7,765,669 7,822,710 - (9,602,640) (503,401) (5,961,930) (17,000,369) 26,358,670 (7,904,436) (10,102,820) - (7,397,729) 26,358,670 (7,401,035) (4,140,890) - 4,352,000 - - 4,352,000 - 3,259,108 - - 3,259,108 - 15,030,124 - (1,037,847) - (16,067,971) 88,621 3,926 19,628 112,175 719 88,621 3,926 19,628 112,175 719 19,345,835 528,761 (10,966,608) 8,907,988 84,987 Cash and cash equivalents, beginning of year 484,830 381,172 22,020,497 22,886,499 240,451 Cash and cash equivalents, end of year $ 19,830,665 $ 909,933 $ 11,053,889 $ 31,794,487 $ 325,438 $ 12,054,139 $ 909,933 $ 1,734,497 $ 14,698,569 $ 325,438 7,776,526 $ 19,830,665 $ 909,933 9,319,392 $ 11,053,889 17,095,918 $ 31,794,487 $ 325,438 Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents Restricted cash and cash equivalents See accompanying notes. 32 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2010 Total Governmental Activities Internal Service Funds (318,934) $ Business-type Activities-Enterprise Funds Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) Water & Sewer $ Adjustment to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization (Increase) decrease in: Accounts receivable Inventories Increase (decrease) in: Accounts payable Accrued payroll and employee benefits Accrued liabilities Due to other funds Unearned revenue Deposits held for others Compensated absences payable Net cash provided (used) by operating activities Noncash investing, capital, and financing activities: Contributions of capital assets Amortization of bond premium Amortization of deferred bond costs Total See accompanying notes. Sanitation 2,885,220 $ 1,009,565 5,142,869 145,054 (232,019) (33,135) Stadium $ (4,213,719) $ 2,045,589 (28,505) - (2,063,238) 5,476 - 326,018 (6,882) (1,465,559) (1,050,431) 406,055 (312,453) (25,378) 7,333,512 (3,922) 1,625 84,267 - (255,048) (33,135) (33,589) (173,137) (1,910,357) (18,178) 43,127 (489,652) 34,666 63,716 32,323 (1,465,559) (1,540,083) 440,721 (312,453) 39,963 1,022 50,746 - $ 3,245,049 $ 1,449,835 $ (2,683,934) $ 2,010,950 $ 84,268 $ 2,945,000 (416,290) $ $ $ 2,945,000 (348,972) $ - (47,518) 19,800 $ (117,161) 2,478,867 $ (69,643) 2,459,067 $ - $ 67,318 $ - 33 CITY OF GOODYEAR, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS June 30, 2010 ASSETS Cash and cash equivalents Total assets Pension Trust $ LIABILITIES Deposits held for others Due to other funds Total liabilities NET ASSETS Held in trust for pension benefits See accompanying notes. 369,911 369,911 - $ Agency Funds $ $ 889,412 889,412 855,105 34,307 889,412 369,911 34 CITY OF GOODYEAR, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUND Year Ended June 30, 2010 ADDITIONS Other revenue Total other revenue Pension Trust $ Investment income Net increase (decrease) in fair value of investments Interest Total investment income Total additions 33,463 259 33,722 33,722 DEDUCTIONS Benefits Total deductions 1,850 1,850 Net decrease Net assets, beginning of year Net assets, end of year See accompanying notes. - 31,872 $ 338,039 369,911 35 FINANCIAL SECTION NOTES TO FINANCIAL STATEMENTS CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Goodyear, Arizona (City) have been prepared in conformity with accounting principles generally accepted in the United Sates of America as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. A. Reporting Entity The City is a municipal entity governed by an elected Mayor and council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component units, entities for which the City is considered 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 from the City, the primary government. The financial reporting entity consists of a primary government, and its component units. The City is a primary government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. Furthermore, component units are combined with the City for financial statement presentation purposes, and are not included in any other governmental reporting entity. Consequently, the City’s financial statements include the funds of those organizational entities for which its elected governing body is financially accountable. Blended Component Units - The Goodyear Community Facilities General District No. 1, Goodyear Community Facilities Utilities District No. 1, Wildflower Ranch Community Facilities General District No. 1, Wildflower Ranch Community Facilities General District No. 2, Estrella Mountain Ranch Community Facilities District, Cottonflower Community Facilities District, Centerra Community Facilities District, Cortina Community Facilities District, Palm Valley Community Facilities District No. 3, and King Ranch Community Facilities District were formed for the purpose of acquiring and improving public infrastructure in specified land areas. As special purpose districts and separate political subdivisions under the Arizona Constitution, the Districts can levy taxes and issue bonds independently of the City. Property owners in the designated areas are assessed for District taxes and thus for the cost of operating the Districts. The City Council serves as the Board of Directors; however, the City has no liability for the Districts’ debt. For financial reporting purposes, transactions of the Districts are combined together and included as if they were part of the City’s operations. Complete financial statements for each of the individual component units may be obtained at the entities administrative offices. B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e. the statement of net assets and the statement of activities) present financial information about the City as a whole. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between the governmental activities and the business-type activities are shown in the government-wide financial statements. The “doubling up” effect of internal service fund activity has been removed from the government-wide statements with the expenses shown in the various functions on the Statement of Activities. These statements are to distinguish between the governmental and business-type activities of the City. Governmental activities normally are supported by taxes and intergovernmental revenues, and are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. 39 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, state-shared revenues, investment income and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-wide Financial Statements - The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the grantor or provider have been met. As a general rule, the effect on internal activity has been eliminated from the government-wide financial statements. Fund Financial Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt services expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, licenses and permits, charges for service, special assessments and investment income associated with the current fiscal period are considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenues as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible to accrual because generally they are not measurable until received in cash. Deferred revenues also arise when the City receives resources before it has legal claim to them, as when grant monies are received prior to meeting all eligibility requirements imposed by the provider. Delinquent property taxes have been 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. The City reports the following major governmental funds: General Fund - This fund is the general operating fund of the City. It accounts for all financial resources of the City, except those required to be accounted for in other funds. 40 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Community Facilities Districts - Debt Service Fund - This fund accounts for the debt portion of the City’s Community Facilities Districts, which are component units that provide general infrastructure and capital assets for the property within each District’s boundaries. McDowell Road Commercial Corridor Improvement Debt Service Fund - This fund accounts for the debt portion of the McDowell Road Improvements. Capital Improvement Projects Funds - This fund accounts for all the acquisition and construction of major capital facilities other than those financed by proprietary funds and the McDowell Road Improvements project. McDowell Road Commercial Corridor Improvement District Capital Projects Fund - This fund accounts for all the acquisition and construction of major capital improvements on McDowell road. Community Facilities Districts - Capital Projects Funds - This fund accounts for all the acquisition and construction portion of the City’s Community Facilities District which are component units that provide general infrastructure and capital assets for the property within each District’s boundaries. The City reports the following major proprietary funds: Water and Sewer Fund - This fund accounts for the City’s water and sewer utility operations. Sanitation Fund - This fund is used to account for the activities of the City’s sanitation operations. Stadium Fund - This fund is used to account for the activities of the City’s stadium operations. The City reports the following internal service funds: Fleet Inter-Department Service Fund – This fund accounts for activities that provide preventative maintenance, repairs and safety inspections for City vehicles and equipment. Health Insurance Fund – This fund is used for the City’s wellness initiative and to build up a reserve for the City to become self funding. The Internal service fund activities are reported as governmental activities on the government-wide statements. Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. The City maintains the following fiduciary funds: Pension Trust Fund – This fund is used to account for the Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan Fund, a defined contribution plan for which the assets are held by the City in a trustee capacity. The Pension Trust Fund is reported using the accrual basis of accounting. 41 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Agency Funds – The City holds these assets as an agent for individuals, private organizations or others in a temporary custodial capacity. The City currently maintains four agency funds. One fund accounts for monies held in trust for the United States Environmental Protection Agency and the Crane Co. for cleanup of the Phoenix-Goodyear Airport Superfund site known as the Brownfield EPA Cleanup. The remaining three funds account for monies donated by individuals for the GAIN, Fill-A-Need and Shop With A Cop activities. Pursuant to GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting, the City follows GASB guidance as applicable to its proprietary funds, and Financial Accounting Standards Boards Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins issued on or before November 30, 1989 that do not conflict with or contradict GASB Pronouncements. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for water, wastewater, and sanitation services. Operating expenses for these funds include the administrative expenses, cost of sales and services, and depreciation. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources, as they are needed. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. The City’s non-major funds are as follows: Special Revenue Funds Highway User Revenue Fund (HURF) Grants Fund Community Facilities Districts Community Facilities Impact Fees General Government Impact Fees Public Works Impact Fees Fire Impact Fees Police Impact Fees Transportation Impact Fees Library Impact Fees Regional Transportation Impact Fees Debt Service Fund D. Cash and Cash Equivalents Cash represents amounts in demand deposits and amounts held in trust by financial institutions. The funds held in trust are available to the City upon demand. Cash equivalents are defined as short-term (original maturities of three months or less), highly liquid investments that are 1) readily convertible to known amounts of cash and 2) so near maturity that they present insignificant risk of changes in value because of changes in interest rates. The City has no formal policy relating to custodial credit risk for deposits. 42 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 E. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments Arizona Revised Statutes (ARS) authorize the City to invest public monies in the State Treasurer’s Local Government Investment Pool, interest-bearing savings account, certificates of deposit, and repurchase agreements in eligible depositories; bonds or other obligations of the U.S. government that are guaranteed as to principal and interest by the U.S. government; and bonds of the State of Arizona counties, cities, school districts, and special districts as specified by statute. Investments for the City are reported at fair value. The City has no formal policy relating to interest-rate risk or credit risk of investments, though in practice, invests in highly liquid, low risk investments. F. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of the interfund loans). All trade and property tax receivables are shown net of allowance for uncollectibles. Trade accounts receivable in excess of 180 days comprise the trade accounts receivables allowance for uncollectibles. Property taxes are levied by the City and collected by the Maricopa County Treasurer. Property taxes are levied no later than the third Monday in August and are payable in two installments due October 1 of the current year and March 1 of the subsequent year. Taxes become delinquent after the first business day of November and May, respectively. Interest attaches on installments after the delinquent date. Pursuant to ARS, a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. G. Inventory Inventories are stated at average cost using the first-in, first-out (FIFO) flow assumption in determining cost. Inventory in the governmental funds, which consists of expendable supplies held for consumption, is recorded as an expenditure at the time individual inventory items are consumed (i.e. the consumption method) and is offset by a fund balance reserve in the governmental fund financial statements indicating it does not constitute available expendable resources. No reservation in shown in the proprietary funds statements or the governmentwide financial statements for inventories. H. Prepaid Items Prepaid items are generally for payments made by the City in the current fiscal year for goods or services to be received in a subsequent fiscal year. Such items recorded as prepaid at the time of the payment and recognized as expenditures/expenses when the related goods or services are received. Prepaid items are offset by fund balance reserve in the governmental fund financial statements indicating it does not constitute available expendable resources. No reservation is shown in the proprietary fund statements or the government-wide financial statements for prepaid items. I. Restricted Assets Certain proceeds of the City’s bonds, as well as certain resources set aside for their repayment, are classified as restricted cash and investments on the balance sheet because their use is limited by applicable bond covenants. 43 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 J. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets Capital assets, which include land, buildings, improvements other than buildings, vehicles, machinery, equipment, construction in progress, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Certain capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Infrastructure Buildings Improvement other than buildings Vehicles, machinery and equipment Water rights K. Years 20-65 50 7-50 3-7 100 Compensated Absences The City’s employee vacation and sick leave policies provide for granting vacation and sick leave with pay. Sick leave and vacation benefits vest at the employee’s current rate of pay. The current and long-term liabilities for accumulated vacation and sick leave are reported on the government-wide financial statements and in the proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee leave, resignation and retirements. Resources from the General Fund are generally used to liquidate the governmental funds liabilities compensated absences. L. Long-term Obligations In the government-wide financial statements and proprietary fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the statement of net assets. M. Fund Equity In the fund financial statements, governmental funds report reservations of the fund balance for amounts that are not available for expenditures or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent management’s intended use of resources and reflect actual plans approved by the government’s senior management. At June 30, 2010, the City reserved and designated fund balance for various purposes. 44 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 N. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund services provided and used are not eliminated in the process of consolidation. Interfund transfers in the fund statements are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. O. Estimates The preparation of the 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 may differ from those estimates. P. Budgetary Data According to the laws of the State of Arizona, all operating budgets must be approved by their governing board on or before the second Monday in August to allow sufficient time for legal announcements and hearings required for the adoption of the property tax levy on the third Monday in August. In April, the proposed budget for the following fiscal year is presented by the City Manager to the City Council. The budget includes proposed expenditures and the means of financing them. Public meetings are held to obtain citizen comment. Prior to June 30, the City Council legally enacts the budget, through the passage of an ordinance. The ordinance sets the limit for expenditures for the year, within the voter mandated state expenditure limitation. Additional expenditures may be authorized if directly necessitated by a natural or man-made disaster as prescribed in the state constitution. There were no supplemental appropriations made during fiscal year 2010. The maximum legal expenditure permitted for the year is the total budget as adopted. All funds of the City have legally adopted budgets. The initial budget for the fiscal year may be amended during the year in a legally permissible manner. The City adopts the budget by departments for the General Fund and by fund for all others. The City Manager is generally authorized to transfer budgeted amounts within any specific department’s expenditure appropriation. Any budget revisions requiring a transfer between departments in the General Fund or a transfer between any other fund must be approved by the City Council. All unencumbered expenditure appropriations expire at the end of the fiscal year. Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office. Budgetary carry forwards are approved by the City Council. The City approves its annual budget consistent with GAAP. GASB Statement #34 requires that budgetary comparison statements for the General Fund and major governmental funds be presented in the annual financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis).The City has also shown this information as supplementary schedules for other non-major governmental funds as well as enterprise funds. 45 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 2 CASH AND INVESTMENTS At June 30, 2010, cash and cash equivalents are presented in the funds as follows: Cash and cash equivalents Restricted cash and cash equivalents Governmental Activities $ 64,311,677 $ 2,098,966 $ 66,410,643 Business Activities 14,698,569 Fiduciary Fund $ 1,259,323 17,095,918 $ 31,794,487 $ $ 1,259,323 Total 80,269,569 19,194,884 $ 99,464,453 The restricted cash and cash equivalents are proceeds from debt issuances that are held in trustee accounts for the purpose of major capital improvements. Deposits At June 30, 2010, the City had $5,850 of cash on hand. The carrying amount of the City’s cash in bank totaled $5,211,865 and the bank balance was $1,572,361. The City’s deposits at June 30, 2010 were covered by Federal Depository Insurance to the extent of $568,777. Deposits of $1,003,584 were collateralized with securities held by the pledging financial institution or by its trust department or agent but not in the depositor-government’s name. There were no deposits that were uncollateralized at year end. Deposits of $5,447,636 were held in a sweep account, which purchases investments nightly. The City has no formal policy relating to custodial credit risk, but in practice deposits money with reputable banks. Investments ARS authorizes the City to invest public monies in the State Treasurer’s Local Government Investment Pool, interest-bearing savings accounts, certificates of deposit, and repurchase agreements in eligible depositories; bonds or other obligations of the U.S. government that are guaranteed as to principal and interest by the U.S. government; and bonds of the State of Arizona counties, cities, school districts, and special districts as specified by statute. The City invests in the Local Government Investment Pool 5 (LGIP), an investment pool managed by the State Treasurer’s Office that allows governments within the State to pool their funds for investment purposes. The LGIP is not registered with the Securities Exchange Commission under the 1940 Investment Advisors Act. The State Board of Investment has oversight responsibilities of the investment pool in accordance with ARS 35-311. The pool’s policy is to invest in fixed-rate securities with a final maturity less than 36 months from the settlement date of the purchase and variable-rate securities with final maturity less than 5 years. The dollar weighted average portfolio maturity is less than 240 days. The net asset value per share of the pool at June 30, 2010 was $1.00. The Arizona State Treasurer issues a publicly available financial report that includes financial statements and required supplementary information. Copies may be obtained by contacting the Arizona State Treasurer, 1700 West Washington, Phoenix, Arizona 85007. Funds held in the State Treasurer’s Local Government Investment Pool represent a proportionate interest in the pool’s portfolio; however, the City’s portion is not identified with specific investments and is not subject to custodial credit risk. At June 30, 2010, the City’s funds invested with the State Treasurer totaled $70,442,183. The City is invested in multiple mutual funds through the trust department of Wells Fargo. The mutual funds have a value of $22,842,521 at June 30, 2010. 46 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 2 CASH AND INVESTMENTS (Continued) The City’s Community Facilities Districts are invested in a guaranteed investment contract through the trust department of Wells Fargo. The guaranteed investment contract has a value of $667,000 at June 30, 2010. The City also holds investments that belong to the Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan. These funds are held by LGIP as described above and LPL Financial and consist of multiple money market funds and mutual funds. The maturities of these investments are usually less than 30 days. The Fiduciary Fund investments have a value of $369,542 at June 30, 2010. Interest Rate Risk Interest rate risk is the risk of changes in market interest rates that will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The guaranteed investment contract the City is invested in matures in July of 2016. All other investments have maturities of less than 12 months. The City has no formal policy relating to the interest rate risk of its investments. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of year-end for each investment type. The City has no formal policy relating to the credit risk of its investments. Governmental funds Investment Type LGIP Money market mutual funds Guaranteed Investment Contract Repurchase agreements Total $ 51,187,832 10,459,666 667,000 5,447,636 $ 67,762,134 Proprietary funds Investment Type LGIP Money market mutual funds Fiduciary funds Investment Type LGIP Money market funds Mutual funds Total $ 19,179,843 12,050,181 $ 31,230,024 $ $ Total 74,508 27,636 267,398 369,542 $ Ratings as of Year-End AAA Unrated 51,187,832 $ 10,459,666 667,000 5,447,636 $ 61,647,498 $ Ratings as of Year-End AAA Unrated 19,179,843 $ 12,050,181 31,230,024 $ - $ $ $ $ 6,114,636 Ratings as of Year-End AAA Unrated 74,508 $ 27,636 267,398 74,508 $ 295,034 47 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 3 RECEIVABLES Receivables, net of no allowance for uncollectibles, as of year-end for the City’s individual major governmental funds and nonmajor governmental funds in the aggregate are as follows: Receivables: Taxes Interest Accounts Special assessments Net receivables General Fund $ 5,674,266 156 897,709 Community Facilities DistrictsDebt Service Fund $ 273,802 - McDowell Road Commercial Corridor Improvement District Non-Major Debt Governmental Service Fund Total $ $ 743,936 $ 6,692,004 156 150 897,859 $ 6,572,131 24,049,800 $ 24,323,602 46,060,000 $ 46,060,000 $ 744,086 70,109,800 $ 77,699,819 The following table summarizes the City’s receivables for the enterprise funds as of June 30, 2010. Receivables: Interest Accounts Less: Allowance Net receivables Water and Sewer Fund $ 13 2,741,362 2,741,375 Sanitation Fund $ 823,820 823,820 Stadium Fund $ 76 6,333 6,409 $ (621,646) $ 2,119,729 $ 823,820 $ 6,409 (621,646) $ 2,949,958 Total 89 3,571,515 3,571,604 Revenues of the Water and Sewer Fund and Sanitation Fund are reported net of uncollectible amounts. Total uncollectible amounts related to water and sewer revenues of the current period are $53,103. 48 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 4 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2010 follows: Governmental Activities Capital assets, not being depreciated: Land Construction in progress Right of Way Streetscape Total capital assets not being depreciated Capital assets, being depreciated: Infrastructure Buildings and improvements Vehicles, furniture and equipment Total capital assets being depreciated Less accumulated depreciation for: Infrastructure Buildings and improvements Vehicles, furniture and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Beginning Balance $ 19,426,644 17,306,030 90,128,522 8,305,608 Increases $ * 10,677,011 444,000 Ending Balance Decreases $ (14,147,678) - $ 19,426,644 13,835,364 90,128,522 8,749,608 135,166,804 11,121,011 (14,147,678) 132,140,138 321,010,553 115,599,897 35,856,718 472,467,168 6,209,000 10,596,010 1,871,531 18,676,541 (981,846) (981,846) 327,219,553 126,195,907 36,746,403 490,161,863 (48,743,752) (5,120,137) (23,768,586) (77,632,476) (7,455,151) (4,130,050) (2,027,525) (13,612,725) 980,689 980,689 (56,198,903) (9,250,187) (24,815,422) (90,264,512) 394,834,692 5,063,817 (1,157) 399,897,351 $ 530,001,496 $ 16,184,828 $ (14,148,835) $ 532,037,489 * The beginning balance of right of way was restated from $82,372,894 to $90,128,522 to reflect a land purchase in a prior fiscal year. Business-Type Activities Capital assets, not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated: Buildings & improvements Vehicles, machinery and equipment Water rights Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Vehicles, machinery and equipment Water rights amortization Total accumulated depreciation Total capital assets, being depreciated, net Business-Type activities capital assets, net Beginning Balance $ 14,754,260 103,820,478 Increases $ 18,203,036 Ending Balance Decreases $ (31,864,097) $ 14,754,260 90,159,417 118,574,738 18,203,036 (31,864,097) 104,913,677 275,842,895 14,382,379 18,211,497 308,436,771 35,006,307 189,798 169,601 35,365,706 (69,525) (69,525) 310,849,202 14,502,652 18,381,098 343,732,952 (23,819,965) (8,331,798) (348,863) (32,500,626) (4,725,913) (673,059) (1,934,540) (7,333,512) 69,525 69,525 (28,545,878) (8,935,332) (2,283,403) (39,764,613) 275,936,145 28,032,194 - 303,968,339 $ 394,510,883 $ 46,235,230 $ (31,864,097) $ 408,882,016 49 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 4 CAPITAL ASSETS (Continued) Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Highway and streets Culture and recreation Public works Total depreciation expense $ Business-type activities: Water and wastewater Sanitation Stadium Total depreciation and amortization expense NOTE 5 559,510 1,635,758 7,851,305 49,446 3,516,706 $ 13,612,726 $ 5,142,867 145,054 2,045,589 $ 7,333,509 LOANS PAYABLE The City received three loans from the Water Infrastructure Finance Authority. The first loan was used to acquire the rights and make improvements to existing capacity in the wastewater treatment plant. The second loan will be used to finance the planning and design of a pilot recharge project and to construct a well distribution line. The third loan will be used for expansion of an effluent sewer facility and to rehabilitate the existing effluent lift station. The loans payable at June 30, 2010, are as follows: Description Business-type activities: Water Infrastructure Finance Authority Loan Water Infrastructure Finance Authority Loan Water Infrastructure Finance Authority Loan Total Business-type activities Interest Rate (Including Fees) Maturity 4.06% 07/01/07 - 21 4.06% 07/01/07 - 21 2.00% 07/01/10 - 29 Outstanding Principal June 30, 2010 $ 2,846,717 Due Within One Year $ 5,432,954 $ 1,645,618 9,925,289 - $ - Annual debt service requirements to maturity on the loans payable at June 30, 2010 are summarized as follows: Fiscal year ending June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2022 Total Business-Type Activities Principal Interest $ $ 164,401 946,062 349,340 977,530 310,520 1,010,136 277,255 1,043,923 242,784 4,140,678 737,207 1,806,960 64,005 $ 9,925,289 $ 2,145,512 50 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 6 CONTRACT PAYABLE The City entered into an agreement to acquire approximately 80,443 acres of right-of-way for proposed 303 alignment for $11,755,628. The City agreed to pay the owner an initial payment of $2,000,000 in fiscal year 2008 and to make annual principal only payments to the owner each fiscal year until the contract is paid off. The contract payable as of June 30, 2010, is summarized below: Fiscal Year Ending Business-Type Activities Principal June 30, 2011 2012 2013 NOTE 7 Interest $ 2,000,000 2,000,000 1,755,628 $ - $ 5,755,628 $ - GENERAL OBLIGATION BONDS PAYABLE Bonds payable at June 30, 2010, consisted of the outstanding general obligation and refunding bonds presented below. The bonds are generally callable with interest payable semiannually. Of the total amounts originally authorized, $167,660,449 remains unissued. The bonds payable at June 30, 2010 are presented below. Description Governmental activities: General Obligation Bonds Series 2002 General Obligation Bonds Series 2003 General Obligation Bonds Series 2007 General Obligation Bonds Series 2008 General Obligation Refunding Bonds Series 2009 General Obligation Bonds Series 2010 - Build America Total Governmental activities Business-type activities: General Obligation Bonds Series 2005 General Obligation Bonds Series 2007 General Obligation Bonds Series 2008 General Obligation Refunding Bonds Series 2009 General Obligation Bonds Series 2010 - Build America General Obligation Refunding Bonds Series 2010 Total Business-type activities Total Interest Rate Maturity 3.65 - 4.25% 7/1/07 - 17 3.00 - 4.50% Outstanding Principal June 30, 2010 $ Due Within One Year 6,590,000 - 7/1/08 - 18 8,425,000 - 3.00 - 5.00% 7/1/08 - 26 9,449,570 - 4.25 - 6.00% 7/1/09 - 27 8,427,911 - 5.25 - 5.125% 7/1/27 - 30 604,500 - 5.40 - 6.30% 7/1/21 - 30 $ 105,000 33,601,981 $ - $ 19,985,000 $ - 3.50 - 5.00% 7/1/07 - 20 3.00 - 5.00% 7/1/08 - 26 22,975,430 - 4.25 - 6.00% 7/1/09 - 27 34,497,090 - 5.25 - 5.125% 7/1/27 - 30 4,975,500 - 5.40 - 6.30% 7/1/21 - 30 5,710,000 - 4.018 - 5.125% 7/1/22 - 30 $ 4,610,000 92,753,020 $ - $ 126,355,001 $ - 51 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 7 GENERAL OBLIGATION BONDS PAYABLE (Continued) Annual debt service requirements to maturity on governmental bonds payable at June 30, 2010 are summarized as follows: Fiscal year ending June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2038 Total Governmental Activities Principal Interest $ $ 737,224 2,243,524 1,430,071 2,357,821 1,338,100 2,545,067 1,239,522 2,651,833 1,134,061 11,725,487 3,912,948 5,141,659 2,171,489 3,952,217 1,010,314 1,727,795 458,588 1,256,578 81,984 $33,601,981 $13,514,301 Business-Type Activities Principal Interest $ $ 2,185,559 1,631,476 4,262,466 1,727,179 4,082,845 4,009,933 3,910,138 4,143,167 3,726,952 24,524,513 15,504,599 21,693,341 9,846,765 21,552,783 5,162,854 8,327,205 1,897,601 5,143,423 335,579 $92,753,020 $50,915,358 In May 2009, the City issued $5,580,000 of General Obligation Bonds to do advance and current refunding of the 1998-2008 series bonds. Under the terms of the refunding issue, sufficient assets to pay all principal interest on the refunded bonds issues have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities, which, together with interest earned thereon, will provide amounts sufficient for future payment of principal and interest of the issue refunded. There was $2,750,000 outstanding on these bonds as of June 30, 2010. The $76,619 deferred amount on retirement bonds is being amortized over the lives of the refunding bonds on the straight-line basis. The City issued $5,815,000 General Obligation Bonds 2010 (Build America Bonds – Direct Pay) in January 2010 to acquire and construct certain sewer system and street improvements. $5,710,000 will be repaid from sewer rates and $105,000 will be repaid from excise taxes. The bonds have a stated interest rate 5.40 % - 6.30% with semi-annual interest payable for the next 20 years and principal payable over the last eleven years. The City issued $4,610,000 of General Obligation Refunding Bonds in June 2010 to do advance and current refunding of the 2002-2008 series general obligation bonds. Under the terms of the refunding issue, sufficient assets to pay all principal interest on the refunding bonds issues have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities, which together with interest earned thereon, will provide amount sufficient for future payment of principal and interest of the issue refunded. There was $6,770,000 outstanding on these bonds as of June 30, 2010. These bonds have been fully defeased. The transaction resulted in an economic loss (difference between the present value of the debt service on the old and the new bonds) of approximately $385,892 and a nominal loss of approximately $3,235,000. The $340,000 deferred amount on retirement of bonds is being amortized over the lives of the refunding bonds on the straightline basis. 52 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 8 REVENUE BONDS PAYABLE Revenue bonds payable at June 30, 2010 consisted of the outstanding revenue bonds presented below. The bonds are generally callable with interest payable semiannually. Description Governmental activities: Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007B Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007C McDowell Road Corridor Improvement District Bonds Outstanding Principal June 30, 2010 Due Within One Year $ 2,230,000 $ 525,000 Interest Rate Maturity 4.00 - 5.00% 7/1/08 - 13 4.00 - 4.50% 7/1/08 - 21 3,000,000 195,000 5.25% 1/1/10 - 32 46,060,000 1,160,000 51,290,000 $1,880,000 Outstanding Principal June 30, 2010 Due Within One Year $ $ Total Governmental Activities Description Interest Rate Business-type activities: Revenue Bonds, Series 1999 4.47 - 6.73% Public Improvement Corporation Municipal Facilities Revenue 4.50 - 5.00% Bonds, Series 2007A Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2008 5.00 - 6.375% Revenue Bonds, Series 2009 6.75% Revenue Bonds, Series 2010 5.00 - 5.625% $ Maturity 7/1/07 - 18 1,765,000 - 7/1/20 - 32 67,850,000 - 7/1/20 - 32 7/1/2049 7/1/23 - 40 34,450,000 325,000 14,950,000 - Total Business-Type Activities $ 119,340,000 $ - Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2050 Governmental Activities Principal Interest $ 1,880,000 $ 1,419,800 1,970,000 2,538,675 2,065,000 2,443,338 2,160,000 2,340,163 1,650,000 2,244,375 9,660,000 9,850,571 11,385,000 7,165,306 13,890,000 4,002,600 6,630,000 526,574 $ 51,290,000 $ 32,531,402 Business-Type Activities Principal Interest $ $ 3,107,635 275,000 6,425,269 260,000 6,445,269 245,000 6,445,269 230,000 6,460,269 7,510,000 31,838,854 28,270,000 25,249,681 42,195,000 17,508,836 33,160,000 4,705,177 6,870,000 1,117,969 109,688 325,000 98,719 $119,340,000 $ 109,512,635 53 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 9 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE Community facilities district bonds payable at June 30, 2010 consisted of outstanding general obligation and special assessment bonds. The bonds are generally callable with interest payable semiannually. The community facilities district bonds payable at June 30, 2010, are presented below. Description General District No. 1: G.O. Bonds, Series 1996 (A) G.O. Bonds, Series 1998 G.O. Bonds, Series 2000 G.O. Bonds, Series 2003 Assessment Bonds, Series 1996(C) Palm Valley: G.O. Bonds, Series 2006 G.O. Bonds, Series 2007 Utilities District No. 1: G.O. Bonds, Series 1998 G.O. Bonds, Series 2000 G.O. Bonds, Series 2003 G.O. Bonds, Series 2005 G.O. Bonds, Series 2005 Refunding G.O. Bonds, Series 2007 Wildflower Ranch General District 1: G.O. Bonds, Series 1997 G.O. Bonds, Series 1998 Wildflower Ranch General District 2: G.O. Bonds, Series 2000 G.O. Bonds, Series 2001 Estrella Mountain Ranch: Assessment Bonds, Series 2001(A) Assessment Bonds, Series 2002 G.O. Bonds, Series 2005 Assessment Bonds, Series 2007(M) G.O. Bonds, Series 2007 Assessment Bonds, Series 2007(G) Cottonflower: G.O. Bonds, Series 2003 G.O. Bonds, Series 2004 Cortina: G.O. Bonds, Series 2005 G.O. Bonds, Series 2006 Centerra: G.O. Bonds, Series 2005 G.O. Bonds, Series 2006 G.O. Bonds, Series 2008 Total Outstanding Principal June 30, 2010 Due Within One Year Interest Rate Maturity 6.5 - 7.0% 4.55 - 5.25% 4.6 - 5.3% 3.3 - 5.75% 6.75 - 7.25% 07/15/21 07/15/23 07/15/25 07/15/28 07/01/16 4.25 - 5.30% 4.25 - 5.80% 07/15/31 07/15/32 4,210,000 3,805,000 110,000 80,000 4.55 - 5.25% 4.7 - 5.2% 3.3 - 5.75% 3.5 - 4.5% 3.0 - 4.3% 4.00 - 5.00% 07/15/22 07/15/25 07/15/28 07/15/29 07/15/21 07/15/32 4,435,000 6,335,000 7,740,000 7,190,000 1,250,000 22,695,000 270,000 205,000 135,000 180,000 80,000 415,000 5.875 - 6.5% 5.2 - 5.75% 07/15/22 07/15/23 470,000 565,000 25,000 25,000 6.0 - 7.0% 4.5 - 5.9% 07/15/25 07/15/26 585,000 635,000 20,000 25,000 7.88% 7.38% 5.0 - 5.8% 4.65 - 5.80% 4.50 - 6.20% 6.00 - 6.75% 07/01/25 07/01/27 07/15/30 07/01/32 07/15/32 07/01/32 5,225,000 3,774,000 4,570,000 7,451,000 12,485,000 6,777,000 286,000 145,000 110,000 184,000 280,000 157,000 4.1 - 5.7% 3.7 - 6.75% 07/15/28 07/15/28 1,535,000 1,210,000 50,000 35,000 5.0 - 5.7% 5.0 - 5.375% 07/15/29 07/15/31 1,550,000 905,000 45,000 15,000 5.50% 4.75 - 5.15% 4.875-6.625% 07/15/29 07/15/31 07/15/32 2,190,000 595,000 725,000 $ 122,313,000 65,000 5,000 10,000 $ 3,460,000 $ 500,000 1,690,000 5,040,000 5,195,000 981,000 $ 30,000 80,000 190,000 105,000 98,000 54 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 9 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE (Continued) Community Facilities District bonds debt service requirements to maturity are as follows: Fiscal year ending June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 Total Governmental Activities Principal Interest $ 3,460,000 $ 6,594,413 3,442,000 6,420,553 3,620,000 6,242,834 3,875,000 6,053,130 4,079,000 5,845,263 22,804,000 25,688,016 28,369,000 18,647,191 33,039,000 9,806,613 19,625,000 1,655,970 $ 122,313,000 $ 86,953,983 On March 31, 2005, Community Facilities Utilities District #1 issued $1,455,000 of General Obligation Bonds to do an advance refunding of the 1996(B) bonds. The $56,974 deferred amount on retirement of bonds is being amortized over the lives of the refunding bonds on the straight-line basis. Amortization for the year ended June 30, 2010 of $5,180 was taken on the deferred amount. Legal Debt Limit - General Obligation bonded indebtedness for each District cannot exceed 60 percent of the market value of the property in the District after the infrastructure is completed, plus the value of the infrastructure improvements made. 55 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 10 AMORTIZATION OF BOND COSTS Bond costs are being amortized over the life of the bonds on the straight-line basis. Amortization has been offset against interest expense. A summary of the amortizations are as follows: Beginning Balance Bond Costs: Governmental Activities General Obligation Bonds Series 2007 Series 2008 Series 2009-Refunding Series 2010 - Build America Public Improvement Corporation Series 2007B Series 2007C Improvement District Bonds McDowell Road Community Facilities District Bonds Payable Palm Valley District #3 Series 2006 Palm Valley District #3 Series 2007 Utilities District #1 Series 2005 Utilities District #1 Series 2005 Refunding Utilities District #1 Series 2007 Estrella Mountain Ranch Series 2005 Estrella Mountain Ranch Series 2007 Estrella Mountain Ranch Series 2007(M) Estrella Mountain Ranch Series 2007(G) Centerra Series 2005 Centerra Series 2006 Centerra Series 2008 Cortina Series 2005 Cortina Series 2006 Business-type Activities General Obligation Bonds Series 2005 Series 2007 Series 2008 Series 2009-Refunding Series 2010-Refunding Series 2010 - Build America Public Improvement Corporation Series 2007A Series 2008 Revenue Bonds, Series 1999 Revenue Bonds, Series 2009 Revenue Bonds, Series 2010 $ 80,823 108,133 4,732 - Additions $ 8,946 Ending Balance Reductions $ 4,490 5,691 237 224 $ 76,333 102,442 4,495 8,722 27,196 36,828 - 6,048 2,952 21,148 33,876 2,035,659 - 90,474 1,945,185 238,257 223,014 308,225 13,410 695,408 151,361 386,907 338,193 335,674 105,223 68,665 110,808 92,191 115,940 44,000 - 10,359 9,292 15,411 1,118 28,975 6,880 16,121 15,932 13,986 5,261 2,985 4,617 4,610 5,040 227,898 213,722 292,814 12,292 666,433 144,481 370,786 366,261 321,688 99,962 65,680 106,191 87,581 110,900 290,816 196,509 450,386 54,630 - 39,084 107,354 24,234 10,917 15,531 2,731 2,682 266,582 185,592 434,855 51,899 39,084 104,672 767,190 241,904 39,112 24,226 - 511,418 32,574 10,751 4,346 2,692 7,106 734,616 231,153 34,766 21,534 504,312 364,267 $ 7,887,955 $ 7,541,420 $ 710,802 $ 56 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 11 WATER RIGHTS OBLIGATIONS The City entered into an agreement to purchase surface water rights for a 100-year period. Annual payments of $859,503 plus interest at 8.25% are due for the first 15 years of the agreement. Amortization expense relating to this agreement is being recorded on the straight-line basis totaling $128,336 per year. Future payments of these obligations are presented below: Fiscal year ending Business-Type Activities June 30, Principal 2011 $ $ 779,999 2012 859,503 709,090 2013 859,503 638,181 2014 859,503 567,272 2015 859,503 496,363 4,297,515 1,418,181 2016-2020 2021-2022 1,719,011 Total NOTE 12 Interest 859,503 $ 10,314,041 70,909 $ 4,679,995 CHANGES IN LONG-TERM LIABILITIES Long-term liabilities activity for the year ended June 30, 2010 was as follows: Beginning Balance Governmental activities: Compensated absences General obligation bonds payable Community Facilities District bonds payable Public improvement bonds Revenue bonds payable Contracts payable Premiums Discounts Governmental activities long-term liabilities $ 3,645,701 Additions $ 35,842,739 $ 105,000 127,125,000 5,910,000 47,165,000 7,755,628 * 2,299,376 (66,580) $ 229,676,864 1,753,301 5,733 $ 1,864,034 Ending Balance Reductions 1,608,195 $ 3,790,807 2,345,758 33,601,981 4,812,000 680,000 1,105,000 2,000,000 116,144 (3,329) 122,313,000 5,230,000 46,060,000 5,755,628 2,188,965 (63,251) $ 12,663,768 $ 218,877,130 Due Within One Year $ 1,289,990 3,460,000 720,000 1,160,000 $ 6,629,990 * Beginning balance was changed to reflect the contractual obligations for purchase of right of way. Beginning Balance Business-type activities Compensated absences General obligation bonds payable Public improvement bonds Revenue bonds payable Water rights obligations Loans payable Premiums Business-type activities long-term liabilities $ 379,731 Additions $ 88,282,261 102,300,000 2,370,000 11,173,544 8,866,108 2,483,789 $ 215,855,433 229,613 $ 10,320,000 14,950,000 1,974,872 111,654 $ 27,586,139 Ending Balance Reductions $ 189,650 $ 419,694 Due Within One Year $ 175,643 5,849,241 280,000 859,503 915,691 124,154 92,753,020 102,300,000 17,040,000 10,314,041 9,925,289 2,471,289 859,503 - 8,218,239 $ 235,223,333 $ 1,035,146 57 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 13 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At June 30, 2010, interfund balances were as follows: Interfund receivables/payable: Fund General Fund Non-Major Governmental Funds Internal Service Fund Stadium Fund Total Receivable Amount $ 3,313,363 $ 3,313,363 Payable Amount $ 2,263,837 87,686 961,840 $ 3,313,363 All interfund borrowing resulted from the borrowing of funds to cover cash deficit. Interfund transfers: Fund General Fund Community Facilities Districts-Debt Service Capital Improvements Community Facilities Districts-Capital Projects Non-Major Governmental Funds Water and Sewer Fund Sanitation Fund Stadium Fund Total Transfers Out $ 7,704,350 124,979 805,097 5,557,149 3,292,860 925,000 $ 18,409,435 Transfers In $ 4,342,839 805,097 357,342 871,012 4,267,476 7,765,669 $ 18,409,435 All transfers made during the year were to cover operations or debt service as approved during budget development, or were necessary for grant matching purposes. NOTE 14 CONTINGENT LIABILITIES Federal and State grants and loans - The City has received a number of grants and loans from both the Federal and State governments. Although the programs have been audited, not all audits have been approved as of June 30, 2010; however, the City expects no material disallowances of expenditures. Lawsuits - The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s legal counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City. NOTE 15 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; and natural disasters. The City’s insurance protection is provided by the Arizona Municipal Risk Retention Pool, of which the City is a participating member. 58 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 15 RISK MANAGEMENT (Continued) The Arizona Municipal Risk Retention Pool is structured such that member premiums are based on an actuarial review that will provide adequate reserves to allow the pool to meet its expected financial obligations. The pool has authority to assess its members additional premiums should reserve and annual premiums be insufficient to meet the pool’s obligations. The City has no known claims in excess of $250,000 for the fiscal year ending June 30, 2010. The maximum liability for the City for the fiscal year is $500,000 and the deductible is $250,000 per occurrence. The City is insured by the Workers’ Compensation Insurance Fund for potential workerrelated accidents. NOTE 16 RETIREMENT PLANS All full-time City employees are covered by one of two contributory retirement and pension plans, which are administered by the State of Arizona under State Statute. Arizona State Retirement Plan Plan Description - The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefits pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of ARS Title 38, Chapter 5, Article 2. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. ASRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at Arizona State Retirement System, 3300 Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067 or by calling 602-240-2200 or 1-800-621-3778. Funding Policy - The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2010, active ASRS members and the City were each required by statute to contribute at the actuarially determined rate of 9.0 percent (8.6 percent retirement and .40 percent long-term disability) of the member’s annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2010, 2009, and 2008 were $1,793,509, $1,999,370, and $2,044,154, respectively, which were equal to the required contributions for the year. Arizona Public Safety Personnel Retirement System Plan Description - 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 ARS Title 38, Chapter 5, Article 4. The City contributes to one PSPRS plan for police and one for firefighters. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. PSPRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at PSPRS, 1020 East Missouri Avenue, Phoenix, Arizona 85014 or by calling 602-255-5575. 59 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 16 RETIREMENT PLANS (Continued) Funding Policy – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2010, active PSPRS members were required by statute to contribute 7.65 percent of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 13.52% and 10.83% of the covered payroll to the Plan for the Police and Firefighters, respectively. Annual pension cost and related information was not available by year end June 30, 2010. Annual Pension Cost - The City’s pension cost for the agent plan for the year ended June 30, 2009, and related information follows: Contribution Rates: City Plan members Annual pension cost Contributions made Actuarial valuation date Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at cost-of-living adjustment Amortization method Remaining amortization period Asset valuation method Post retirement benefit increases PSPRS – Police 13.52% 7.65% $1,003,236 $1,003,236 June 30, 2009 Entry Age PSPRS - Fire 10.83% 7.65% $856,004 $856,004 June 30, 2009 Entry Age 8.5% 5.5% - 8.5% 8.5% 5.5% - 8.5% 5% Level Percent Open Open 20 Years Smoothed Market Based on Income 5% Level Percent Open Open 20 Years Smoothed Market Based on Income Trend Information - Information for the PSPRS plan as of the most recent actuarial valuations follows: Plan PSPRS - Police PSPRS - Fire Year Ended June 30, 2009 2008 2007 Annual Pension Cost (APC) $ 1,003,236 552,097 452,954 2009 2008 2007 856,004 522,152 325,166 Percentage of APC Contributed 100.0% 100.0% 100.0% Net Pension Obligation - 100.0% 100.0% 100.0% - Funding Progress - An analysis of funding progress for each of the agent plans as most recent actuarial valuations, June 30, 2009 follows: PSPR - Goodyear Police Plan: Valuation Date June 30, 2009 2008 2007 Actuarial Value of Assets (a) $12,239,614 9,709,250 8,041,204 Actuarial Accrued Liability (AAL) (b) $ 15,500,586 13,516,877 12,267,389 Unfunded AAL (b-a) $ 3,260,972 3,807,627 4,226,185 Funded Ratio (a/b) 79.0% 71.8% 65.5% Annual Covered Payroll (c) $6,431,412 6,192,247 4,937,043 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 50.7% 61.5% 85.6% 60 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 16 RETIREMENT PLANS (Continued) PSPR - Goodyear Fire Plan: Valuation Date June 30, 2009 2008 2007 Actuarial Value of Plan Assets (a) $10,127,059 8,177,938 6,438,344 Actuarial Accrued Liability (AAL) (b) $ 10,391,001 9,616,934 7,852,616 Unfunded AAL (b-a) $ 263,942 1,438,996 1,414,272 Funded Ratio (a/b) 97.5% 85.0% 82.0% Annual Covered Payroll (c) $7,047,317 6,888,845 5,397,930 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 3.8% 20.9% 26.2% Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan The Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan is a single-employer defined contribution plan, which was approved by the City Council on February 27, 1990, under Arizona Revised Statutes Section 9-981. The authority to establish and amend benefit provisions rests with the City Council. In December 1999, the council revised the pension and benefit program for the part-time firefighters. The City discontinued using part-time firefighters as of December 1, 2005. The assets of the plan are valued annually and the earnings or loss is distributed among the participant’s accounts in the plan. The only expenditures being made from this fund are administration fees, benefit payments, and refunds to those firefighters who leave the service of the Fire Department before becoming eligible for pension benefits. The cost of administering the plan is financed from investment earnings. Retirement with full benefits can be at age fifty-five (55) or twenty years of credited service. This plan was fully vested as of June 30, 2010. As of June 30, 2010, there were 6 eligible employees participating in the plan. The plan is administered by LPL Financial. As of June 30, 2010, the plan’s assets consisted of the following: Cash LGIP Mutual Funds $ $ 369 74,508 295,034 369,911 The plan has never had an actuarial valuation; however, benefits cannot exceed plan assets. The market values of mutual funds are determined from readily available market quotations. The fund uses the accrual basis of accounting. Contributions are recognized when earned; benefits and refunds are expensed when incurred. Separate audited financial statements of this employee benefit plan are not available. NOTE 17 DEFICIT FUND BALANCE Grants Fund Deficit Fund Balance - At June 30, 2010, the Grants Fund contains a deficit fund balance of $2,179,269 in the fund financial statements. Future revenues are expected to cover this deficit. 61 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 18 COMMITMENTS The City has active construction projects as of June 30, 2010. The balances for work not yet complete as of June 30, 2010 were as follows: Alliance Service & Control AJP Electric Goodyear Civic Center Developers Nesbitt Contracting PCL Constructors Prime Contracting $ $ 33,424 31,852 191,577 2,362,234 1,805,291 2,836,336 7,260,714 These commitments are being financed from existing fund balances. NOTE 19 SUBSEQUENT EVENTS The Mayor of The City of Goodyear as of June 30, 2010 resigned effective November 15, 2010. 62 OTHER SUPPLEMENTARY INFORMATION COMBINING FUND FINANCIAL STATEMENTS CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2010 Special Revenue ASSETS Cash and cash equivalents Taxes receivable Accounts receivable Due from other governments Inventories Prepaid items Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits held for others Due to other funds Deferred revenue Total liabilities Fund balances: Reserved: Debt service Unreserved, reported in Special revenue Total fund balances Total liabilities and fund balances Highway User Revenue $ 263,687 242,025 307,240 $ 812,952 $ $ $ 249,599 734,837 63,681 290,592 603,872 1,699,718 2,259,519 4,694,074 - 812,952 $ (27,597) 2,514,805 1,095,057 1,095,057 $ $ - 57,102 5,000 564,119 27,993 654,214 (2,179,269) (2,179,269) $ $ - 209,080 209,080 $ Grants 215,651 2,298,649 505 2,514,805 Community Facilities Districts $ 1,713,080 36,041 150 $ 1,749,271 1,749,271 - $ (389,047) 64 Special Revenue Community Facilities Impact Fees $ 2,750,512 $ 2,750,512 General Government Impact Fees $ 2,816,063 $ 2,816,063 Public Works Impact Fees $ 5,711,562 $ 5,711,562 Fire Impact Fees $ 984,626 $ 984,626 Police Impact Fees $ 6,883,236 $ 6,883,236 $ $ $ $ $ 54,696 - - - - - 2,750,512 2,816,063 2,816,063 $ $ - 54,696 2,695,816 2,695,816 $ - 107,676 2,816,063 - $ 188,750 188,750 - 5,711,562 5,711,562 $ 5,711,562 - 795,876 795,876 $ 984,626 $ - - 25,820 - 25,820 - - 6,883,236 6,883,236 $ (1) Transportation Impact Fees $ 832,097 $ 832,097 6,883,236 806,277 806,277 $ $ - $ 832,097 - 1 $ 3,694 (Continued on next page) 65 CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2010 ASSETS Cash and cash equivalents Taxes receivable Accounts receivable Due from other governments Inventories Prepaid items Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Deposits held for others Due to other funds Deferred revenue Total liabilities Fund balances: Reserved: Debt service Unreserved: Special revenue Total fund balances Total liabilities and fund balances Special Revenue Regional Library Impact Transportation Fees Impact Fees $ 1,574,963 $ 54,545 $ 1,574,963 $ 54,545 Debt Services $ 679,191 465,870 $ 1,145,061 Total Non-Major Governmental Funds $ 24,479,213 743,936 150 2,298,649 307,240 505 $ 27,829,693 $ $ $ - $ - 1,133,081 - 11,027 305,585 317,045 63,681 5,000 2,263,837 3,072,439 6,549,498 - - 828,016 828,016 43,518 43,518 828,016 20,452,179 21,280,195 1,574,963 1,574,963 $ 11,027 1,574,963 $ 54,545 $ 1,145,061 #REF! $ 27,829,693 #REF! 67 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2010 Special Revenue REVENUES Taxes Intergovernmental Charges for services Investment income (loss) Miscellaneous Total revenues 2,787,394 48 3,659 2,791,101 Community Facilities Districts $ 627,598 4,760 174,846 807,204 3,744,516 44,091 96,303 400,713 85,575 6,600 4,022,285 1,112,477 - 3,788,607 4,611,476 1,112,477 Highway User Revenue $ 2,769,619 9,626 816 104,170 2,884,231 EXPENDITURES Current: General government Public safety Highway and streets Culture and recreation Capital outlay Debt service: Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures $ (904,376) Grants (1,820,375) (305,273) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) 871,012 - - - 871,012 - - Net change in fund balances (33,364) Fund balances, beginning of year 242,444 Fund balances, end of year $ 209,080 (1,820,375) (305,273) (358,894) $ (2,179,269) 1,400,330 $ 1,095,057 68 Community Facilities Impact Fees $ 325,392 7,227 332,619 General Government Impact Fees $ 666,139 10,865 677,004 125,904 41,479 1,274,227 167,383 1,274,227 165,236 (597,223) Special Revenue Public Works Impact Fees $ 241,448 18,534 259,982 Fire Impact Fees $ 663,973 1,311 665,284 Police Impact Fees $ 416,324 24,408 440,732 Transportation Impact Fees $ 266,910 2,885 298,500 568,295 - 5,341 745,522 403,046 - 5,341 745,522 403,046 (304,790) 165,249 259,982 659,943 - - - (357,342) - - - - - (357,342) - - 165,236 (597,223) 259,982 302,601 493,275 7,188,026 795,876 $ 6,883,236 2,530,580 3,413,286 5,451,580 $ 2,695,816 $ 2,816,063 $ 5,711,562 $ (304,790) 165,249 641,028 $ 806,277 (Continued on next page) 69 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2010 REVENUES Taxes Intergovernmental Charges for services Investment income Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Highway and streets Culture and recreation Capital outlay Debt service: Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of 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 of year Fund balances, end of year Special Revenue Regional Transportation Library Impact Fees Impact Fees $ $ (74,808) 96,805 6,227 7 (68,581) 96,812 Debt Service $ 9,332,148 302 9,332,450 Total Non-Major Government Funds $ 9,959,746 5,557,013 2,611,809 77,390 581,175 18,787,133 500,000 61,498 - 500,000 61,498 2,345,758 1,553,113 3,898,871 2,345,758 1,553,113 16,568,448 (568,581) 35,314 5,433,579 2,218,685 - - (5,199,807) 871,012 (5,557,149) - - (5,199,807) (4,686,137) (568,581) 2,143,544 $ 1,574,963 $ - 1,208,780 400,713 3,891,589 132,504 7,035,991 35,314 233,772 (2,467,452) 8,204 594,244 23,747,647 43,518 $ 828,016 $ 21,280,195 71 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS June 30, 2010 ASSETS Cash and cash equivalents Total assets LIABILITIES Deposits held for others Due to other funds Total liabilities Brownfield EPA Cleanup Fill-A-Need Shop With A Cop Gain Total $ 864,022 $ 864,022 $ 21,230 $ 21,230 $ $ 2,858 2,858 $ 1,302 $ 1,302 $ 889,412 $ 889,412 $ 829,715 34,307 $ 864,022 $ 21,230 $ 21,230 $ 2,858 2,858 $ 1,302 $ 1,302 $ 855,105 34,307 $ 889,412 $ 72 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS Year Ended June 30, 2010 Brownfield EPA Cleanup: Assets Cash and cash equivalents Balance June 30, 2009 Additions Deletions Balance June 30, 2010 $ - $ 864,022 $ - $ 864,022 $ $ $ - $ $ 829,715 34,307 864,022 $ $ - $ 829,715 34,307 864,022 GAIN: Assets Cash and cash equivalents $ - $ 21,230 $ - $ 21,230 Liabilities Deposits held for others $ - $ 21,230 $ - $ 21,230 Fill-A-Need: Assets Cash and cash equivalents $ - $ 2,858 $ - $ 2,858 Liabilities Deposits held for others $ - $ 2,858 $ - $ 2,858 Shop With A COP: Assets Cash and cash equivalents $ - $ 1,302 $ - $ 1,302 Liabilities Deposits held for others $ - $ 1,302 $ - $ 1,302 Total - All Agency Funds Assets Cash and cash equivalents $ - $ 889,412 $ - $ 889,412 $ - $ 855,105 34,307 889,412 $ - $ 855,105 34,307 889,412 Liabilities Deposits held for others Due to other funds Total liabilities Liabilities Deposits held for others Due to other funds Total liabilities $ $ $ 73 OTHER SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES MAJOR GOVERNMENTAL FUNDS CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Taxes Investment income Special assessments Contributions Total revenues Original $ 6,840,169 79,960 5,994,381 1,586,978 14,501,488 Final $ Actual Variance with Final Budget Positive (Negative) 6,840,169 79,960 5,994,381 1,586,978 14,501,488 $ 6,656,740 46,302 2,970,177 2,341,829 12,015,048 $ (183,429) (33,658) (3,024,204) 754,851 (2,486,440) 4,812,000 6,901,373 11,713,373 3,878,000 1,410,096 5,288,096 EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures 8,690,000 8,311,469 17,001,469 8,690,000 8,311,469 17,001,469 Excess (deficiency) of revenues over (under) expenditures (2,499,981) (2,499,981) 301,675 2,801,656 1,000,000 55,000 1,000,000 55,000 805,097 (1,000,000) 750,097 1,055,000 1,055,000 805,097 (249,903) Net change in fund balance (1,444,981) (1,444,981) 1,106,772 Fund balance, beginning of year 12,984,536 12,984,536 12,984,536 $ 11,539,555 $ 11,539,555 $ 14,091,308 OTHER FINANCING SOURCES (USES) Debt issuance Transfers in Total other financing sources (uses) Fund balance, end of year 2,551,753 $ 2,551,753 76 CITY OF GOODYEAR, ARIZONA MCDOWELL ROAD COMMERCIAL CORRIDOR IMPROVEMENT DISTRICT DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Variance with Final Budget Positive (Negative) Budgeted Amounts REVENUES Investment income Special assessments Total revenues Original $ - $ - EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance, beginning of year Fund balance, end of year Final - 1,105,000 2,476,162 3,581,162 1,105,000 2,476,162 3,581,162 (3,581,162) (3,581,162) (3,562,193) $ - 18,969 $ Actual 18,969 $ (3,562,193) 307 3,552,747 3,553,054 $ 1,105,000 2,447,906 3,552,906 28,256 28,256 148 3,581,310 18,969 $ 307 3,552,747 3,553,054 19,117 $ 3,581,310 77 CITY OF GOODYEAR, ARIZONA CAPITAL IMPROVEMENT PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Variance with Final Budget Positive (Negative) Budgeted Amounts REVENUES Investment income Total revenues Original $ EXPENDITURES Capital outlay Debt service Interest and debt cost Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Debt issuance Debt premium Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Final - $ - $ 972 972 $ 972 972 166,998,830 155,037,740 156,256 154,881,484 166,998,830 155,037,740 8,190 164,446 (8,190) 154,873,294 (166,998,830) (155,037,740) (163,474) 154,874,266 167,073,108 - 167,073,108 - 105,000 5,733 357,342 (124,979) (166,968,108) 5,733 357,342 (124,979) 167,073,108 167,073,108 343,096 (166,730,012) 74,278 12,035,368 179,622 (11,855,746) (168,269) $ Actual (93,991) (168,269) $ 11,867,099 (168,269) $ 11,353 $ (11,855,746) 78 CITY OF GOODYEAR, ARIZONA MCDOWELL ROAD COMMERCIAL CORRIDOR IMPROVEMENT DISTRICT CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Investment income Miscellaneous Total revenues Original $ EXPENDITURES Capital outlay Total expenditures - Final $ Actual - $ 12,628 1,259,776 1,272,404 Variance with Final Budget Positive (Negative) $ 12,628 1,259,776 1,272,404 299,314 299,314 299,314 299,314 697,866 697,866 (398,552) (398,552) Excess (deficiency) of revenues over (under) expenditures (299,314) (299,314) 574,538 873,852 Fund balance, beginning of year 807,658 807,658 807,658 Fund balance, end of year $ 508,344 $ 508,344 $ 1,382,196 $ 873,852 79 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Variance with Final BudgetPositive (Negative) Budgeted Amounts REVENUES Investment income Contributions Total revenues Original $ EXPENDITURES Capital outlay Total expenditures 183,550 3,585,000 3,768,550 Final $ 183,550 3,585,000 3,768,550 Actual $ 2,039 2,039 $ (181,511) (3,585,000) (3,766,511) 79,520,739 79,520,739 79,520,739 79,520,739 4,103,438 4,103,438 75,417,301 75,417,301 (75,752,189) (75,752,189) (4,101,399) 71,650,790 OTHER FINANCING SOURCES (USES) Debt issuance Transfers out Total other financing sources (uses) 68,370,000 55,000 68,370,000 55,000 (805,097) (68,370,000) (860,097) 68,425,000 68,425,000 (805,097) (69,230,097) Net change in fund balance (7,327,189) (7,327,189) (4,906,496) 4,906,496 4,906,496 4,906,496 Excess (deficiency) of revenues over (under) expenditures Fund balance, beginning of year Fund balance, end of year $ (2,420,693) $ (2,420,693) $ - 2,420,693 $ 2,420,693 80 OTHER SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS AND ENTERPRISE FUNDS CITY OF GOODYEAR, ARIZONA HIGHWAY USER REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment income Miscellaneous Total revenues Original $ EXPENDITURES Current Highway and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ 3,052,117 13,844 3,065,961 Final $ Actual Variance with Final Budget Positive (Negative) 3,052,117 13,844 3,065,961 $ 2,769,619 9,626 816 104,170 2,884,231 4,640,389 200,000 4,840,389 4,640,389 200,000 4,840,389 3,744,516 44,091 3,788,607 (1,774,428) (1,774,428) (904,376) 870,052 1,571,428 1,571,428 871,012 (700,416) 1,571,428 1,571,428 871,012 (700,416) 169,636 (203,000) (203,000) (33,364) 242,444 242,444 242,444 39,444 $ 39,444 $ 209,080 $ (282,498) 9,626 (13,028) 104,170 (181,730) 895,873 155,909 1,051,782 $ 169,636 82 CITY OF GOODYEAR, ARIZONA GRANTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts Variance with Final Budget Positive (Negative) Original Final Actual $ 12,000,000 12,000,000 $ 12,000,000 12,000,000 $ 2,787,394 48 3,659 2,791,101 EXPENDITURES Current General government Public safety Highway and streets Culture and recreation Capital outlay Total expenditures 12,000,000 5,498,877 17,498,877 12,000,000 5,498,877 17,498,877 96,303 400,713 85,575 6,600 4,022,285 4,611,476 11,903,697 (400,713) (85,575) (6,600) 1,476,592 12,887,401 Excess (deficiency) of revenues over (under) expenditures (5,498,877) (5,498,877) (1,820,375) 3,678,502 Fund balance, beginning of year (358,894) (358,894) (358,894) $ (5,857,771) $ (5,857,771) $ (2,179,269) REVENUES Intergovernmental Investment income Miscellaneous Total revenues Fund balance, end of year $ (9,212,606) 48 3,659 (9,208,899) $ 3,678,502 83 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - GENERAL SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Variance with Final BudgetPositive (Negative) Budgeted Amounts REVENUES Taxes Investment income Miscellaneous Total revenues Original $ EXPENDITURES Current General government Total expenditures 640,074 7,582 559,284 1,206,940 Final $ 640,074 7,582 559,284 1,206,940 Actual $ 627,598 4,760 174,846 807,204 2,382,839 2,382,839 2,382,839 2,382,839 Excess (deficiency) of revenues over (under) expenditures (1,175,899) (1,175,899) Fund balance, beginning of year 1,400,330 1,400,330 1,400,330 224,431 $ 1,095,057 Fund balance, end of year $ 224,431 $ $ 1,112,477 1,112,477 (12,476) (2,822) (384,438) (399,736) 1,270,362 1,270,362 (305,273) 870,626 $ 870,626 84 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current: Capital outlay Total expenditures 252,793 37,205 289,998 Final $ 252,793 37,205 289,998 Actual $ 325,392 7,227 332,619 Variance with Final Budget Positive (Negative) $ 72,599 (29,978) 42,621 97,859 97,859 97,859 97,859 167,383 167,383 (69,524) (69,524) Excess (deficiency) of revenues over (under) expenditures 192,139 192,139 165,236 (26,903) Fund balance, beginning of year 2,530,580 2,530,580 2,530,580 Fund balance, end of year $ 2,722,719 $ 2,722,719 $ 2,695,816 $ (26,903) 85 CITY OF GOODYEAR, ARIZONA GENERAL GOVERNMENT IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current Capital outlay Total expenditures 692,834 1,638 694,472 Final $ 692,834 1,638 694,472 1,968,528 1,968,528 1,968,528 1,968,528 Excess (deficiency) of revenues over (under) expenditures (1,274,056) (1,274,056) Fund balance, beginning of year 3,413,286 3,413,286 Fund balance, end of year $ 2,139,230 $ 2,139,230 Actual $ 666,139 10,865 677,004 Variance with Final Budget Positive (Negative) $ 1,274,227 1,274,227 694,301 694,301 (597,223) 676,833 3,413,286 $ 2,816,063 (26,695) 9,227 (17,468) $ 676,833 86 CITY OF GOODYEAR, ARIZONA PUBLIC WORKS IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Variance with Final Budget Positive (Negative) Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current Capital outlay Total expenditures 243,876 85,423 329,299 Final $ 243,876 85,423 329,299 6,024,197 6,024,197 6,024,197 6,024,197 Excess (deficiency) of revenues over (under) expenditures (5,694,898) (5,694,898) Fund balance, beginning of year 5,451,580 5,451,580 Fund balance, end of year $ (243,318) $ (243,318) Actual $ 241,448 18,534 259,982 $ - 6,024,197 6,024,197 259,982 5,954,880 5,451,580 $ 5,711,562 (2,428) (66,889) (69,317) $ 5,954,880 87 CITY OF GOODYEAR, ARIZONA FIRE IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources (uses) Net change in fund balance $ 963,755 963,755 2,748,768 2,748,768 (1,785,013) (1,785,013) $ 663,973 1,311 665,284 $ (299,782) 1,311 (298,471) 5,341 5,341 2,743,427 2,743,427 659,943 2,444,956 - - (357,342) (357,342) - - (357,342) (357,342) (1,785,013) 493,275 $ Actual 2,748,768 2,748,768 (1,785,013) Fund balance, beginning of year Fund balance, end of year 963,755 963,755 Final Variance with Final Budget Positive (Negative) (1,291,738) 302,601 493,275 $ (1,291,738) 2,087,614 493,275 $ 795,876 $ 2,087,614 88 CITY OF GOODYEAR, ARIZONA POLICE IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current Capital outlay Total expenditures 412,188 47,318 459,506 Final $ 412,188 47,318 459,506 Actual $ 416,324 24,408 440,732 Variance with Final Budget Positive (Negative) $ 4,136 (22,910) (18,774) 7,043,749 7,043,749 7,043,749 7,043,749 745,522 745,522 6,298,227 6,298,227 Excess (deficiency) of revenues over (under) expenditures (6,584,243) (6,584,243) (304,790) 6,279,453 Fund balance, beginning of year 7,188,026 7,188,026 Fund balance, end of year $ 603,783 $ 603,783 7,188,026 $ 6,883,236 $ 6,279,453 89 CITY OF GOODYEAR, ARIZONA TRANSPORTATION IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Miscellaneous Total revenues Original $ EXPENDITURES Current Capital outlay Total expenditures 436,130 12,540 448,670 Final $ 436,130 12,540 448,670 Actual $ 266,910 2,885 298,500 568,295 Variance with Final Budget Positive (Negative) $ (169,220) (9,655) 298,500 119,625 366,645 366,645 366,645 366,645 403,046 403,046 (36,401) (36,401) Excess (deficiency) of revenues over (under) expenditures 82,025 82,025 165,249 83,224 Fund balance, beginning of year 641,028 641,028 641,028 - Fund balance, end of year $ 723,053 $ 723,053 $ 806,277 $ 83,224 90 CITY OF GOODYEAR, ARIZONA LIBRARY IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current: Capital outlay Total expenditures 221,381 26,245 247,626 Final $ 221,381 26,245 247,626 Actual $ (74,808) 6,227 (68,581) Variance with Final Budget Positive (Negative) $ (296,189) (20,018) (316,207) 2,870,513 2,870,513 2,870,513 2,870,513 500,000 500,000 2,370,513 2,370,513 Excess (deficiency) of revenues over (under) expenditures (2,622,887) (2,622,887) (568,581) 2,054,306 Fund balance, beginning of year 2,143,544 2,143,544 Fund balance, end of year $ (479,343) $ (479,343) 2,143,544 $ 1,574,963 $ 2,054,306 91 CITY OF GOODYEAR, ARIZONA REGIONAL TRANSPORTATION IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current Highway and streets Total expenditures 66,981 66,981 Final $ Actual 66,981 66,981 $ 96,805 7 96,812 Variance with Final Budget Positive (Negative) $ 29,824 7 29,831 - - 61,498 61,498 (61,498) (61,498) Excess (deficiency) of revenues over (under) expenditures 66,981 66,981 35,314 (31,667) Fund balance, beginning of year 8,204 8,204 8,204 - 75,185 $ 43,518 Fund balance, end of year $ 75,185 $ $ (31,667) 92 CITY OF GOODYEAR, ARIZONA DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts REVENUES Taxes Investment income Total revenues Original $ Final 9,386,279 9,386,279 $ Actual 9,386,279 9,386,279 $ 9,332,149 301 9,332,450 Variance with Final Budget Positive (Negative) $ (54,130) 301 (53,829) EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures 2,718,106 2,400,698 5,118,804 2,718,106 2,400,698 5,118,804 2,345,758 1,553,113 3,898,871 372,348 847,585 1,219,933 Excess (deficiency) of revenues over (under) expenditures 4,267,475 4,267,475 5,433,579 1,166,104 OTHER FINANCING SOURCES Transfers out Total other financing sources (4,267,475) (4,267,475) (4,267,475) (4,267,475) (5,199,807) (5,199,807) Net change in fund balance - Fund balance, beginning of year Fund balance, end of year - 594,244 $ 594,244 233,772 594,244 $ 594,244 (932,332) (932,332) 233,772 594,244 $ 828,016 $ 233,772 93 CITY OF GOODYEAR, ARIZONA WATER & SEWER ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Impact fees Intergovernmental Investment income Proceeds from the sale of water rights Interest expense Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers Original Final $ 17,182,557 26,950 17,209,507 $ 17,182,557 26,950 17,209,507 3,408,145 43,537,462 46,945,607 3,408,145 43,537,462 46,945,607 3,068,187 5,282,401 5,142,869 13,493,457 339,958 38,255,061 (5,142,869) 33,452,150 (29,736,100) (29,736,100) 2,885,220 32,621,320 4,733,532 267,842 (4,916,265) 4,733,532 267,842 (4,916,265) 3,259,108 7,425 40,130 4,352,000 (4,626,823) (1,474,424) 7,425 (227,712) 4,352,000 289,442 3,031,840 2,946,731 85,109 85,109 Actual Variance with Final Budget Positive (Negative) $ 16,258,079 120,598 16,378,677 $ (924,478) 93,648 (830,830) (29,650,991) (29,650,991) 5,917,060 35,568,051 Capital contributions Transfers in Transfers out 4,267,476 (3,292,860) 4,267,476 (3,292,860) 2,945,000 4,267,476 (3,292,860) 2,945,000 - Change in net assets (28,676,375) (28,676,375) 9,836,676 38,513,051 Net assets, beginning of year 160,772,198 160,772,198 160,772,198 $ 132,095,823 $ 132,095,823 $ 170,608,874 Net assets, end of year $ 38,513,051 94 CITY OF GOODYEAR, ARIZONA SANITATION ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Transfers out Change in net assets Net assets, beginning of year Net assets, end of year Variance with Final Budget Positive (Negative) Original Final Actual $ 5,399,792 5,399,792 $ 5,399,792 5,399,792 $ 5,790,357 620 5,790,977 714,458 3,797,249 4,511,707 714,458 3,797,249 4,511,707 708,784 3,927,574 145,054 4,781,412 5,674 (130,325) (145,054) (269,705) 888,085 888,085 1,009,565 121,480 1,692 1,692 1,692 1,692 1,011,257 123,172 - - 888,085 888,085 (925,000) (925,000) (925,000) (36,915) (36,915) 86,257 1,948,028 1,948,028 1,948,028 $ 1,911,113 $ 1,911,113 $ 2,034,285 $ 390,565 620 391,185 123,172 $ 123,172 95 CITY OF GOODYEAR, ARIZONA STADIUM ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2010 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Original $ 1,757,500 1,757,500 Final $ Actual 1,757,500 1,757,500 $ 1,530,799 21,260 1,552,059 Variance with Final Budget Positive (Negative) $ (226,701) 21,260 (205,441) Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 2,039,436 9,639,811 250,000 11,929,247 2,039,436 9,639,811 250,000 11,929,247 2,021,582 1,698,607 2,045,589 5,765,778 17,854 7,941,204 (1,795,589) 6,163,469 Operating income (loss) (10,171,747) (10,171,747) (4,213,719) 5,958,028 (4,482,983) (4,482,983) (4,482,983) (4,482,983) 15,705 (5,779,416) (5,763,711) 15,705 (1,296,433) (1,280,728) (14,654,730) (14,654,730) (9,977,430) 4,677,300 6,618,497 6,618,497 7,765,669 1,147,172 Change in net assets (8,036,233) (8,036,233) (2,211,761) 5,824,472 Net assets, beginning of year 25,516,941 25,516,941 25,516,941 17,480,708 $ 23,305,180 Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Net assets, end of year $ 17,480,708 $ $ 5,824,472 96 COMBINING FINANCIAL STATEMENTS INTERNAL SERVICE FUNDS CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS June 30, 2010 Internal Service Funds ASSETS Current assets: Cash and cash equivalents Inventories Total current assets Fleet Management $ Total assets $ 387,224 LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Due to other funds Total current liabilities Total liabilities NET ASSETS Unrestricted Total net assets 267,736 119,488 387,224 Health Insurance $ 57,702 57,702 Total $ 57,702 325,438 119,488 444,926 444,926 2,309 - 2,309 29,494 87,686 119,489 - 29,494 87,686 119,489 119,489 - 119,489 267,735 267,735 $ 57,702 57,702 $ 325,437 325,437 98 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS Year Ended June 30, 2010 Internal Service Funds Operating revenues: Charges for service Miscellaneous Total operating revenue Fleet Management $ Operating expenses: Administration Costs of sales and services Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) Change in net assets Net assets, beginning of year Net assets, end of year $ 1,354,854 84,268 1,439,122 Health Insurance $ Total - $ 1,354,854 84,268 1,439,122 569,048 785,807 1,354,855 - 569,048 785,807 1,354,855 84,267 - 84,267 357 43 400 357 43 400 84,624 43 84,667 183,111 57,659 240,770 267,735 $ 57,702 $ 325,437 99 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS Year Ended June 30, 2010 Internal Service Funds Cash flows from operating activities: Received from customers Payments to vendors Payments to employees Fleet Management $ 1,489,868 (837,574) (568,026) Net cash provided by operating activities Health Insurance $ 84,268 - Total $ 1,489,868 (837,574) (568,026) - 84,268 Cash flows from investing activities: Investment income received 676 43 719 Net cash provided by investing activities 676 43 719 84,944 43 84,987 182,792 57,659 240,451 Net change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ 267,736 $ 57,702 $ 325,438 100 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS Year Ended June 30, 2010 Internal Service Funds Fleet Management Reconciliation of operating income to net cash provided by operating activities Operating income $ 84,267 Adjustment to reconcile operating income to net cash provided by operating activities: (Increase) decrease in: Inventories Increase (decrease) in: Accounts payable Accrued payroll and employee benefits Due to other funds Net cash provided by operating activities $ Health Insurance $ - Total $ 84,267 (33,589) - (33,589) (18,178) - (18,178) 1,022 50,746 - 1,022 50,746 84,268 $ - $ 84,268 101 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE June 30, 2010 Governmental funds capital assets Land Right of Way Streetscape Buildings and improvements Vehicles, machinery and equipment Infrastructure Construction in progress Total governmental funds capital assets Investment in governmental funds capital assets by source: Government funds Total governmental funds capital assets 2010 $ 19,426,644 90,128,522 8,749,608 126,195,907 36,746,403 327,219,553 13,835,365 $ 622,302,002 $ 622,302,002 $ 622,302,002 103 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY June 30, 2010 Function and Activity General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Land Right of Way Streetscape $ 6,184,658 98,878,130 12,493,223 748,763 $ 118,304,774 Buildings and Improvements Improvements other than Buildings $ $ 18,104,261 813,910 7,262,782 $ 26,180,954 159,200 62,073 6,646,487 93,147,193 $ 100,014,954 104 Vehicles, Machinery and Equipment Infrastructure $ $ 7,851,642 17,365,470 1,671,745 9,857,546 $ 36,746,403 Construction in Progress Total 327,219,553 - $ 10,216,149 785 3,618,431 $ 24,411,650 35,532,590 426,097,683 21,625,366 114,634,714 $ 327,219,553 $ 13,835,365 $ 622,302,002 105 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY For the fiscal year ended June 30, 2010 Function and Activity General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Governmental Funds Capital Assets July 1, 2009 Additions $ 24,462,229 35,529,477 411,689,054 21,583,887 106,613,697 $ 8,736,989 554,126 14,408,628 5,799,435 8,054,005 $ 599,878,344 $ 37,553,183 Deductions $ Governmental Funds Capital Assets June 30, 2010 (8,787,568) (551,014) (5,757,957) (32,985) $ 24,411,649 35,532,590 426,097,682 21,625,365 114,634,716 $ (15,129,524) $ 622,302,002 106 STATISTICAL SECTION STATISTICAL SECTION Contents Page Financial Trends (Table 1 - 2) 110 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 (Table 3 – 14) 119 These schedules contain information to help the reader assess the City’s most significant local revenue sources, property tax and sales and uses taxes. Debt Capacity (Table 15 – 19) 144 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Statistics (Table 20) 150 These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information (Table 21 – 24) 151 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 relevant year. 109 City of Goodyear Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2010 2009 2008 Governmental Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Governmental Activities Net Assets $ 317,162,459 115,881,050 19,272,548 452,316,057 $ 309,491,989 117,787,315 20,522,420 447,801,724 $ 256,047,572 70,835,115 36,122,934 363,005,621 Business-type Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Business-type Activities Net Assets 191,582,614 4,365,725 195,948,339 Primary Government Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Primary Government Net Assets 508,745,073 115,881,050 23,638,273 $ 648,264,396 199,696,564 (11,409,545) 188,287,019 509,188,553 117,787,315 9,112,875 $ 636,088,743 159,530,687 (13,193,174) 146,337,513 415,578,259 70,835,115 22,929,760 $ 509,343,134 Note: The City implemented GASB 34 for the fiscal year ended June 30, 2003. Prior financial statements have not been restated to provide this information. Source: Statement of Net Assets City financial records and reports 110 Table 1 Fiscal Year 2007 2006 2005 2004 2003 $ 206,294,183 60,388,579 57,992,720 324,675,482 $ 144,405,463 67,199,030 49,858,294 261,462,787 $ 127,120,944 92,391,268 26,380,488 245,892,700 $ 162,387,951 36,249,889 31,059,204 229,697,044 $ 73,017,558 3,058,777 31,801,683 107,878,018 101,366,083 8,166,207 109,532,290 61,259,814 24,329,033 85,588,847 55,662,610 3,498,896 59,161,506 46,277,707 4,850,793 51,128,500 307,660,266 60,388,579 66,158,927 $ 434,207,772 205,665,277 67,199,030 74,187,327 $ 347,051,634 182,783,554 92,391,268 29,879,384 $ 305,054,206 208,665,658 36,249,889 35,909,997 $ 280,825,544 40,297,163 335,000 (4,302,180) 36,329,983 113,314,721 3,058,777 27,499,503 $ 143,873,001 111 City of Goodyear Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2010 Expenses Governmental Activities: General Government Police Financial Services Community Services Information Services Fire Municipal Services Human Resources Community Development Culture and Recreation Highways and Streets Public Works Interest on Long-term Debt Total Governmental Activities Expenses Business-type Activities Water Utility Wastewater Utility Sanitation Stadium* Total Business-type Activities Expenses Total Primary Government Net Assets $ $ $ 6,469,757 16,050,100 3,190,931 454,550 2,722,449 11,413,558 1,497,249 1,929,973 2,555,353 4,023,639 12,179,531 11,070,853 11,210,504 84,768,447 2009 $ $ $ 2008 4,701,916 15,580,923 2,842,884 1,248,219 2,743,877 12,249,685 1,636,533 2,222,189 9,583,326 5,435,750 8,436,341 14,370,096 12,001,714 93,053,453 9,260,326 18,491,397 2,751,164 1,290,021 2,931,295 8,840,019 1,484,507 1,998,317 14,731,322 1,909,303 9,104,717 59,138,044 9,710,526 $ 141,640,958 $ 11,794,505 5,189,053 4,839,626 861,000 $ 22,684,184 $ 164,325,142 $ 10,475,189 7,649,704 4,782,565 11,547,500 34,454,958 $ 11,608,878 7,046,385 5,090,150 6,475,960 30,221,373 $ 119,223,405 $ 123,274,826 $ Note: * Stadium Fund did not have operating activity until 2008 N/A data was not separated in these years. 112 Table 2 Fiscal Year 2006 2007 2005 2004 2003 $ 5,020,742 11,091,150 2,233,303 1,277,245 1,769,833 10,129,091 1,163,005 1,976,324 19,683,385 3,181,071 9,581,333 25,397,680 5,785,031 $ 98,289,192 $ 3,007,708 9,305,303 1,768,327 1,108,528 1,551,418 5,839,807 853,289 1,361,992 6,668,282 2,016,304 13,536,118 1,791,319 5,573,064 $ 54,381,459 $ 4,238,904 7,798,053 2,888,511 1,012,533 1,434,932 7,275,586 981,256 1,276,457 4,613,424 2,591,911 8,007,969 6,398,665 4,567,604 $ 53,085,805 $ 481,277 7,416,958 2,690,132 1,326,811 2,056,194 5,862,554 1,460,026 1,987,100 5,386,786 1,716,362 4,217,554 2,744,892 5,649,175 $ 42,995,822 $ 5,731,101 6,507,095 1,151,840 479,498 1,907,004 4,879,245 811,904 1,525,546 888,182 1,925,726 6,433,665 3,409,198 4,153,359 $ 39,803,363 $ 10,866,043 4,872,792 4,401,267 $ 20,140,102 $ 9,722,925 4,313,533 3,435,486 $ 17,471,944 $ 15,150,219 N/A 2,588,541 $ 17,738,760 $ 13,696,021 N/A 2,133,917 $ 15,829,938 $ 9,535,629 N/A 1,911,839 $ 11,447,468 $ 118,429,294 $ 71,853,403 $ 70,824,565 $ 58,825,760 $ 51,250,831 continued 113 City of Goodyear Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2010 Program Revenue Governmental Activities: Charges for Services: General Government Fire Police Municipal Services Public Works Culture and recreation Community Development Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Program Revenues Business-type Activities Charges for Services: Water Utility Wastewater Utility Sanitation Stadium Operating Grants and Contributions Capital Grants and Contributions Total Business-type Activities Revenues Total Primary Government Revenues Net (Expense)/Revenue Governmental Activities Business-type Activities Total Primary Government Net Revenue $ $ 863,192 336,303 320,967 852,500 287,805 3,615,255 5,648,867 16,436,375 28,361,264 2009 $ $ 301,151 24,054 240,293 730,571 357,039 4,776,076 4,843,140 102,028,190 113,300,514 2008 $ 3,988,792 57,630 210,707 686,135 343,274 12,183,231 4,587,630 85,108,447 $ 107,165,846 $ 9,022,576 7,235,503 5,790,357 1,530,799 6,211,533 29,790,768 $ 8,880,151 6,389,190 5,625,426 1,014,221 25,000 41,595,562 63,529,550 $ 58,152,032 $ 176,830,064 $ 155,618,636 (56,407,183) $ (4,664,190) (61,071,373) $ 20,247,061 33,308,177 53,555,238 $ (34,475,112) 25,768,606 $ (8,706,506) $ $ $ 8,894,793 6,244,742 5,145,922 762,200 27,405,133 48,452,790 114 Table 2 Fiscal Year 2006 2007 $ 2005 2004 2003 396,770 54,887 128,040 638,390 3,527,777 272,516 13,241,940 895,854 62,732,783 $ 81,888,957 $ 286,419 61,456 67,264 529,007 126,800 14,584,804 648,756 26,761,281 $ 43,065,787 $ 133,367 434,179 259,993 10,631,653 523,405 16,472,105 $ 28,454,702 $ 276,990 38,716 8,425 293,355 1,162,624 8,774,894 109,956 46,863,563 $ 57,528,523 $ $ $ $ 8,895,239 3,775,636 2,786,148 10,853,019 26,310,042 $ 10,525,392 3,631,132 2,335,547 12,702,625 29,194,696 $ $ 54,764,744 $ 86,723,219 $ 31,838,808 7,588,225 6,137,152 4,392,794 20,000 24,414,623 42,552,794 $ 124,441,751 5,952,571 4,846,569 3,185,387 240,000 26,016,946 40,241,473 $ 83,307,260 $ (16,672,751) $ (11,315,672) $ (24,631,103) $ 14,532,701 22,769,529 8,571,282 13,364,758 22,412,692 $ 5,739,941 $ 11,453,857 $ (16,059,821) $ 27,897,459 5,416,791 45,991 35,035 1,454,454 2,195,739 - 397,092 9,475,823 $ 19,020,925 2,334,840 3,729,617 1,939,809 4,813,617 12,817,883 $ (20,782,438) 1,370,415 $ (19,412,023) continued 115 City of Goodyear Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2010 Governmental Revenues and Other Changes in Net Assets Governmental Activities: Taxes Intergovernmental Interest and Investment Income Miscellaneous Transfers Total Governmental Activities Business-type Activities Interest and Investment Income Proceeds from the sale of water rights Mitigation proceeds Miscellaneous Transfers Total Business-type Activities Total Primary Government Changes in Net Assets Governmental Activities Business-type Activities Total Primary Government 2009 $ 55,623,884 $ 10,907,518 179,114 2,026,285 (7,815,285) $ 60,921,516 $ $ 2008 59,003,971 $ 61,251,635 12,236,437 12,654,235 148,687 4,268,448 911,254 4,075,011 (7,751,307) (9,444,077) 64,549,042 $ 72,805,252 57,527 4,352,000 100,698 7,815,285 $ 12,325,510 $ $ 121,900 78,586 7,751,307 7,951,793 $ 73,247,026 $ 72,500,835 $ 83,841,869 $ $ 84,796,103 41,259,970 $ 126,056,073 $ 38,330,140 36,375,158 $ 74,705,298 4,514,333 7,661,320 $ 12,175,653 $ 1,379,832 212,708 9,444,077 $ 11,036,617 Note:The City implemented GASB 34 for the fiscal year ended June 30, 2003. Prior financial statements have not been restated to provide this information. Source: Statement of Net Assets City financial records and reports 116 Table 2 Fiscal Year 2006 2007 2005 $ 59,428,806 $ 48,726,571 $ 31,498,052 15,053,501 6,997,920 5,973,538 4,723,886 4,436,598 1,079,720 1,029,445 1,486,027 1,641,295 (117,062) 634,153 (56,622) $ 80,179,016 $ 61,530,054 $ 40,826,758 $ $ 1,447,446 26,683 56,622 1,530,751 $ $ 715,181 1,950,000 17,431 117,062 2,799,674 $ $ 2004 2003 $ 25,487,392 $ 21,111,029 5,756,754 5,587,983 556,145 (499,021) 408,114 233,858 (799,999) 2,257,938 $ 31,408,406 $ 28,691,787 88,211 $ 7,666 (634,153) (538,276) $ 119,849 67,756 799,999 987,604 $ $ 152,306 82,345 (2,257,938) (2,023,287) $ 81,709,767 $ 64,329,728 $ 40,288,482 $ 32,396,010 $ 26,668,500 $ 63,505,623 23,943,443 $ 87,449,066 $ 50,214,382 25,569,203 $ 75,783,585 $ 16,195,655 8,033,006 $ 24,228,661 $ 45,941,107 14,352,362 $ 60,293,469 $ $ 7,909,349 (652,872) 7,256,477 concluded 117 Table 3 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year Property Taxes Sales & Use Taxes 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 $ 21,941,576 22,602,319 18,144,197 12,370,983 9,826,690 8,583,676 7,187,270 5,718,332 2,169,086 1,622,925 $ 31,448,399 34,205,905 42,045,316 45,240,436 37,420,013 21,747,851 17,342,116 14,610,889 12,243,826 10,978,934 Franchise Taxes $ 2,233,909 2,195,747 2,071,378 1,817,387 1,479,868 1,166,525 958,006 781,808 751,432 550,374 State Shared Revenues - not Restricted to Specific Programs State Shared State Revenue Sales Sharing $ 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 2,600,534 2,582,196 2,224,251 2,255,263 1,606,992 $ 5,966,584 6,880,761 6,503,557 5,252,405 1,979,970 1,738,442 1,705,193 2,012,719 1,972,442 1,103,778 Highway User Revenue $ 2,769,619 3,008,499 3,401,589 3,493,824 1,792,240 1,634,562 1,469,365 1,351,013 1,679,426 1,221,327 Source: City financial records and reports 119 City of Goodyear Sales & Use Taxes by Industry Classification Last Ten Fiscal Years (Unaudited) Fiscal Year 2010 Mining & Government Construction Manufacturing Utilities Wholesale Trade Retail Trade Restaurant & Bar Real Estate Hotels Services Miscellaneous $ 15,141 5,365,079 535,972 3,085,682 540,630 11,569,427 4,161,539 2,692,806 820,902 1,388,178 640,388 Total* $ 30,815,744 2009 $ 11,412 12,779,596 508,454 2,448,686 538,279 9,568,935 3,687,991 2,227,491 854,203 1,176,780 622,042 $ 34,423,869 2008 $ 6,391 17,256,194 451,147 2,397,905 775,843 9,526,853 3,740,867 2,698,200 1,006,334 1,451,721 1,035,306 $ 40,346,762 2007 $ 1,055 19,305,179 405,882 2,115,344 815,930 9,789,605 3,996,446 2,603,404 944,488 3,725,380 2,286,662 $ 45,989,375 2006 $ 371 15,029,430 600,356 1,640,534 746,566 8,727,607 3,441,051 1,506,238 889,513 643,325 641,428 $ 33,866,419 * Total may differ from Governmental Activities Tax Revenues By Source because of difference in reporting periods. Source: Arizona Department of Revenue North American Industry Code System (NAICS) Summary 120 Table 4 Fiscal Year 2004 2005 $ 17,116 8,915,836 301,797 671,037 177,946 6,397,775 2,544,019 1,011,414 719,181 441,333 633,503 $ 21,830,957 $ 16,597 6,918,462 116,997 352,894 92,257 5,393,963 2,087,339 693,762 527,267 483,406 730,151 $ 17,413,095 2003 $ 5,271,160 26,120 403,567 343,762 4,935,805 1,947,312 486,911 500,620 612,169 4,309 $ 14,531,735 2002 $ 4,786,758 34,008 354,844 48,402 4,041,687 1,680,128 461,419 394,327 492,499 11,004 $ 12,305,076 2001 $ 798 4,042,637 52,286 333,763 58,406 3,768,041 1,052,863 432,028 247,445 473,238 8,423 $ 10,469,928 121 City of Goodyear Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2010 2009 2008 2007 General Fund Reserved Unreserved $ 17,812,619 10,742,777 $ Total General Fund $ 28,555,396 $ 29,117,875 $ 42,219,809 $ 61,037,128 $ 14,891,228 1,393,549 47,213 $ 13,597,749 4,110,554 - $ 15,356,746 10,942,787 - $ 8,726,046 7,810,178 - 20,452,179 - 23,153,403 1,435,331 25,851,665 27,462,037 20,649,813 10,220,953 $ 36,784,169 $ 42,297,037 $ 79,613,235 $ 47,406,990 All Other Governmental Funds Reserved, Reported in: Debt Service Funds Capital Projects Funds Community Facilities District Unreserved, Reported in: Special Revenue Funds Capital Projects Funds Total All Other Governmental Funds 29,117,875 $ 42,219,809 $ 61,037,128 Source: Statement of Net Assets City financial records and reports 122 Table 5 Fiscal Year 2005 2006 $ 53,853,901 $ 29,393,457 2004 $ 18,701,153 2003 $ 12,456,038 2002 $ 11,904,771 2001 $ 7,876,202 $ 53,853,901 $ 29,393,457 $ 18,701,153 $ 12,456,038 $ 11,904,771 $ 7,876,202 $ 7,833,170 21,303,978 - $ 6,643,132 9,704,731 - $ 6,388,963 - $ 3,027,055 - $ 4,096,549 - $ 3,804,079 - 19,835,781 3,354,296 14,475,469 46,019,494 8,731,725 21,129,201 4,613,137 32,003,402 3,773,232 18,922,708 2,973,780 25,862,738 $ 52,327,225 $ 76,842,826 $ 36,249,889 $ 39,643,594 $ 26,792,489 $ 32,640,597 123 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2010 Expenditures Transfer in Transfer out Debt issuance Debt premium Refunding Bonds Payment to refunded bond escrow agent $ Total Other Financing Sources and (Uses) Net Change in Fund Balances Debt Service as a Percentage of Noncapital Expenditures 2008 2007 6,376,290 $ 4,123,384 $ 11,561,671 $ 17,288,179 (14,191,575) (11,874,691) (21,005,748) (17,387,710) 105,000 604,500 112,248,000 16,969,302 5,733 5,722 2,300,192 (72,151) 6,415,000 (3,585,000) (6,734,459) - (7,704,552) $ 2009 (10,726,085) 104,784,656 (6,075,347) $ (50,418,132) $ 13,388,927 $ 27.0% 17.5% 10.8% 16,797,620 2,262,992 12.4% Source: City financial records and reports 124 Table 6 Fiscal Year 2006 2005 2004 2003 $ 18,210,420 $ 2,933,372 $ 2,242,149 $ 8,994,203 $ (47,966,568) (2,299,219) (3,042,148) (6,736,265) 5,005,000 42,005,000 27,050,000 16,010,000 479,593 272,362 2,300,000 - (24,751,148) $ 43,118,746 (55,157) $ 51,285,241 $ 17.9% 21.6% 26,250,001 20,840,300 (69,812) $ 14,240,042 $ 18.7% 18.8% 2002 2001 7,799,778 $ 10,043,729 (5,831,078) (9,303,528) 5,078,915 21,188,698 - 7,047,615 21,928,899 (1,819,539) $ 10,897,171 16.7% 16.8% concluded 125 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2010 Expenditures Transfer in Transfer out Debt issuance Debt premium Refunding Bonds Payment to refunded bond escrow agent $ Total Other Financing Sources and (Uses) Net Change in Fund Balances Debt Service as a Percentage of Noncapital Expenditures 2008 2007 6,376,290 $ 4,123,384 $ 11,561,671 $ 17,288,179 (14,191,575) (11,874,691) (21,005,748) (17,387,710) 105,000 604,500 112,248,000 16,969,302 5,733 5,722 2,300,192 (72,151) 6,415,000 (3,585,000) (6,734,459) - (10,726,085) 104,784,656 16,797,620 (6,075,347) $ (50,418,132) $ 13,388,927 $ 2,262,992 (7,704,552) $ 2009 28.5% 18.5% 19.1% 16.3% Source: City financial records and reports 126 Table 6 Fiscal Year 2006 2005 2004 2003 2002 $ 18,210,420 $ 2,933,372 $ 2,242,149 $ 8,994,203 $ (47,966,568) (2,299,219) (3,042,148) (6,736,265) 5,005,000 42,005,000 27,050,000 16,010,000 479,593 272,362 2,300,000 - (24,751,148) $ 43,118,746 (55,157) $ 51,285,241 18.1% 24.5% 26,250,001 $ 20,840,300 (69,812) $ 14,240,042 18.7% 19.3% 7,799,778 $ 10,043,729 (5,831,078) (9,303,528) 5,078,915 21,188,698 - 7,047,615 $ 2001 21,928,899 (1,819,539) $ 10,897,171 16.7% 16.8% concluded 127 Table 7 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year Property Taxes 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 $ 21,908,223 22,332,774 18,004,766 12,289,010 9,769,889 8,583,676 7,187,270 5,718,332 4,460,668 3,370,249 Sales & Use Taxes $ 31,183,096 34,205,906 41,036,060 45,240,436 37,420,013 22,475,427 17,869,383 15,111,509 13,427,467 12,250,286 Franchise Taxes $ 2,233,909 2,195,748 2,071,378 1,817,387 1,479,868 1,166,525 958,006 781,808 751,432 550,374 State Shared Revenues - not Restricted for Specific Programs State Shared State Revenue Highway User Sales Sharing Revenue $ 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 2,600,534 2,582,196 2,224,251 2,255,263 1,606,992 $ 5,966,584 6,880,761 6,503,557 5,252,405 1,979,970 1,738,442 1,705,193 2,012,719 1,972,442 1,103,778 $ 2,769,619 3,008,499 3,401,589 3,493,824 1,792,240 1,634,562 1,469,365 1,351,013 1,679,426 1,221,327 Source: City financial records and reports 129 City of Goodyear Property Tax Rates Direct and Overlapping Governments1 Last Five Fiscal Years (Unaudited) City Direct Rate Overlapping Rates County-Wide Jurisdictions Fiscal Year 2010 2009 2008 2007 2006 Debt Operating Service Rate Rate $ 0.6320 $ 0.9679 0.6678 0.9322 0.7321 0.8679 0.7945 0.7991 0.8222 0.7778 Total City Rate $ 1.5999 1.6000 1.6000 1.5936 1.6000 County Operating Rate $ 0.9909 1.0327 1.1046 1.1794 1.1971 County County County Library Fire District Flood Education District Assistance District Equalization Rate Rate Rate Rate $ 0.0353 $ 0.0057 $0.1367 $ 0.3306 0.0353 0.0053 0.1367 0.0391 0.0053 0.1533 0.0507 0.0068 0.2047 0.0521 0.0069 0.2119 0.4358 * = Assessed / Acreage Basis Note: Data not available prior to 2006 1 Source: Maricopa County Assessor's Office 130 Table 8 Overlapping Rates County-Wide Jurisdictions Fiscal Year 2010 2009 2008 2007 2006 Central Community Arizona College Project Rate Rate $ 0.8844 $ 0.1000 0.9386 0.1000 0.9760 0.1000 1.0646 0.1200 1.0315 0.1200 Special Health Care District Rate $ 0.0914 0.0856 0.0935 0.1184 0.1206 School Districts Total Agua Fria/ Agua Fria/ Buckeye/ Tolleson/ County Avondale Litchfield Liberty Littleton Rate Rate Rate Rate Rate $ 2.5750 $ 6.0066 $ 5.3164 $ 5.2568 $ 5.8681 2.3342 5.7554 4.9382 5.5581 6.3843 2.4718 6.4298 5.3545 6.7267 6.8078 2.7446 7.8564 6.8558 7.3005 7.3586 3.1759 7.8631 6.9430 7.4944 8.3794 Mobile Rate $ 6.2147 8.3984 N/A N/A N/A continued 131 City of Goodyear Property Tax Rates Direct and Overlapping Governments1 Last Five Fiscal Years (Unaudited) Overlapping Rates Other Special Taxing Districts Fiscal Year 2010 2009 2008 2007 2006 West Maricopa Education Center District Rate $ 0.0500 0.0500 0.0500 0.0500 0.0500 Central Arizona GRD Rate $ 1.0000 1.0000 1.0000 1.0000 1.0000 Estrella Centerra Cortina Cottonflower Mtn. Ranch Roosevelt Community Community Community Community Irrigation Facilities Facilities Facilities Facilities District District District District District Rate* Rate Rate Rate Rate $ 17.1000 $ 2.6829 $ 1.2146 $ 2.1198 $ 1.3000 17.1000 2.6965 0.1520 1.2843 1.3000 15.0000 3.0000 2.8500 1.7639 1.3000 15.0000 3.0000 2.8500 3.0000 1.3000 15.0000 3.0000 2.8500 3.0000 1.3000 132 Table 8 Overlapping Rates Fiscal Year 2010 2009 2008 2007 2006 Goodyear Community Facilities General District #1 Rate $ 0.6629 0.5313 0.8040 1.0000 1.0000 Other Special Taxing Districts Goodyear Palm King Wildflower Wildflower Community Valley Ranch Community Community Facilities Community Community Facilities Facilities Utilities Facilities Facilities General General District #1 District #3 District District #1 District #2 Rate Rate Rate Rate Rate $ 1.0000 $ 0.2165 $ 0.3000 $ 1.5905 $ 1.6561 1.0000 1.7949 0.3000 1.1703 1.3143 1.0000 1.6295 0.3000 1.3123 1.4154 1.0000 2.0000 0.3000 2.1340 2.3935 1.0000 0.3000 $ 2.1893 2.3547 concluded 133 Table 9 City of Goodyear Principal Property Tax Payers Current Fiscal Year and Eight Years Ago (Unaudited) Fiscal Year 2003 2010 Taxable Assessed Value Taxpayer Arizona Public Service Company $ Percentage of Total Taxable Assessed Rank Value Taxable Assessed Value 20,220,531 1 2.06% $ Suncor Development Company 16,767,833 2 1.71% VHS of South Phoenix, Inc. 15,583,182 3 1.59% - NNP III Estrella Mountain Ranch, LLC 13,715,458 4 1.40% - Duke Realty LP 11,857,862 5 1.21% - First American Title Insurance Company 11,735,998 6 1.19% NNP III EMR 3, LLC 9,883,681 7 1.01% - Macy's Retail Holdings, Inc. 8,866,241 8 0.90% - DOA Properties I, LLC 8,748,880 9 0.89% - Cardinal Capital Co. 7,472,133 10 0.76% - Rank Percentage of Total Taxable Assessed Value 7,739,112 3 3.48% 14,143,894 1 6.36% 6 1.61% 3,580,451 Rubbermaind, Inc. - 8,339,560 2 3.75% Sun Chase Estrella LP - 6,560,454 4 2.95% McLane Company - 4,492,243 5 2.02% Qwest Communications - 2,646,420 7 1.19% Dayton Hudson - 2,246,121 8 1.01% Byrd Enterprises of Arizona Inc. - 2,068,211 9 0.93% Southwest Gas Corporation - 1,801,345 10 0.81% Total $ 124,851,799 12.70% $ 53,617,811 24.11% Note: Data not available prior to 2003 Source: Maricopa County Treasurer 135 City of Goodyear Assessed Value and Estimated Actual Value of Taxable Property1 Last Five Fiscal Years (Unaudited) Fiscal Year Ended June 30 Total Assessed Value Residential Property 2010 2009 2008 2007 2006 $ 497,383,109 586,181,619 464,968,904 259,063,526 219,161,231 Total Assessed Value Commercial Property $ 284,491,038 211,360,209 159,482,762 131,663,157 109,929,249 Agricultural/ Vacant Land Other Less: Tax-Exempt Property $ 374,640,069 323,172,973 221,884,779 164,267,777 97,388,312 $ 28,842 30,053 30,978 47,639 226,783 $ 173,686,635 120,023,805 82,130,285 60,129,086 35,549,177 Net Assessed Value $ 982,856,423 1,000,721,049 764,237,138 494,913,013 391,156,398 Note: Data prior to 2006 is not available. Source: Maricopa County Assessor's Office Under Arizona law, there are two property valuations bases: PRIMARY and SECONDARY. The primary (limited) assessed valuation is used when levying for maintenance and operations The secondary (full cash) assessed valuation is used when levying for debt retirement. 136 Table 10 Estimated Actual Taxable Value Secondary Tax Rate $ 0.9679 0.9322 0.8679 0.7991 0.7778 $ 8,607,745,155 8,799,999,309 6,700,379,823 4,159,221,424 3,254,133,854 Assessed Value as Percentage of Actual Value 11.4% 11.4% 11.4% 11.9% 12.0% 137 Table 11 City of Goodyear Property Tax Levies and Collections1 Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 Taxes Levied for the Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 $ 14,959,898 14,460,290 10,843,797 7,424,246 6,070,318 6,049,416 5,096,682 4,287,085 3,204,131 2,541,008 Collected within the Collection in Fiscal Year of the Levy Percentage Subsequent Amount of Levy Years $ 14,527,751 13,888,743 10,706,881 7,257,013 5,923,200 5,974,482 4,982,963 4,112,585 3,102,195 2,484,965 97.11% 96.05% 98.74% 97.75% 97.58% 98.76% 97.77% 95.93% 96.82% 97.79% $ 96,134 44,605 77,686 49,075 49,184 51,203 2,469 Total Collections to Date Percentage Amount of Levy $ 14,623,885 13,933,348 10,784,567 7,306,088 5,972,384 5,974,482 4,982,963 4,112,585 3,153,398 2,487,434 97.75% 96.36% 99.45% 98.41% 98.39% 98.76% 97.77% 95.93% 98.42% 97.89% Note: Data not availabe for FY2003, FY2004 & FY2005. All secondary collections are reported as current collections. Delinquent tax collections are shown in the year collected. Source: City Financial Records and Reports Schedule includes General and Debt Service Funds 138 Table 12 City of Goodyear Utility Statistical Data Ten Largest Water Users Last Three Fiscal Years (Unaudited) Fiscal Year 2010 2009 Fees & Entity Type of User Rank Charges $ 2008 Fees & Rank Fees & Charges $ Rank 175,863 8 Charges Canyon Trails 3 Homeowner's Association 1 197,098 2 Canyon Trails HOA Homeowner's Association 2 189,539 1 197,693 $ 93,896 Canyon Trails Unit 4 Homeowner's Association 3 164,577 3 154,868 5 145,474 Canyon Trails 4 - South Homeowner's Association 4 139,712 4 143,926 2 166,139 Centerra, LLC Homeowner's Association 5 121,117 7 106,752 7 102,443 Agua Fria High School School 6 104,297 6 113,045 1 173,266 Avondale School School 7 102,992 8 92,499 6 105,348 Sarival Paseo Joint Community Homeowner's Association 8 99,371 5 127,107 3 154,195 Cottonflower Goodyear Community Homeowner's Association 9 74,265 Park Shadows Apartments 10 67,355 9 70,677 9 76,401 10 65,138 - - - Pueblo Verda HOA Homeowner's Association - Evergreen Lawn Sprinklers Homeowner's Association - - 4 148,800 Estrella Vista HOA Homeowner's Association - - 10 64,527 $ 1,260,323 $ 1,247,568 Total - $ 1,230,489 Total as a percent of total FY 2010, FY 2009 & FY 2008 Water System Operating Revenue 14.10% 14.00% 13.94% Note: Water information not available prior to FY 2008 Source: City customer service and billing records 139 Table 13 City of Goodyear Utility Statistical Data Ten Largest Wastewater Users Last Three Fiscal Years (Unaudited) Fiscal Year 2010 2009 Fees & Entity Type of User Rank Arizona State Prison/Perryville Prison 1 Park Shadows Apartments 2 Charges $ 2008 Fees & Fees & Rank Charges Rank 287,556 1 $ 310,582 1 54,303 2 50,718 2 Charges $ 317,331 50,512 Cancer Treatment Center Hospital 3 48,613 - - Fairfield Development Real Estate 4 42,942 3 37,170 - 4 31,970 Airport Training Center Airport 5 40,286 Fairfield Centerra Real Estate 6 38,030 Poore Brothers, Inc. Food Manufacturer, Snacks 7 31,889 5 22,656 6 22,656 5 29,681 - Pem Investments Real Estate 8 28,887 - - Alliance Residential Real Estate 9 28,260 9 20,015 - 10 Avondale Elementary Education 26,585 6 28,237 7 21,794 Agua Fria Union High School District Education - 7 25,516 3 32,000 McLane Sunwest Grocery Distributor - 8 22,180 8 19,253 Americas Best Value Inn Hotel - 10 19,547 Wal-Mart Stores, Inc. Grocery Retail - - 4 24,273 La Jolla Court, Inc. Apartments - - 9 18,044 Estrella Joint Committee Homeowner's Association - - 10 17,581 627,351 $ 575,616 Total $ - $ 546,100 Total as a percent of total FY 2010, FY 2009 & FY 2008 Wastewater System Operating Revenue 8.81% 9.01% 8.74% Note: Wastewater information not available prior to FY 2008 Source: City customer service and billing records 141 City of Goodyear Schedule of Existing and Adopted Monthly Water & Sewer Service Charges (2010 - 2013) (1) (Unaudited) Description of Water System Services Adopted Adopted Adopted Adopted 2010 2011 2012 2013 Existing Fees Base Charge (Meter Size) 3/4 Inch 9.94 $ 10.05 $ 10.23 1 Inch $ 10.15 9.67 $ 10.95 9.69 $ 11.81 12.74 14.14 1 1/2 Inch 11.24 13.56 16.36 19.74 22.86 2 Inches 17.58 21.47 26.22 32.02 37.01 3 Inches 29.89 38.05 48.43 61.64 70.67 4 Inches 58.41 69.78 83.36 99.58 115.24 6 Inches 114.21 135.11 159.83 189.08 218.71 Monthly Volume Charge - Residential 0 - 6,000 gallons (per thousand) $ 1.76 (2) $ 1.27 2.70 (3) 2.54 2.64 2.92 2.36 12,001 - 30,000 (per thousand) 3.47 (4) 3.81 3.96 4.38 3.54 30,001+ gallons (per thousand) 3.77 4.95 5.15 5.69 5.69 6,001 - 12,000 (per thousand) $ 1.32 $ 1.46 $ 1.18 Monthly Volume Charge - Commercial 0 - 40,000 gallons (per thousand) $ 1.76 $ 1.70 $ 2.30 $ 2.60 $ 3.00 40,001 - 100,000 gallons (per thousand) 2.70 2.72 3.68 4.16 4.80 100,001+ gallons (per thousand) 3.47 3.54 4.78 5.41 6.24 (1) Rates shown are for inside City customers. Outside City rates are 25% greater than inside City rates. Rate increases were adopted, but are subject to change at the direction of City Council. (2) Monthly volume change for fees is 0 - 8,000 gallons (per thousand). (3) Monthly volume change for fees is 8,000 - 20,000 gallons (per thousand). (2) Monthly volume change for fees is 20,001 - 30,000 gallons (per thousand). Source: City of Goodyear Finance Department. The table above reflects only certain basic fees and charges of the City's water system and is not a comprehensive statement of all such fees. Schedule of Water System Rate Increases (2010-2013) (1) Rate Date Increase Fiscal Year 2010 0.00% Fiscal Year 2011 7.50% Fiscal Year 2012 9.40% Fiscal Year 2013 0.00% (1) Rate increases were adopted, but are subject to change at the discretion of City Council. Source: City of Goodyear Finance Department. 142 Table 14 Description of Sewer System Services Existing Fees Adopted Adopted Adopted Adopted 2010 2011 2012 2013 Residential Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 3.00 $ 4.05 $ 4.45 $ 4.90 $ 5.78 3.00 $ 4.05 $ 4.45 $ 4.90 $ 5.78 14.96 $ 16.19 $ 17.52 $ 18.96 $ 21.12 General Commercial Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ Base Charge (Meter Size) 3/4 Inch $ 1 Inch 16.96 20.05 23.70 28.02 32.41 1 1/2 Inch 21.98 25.57 29.75 34.61 39.94 2 Inches 36.03 44.34 54.57 67.16 77.58 3 Inches 61.24 72.04 84.74 99.68 115.22 4 Inches 114.52 122.19 130.37 139.10 152.86 6 Inches 214.15 247.06 285.03 328.83 378.70 Schedule of Wastewater System Rate Increases (2010-2013) (1) Rate Date Increase Fiscal Year 2010 22.20% Fiscal Year 2011 9.30% Fiscal Year 2012 9.50% Fiscal Year 2013 15.20% (1) Rate increases were adopted, but are subject to change at the discretion of City Council. Source: City of Goodyear Finance Department. 143 City of Goodyear Ratios of Outstanding Debt by Type Last Five Fiscal Years (Unaudited) Fiscal Year Ended June 30 2010 2009 2008 2007 2006 Note: General Obligation Bonds Contract Payable Governmental Activities Public Greater Improvement McDowell Arizona Corporation Road Development Municipal Corridor Authority Facilities Improvement Loan Revenue Bond District $ 33,601,981 $ 5,755,628 $ 35,842,739 11,755,628 41,719,857 36,050,000 3,185,000 27,280,000 3,645,000 $ 5,230,000 5,910,000 6,415,000 3,320,000 3,485,000 Community Facilities District Bonds $ 46,060,000 $ 122,313,000 47,165,000 127,125,000 47,165,000 131,116,000 76,844,000 73,000,000 Data prior to 2006 is not available. Source: City Financial Records and Reports 144 Table 15 General Obligation Bonds Business-Type Activities Public Improvement Corporation Municipal Facilities Revenue Revenue Bond Bonds Water Infrastructure Finance Authority Loan Water Rights Total $ 92,753,019 $ 102,300,000 $ 17,040,000 $ 9,925,289 $ 10,314,041 $ 445,292,958 88,282,261 102,300,000 2,370,000 8,866,108 11,173,544 440,790,280 88,125,143 67,850,000 2,345,000 9,443,400 394,179,400 54,145,000 2,460,000 9,985,012 185,989,012 28,990,000 2,580,000 10,505,512 149,485,512 Percentage of Personal Income Per Capita 24.92% $ 6,858 24.89% $ 7,047 25.65% 6,742 12.34% 3,335 11.74% 3,007 145 Table 16 City of Goodyear Ratios of General Bonded Debt Outstanding Last Nine Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2010 2009 2008 2007 2006 2005 2004 2003 2002 $ 126,355,000 124,125,000 129,845,000 90,195,000 56,270,000 58,265,000 30,395,000 22,270,000 11,210,000 Less: Amounts Available in Debt Service Fund $ 828,016 592,244 3,026,753 587,476 210,498 123,863 499 - Total $ Percentage Estimated Actual Taxable Value of Property 125,526,984 123,532,756 126,818,247 89,607,524 56,059,502 58,141,137 30,394,501 22,270,000 11,210,000 11.40% 11.40% 11.40% 12.00% 12.00% 17.77% 11.49% 10.01% 6.43% Per Capita $ 1,933 1,975 2,169 1,607 1,128 1,410 849 733 420 Note: Data prior to 2002 not available. Source: City Records (Does not include Enterprise or Special Assessment bonds) 146 Table 17 City of Goodyear Direct and Overlapping Governmental Activities Debt As of June 30, 2010 (Unaudited) Debt Outstanding Governmental Unit Debt repaid with property taxes and special assessment liens Overlapping Debt: Maricopa County Maricopa County Community College District Avondale Elementary School District #44 Liberty Elementary School District #25 Litchfield Elementary School District #79 Agua Fria Union High School District #216 Buckeye Union High School District #201 Centerra Community Facilities District Cortina Community Facilities District Cottonflower Community Facilities District Estrella Mountain Ranch Community Facilities District Goodyear Community Facilities Utilities District #1 Goodyear Community Facilities General District #1 Palm Valley Community Facilities District #3 Wildflower Ranch Community Facilities General District #1 Wildflower Ranch Community Facilities General District #2 Subtotal of overlapping debt Direct Debt: City of Goodyear $ Estimated Percentage Applicable (a) Estimated Share of Overlapping Debt 653,040,000 33,050,000 11,265,000 25,205,000 52,485,000 56,960,000 3,510,000 2,455,000 2,745,000 17,055,000 49,645,000 12,425,000 8,015,000 1,035,000 1,220,000 $ 930,110,000 1.7000% 1.7000% 78.1200% 48.1600% 36.8200% 51.6200% 15.5100% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% $ 11,101,680 25,818,660 5,425,224 9,280,481 27,092,757 8,834,496 3,510,000 2,455,000 2,745,000 17,055,000 49,645,000 12,425,000 8,015,000 1,035,000 1,220,000 $ 185,658,298 126,355,000 100.0000% 126,355,000 (a) Proportion applicable to the City of Goodyear, Arizona is computed on the ratio of secondary assessed valuation for 2010-2011 Sources: Maricopa County Department of Finance, Maricopa County Assessor's Office and Official Statements 147 Table 18 City of Goodyear Legal Debt Margin Information Last Five Fiscal Years (Unaudited) Fiscal Year 2010 2009 2008 2007 2006 $ 982,856,423 $ 1,000,721,049 $ 764,237,138 $ 494,913,013 $ 391,377,371 20% Limitation Debt Limit Equal to 20% of Assessed Valuation 196,571,285 200,144,210 152,847,428 98,982,603 78,275,474 Total Debt Applicable to 20% Limit 126,070,000 123,830,000 129,540,000 90,195,000 47,795,000 Legal 20% Debt Margin (Available Borrowing Capacity) $ 70,501,285 76,314,210 $ 23,307,428 8,787,603 $ 30,480,474 Secondary Assessed Value Total net debt applicable to the limit as a percentage of debt limit $ 64.13% 6% Limitation Debt Limit Equal to 6% of Assessed Valuation $ 58,971,385 Total Debt Applicable to 6% Limit 285,000 Legal 6% Debt Margin (Available Borrowing Capacity) $ 58,686,385 Total net debt applicable to the limit as a percentage of debt limit 0.48% 61.87% $ $ 84.75% $ 91.12% 61.06% 60,043,263 $ 45,854,228 $ 29,694,781 $ 23,482,642 295,000 305,000 - 8,475,000 59,748,263 $ 45,549,228 $ 29,694,781 $ 15,007,642 0.49% 0.67% 0.00% 36.09% Note: Data prior to 2006 is not available. Sources: Maricopa County Treasurer's Office City financial records and reports 148 Table 19 City of Goodyear Pledged-Revenue Coverage Last Five Fiscal Years (Unaudited) Public Improvement Corporation Municipal Facilities Revenue Bonds* Fiscal Year Ended June 30 Operating Revenue 2010 2009 2008 $ 57,363,961 62,281,214 85,680,828 Pledged Revenue $ Debt Service Principal Interest 45,810,806 49,324,646 56,440,267 $ 720,000 680,000 505,000 $ 4,545,393 4,735,308 2,019,691 Coverage 8.70 9.11 22.36 Water & Sewer Bonds & Loans Fiscal Year Ended June 30 Operating Revenue 2010 2009 2008 2007 2006 $ 16,378,677 15,300,056 15,151,775 13,760,462 10,816,571 Less: Operating Expenses $ 8,350,588 9,733,836 11,424,111 11,008,102 9,629,632 Net Operating Revenue $ 8,028,089 5,566,220 3,727,664 2,752,360 1,186,939 Debt Service Principal Interest $ 1,195,691 877,292 656,612 640,500 502,118 $ 543,662 540,523 474,992 506,104 516,469 Coverage 4.62 3.93 3.29 2.40 1.17 Note: Data prior to 2006 is not available. * PIC 2007 Bonds issued in FY2008 & PIC 2008 Bonds issued in FY2009 Source: City Financial Records and Reports 149 Table 20 City of Goodyear Demographic and Economic Statistics Last Five Fiscal Years (Unaudited) Fiscal Year 2010 2009 2008 2007 2006 Population 64,927 62,554 58,462 55,775 49,714 Personal Income (in thousands) $ 1,786,856 1,771,217 1,536,966 1,507,375 1,274,269 Per Capita Personal Income $ 27,521 28,315 26,290 27,026 25,632 Median Age 35.5 39.1 36.1 36.3 35.7 Education Level in Years of Schooling 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 Unemployment Rate 6.4% 5.8% 3.0% 2.3% 2.3% Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 150 Table 21 City of Goodyear Principal Employers1 Current Fiscal Year and Seven Years Ago (Unaudited) Major Corporation Fiscal Year Fiscal Year 2010 2003 Percentage Percentage of Total City of Total City Employees Rank Employment* Employees Rank Employment* Arizona State Prison/Perryville 794 1 2.70% 825 1 6.28% Metokote Corporation 750 2 2.55% City of Goodyear 703 3 2.39% Lockheed Martin 700 4 2.38% 0.00% Amazon.com 600 5 2.04% 0.00% McLane Sunwest 510 6 1.73% Americus Logistics, LLC 500 7 1.70% 0.00% West Valley Hospital 444 8 1.51% 0.00% Wal-Mart Supercenter 370 9 1.26% 0.00% Cancer Treatment Centers of America 279 10 0.95% 0.00% 0.00% 200 450 7 2 1.52% 3.42% Newell Rubbermaid, Inc. 0.00% 250 4 1.90% Timco Aviation Services 0.00% 430 5 1.60% Rudolfo Brothers 0.00% 260 8 0.97% Cavco Industries, Inc. 0.00% 400 3 3.04% Fry's Food and Drug Store 0.00% 225 5 1.71% Aviation Management Systems 0.00% 220 6 1.67% Target 0.00% 175 8 1.33% Lufthansa-German Airlines 0.00% 170 9 1.29% Arizona Glavanizing 0.00% 150 10 1.14% 19.90% 3,755 Total 5,650 25.88% Note: This schedule should be current and nine years ago, but the ealiest infromation available is FY2003. 1 Source: City Records *2010 labor force = 29,450; 2003 labor force = 13,147 151 Table 22 City of Goodyear Full-time Equivalent City Government Employees by Function Last Five Fiscal Years (Unaudited) 2009 2010 Function . General Government Financial Services Information Services Police Officers Civilians Planning and Development Fire Firefighters and Officers Civilians Human Resources Community Services Economic Development Municipal Services Public Works Water Wastewater Sanitation Total 2008 2007 2006 53 30 13 47 30 15 52 28 12 52 27 11 41 21 9 97 29 10 97 30 16 89 26 38 72 24 32 72 18 21 90 22 8 0 7 10 79 23 18 9 91 22 10 0 4 14 87 24 19 9 93 17 10 11 5 14 64 30 18 12 70 12 9 12 3 11 52 30 14 13 65 12 9 8 3 9 49 30 14 10 498 515 519 444 391 Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 153 Table 23 City of Goodyear Operating Indicators by Function Last Five Fiscal Years (Unaudited) Fiscal Year Function 2009 2010 2008 2007 2006 General Government City Clerk's Office # of records requests 504 613 648 576 180 3,395 2,494 2,469 3,653 2,692 City Prosecutor's Office Charges filed/charges adjudicated (resolved) City Manager's Office % of survey respondents rating "Your Neighborhood as a Place to Live" as good to excellent 90% 94% 94% 94% 91% Communications & Public Information News releases/media updates 235 161 182 129 92 Traffic construction alerts 253 1,135 462 215 267 Total newsletter pages sent to citizens Web pages created/updated Number of visits to website Number of web pages viewed Number of graphics/photography projects completed 176 186 136 116 42 4,825 5,721 5,788 4,296 2,520 715,285 738,949 1,509,717 1,322,259 840,757 2,208,180 2,346,423 7,203,478 4,865,081 5,318,311 217 200 200 175 140 Police # Total arrests 4,731 2,829 2,614 2,814 2,603 11,810 13,313 11,452 12,422 12,175 5,570 5,328 3,431 3,236 1,960 226 270 143 154 150 4,262 3,953 3,427 2,403 759 # accounts payable checks issued 8,024 10,184 9,949 9,305 9,014 # purchase orders 1,147 918 1,043 1,002 1,067 168,647 163,444 155,805 147,241 125,382 # Moving violations citations Fire # Emergency responses # Fire extinguished # Inspections Financial Services # water meters read annually Information Services 3,637 5,045 6,052 4,000 3,477 # of SPAM emails blocked from being delivered to the staff 11,948,508 15,370,086 5,214,519 3,587,184 878,595 # of emails received 12,857,998 16,327,382 6,008,336 4,264,236 1,246,386 # documents requests for service (Help Desk tickets) Planning and Development Customer wait-time (in minutes) at One Stop Shop Total Number of Permits Issued <3 4,232 <5 3,401 <5 5,874 <5 <5 1,340 7,859 Provide applicant with pre-application meeting within 30 days of submitting request % of inspections performed within 24 hours of request 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Human Resources # of new hires (FT & PT) HR operating cost as a % of City payroll 247 158 179 164 4.18% 4.11% 4.36% 5.50% 174 5.26% continued 154 Table 23 City of Goodyear Operating Indicators by Function Last Five Fiscal Years (Unaudited) Fiscal Year Function 2009 2010 2008 2007 2006 Table 23 Parks and Recreation # attending Park & Recreation facilities and Libraries annually # of square feet of medians and rights of way maintained * 52,241 51,844 49,111 50,093 46,330 22,175,027 22,118,000 15,320,000 15,320,000 15,320,000 Economic Vitality Sales Tax growth (% annual change) Bed Tax growth (% annual change) -10.40% -12.30% -10.25% 21% 70% -3.90% -15% 6% 7% 23% Municipal Services # of homes serviced by Residential Refuse Collection 20,928 20,149 19,811 18,664 17,228 634 510 531 # of citizens serviced by Household Hazardous Waste collection program 848 - Water Service Water Service Connections Drinking Water Supplied (million gallons per day) Reclaimed Water Supplied (million gallons per day) 14,488 13,975 13,500 13,051 11,597 11.10 11.00 10.80 6.86 6.95 0.23 0.45 0.27 0.09 0.09 16,144 16,144 13,500 11,398 5,037 3.73 3.70 3.24 2.48 2.29 Wastewater Sewer Service Connections Sewage Treated (millions gallons per day) Other Public Works Street resurfacing (miles) - 34 32.7 Potholes repaired 372 681 4 783 - 1,096 977 2,255 2,155 2,698 2,755 2,092 Citizen & Neighborhood Resources # of new Code Enforcement cases processed per year Note: Data prior to 2006 is not available. *Change in value is not available for fiscal years 2007 & 2008 Source: City Financial Records and Reports concluded 155 Table 24 City of Goodyear Capital Asset Statistics by Function Last Five Fiscal Years (Unaudited) Function 2010 2009 Fiscal Year 2008 2007 2006 Public Safety Police: Stations Police Vehicles Fire Stations 3 124 6 3 130 6 3 125 6 4 146 4 1 107 4 Highways and Streets Street (miles) Streetlights Traffic signals 704 8329 72 563 7969 67 450 7391 56 360 7391 37 360 7,391 30 17 204 1 6 1 16 184 1 6 1 16 156 1 6 1 12 117 1 6 1 11 82 1 2 1 257 2,370 11 173 2,053 12 Culture and Recreation Parks Parks Acreage Swimming Pools Tennis Courts Community Centers Water Water Mains (miles) Fire Hydrants Storage capacity (thousands of gallons) Wastewater Sanitary Sewers (miles) Storm Sewers (miles) Treatment capacity (thousands of gallons) 310 2791 16 223 54 5.6 MGD 307 2,754 16 225 58 5.6 MGD 286 2,481 15 236 152 167 80 105 105 5.5 MGD 4.55 MGD 11.6 MGD Source: City Financial Records and Reports 156 SINGLE AUDIT SECTION REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and Council City of Goodyear, Arizona We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Goodyear (the City), Arizona as of and for the year ended June 30, 2010, which collectively comprise the City’s basic financial statements and have issued our report thereon dated November 17, 2010. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. www.henryandhorne.com The Honorable Mayor and Council City of Goodyear Page Two Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, City Council, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Casa Grande, Arizona November 17, 2010 160 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 The Honorable Mayor and Council City of Goodyear, Arizona Compliance We have audited the compliance of the City of Goodyear (the City), Arizona with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2010. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and NonProfit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City’s compliance with those requirements. In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2010. However, the results of our auditing procedures disclosed no instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133. www.henryandhorne.com The Honorable Mayor and Council City of Goodyear, Arizona Page Two Internal Control Over Compliance Management of the City of Goodyear, Arizona is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. The City’s responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the City’s responses and, accordingly, we express no opinion on the responses. This report is intended solely for the information and use of management, City Council, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. November 17, 2010 Casa Grande, Arizona 162 CITY OF GOODYEAR SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2010 Grant Number Federal CFDA Number DG0803 DG0902 14.218 14.218 08FG320180 15.530 7,426 7,426 ST-WSG-09-9365-05 ST-WSG-09-9365-05Y2 16.588 16.588 16,178 9,055 2008-BVP 2009-BVP 16.607 16.607 2,491 5,256 C5009010300 C5010021300 2009SBB92970 16.803 16.804 16.804 74,410 3,119 56,245 166,754 P0012010001008 20.205 352,950 * 2009-PT-003 2010-PT-038 2008-410-048 2008-410-042 20.600 20.600 20.601 20.601 20,000 31,332 2,280 29,937 83,549 2009-NG-008 20.614 1,365 U.S. Department of Housing and Urban Development: Passed through Maricopa County Department of Housing Community Development Block Grant Community Development Block Grant Total U.S. Department of Housing and Urban Development U.S. Department of the Interior: Passed through Bureau of Reclamation: Water Audit of City Facilities Total U.S. Department of the Interior U.S. Department of Justice: Passed through Governor's Office for Childeren, Youth & Families: STOP Calendar 2009 STOP Calendar 2010 Passed through The Bureau of Justice Assistance: Bullet Proof Vest Bullet Proof Vest Passed through Maricopa County: ARRA MCNNET Grant ARRA MCNNET OT Grant ARRA Prosecution Initiative Total U.S. Department of Justice U.S. Department of Transportation: Passed through Arizona Department of Transportation: Yuma Road Bridge Passed through Arizona Governor's Office of Highway Safety: Highway Safety Cluster Speed Awareness & Monitoring Trailer Capital Outlay Equipment DRE Conference West Valley DUI Task Force Enf OT Highway Safety Cluster Subtotal CIOT Next Generation Maricopa County Total U.S. Department of Transportation U.S. Environmental Protection Agency: Passed through Water Infrastructure Finance Authority ARRA Wastewater Facility Expansion & Rehabilitation Proje Total U.S. Environmental Protection Agency Expenditures $ 152,423 600 153,023 437,864 91A129-10 66.458 500,000 * 500,000 164 U.S. Department of Homeland Security Assistance to Firefighters Passed through Arizona Division of Emergency Management: Arizona Dept of Homeland Security Arizona Dept of Homeland Security Arizona Dept of Homeland Security Arizona Dept of Homeland Security Arizona Dept of Homeland Security Arizona Dept of Homeland Security Subtotal Total Department of Homeland Security Total Expenditures of Federal Awards EMW-2008-FO-07032 97.044 354,000 * 2008-GE-T8-0021 2008-GE-T8-0021 2007-GE-T7-0006 2007-GE-T7-0006 09-AZDOHS-HSGP 09-AZDOHS-HSGP 97.067 97.067 97.067 97.067 97.067 97.067 180,842 7,698 620 42,134 86,794 5,381 323,469 677,469 $ 1,942,536 *Denotes major program 165 CITY OF GOODYEAR, ARIZONA NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2010 NOTE 1 BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Goodyear, Arizona and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. 166 CITY OF GOODYEAR, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2010 Summary of Auditors’ Results 1. The auditor’s report expresses an unqualified opinion on the financial statements of City of Goodyear. 2. No significant deficiencies relating to the audit of the financial statements are reported. 3. No instances of noncompliance material to the financial statements of the City of Goodyear were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major federal award programs are reported. 5. The auditor’s report on compliance for U.S. Department of Transportation passed through Arizona Department of Transportation, U.S. Environmental Protection Agency passed Water Infrastructure Finance Authority and U.S. Department of Homeland Security expresses an unqualified opinion. 6. The audit disclosed no findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133. 7. The programs tested as major programs include U.S. Department of Transportation passed through Arizona Department of Transportation (CFDA 20.205), U.S. Environmental Protection Agency passed Water Infrastructure Finance Authority (CFDA 66.458) and U.S. Department of Homeland Security (CFDA 97.044). 8. The threshold used for distinguishing between Type A and B programs was $300,000. 9. City of Goodyear did not qualify as a low-risk auditee. 10. There were no prior year findings. 167