CITY OF GOODYEAR, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 19 Government-wide Financial Statements Statement of Net Assets Statement of Activities 21 22 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 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – General Fund 28 31 32 35 36 Proprietary Fund Financial Statements Statement of Net Assets Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows 41 42 43 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets 47 48 Notes to Financial Statements 1. Summary of Significant Accounting Policies 2. Cash and Investments 3. Receivables 4. Capital Assets 5. Loans Payable 6. Contract Payable 7. General Obligation Bonds Payable 8. Revenue Bonds Payable 9. Community Facilities Districts Bonds Payable 10 Amortization of Bond Costs 11. Changes in Long-term Liabilities 12. Interfund Receivables, Payables, and Transfers 13. Contingent Liabilities 14. Risk Management 15. Retirement Plans 16. Deficit Fund Balance 17. Commitments 18. Subsequent Event Page 53 62 66 67 69 69 70 72 74 76 77 77 78 78 79 84 84 84 C. Other Supplementary Information Non-Major Governmental Funds – Financial Statements Combining Balance Sheet Combining Statement of Revenues, Expenses and Changes in Fund Balances 92 94 Fiduciary Funds –Financial Statements Combining Statement of Fiduciary Net Assets-Agency Funds Combining Statement of Changes in Assets and Liabilities-Agency Funds 99 100 Budgetary Comparison Schedules - Other Major Governmental Funds Community Facilities Districts - Debt Service McDowell Road Commercial Corridor Improvement District - Debt Service Non-Utility Development Impact Fees 103 104 105 Budgetary Comparison Schedules - Non-Major Governmental Funds Highway User Revenue Fund Grants Community Facilities Districts – General Debt Service 109 110 111 112 Budgetary Comparison Schedules – Enterprise Funds Page Water & Sewer Enterprise Fund Sanitation Enterprise Fund Stadium Enterprise Fund 113 114 115 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 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 119 120 122 Table Page 1 2 3 4 5 6 7 8 9 10 11 12 13 128 130 137 138 140 142 147 148 153 154 156 157 159 14 15 16 17 18 19 20 21 22 23 24 160 162 165 166 168 170 171 172 173 174 178 IV. SINGLE AUDIT SECTION Page 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 181 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-133 183 Schedule of Expenditures of Federal Awards 185 Notes to the Schedule of Expenditures of Federal Awards 186 Schedule of Findings and Questioned Costs 187 PROFILE OF THE GOVERNMENT The City of Goodyear, incorporated in 1946 and chartered in 1988, started as a small town producing cotton for the production of rubber tires during World War I. Over the years, Goodyear has sustained continued growth and currently encompasses approximately 191 square miles in the western portion of Maricopa County and is approximately 17 miles west of the downtown Phoenix business district. The City’s growth is attributable to excellent housing, a small-town atmosphere, convenient access to the central Valley, and outstanding school districts. The population as of the 2010 census was 65,275, with current estimates as of fiscal year ended June 30, 2012 projected to be 67,239. Goodyear 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-today operations of the City. 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. The City is community-driven and includes more than 500 volunteers that serve in various areas and, through their efforts, have saved the City more than $629,357 in fiscal year 2012 alone. In addition, Goodyear continues to attract major employers with its availability of land, access to the central Valley, and available commercial space. FINANCIAL CONTROLS Internal Controls The management of the City of Goodyear is responsible for establishing and maintaining a system of internal controls. 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 on 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 year-end and are reencumbered as needed in the next fiscal year. LOCAL ECONOMIC CONDITION AND OUTLOOK Although current economic conditions continue to impact the country and Goodyear, sales tax revenues are steadily increasing and the City has seen considerable growth in building permits. As optimistic as the City is in these trends continuing, the City continues to monitor the changes taking place in the national and local economies, as adaptation is imperative to keeping the budget balanced and positioning the City for future growth. The City has implemented alternative services, enacted cost saving adjustments, reorganized where cost savings would be realized, 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, FY 2013 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 and an overall goal of fiscal solvency with the flexibility to change as the economy and services demand. Goodyear continues to attract large business. Suntech, the world’s largest producer of solar panels, celebrated its grand opening of the first U.S. based manufacturing plant in Goodyear on October 8, 2010. In addition, Sub-Zero, Inc., manufacturer of high-end refrigeration, freezer, and wine storage have also made their presence known by expanding facilities in Goodyear during FY 2011, bringing nearly 400 jobs to the City. Dick’s Sporting Goods’ western U.S. distribution center also began construction this year and will be open and fully operational by January 1, 2013, ultimately expecting to employ more than 300 people. A key City Council goal continues to be bringing jobs into the city and working to make Goodyear one of the largest employment bases in the West Valley. There are three major corridors that are forming in the City that will have a great influence on the community’s future: Airport Gateway Center – 1,200 acres of mixed development, Palm Valley 303 – 2,000 acre ix master planned business park, and the 801/85 Employment Center – 1,700 acre employment corridor for manufacturing and industrial business. Economic Outlook The economic slowdown at the national level has had a direct impact in the state and local economy, but the recovery has begun. General fund revenues are projected to increase by 11% during FY 2013, mainly due to increases sales tax and State Shared Revenue collections. Although this adds to the City’s revenue growth, the City still continues to be conservative in its estimates. 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 2013 are expected to equal 55% of general fund revenues. City sales tax revenues for FY 2012 increased by approximately 10% over FY 2011 levels. 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 amount received by a municipality is determined by the Decennial Census and its relationship to Arizona’s population as a whole. The City anticipates a 13% increase in State Share Revenues in FY 2013. Property Tax – The City’s combined (secondary and primary) property tax rate was $1.60 per $100 of assessed valuation for FY 2012. Of this, $0.6554 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 FY 2013, City Council voted to increase the total combined property tax rate to $1.7750 per $100 of assessed value to maintain the overall levy. The primary property tax rate is $0.9446 for FY 2012. 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 $6.3 million in FY 2012. The primary tax rate will be $1.1115 and primary property tax revenues are expected to close to $6.7 million in FY 2013. While this amount is approximately 12% of general fund revenues, it is nonetheless an important component for the stability and revenue diversity of the City’s operating revenues. Total primary (limited) and secondary assessed property values within the City both decreased by approximately 10% from FY 2012. Property values continue to be unstable in the City and future assessed valuation is expected to decrease. Labor Force – Goodyear has a well-educated and available labor force. For Goodyear heads of households, more than 85% are college educated with 56% obtaining college degrees. The estimated median income level is $76,523 and approximately 47% have a household income of more than $75,000. 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 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 xii CITY OF GOODYEAR LIST OF PRINCIPAL OFFICIALS MAYOR Georgia Lord VICE MAYOR Joanne Osborne COUNCIL MEMBERS Wally Campbell Gary Gelzer Sheri Lauritano Joe Pizzillo William Stipp SENIOR MANAGEMENT STAFF Brian Dalke Michael Simonson City Manager Presiding Judge Roric Massey Jeffrey Fiegenschuh City Attorney Deputy City Manager Jack Friedline Maureen Scott Interim Deputy City Manager City Clerk Wynette Reed Mark Gaillard Human Resources Director Fire Chief Larry Lange Gerald Geier Finance Director Police Chief Sheri Wakefield-Saenz Manuel Mejia Development Services Director Interim Information Technology Director David Ramirez Nathan Torres Engineering Director Interim Park & Recreation Director Romina Khananisho Romina Khananisho Intergovernmental & Grants Programs Manager Interim Communication & Marketing Manager Mark Flynn Mark Holmes Municipal Services Division Manager Water Resources Division Manager Jerry Postema Eduardo Cruz Environmental Services Division Manager Court Administrator xiii xiv Environmental Services Division Jerald Postema Manager Municipal Services Division Mark Flynn Manager Water Resources Division Mark Holmes Manager Engineering Department David Ramirez City Engineer Finance Department Larry Lange Director Interim Deputy City Manager Jack Friedline Presiding Judge Michael Simonson Communication & Marketing Divison Romina Khananisho Interim Manager Intergovernmental & Grants Program Division Romina Khananisho Manager Development Services Department Sheri Wakefield-Saenz Director Human Resources Department Wynette Reed Director City Manager Brian Dalke MAYOR & CITY COUNCIL CITIZENS OF GOODYEAR Municipal Court Eduardo Cruz Administrator Information Technology Services Manuel Mejia Interim Director Parks & Recreation Department Nathan Torres Interim Director Police Department Gerald Geier Chief Fire Department Mark Gaillard Chief City Clerk Maureen Scott Deputy City Manager Jeffrey Fiegenschuh City Attorney Roric Massey ACKNOWLEDGEMENTS The Comprehensive Annual Financial Report (CAFR) was prepared by the staff of the Finance Department – Accounting, Administrative Services, Community Facilities District and Utility Customer Service Divisions: Theresa Simms, MBA, CPA MaryKae Struck, MBA Kathy Painter Regina Mullaney Sheila Mills Carmelita Evans Marty Eckstaine Anna K. Dizack, MA Kathy Cheff xv 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, Arizona, as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States 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, 2012, and the respective changes in financial position, and, where applicable, cash flows 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. Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m In accordance with Government Auditing Standards, we have also issued our report dated November 19, 2012 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 17 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 as a whole. 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 accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The financial information listed as other supplementary information in the financial section and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Casa Grande, Arizona November 19, 2012 MANAGEMENT’S DISCUSSION AND ANALYSIS For The Year Ended June 30, 2012 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, 2012. 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 page 21 and the accompanying notes to the financial statements. FINANCIAL HIGHLIGHTS  The City’s total assets exceeded its liabilities by $658.2 million (net assets) at the close of fiscal year 2012. Of this amount, $38.7 million represents unrestricted net assets, which may be used to meet the City’s ongoing obligations to citizens and creditors.  Total net assets of the City increased by $10.3 million due primarily to debt retirement.  At June 30, 2012, total fund balance of the governmental funds was $70.1 million, an increase of $6.4 million (10.03%) from the previous year. The majority of this increase can be attributed to General fund revenues in excess of anticipated amounts and receiving of a grant reimbursement that had been outstanding for two years. Approximately 32.92% of this total amount ($23.1 million) is unassigned fund balance available for spending at the government’s discretion.  At June 30, 2012, total unassigned fund balance for the General Fund is $23.1 million, an increase of $1.6 million (7.42%) from the prior fiscal year. This increase is due primarily from grant reimbursement.  The City’s outstanding long-term debt decreased by $13.5 million during the current fiscal year due to refunding. 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) governmentwide 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. 5 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 21-23 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. 6 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 31 and 35 respectively. The City maintains eight 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, and Non-Utility Development Impact Fees all of which are considered to be major funds. Data from the other four 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 92 of this report. The governmental fund financial statements can be found on pages 28-35 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 one internal service fund – Fleet Management. The Fleet Management Fund reports activities that provide preventative maintenance, repairs and safety inspections for City vehicles and equipment. 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 41-44 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 47-48 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 53-84 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 36-37 of this report. 7 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 92- 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, 2012 with comparative information for the previous year. Net Assets As noted earlier, net assets over time, may serve as a useful indicator of a government’s financial position. The City’s net assets exceeded liabilities by $658.2 million at the close of fiscal year 2012. The following table reflects the condensed Statement of Net Assets of the City as of June 30, 2012 compared to the prior year. Statement of Net Assets as of June 30 Governmental Business-type Total Activities Activities Primary Government 2012 Current and other assets $ $ 2012 2011 2012 Percent 2011 $ Change 151,036,689 $ 38,364,051 $ 36,927,125 $ 191,419,708 187,963,814 1.84% Capital assets 522,795,760 531,058,572 410,112,347 410,952,117 932,908,107 942,010,689 -0.97% Total assets 675,851,417 682,095,261 448,476,398 447,879,242 1,124,327,815 1,129,974,503 -0.50% Other liabilities 153,055,657 2011 24,055,377 25,448,349 13,464,853 14,641,167 37,520,230 40,089,516 -6.41% 189,443,799 200,788,304 239,159,907 241,152,470 428,603,706 441,940,774 -3.02% 213,499,176 226,236,653 252,624,760 255,793,637 466,123,936 482,030,290 -3.30% 329,064,345 327,503,686 178,432,900 179,254,929 507,497,245 506,758,615 0.15% Courts 261,229 198,457 - - 261,229 198,457 31.63% Law enforcement 125,812 129,231 - - 125,812 129,231 -2.65% Highw ays and streets 400,610 285,914 - - 400,610 285,914 40.12% Long-term liabilities outstanding Total liabilities Net assets: Invested in capital assets, net of related debt Restricted for: Community facilities Debt service Capital projects Unrestricted Total net assets $ 538,410 536,230 - - 538,410 536,230 0.41% 85,199,636 86,963,445 2,663,045 2,661,924 87,862,681 89,625,369 -1.97% 21,720,718 21,992,019 1,135,981 905,313 22,856,699 22,897,332 -0.18% 25,041,481 18,249,626 13,619,712 9,263,439 38,661,193 27,513,065 40.52% 455,858,608 $ 195,851,638 $ 192,085,605 $ 658,203,879 647,944,213 1.58% 462,352,241 $ $ By far, the largest portion of the City’s net position $507.5 million ((77.10%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, artwork, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City used these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources to repay this debt must be 8 provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s net position is restricted net assets of $112.07 million (17.02%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $38.7 million (5.88%) is unrestricted and may be used to meet the City’s ongoing obligations to its citizens and creditors. At the end of the fiscal year 2012, the City is able to report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year for investment in capital asset and unrestricted net assets. However, the City’s overall net position increased by $10.3 million from the prior fiscal year. The reasons for the overall increase are discussed in the following section for governmental and business-type activities. Governmental Activities During the current fiscal year, the net assets for governmental activities increased $6.5 million from the prior fiscal year for an ending balance of $462.4 million. Even though the City is coming out of an economic downturn the City’s sales tax revenue have increase $3.6 million because increase in construction activity. The State shared revenue has also increase by $3.0. Business-type Activities The City business-type activities have also resulted in positive overall net increase of $3.8 million bring the net assets balance to $195.8 million from the prior year. The majority this 9 increase resulted from capital grants and contributions for infrastructure assets of $4.9 million of which $3.3 million came Cotton Lane expansion and $1.9 million for the Adaman water connection. The City’s charges for services increase by $2.9 million primarily for water and sewer customers during to increase in rates. 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 2011 2012 2012 2011 2012 Percent 2011 Change REVENUES: Programrevenues: Charges for services $ 6,984,218 $ 6,811,781 $ 27,854,213 $ 24,973,155 $ 34,838,431 $ 31,784,936 9.61% 7,636,691 5,818,158 - - 7,636,691 5,818,158 31.26% 9,701,254 13,951,581 9,252,599 4,570,849 18,953,853 18,522,430 2.33% Sales taxes 36,364,557 32,729,749 - - 36,364,557 32,729,749 11.11% Property taxes 16,476,434 18,548,550 - - 16,476,434 18,548,550 -11.17% Operating grants and contributions Capital grants and contributions General revenues: Franchise taxes State shared revenue Investment income 2,460,521 2,316,820 - - 2,460,521 2,316,820 6.20% 12,704,826 9,699,146 - - 12,704,826 9,699,146 30.99% 319,017 227,446 92,945 71,819 411,962 299,265 37.66% Proceeds fromsale of water rights - - - - - - 100.00% 493,244 827,619 117,103 638,611 610,347 1,466,230 -58.37% 93,140,762 90,930,850 37,316,860 30,254,434 130,457,622 121,185,284 7.65% General government 17,087,161 15,765,527 - - 17,087,161 15,765,527 8.38% Public safety 26,689,702 29,474,246 - - 26,689,702 29,474,246 -9.45% Highways and streets Miscellaneous Total revenues EXPENSES: Programactivities: Governmental activities: 13,179,678 14,798,670 - - 13,179,678 14,798,670 -10.94% Public works 4,168,252 3,658,756 - - 4,168,252 3,658,756 13.93% Culture and recreation 4,962,070 4,439,181 - - 4,962,070 4,439,181 11.78% Community development 6,225,917 5,150,677 - - 6,225,917 5,150,677 20.88% Interest on long-termdebt 10,441,684 10,710,302 - - 10,441,684 10,710,302 -2.51% Water and sewer - - 20,654,800 20,733,932 20,654,800 20,733,932 -0.38% Sanitation - - 5,154,201 4,815,314 5,154,201 4,815,314 7.04% Stadium - - 11,634,491 11,958,862 11,634,491 11,958,862 100.00% Total expenses 82,754,464 83,997,359 37,443,492 37,508,108 120,197,956 121,505,467 -1.08% Business activities: Increase in net assets before transfers 10,386,298 6,933,491 (126,632) (7,253,674) 10,259,666 Transfers (3,892,665) (3,390,940) 3,892,665 3,390,940 - 6,493,633 3,542,551 3,766,033 (3,862,734) 10,259,666 455,858,608 452,316,057 192,085,605 195,948,339 647,944,213 Increase in net assets Net asset July 1 Net asset June 30 $ 462,352,241 $ (320,183) -3304.31% - 0.00% (320,183) -3304.31% 648,264,396 -0.05% 455,858,608 $ 195,851,638 $ 192,085,605 $ 658,203,879 $ 647,944,213 1.58% 10 The pie chart below is a depiction of Government-Wide Revenue Sources, governmental activities accounts for 71.4% of total revenues, while business activities account for 28.6% of total revenues. Sales taxes continue to be the largest source of City revenues at 27.9%, an 11.1% increase from the previous fiscal year. Next are charges for services at 26.7% of revenue, which increased by 9.6% over the previous fiscal year primarily for the business-type activities. The City Council had approved an increase in water and sewer rates starting in fiscal year 2011 for the next four years, this is the third year of the increase. Property taxes represents 12.6% of the total governmental revenues but decreased by $2.1 million (11.1%) from the prior fiscal year due to decline in property values. Another major component of revenues is capital grants and contributions which is 14.5% of total revenues. Government-Wide Revenue Sources Fiscal Year 2012 Operating grants and contributions 5.9% State shared revenue 9.7% Miscellaneous 0.5% Charges for services 26.7% Property taxes 12.6% Franchise taxes 1.9% Investment income 0.3% Sales taxes 27.9% Capital grants and contributions 14.5% 11 As seen in the following pie chart for Government-Wide Functional Expenses, business-type activities account for 31.2% of total functional expenses, while governmental activities account for 68.8% of total functional expenses. For the governmental activities, the largest users of resources are public safety 22.2% of total expenses (32.3% of governmental expenses), general government 14.2% total expenses (20.6% of governmental expenses), highways and streets 11.0% of total expenses (15.9% of governmental expenses), and public works 3.5% of total expenses (5.0% of governmental expenses). Total government-wide expenses (not including transfers out) of the City decreased by 1.1% in fiscal year 2012. 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. Government-Wide Functional Expenses Fiscal Year 2012 General government 14.2% Business activities 31.2% Highways and streets 11.0% Interest on longterm debt 8.7% Community development 5.2% Public works 3.5% Culture and recreation 4.1% Public safety 22.2% 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. 12 Governmental funds The focus of the City’s governmental funds (pages 28-33) 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 92-95. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $70.1 million, an increase of $6.4 million (10.0%) from the previous year. Approximately $23.1 million (32.9%) of the total ending fund balance constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is (1) non-spendable $1.9 million (2.7%) of total ending fund balance for advance to other funds, inventories and prepaid items, (2) restricted $42.1 million (60.1%) of the total ending fund balance for charter mandates, court, law enforcement, debt service, capital projects, highway user funds and Community Facilities Districts operations, (3) assigned $3.0 million (4.3%) of the total ending fund balance for IT replacement, Fleet replacement and risk management insurance. Revenues for governmental functions overall totaled $93.8 million in the fiscal year ended June 30, 2012 which represents an increase of $6.7 million (7.7%) from the prior fiscal year. Five revenue categories show increases over the previous fiscal year. These include taxes ($1.5 million), intergovernmental revenues ($3.5 million), special assessments ($1.0 million), contributions ($.4 million) and miscellaneous ($.2 million). The taxes are due to increase in construction sales tax collections. Special assessment increased because of increase in debt service collections. Intergovernmental revenues increase results from the increase state shared revenues due to an upturn in the economy as these revenues are distributed to the City based on population. Miscellaneous revenue increased because of a prior year reimbursement an auction proceeds in fiscal year 2012. The City’s investment income increased by 14.9% over the previous fiscal year due to the investment policy the City received a higher rate of return on the investments. The expenditures for governmental functions ($86.3 million) are identical to the prior year. In fiscal year ended June 30, 2012 revenues for the governmental functions exceeded expenditures by approximately $7.4 million and increase of $6.6 million (over 800% increase) from the prior fiscal year However, transfer out exceeded transfer in by $3.9 million resulting in an decrease in governmental fund balance of $1.0 million. The majority of the transfers out were subsidy of debt service in the Stadium Enterprise Fund. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $23.1 million. As a measure of liquidity, it may be useful to compare total unassigned fund balance and total fund balance to total expenditures. The unassigned fund balance represents 38.7% of General Fund expenditures. The City’s general fund balance increased by $3.5 million in the current fiscal year due to revenues of $67.4 million exceeding expenditures and transfers of $63.8 million. This is an over 500% increase in from the prior year. 13 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 41-44. The proprietary funds net asset was $195.8 million, an increase of $3.8 million from the previous fiscal year. The Water and Sewer fund had a positive increase in their net assets of $5.7 million for the fiscal year ended June 30, 2012 due to the increase in water and sewer rates while the Sanitation decreased slightly and the Stadium fund decreased by $1.7 million due to increase in transfer in for debt cost. 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 36-37. The other budgetary comparison schedules can be found in the Other Supplementary Information section on pages 103-115. The City has increased the budgeted inflows and outflows due to the upturn in the economy. General Fund actual inflows (revenues and other financing sources) of $71.8 million, was more than budget inflows of $66.9 million by $4.9 million (3.8%), while expenditures and other financing uses of $68.2 million was only 75.2% of final budgeted outflows of $84.7 million. Revenues increased in all categories, the most notable being taxes which had favorable variance of $1.8 million and intergovernmental revenues of $1.2 million, while the other revenue categories experience slight increases. Expenditures are under budget in almost every category except mayor and council, public information, parks, building inspection and principal retirement. The principal retirement is higher than budgeted due to refunding of bonds during the year. Both transfer in and transfer out are more than budgeted as many transfers are based on the actual year end expenditure, most significant is the transfer to Highway User Revenue and Stadium funds. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City’s capital assets (net of accumulated depreciation) for its governmental and businesstype activities as of June 30, 2012 amounted to $932.9 million. Capital assets include land, artwork, construction in progress, right of way, water rights, streetscape, infrastructure, buildings and improvements and vehicles, furniture and equipment. The total decrease in the City’s capital assets for the current fiscal year is $9.1 million (1.0%) from the previous fiscal year. The following schedule presents capital asset balances for the fiscal year ended June 30, 2012 and 2011. 14 Capital Assets at June 30 (Net of depreciation) Governmental Activities Land Artwork Construction in progress Right of way Water rights Streetscape Infrastructure Building and improvements Vehicles, furniture and equipment Total Business-type Activities Total Primary Government Percent 2012 2011 2012 2011 2012 2011 Change $ 19,426,644 204,750 13,213,915 90,128,522 8,775,008 264,885,391 117,262,522 8,899,008 $ 19,426,644 186,900 10,682,782 90,128,522 8,755,008 271,418,179 120,554,781 9,905,756 $ 15,404,260 131,978 42,247,284 16,053,364 154,522,711 177,001,010 4,751,740 $ 14,754,260 75,800 90,092,127 16,076,429 154,850,451 129,975,784 5,127,266 $ 34,830,904 336,728 55,461,199 90,128,522 16,053,364 8,775,008 419,408,102 294,263,532 13,650,748 $ 34,180,904 262,700 100,774,909 90,128,522 16,076,429 8,755,008 426,268,630 250,530,565 15,033,022 1.9% 100.0% -45.0% 0.0% -0.1% 0.2% -1.6% 17.5% -9.2% $ 522,795,760 $ 531,058,572 $ 410,112,347 $ 410,952,117 $ 932,908,107 $ 942,010,689 -1.0% The decrease in capital assets are for the disposal of City vehicles and annual depreciation. For government-wide financial statement presentation, all depreciable capital assets are depreciated from acquisition date to the end of the current fiscal year. Additional information on the City’s capital assets can be found in Note 4 on pages 67- 68 and in the schedules on pages 119-122 of this report. Debt Administration At the end of the current fiscal year, the City had total long-term debt outstanding of $430.7 million. Of this amount $118.4 million is general obligation bonds backed by the full faith and credit of the City, $113.5 million is Community Facilities Districts bonds which are paid by the property owners within those districts, $180.8 million of revenue bonds which are payable from user fees and assessments, $11.9 million loan payable to WIFA by user fees, $1.8 million contract payable paid from excise taxes, and $4.3 million compensated absences from the City operating funds. The following schedule shows the outstanding debt obligation as of June 30, 2012 and 2011. Outstanding Debt as of June 30 Governmental Activities General obligation debt Community Facilities Districts bonds Loan payable Revenue bonds Contracts payable Compensated absences Total outstanding bonds Business-type Activities Total Primary Government Percent 2012 2011 2012 2011 2012 2011 Change $ 29,000,636 $ 31,358,457 $ 89,394,364 $ 91,121,544 $ 118,395,000 $ 122,480,001 -3.3% 113,555,000 46,615,000 1,755,628 3,830,033 117,182,000 49,410,000 3,755,628 4,080,331 11,908,602 134,165,000 440,922 12,554,096 134,545,000 463,890 113,555,000 11,908,602 180,780,000 1,755,628 4,270,955 117,182,000 12,554,096 183,955,000 3,755,628 4,544,221 -3.1% -5.1% -1.7% -53.3% -6.0% $ 194,756,297 $ 205,786,416 $ 235,908,888 $ 238,684,530 $ 430,665,185 $ 444,470,946 -3.1% $ 189,170,636 $ 197,950,457 $ 235,467,966 $ 238,220,640 $ 424,638,602 $ 436,171,097 -3.1% 15 The outstanding revenue bonds include $43.7 in McDowell Road Corridor Improvement District that is secured by pledges of specific revenue sources of the City. In addition to these are $137.1 million in Public Improvement Corporation bonds $134.2 for the Stadium and $2.9 million for 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 $40.4 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 $134.6 million. The City has $118.4 million outstanding general obligation debt for these purposes. During the year, the City maintained the following bond ratings: Bonded Debt Ratings As of June 30, 2011 Type of Debt Moody's Investors Service Standard & Poor's General Obligation Water & Sewer (Revenue) Public Improvement Corporation Aa2 A2 Aa3 AAA+ AA- Additional information on the City’s long-term debt can be found in Notes 5 – 11 on pages 69-77 of this report. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The unemployment rate for Goodyear for June 2012 was 8.2%, which is the same as the state and national rate. Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. While unemployment is not a leading economic indicator, a strong economic recovery will likely coincide with a significant improvement in current unemployment rates. The City is projected a positive outlook for fiscal year 2013 with increase in revenues. Sales taxes are the dominant revenue source for the City and are projected to increase in fiscal year 2012 from $33.6 million to $37.7 million an increase of 12.2%. Property taxes are project to increase in fiscal year 2012 from $6.0 million to $7.6 million an increase of 26.7%. State shared revenues which are combination of state shared sales tax, state shared income tax and vehicle license tax are projected to increase by $1.7 million from $12.6 million in fiscal year 2012 to $14.3 million in fiscal year 2013. The City operational budget is project to increase by the 7.0% in fiscal year 2013 from $74.0 million to $79.2 million due to increase operating cost. The City project capital improvement expenditure is budgeted for $38.0 million includes carryover funds of $6.9 million for projects started in fiscal year 2012 and an additional $31.1 million for new projects. 16 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=1792. 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. 17 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET ASSETS June 30, 2012 ASSETS Cash and cash equivalents Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Prepaid items Deferred charges Restricted cash and cash equivalents Capital assets: Nondepreciable capital assets 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 Bonds payable Due in more than one year: Compensated absences Loans/ contracts 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 Capital projects Community facilities Debt service Unrestricted Total net assets See accompanying notes. Governmental Activities $ 23,941,658 30,702,800 71,938,939 92,132 961,840 573,566 546,136 4,893,812 19,404,774 Business-type Activities $ 16,748,861 9,490,262 3,687,908 (961,840) 555,268 2,390,032 6,453,560 Total $ 40,690,519 40,193,062 75,626,847 92,132 1,128,834 546,136 7,283,844 25,858,334 131,748,839 57,783,522 189,532,361 391,046,921 675,851,417 352,328,825 448,476,398 743,375,746 1,124,327,815 2,135,869 1,014,192 2,961,009 3,845,965 5,480,097 1,608,584 124,785 3,856,113 1,432,528 6,199,632 3,744,453 1,138,977 6,817,122 5,278,493 11,679,729 1,410,617 7,207,628 168,211 75,000 1,578,828 7,282,628 2,920,012 1,755,628 184,884,778 (116,619) 213,499,176 272,712 11,908,602 226,399,124 1,090,325 (510,856) 252,624,760 3,192,724 13,664,230 411,283,902 1,090,325 (627,475) 466,123,936 329,064,345 178,432,900 507,497,245 261,229 125,812 400,610 21,720,718 538,410 85,199,636 25,041,481 $ 462,352,241 1,135,981 2,663,045 13,619,712 $ 195,851,638 261,229 125,812 400,610 22,856,699 538,410 87,862,681 38,661,193 $ 658,203,879 21 CITY OF GOODYEAR, ARIZONA STATEMENT OF ACTIVITIES Year Ended June 30, 2012 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 $ 17,087,161 26,689,702 13,179,678 4,168,252 4,962,070 6,225,917 10,441,684 82,754,464 Business-type activities: Water and sewer Sanitation Stadium Total business-type activities 20,654,800 5,154,201 11,634,491 37,443,492 20,105,006 6,115,977 1,633,230 27,854,213 $ 120,197,956 $ 34,838,431 Total primary government $ 865,484 1,633,469 322,215 4,163,050 6,984,218 $ 214,528 837,561 6,584,602 7,636,691 $ $ 7,636,691 96,940 609,200 8,995,114 9,701,254 9,252,599 9,252,599 $ 18,953,853 General revenues: Sales taxes Property taxes Franchise taxes State shared revenues-not restricted to specific programs Investment income 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. 22 Net (Expense) Revenue and Changes in Net Assets Governmental Activities $ (15,910,209) (24,218,672) (5,985,876) 4,826,862 (4,639,855) (2,062,867) (10,441,684) (58,432,301) (58,432,301) 36,364,557 16,476,434 2,460,521 12,704,826 319,017 493,244 Business-type Activities $ - Totals $ (15,910,209) (24,218,672) (5,985,876) 4,826,862 (4,639,855) (2,062,867) (10,441,684) (58,432,301) 8,702,805 961,776 (10,001,261) (336,680) 8,702,805 961,776 (10,001,261) (336,680) (336,680) (58,768,981) - 36,364,557 16,476,434 2,460,521 92,945 117,103 12,704,826 411,962 610,347 (3,892,665) 64,925,934 3,892,665 4,102,713 69,028,647 6,493,633 3,766,033 10,259,666 455,858,608 192,085,605 647,944,213 $ 462,352,241 $ 195,851,638 $ 658,203,879 23 CITY OF GOODYEAR, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2012 ASSETS Cash and cash equivalents Investments Taxes receivable Interest receivable Accounts receivable Special assessments receivable Due from other governments Due from other funds Advances to other funds Inventories Prepaid items Restricted cash and cash equivalents 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: Nonspendable: Advances to other funds Inventories Prepaid items Restricted by: Charter mandates Court Law enforcement Debt service Development impact fees Capital projects Highway user funds Community Facilities Districts operations Assigned to: IT replacement Fleet replacement Risk management Unassigned Total fund balances Total liabilities and fund balances See accompanying notes. $ $ $ $ General 13,560,647 16,021,400 5,974,157 56,057 1,038,337 709,371 961,840 16,258 500,911 602,425 39,441,403 1,338,874 986,534 686,254 5,131,990 8,143,652 Community Facilities DistrictsDebt Service $ 119,417 20,551,399 45,225 17,521,996 $ 38,238,037 McDowell Road Commercial Corridor Improvement Debt Service $ 43,675,000 75,450 $ 43,750,450 $ $ 68,654 3,159,711 20,622,169 23,850,534 43,675,000 43,675,000 961,840 16,258 500,911 45,225 3,377,572 261,229 125,812 - 14,342,278 - 75,450 - 437,873 1,730,168 811,244 23,074,844 31,297,751 14,387,503 75,450 39,441,403 $ 38,238,037 - $ 43,750,450 28 Non-Utility Development Impact Fees $ 8,728,667 13,587,113 47,480 $ 22,363,260 Non-Major Governmental Funds $ 1,652,194 1,094,287 470,430 3,824 2,838 92,132 412,916 1,204,903 $ 4,933,524 Total Governmental Funds $ 23,941,508 30,702,800 6,564,004 107,361 1,041,175 64,226,399 92,132 709,371 961,840 429,174 546,136 19,404,774 $ 148,726,674 $ $ $ 502,542 140,000 642,542 - $ 225,799 27,658 564,829 1,527,046 2,345,332 2,135,869 1,014,192 3,845,965 564,829 71,096,205 78,657,060 412,916 - 961,840 429,174 546,136 21,720,718 - 1,246,110 400,610 538,410 3,377,572 261,229 125,812 15,663,838 21,720,718 400,610 538,410 21,720,718 (9,854) 2,588,192 437,873 1,730,168 811,244 23,064,990 70,069,614 22,363,260 $ 4,933,524 $ 148,726,674 29 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS June 30, 2012 Total governmental fund balances $ 70,069,614 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 $ 640,926,366 (118,130,606) 522,795,760 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 1,117,995 272,956 64,225,157 Interest payable on long-term debt is not reported in the governmental funds. 65,616,108 (2,961,009) 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 Net assets of governmental activities See accompanying notes. (4,330,629) 4,893,812 116,619 (1,755,628) (192,092,406) (193,168,232) $ 462,352,241 31 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended June 30, 2012 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 14,466,754 25,780,010 2,967,386 4,070,198 4,557,391 2,248,028 Net change in fund balances Fund balances, beginning of year See accompanying notes. - 5,350,000 119,621 59,559,388 OTHER FINANCING SOURCES (USES) Debt issuance Debt premium Refunding bonds Refunding bonds premium Payment to refunded bond escrow agent Transfers in Transfers out Total other financing sources and uses Fund balances , end of year General 45,081,464 4,729,946 12,704,826 1,595,929 825,971 171,812 269,368 122,106 65,501,422 Community Facilities Districts Debt Service $ 4,940,099 9,388 2,294,821 2,830,584 6 10,074,898 - 3,627,000 6,479,396 10,106,396 1,225,000 2,325,697 3,550,697 5,942,034 (31,498) 2,887 1,780,000 129,958 4,348,845 (8,658,827) (2,400,024) - - 3,542,010 (31,498) 2,887 27,755,741 $ McDowell Road Commercial Improvement Debt Service $ 3,490 3,550,094 3,553,584 31,297,751 14,419,001 $ 14,387,503 72,563 $ 75,450 32 Non-Utility Development Impact Fees $ 2,271,804 129,423 2,401,227 Non-Major Governmental Funds $ 5,376,340 6,614,797 9,185 4,904 239,090 12,244,316 Total Governmental Funds $ 55,397,903 4,729,946 19,319,623 3,876,918 825,971 319,017 5,844,915 3,099,952 361,202 93,775,447 109,694 40,803 2,522,031 1,220,546 349,292 3,230,514 4,700 1,667,541 15,687,300 26,129,302 3,340,208 2,967,386 4,115,701 4,557,391 6,437,600 2,672,528 2,231,024 1,762,438 10,466,055 12,433,024 10,687,152 86,355,064 1,778,261 7,420,383 11,530,000 949,267 (11,530,000) 1,155,617 (738,300) 1,366,584 1,780,000 129,958 11,530,000 949,267 (11,530,000) 5,504,462 (9,397,127) (1,033,440) 3,144,845 6,386,943 (271,301) (271,301) 21,992,019 $ 21,720,718 (556,653) $ 2,588,192 63,682,671 $ 70,069,614 33 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, 2012 Net change in fund balances - total governmental funds $ 6,386,943 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 $ 609,200 6,291,363 (15,163,375) (8,262,812) 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 1,014,394 (96,391) (2,117,117) Bond proceeds provide current financial resources to the governmental funds, but issuing debt increases long-term liabilities in the Statement of Activities. (13,310,000) 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. 129,603 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. (1,090,510) 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 Debt principal refunded 12,559,821 11,530,000 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. (250,298) $ 6,493,633 35 CITY OF GOODYEAR, ARIZONA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2012 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 Code compliance Public information Non-departmental Reserved contingency Public safety Police Fire Municipal court City prosecutor Public works Administration Building services Culture and recreation Parks Recreation and aquatics Community development Economic development Community development Engineering Building inspection 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) $ 1,793,190 1,180,202 55,608 365,365 531 104,312 259,368 108,356 3,866,932 Original $ 43,288,274 3,549,744 12,649,218 1,230,564 825,440 67,500 10,000 13,750 61,634,490 Final $ 43,288,274 3,549,744 12,649,218 1,230,564 825,440 67,500 10,000 13,750 61,634,490 Actual $ 45,081,464 4,729,946 12,704,826 1,595,929 825,971 171,812 269,368 122,106 65,501,422 366,601 564,004 1,591,564 909,021 2,399,239 2,732,361 2,232,419 496,662 621,686 3,309,400 16,347,842 374,601 556,004 1,786,973 909,021 2,399,239 3,232,361 2,482,419 496,662 641,686 3,284,200 16,347,842 376,822 500,976 1,768,957 718,115 2,197,124 2,501,278 2,275,991 361,614 647,068 3,118,809 - 13,787,844 11,415,672 964,015 429,498 13,687,148 11,435,635 1,027,015 429,498 13,279,992 11,233,549 849,177 417,292 407,156 202,086 177,838 12,206 619,817 2,774,617 619,817 2,744,617 545,284 2,422,102 74,533 322,515 2,706,375 1,405,558 2,706,375 1,408,558 2,725,063 1,345,135 (18,688) 63,423 476,661 996,381 2,356,225 841,494 4,123,157 477,661 1,020,865 2,356,741 883,589 5,616,253 452,405 963,693 2,253,141 888,152 2,248,028 25,256 57,172 103,600 (4,563) 3,368,225 2,745,000 185,425 77,398,538 2,745,000 185,425 79,855,205 5,350,000 119,621 59,559,388 (2,605,000) 65,804 20,295,817 (15,764,048) (18,220,715) 5,942,034 24,162,749 (2,221) 55,028 18,016 190,906 202,115 731,083 206,428 135,048 (5,382) 165,391 16,347,842 36 Budgeted Amounts OTHER FINANCING 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 $ Original 3,448,845 (8,987,908) 5,298,845 (10,837,908) Actual 1,780,000 129,958 4,348,845 (8,658,827) (5,539,063) (5,539,063) (2,400,024) 3,139,039 (21,303,111) (23,759,778) 3,542,010 27,301,788 27,755,741 27,755,741 27,755,741 3,995,963 $ 31,297,751 6,452,630 Final Variance with Final Budget Positive (Negative) 1,780,000 129,958 (950,000) 2,179,081 $ $ 27,301,788 37 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2012 Business-type Activities-Enterprise Funds ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Accounts receivable 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 Compensated absences payable Revenue bonds payable Total current liabilities Noncurrent liabilities: Accrued interest payable Compensated absences payable Advances from other funds 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 Restricted Capital projects Debt service Unrestricted Total net assets See accompanying notes. Water & Sewer $ 7,148,772 8,505,566 29,722 2,950,245 555,268 19,189,573 Sanitation $ 1,414,214 547,056 417,521 1,459 704,500 1,670,536 - Stadium $ Total 9,053,033 567,175 1,982 9,622,190 $ 16,748,861 9,490,262 33,163 3,654,745 555,268 30,482,299 975,818 2,390,032 Governmental Activities Internal Service Funds $ 150 176,562 176,712 - 6,453,560 46,389,199 239,876,701 294,133,674 313,323,247 470,055 470,055 2,140,591 11,394,323 111,982,069 124,352,210 133,974,400 6,453,560 57,783,522 352,328,825 418,955,939 449,438,238 176,712 1,042,868 354,140 211,576 1,608,584 18,066 70,454 1,050,588 1,432,528 6,175,134 13,296 - 41,035 2,805,525 24,498 124,785 3,856,113 1,432,528 6,199,632 104,848 75,000 9,951,420 19,856 387,292 43,507 3,126,141 168,211 75,000 13,464,853 14,104 144,542 176,712 1,090,325 - - 1,090,325 - 163,991 11,908,602 81,496,494 31,910,000 (61,127) 126,508,285 136,459,705 34,370 34,370 421,662 74,351 961,840 8,142,856 104,849,774 (449,729) 113,579,092 116,705,233 272,712 961,840 11,908,602 89,639,350 136,759,774 (510,856) 240,121,747 253,586,600 162,584,454 470,055 15,378,391 178,432,900 - 2,663,045 11,616,043 $ 176,863,542 1,248,874 1,718,929 1,135,981 754,795 $ 17,269,167 1,135,981 2,663,045 13,619,712 $ 195,851,638 - $ 176,712 $ 41 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Year Ended June 30, 2012 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): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers Capital contributions Transfers in Transfers out Change in net assets Net assets, beginning of year Net assets, end of year See accompanying notes. Water & Sewer $ 20,105,006 116,744 20,221,750 Sanitation $ 6,115,977 223 6,116,200 Stadium $ Total 1,633,230 136 1,633,366 $ 27,854,213 117,103 27,971,316 2,074,129 1,609,205 2,653,087 6,336,421 5,784,949 11,612,459 8,330,547 25,727,955 Governmental Activities Internal Service Funds $ 1,980,446 1,980,446 3,087,652 5,615,793 5,533,888 14,237,333 623,168 4,387,461 143,572 5,154,201 5,984,417 961,999 (4,703,055) 2,243,361 - 76,021 (6,417,467) 3,907 - 13,017 (5,298,070) 92,945 (11,715,537) - (6,341,446) 3,907 (5,285,053) (11,622,592) - (357,029) 965,906 (9,988,108) (9,379,231) - 8,241,510 - 9,252,599 8,241,510 (4,348,845) - (1,746,598) 3,766,033 - 9,252,599 (3,156,460) (1,192,385) 5,739,110 (226,479) 171,124,432 $ 176,863,542 $ 1,945,408 19,015,765 192,085,605 1,718,929 $ 17,269,167 $ 195,851,638 597,848 1,382,598 1,980,446 $ - 42 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2012 Water & Sewer Sanitation Stadium Total Governmental Activities Internal Service Funds $ 19,202,113 (6,840,363) (3,073,658) $ 6,074,267 (4,357,489) (639,522) $ 1,639,685 (1,631,874) (2,066,895) $ 26,916,065 (12,829,726) (5,780,075) $ 2,031,274 (1,437,550) (593,724) Business-type Activities Enterprise Funds Cash flows from operating activities: Received from customers Payments to vendors Payments to employees 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 sale of capital assets Developer contributions Development impact fees received Net cash (used) for capital and related financing activities 9,288,092 1,077,256 (2,059,084) 8,306,264 - (3,156,460) (1,192,385) 8,241,510 3,892,665 - (3,156,460) (1,192,385) 8,241,510 3,892,665 - (756,054) 26,050,023 (25,496,939) (5,376,371) (4,033,587) 26,602,623 (28,017,781) (11,206,831) - (3,277,533) 552,600 (2,520,842) (5,830,460) - 133,811 2,008,522 - - 133,811 2,008,522 - 3,653,077 - - 3,653,077 - (5,280,825) - (10,860,166) - (5,579,341) Cash flows from investing activities: Investment income received 63,160 3,411 13,489 80,060 - Net cash provided by investing activities 63,160 3,411 13,489 80,060 - 616,574 1,418,823 - 1,076,295 9,003,634 31,273,860 Net change in cash and cash equivalents 913,967 (111,718) Cash and cash equivalents, beginning of year 21,193,931 Cash and cash equivalents, end of year $ 22,107,898 $ 964,577 $ 9,620,208 $ 32,692,683 $ 150 $ 7,148,772 8,505,566 $ 547,056 417,521 $ 9,053,033 567,175 $ 16,748,861 9,490,262 $ 150 964,577 $ 9,620,208 6,453,560 $ 32,692,683 $ 150 Cash and cash equivalents Investments Restricted cash and cash equivalents See accompanying notes. 6,453,560 $ 22,107,898 $ 150 43 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2012 Business-type Activities-Enterprise Funds Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) 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 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 See accompanying notes. Water & Sewer $ 5,984,417 5,533,888 (510,598) 67,832 (1,335,645) 18,519 43,243 (716,986) 207,947 (4,525) $ 9,288,092 Sanitation $ 961,999 143,572 Stadium Total $ (4,703,055) $ 2,243,361 2,653,087 (41,933) - 23,268 - 29,972 1,357 (17,711) $ 1,077,256 Governmental Activities Internal Service Funds $ 8,330,547 - - (529,263) 67,832 (20,160) (22,669) (1,328,342) (34,792) 7,965 (8,686) (8,263) (731) 27,841 43,243 (725,672) 199,684 (22,967) $ (2,059,084) $ 8,306,264 4,124 50,828 $ - 3,591,000 36,895 - 502,545 3,591,000 539,440 - 253,791 - 301,863 555,654 - 44 CITY OF GOODYEAR, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS June 30, 2012 ASSETS Cash and cash equivalents Interest receivable Investments Total assets Pension Trust $ LIABILITIES Accounts payable Deposits held for others Total liabilities NET ASSETS Held in trust for pension benefits See accompanying notes. 24,252 165 391,219 415,636 - $ Agency Funds $ $ 494,338 6 494,344 324,794 169,550 494,344 415,636 47 CITY OF GOODYEAR, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUND Year Ended June 30, 2012 ADDITIONS Investment income Net increase (decrease) in fair value of investments Interest Total investment income Total additions Pension Trust $ DEDUCTIONS Benefits Total deductions 2,093 2,093 Net decrease Net assets, beginning of year Net assets, end of year See accompanying notes. (24,815) 330 (24,485) (24,485) (26,578) $ 442,214 415,636 48 Notes to the Financial Statements The notes to the basic financial statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying financial statements. Note Page 1. Summary of Significant Accounting Policies 53 2. Cash and Investment 62 3. Receivables 66 4. Capital Assets 67 5. Loans Payable 69 6. Contract Payable 69 7. General Obligation Bonds Payable 70 8. Revenue Bonds Payable 72 9. Community Facilities Districts Bonds Payable 74 10. Amortization of Bond Costs 76 11. Changes in Long-Term Liabilities 77 12. Interfund Receivables, Payables, and Transfers 77 13. Contingent Liabilities 78 14. Risk Management 78 15. Retirement Plans 79 16. Deficit Fund Balance 84 17. Commitments 84 18. Subsequent Event 84 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 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 States 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. 53 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. 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. Fund Balances – Governmental Funds As of June 30, 2012, fund balances of the governmental funds are classified as follows: Nonspendable - amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact. Restricted - amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments. Committed - amounts that can be used only for specific purposes determined by a formal action of City Council. City Council is the highest level of decision-making authority for the City. Commitments may be established, modified, or rescinded only through resolutions approved by City Council. 54 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 C. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balances – Governmental Funds (Continued) Assigned - amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. Under the City’s adopted policy, only City Council or the City’s Finance Director may assign amounts for specific purposes. Unassigned - all other spendable amounts. The General Fund has Unassigned Funds consisting of a Stabilization Arrangement in the amount of $12.9 million. The Stabilization Arrangement is used to set aside resources to cover unanticipated deficits or revenue reductions that may be caused by adverse economic conditions or public emergency. The amount of the Stabilization Arrangement is equal to 4 months of operating expenditures which is estimated from the prior year’s budgeted expenditures. When an expenditure is incurred for purposes for which both restricted and unassigned fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless City Council or the City’s Finance Director has provided otherwise in its commitment or assignment actions. D. 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. 55 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 D. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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. 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. Non-Utility Development Impact Fees Fund - This fund collects fees to defray the costs of development of infrastructure. 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: The Internal service fund activities are reported as governmental activities on the governmentwide statements. 56 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 D. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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. 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 five 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 four funds account for monies donated by individuals for the GAIN, Payshare (Utility Assistance), 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. 57 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 D. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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 Debt Service Funds E. 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. F. 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. Government Accounting Standards Board Statement 40 – Deposit and Investment Risk Disclosures (Statement 40) requires the City to disclose its deposit and investment policies regarding certain types of risks. The City’s adopted investment policy is in compliance with Statement 40. G. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of the interfund loans). 58 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 G. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Receivables and Payables (Continued) 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. H. 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 government-wide financial statements for inventories. I. 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. J. 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. 59 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 K. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets Capital assets, which include land, land improvements, artwork, right of way, streetscape, buildings and improvements, 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 Land improvements Buildings and improvements Vehicles, machinery and equipment Water rights Years 20-65 15 7-50 3-7 100 The City has a collection of artwork presented both in buildings and public outdoor spaces. The true value of the art is expected to either be maintained at cost or appreciate over time, and thus, the art is not depreciated. If individual pieces are lost or destroyed, the loss is recorded. L. 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. 60 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 M. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. N. 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 2012. 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. 61 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1 P. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Budgetary Data (Continued) 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 Generally Accepted Accounting Principles (GAAP). GAAP 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. NOTE 2 CASH AND INVESTMENTS At June 30, 2012, cash and cash equivalents are presented as follows: Cash and cash equivalents Investments Restricted cash and cash equivalents Governmental Activities $ 23,941,658 30,702,800 $ 19,404,774 $ 74,049,232 Business Activities 16,748,861 9,490,262 $ 6,453,560 $ 32,692,683 Fiduciary Fund 518,590 391,219 $ $ 909,809 Total 41,209,109 40,584,281 25,858,334 $ 107,651,724 The restricted cash and cash equivalents are proceeds from debt issuances that are held in trustee accounts for the purpose of major capital improvements as well as funds held in trustee accounts for the purpose of debt service payments. Deposits At June 30, 2012, the City had $9,850 of cash on hand. The carrying amount of the City’s cash in bank totaled $7,875,819 and the bank balance was $454,698. The City’s deposits at June 30, 2012 were covered by Federal Depository Insurance to the extent of $454,698. There were no deposits that were uncollateralized at year end. Deposits of $8,733,159 were held in a sweep account, which purchases investments nightly. 62 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 2 CASH AND INVESTMENTS (Continued) Investments The City’s portfolio complies with Arizona Revised Statutes (ARS) and the City’s investment policy. 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, 2012 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, 2012, the City’s funds invested with the State Treasurer totaled $32,147,841. Custodial Credit Risk To control custodial credit risk, State law and the City’s investment policy requires all securities and collateral to be held by an independent third party custodian in the City’s name. The custodian provides the City with monthly market values. The City is invested in multiple mutual funds through the trust department of Wells Fargo. The mutual funds have a value of $27,033,983 at June 30, 2012. The City also holds $40,240,153 invested with Bank of New York. The accounts are invested in a money market fund, U.S. Treasury securities, and U.S. Government bonds. 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 $344,128 at June 30, 2012. 63 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 2 CASH AND INVESTMENTS (Continued) 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. In order to limit interest rate and market risk, State law and the City’s investment policy sets a maximum maturity on any investment to five years. In addition, the City shall adopt an average portfolio duration limitation (ranging from 90 days to 3 years) consistent with the primary investment objective of safety, liquidity and yield. The City’s investment in the State of Arizona’s local government investment pool is stated at fair value which also approximates the value of the investment upon withdrawal. At June 30, 2012, the City’s investments included the following: Remaining Maturity (In Years) Less Investment Type Total Not Than 1 1 to 2 2 to 3 Applicable Governmental funds Repurchase Agreement $ LGIP 8,733,159 $ 8,733,159 24,430,661 24,430,661 Money Market Funds 13,617,048 13,617,048 Federal Agency Securities 22,743,027 1,932,498 U.S. Treasury Notes $ - $ - - $ - - - - - 13,270,218 - 7,540,311 - 7,905,927 351,039 2,069,443 5,485,444 - 77,429,822 49,064,406 15,339,661 13,025,755 - Proprietary funds LGIP Money Market Funds Federal Agency Securities U.S. Treasury Notes 7,694,216 7,694,216 - - 13,011,448 13,011,448 - - 7,029,889 597,337 - 4,101,836 2,330,716 - 2,443,729 108,507 639,667 1,695,556 - 30,179,282 21,411,507 4,741,503 4,026,272 - Fiduciary Fund LGIP 22,964 - - - Money Market Funds 530,663 475,977 - - 54,686 U.S. Treasury Notes Mutual Funds 47,091 289,442 47,091 - - - 289,442 890,160 546,032 - - 344,128 Total 22,964 $ 108,499,264 $ $ 71,021,945 $ 20,081,164 $ 17,052,027 $ 344,128 At June 30, 2012, 65.46% of the City’s investments have a maturity of less than one year and 18.51% have maturity between two and three years. 64 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 2 CASH AND INVESTMENTS (Continued) 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. Governmental funds Ratings as of Year-End Investment Type Repurchase agreements Total $ 8,733,159 AAAF/S1+ $ - LGIP 24,430,661 Money market 13,617,048 - Federal Agency Securities 22,743,027 - U.S. Treasury Notes 77,429,822 24,430,661 - 22,743,027 - 7,905,927 $ 30,648,954 $ 8,733,159 Ratings as of Year-End Investment Type Total $ Money market Federal Agency Securities U.S. Treasury Notes 7,694,216 AAAF/S1+ $ 7,694,216 13,011,448 - 7,029,889 - 2,443,729 $ 30,179,282 AAAm $ 7,694,216 $ - 7,029,889 13,011,448 $ - $ Unrated - 13,011,448 $ AA+ - - 2,443,729 $ 9,473,618 $ - Ratings as of Year-End Fiduciary funds Investment Type LGIP 8,733,159 - 13,617,048 $ - $ Unrated - 13,617,048 Proprietary funds LGIP $ - $ AA+ - 24,430,661 7,905,927 $ AAAm $ Total $ Money market U.S. Treasury Notes Mutual funds $ 22,964 AAAF/S1+ $ 22,964 AAAm $ AA+ - $ 530,663 - 47,091 - - 47,091 289,442 - - - 890,160 $ 22,964 475,977 Unrated - $ 475,977 $ - $ 47,091 54,686 289,442 $ 344,128 65 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 2 CASH AND INVESTMENTS (Continued) Concentration of Credit Risk The City’s investment policy limits the diversification on both security types and length of maturity. At the time of purchase a maximum of 5% of the market value of the portfolio may be invested in debt issues by any single entity. Debt backed by the U.S. Treasury or Government Sponsored Enterprises (GSEs) are exempt from this concentration criterion. As of June 30, 2012, the City’s investments are included as follows: Investment Type Total Repurchase Agreement $ Concentration 8,733,159 8.05% 32,147,841 29.63% Money Market Funds 27,159,159 25.03% Federal Agency Securities 29,772,916 27.44% U.S. Treasury Notes 10,396,747 9.58% 289,442 0.27% LGIP Mutual Funds Total NOTE 3 $ 108,499,264 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 Total receivables General Fund $ 5,974,157 56,057 1,038,337 Community Facilities DistrictsDebt Service Fund $ 119,417 - $ 7,068,551 McDowell Road Commercial Corridor Improvement District Debt Service $ - 20,551,399 $ 20,670,816 Non-Utility Development Impact Fees Fund $ 47,480 - 43,675,000 $ 43,675,000 Non-Major Governmental Fund $ 470,430 3,824 2,838 $ 47,480 $ $ 477,092 Total 6,564,004 107,361 1,041,175 64,226,399 $ 71,938,939 66 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 3 RECEIVABLES (Continued) The following table summarizes the City’s receivables for the enterprise funds as of June 30, 2012. Water and Receivables: Sanitation Sewer Fund Interest $ Accounts 29,722 Stadium Fund $ 1,459 Fund $ Total 1,982 $ 33,163 3,008,594 726,214 - 3,734,808 3,038,316 727,673 1,982 3,767,971 Less: Allowance (58,349) Net receivables $ 2,979,967 (21,714) $ 705,959 $ (80,063) 1,982 $ 3,687,908 Revenues of the Water and Sewer Fund and Sanitation Fund are reported net of uncollectible amounts. Total uncollectible amounts related to the Water and Sewer Fund revenues and Sanitation Fund revenues for the current period are $79,662 and $17,661, respectively. NOTE 4 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2012 follows: Governmental Activities Capital assets, not being depreciated: Land Artwork Construction in progress Right of Way Streetscape Total capital assets not being depreciated Capital assets, being depreciated: Land improvements Infrastructure Buildings and improvements Vehicles, furniture and equipment Total capital assets being depreciated Less accumulated depreciation for: Land improvements Infrastructure Buildings and improvements Vehicles, furniture and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Beginning Balance $ 19,426,644 186,900.00 10,682,780 90,128,522 8,755,008 Increases $ 17,850 3,694,017 20,000 Ending Balance Decreases $ (1,162,882) - $ 19,426,644 204,750 13,213,915 90,128,522 8,775,008 129,179,854 3,731,867 (1,162,882) 131,748,839 2,549,608 335,334,358 130,507,719 37,025,590 505,417,275 1,231,450 1,852,866 1,247,262 4,331,578 (53,695) (517,631) (571,326) 2,549,608 336,565,808 132,306,890 37,755,221 509,177,527 (92,069) (63,916,179) (12,410,476) (27,119,833) (103,538,557) (169,974) (7,764,238) (4,921,457) (2,307,706) (15,163,375) 571,326 571,326 (262,043) (71,680,417) (17,331,933) (28,856,213) (118,130,606) 401,878,718 (10,831,797) $ 531,058,572 $ (7,099,930) $ (1,162,882) 391,046,921 $ 522,795,760 67 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 4 CAPITAL ASSETS (Continued) Business-Type Activities Capital assets, not being depreciated: Land Artwork Construction in progress Total capital assets not being depreciated Capital assets, being depreciated: Infrastructure Buildings & improvements Vehicles, machinery and equipment Water rights Total capital assets being depreciated Less accumulated depreciation for: Infrastructure 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 75,800 90,092,127 Increases $ 650,000 56,178 2,585,825 Ending Balance Decreases $ (50,430,668) $ 15,404,260 131,978 42,247,284 104,922,187 3,292,003 (50,430,668) 57,783,522 185,320,649 135,491,832 14,375,052 18,542,224 353,729,757 3,598,945 50,580,450 304,443 161,130 54,644,968 (152,043) (152,043) 188,919,594 186,072,282 14,527,452 18,703,354 408,222,682 (30,470,198) (5,516,048) (9,247,786) (2,465,795) (47,699,827) (3,926,685) (3,555,224) (664,443) (184,195) (8,330,547) 136,517 136,517 (34,396,883) (9,071,272) (9,775,712) (2,649,990) (55,893,857) 306,029,930 46,314,421 (15,526) 352,328,825 $ 410,952,117 $ 49,606,424 $ (50,446,194) $ 410,112,347 Depreciation expense was charged to functions/programs as follows: Governmental activities: General government $ Public safety 994,784 1,601,155 Highway and streets 11,395,920 Culture and recreation 708,136 Public works 463,380 Total depreciation expense $ 15,163,375 $ 5,533,888 Business-type activities: Water and wastewater Sanitation 143,572 Stadium Total depreciation and amortization expense 2,653,087 $ 8,330,547 68 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 5 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 was used to finance the planning and design of a pilot recharge project and to construct a well distribution line. The third loan is being used for expansion of an effluent sewer facility and to rehabilitate the existing effluent lift station. The loans payable at June 30, 2012, 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, 2012 $ 2,430,953 Due Within One Year $ 4,617,230 $ 4,860,419 11,908,602 - $ - Annual debt service requirements to maturity on the loans payable at June 30, 2012 are summarized as follows: Fiscal year ending Business-Type Activities June 30, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2030 Total NOTE 6 Principal $ $ 909,661 941,439 974,404 1,008,601 5,642,320 1,548,187 883,990 11,908,602 Interest $ $ 339,779 359,617 327,246 293,665 258,828 727,052 156,180 24,355 2,486,722 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 amount due for the contract payable as of June 30, 2012, is $1,755,628. 69 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 7 GENERAL OBLIGATION BONDS PAYABLE Bonds payable at June 30, 2012, 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, 2012 are presented below. Description Governmental activities: 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 2012 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 Outstanding Principal June 30, 2012 Due Within One Year Interest Rate Maturity 3.00 - 5.00% 7/1/08 - 26 4.25 - 6.00% 7/1/09 - 38 8,040,139 - 5.25 - 5.125% 7/1/27 - 30 604,500 - 5.40 - 6.30% 7/1/21 - 30 105,000 - 3.90% - 4.25% 7/1/12 - 18 $ 8,720,997 $ $ 11,530,000 29,000,636 $ $ 19,985,000 $ - - 3.50 - 5.00% 7/1/07 - 20 3.00 - 5.00% 7/1/08 - 26 21,204,003 - 4.25 - 6.00% 7/1/09 - 27 32,909,861 - 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 89,394,364 $ $ 118,395,000 $ - - 70 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 7 GENERAL OBLIGATION BONDS PAYABLE (Continued) Annual debt service requirements to maturity on governmental bonds payable at June 30, 2012 are summarized as follows: Fiscal year ending June 30, Governmental Activities Principal Interest Business-Type Activities Principal Interest 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2037 2038 $ 2,445,067 2,691,833 2,828,415 2,930,269 8,008,019 5,516,640 2,239,034 1,899,593 441,766 $ 1,059,728 1,198,422 1,089,351 989,213 888,470 3,013,902 1,659,877 729,627 303,426 9,384 $ 4,009,933 4,143,167 4,331,585 4,549,731 25,241,981 21,133,360 16,400,966 7,775,407 1,808,234 $ 4,082,845 3,910,138 3,726,952 3,531,948 3,331,166 13,154,828 7,953,042 3,496,007 1,241,980 38,428 Total $ 29,000,636 $ 10,941,400 $ 89,394,364 $ 44,467,334 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 $2,175,000 outstanding on these bonds as of June 30, 2012. These bonds have been fully defeased. The City issued $11,530,000 of General Obligation Refunding Bonds in March 2012 to do advance and current refunding of the 2002-2003 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 $11,530,000 outstanding on these bonds as of June 30, 2012. These bonds have been fully defeased. The transaction resulted in an economic gain (difference between the present value of the debt service on the old and the new bonds) of approximately $796,561. 71 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 8 REVENUE BONDS PAYABLE Revenue bonds payable at June 30, 2012 consisted of the outstanding revenue bonds and refunding bonds presented below. The bonds are generally callable with interest payable semiannually. The bonds payable at June 30, 2012 are presented below. Description Governmental activities: Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007B Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2011A McDowell Road Corridor Improvement District Bonds Interest Rate Maturity 4.00 - 5.00% 7/1/08 - 13 2.00 - 3.00% 7/1/12 - 21 1,780,000 5.25% 1/1/10 - 32 43,675,000 Total Governmental Activities Description Business-type activities: Revenue Bonds, Series 1999 Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007A Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2008 Revenue Bonds, Series 2009 Revenue Bonds, Series 2010 Revenue Bonds, Series 2011 Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2011A Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2011B Total Business-Type Activities Outstanding Principal June 30, 2012 $ $ 1,160,000 46,615,000 Due Within One Year $ 570,000 1,285,000 $ Outstanding Principal June 30, 2012 1,855,000 Due Within One Year Interest Rate Maturity 4.47 - 6.73% 7/1/07 - 18 4.50 - 5.00% 7/1/20 - 32 44,200,000 - 5.00 - 6.375% 6.75% 5.00 - 5.625% 2.00 - 5.50% 7/1/20 - 32 7/1/2049 7/1/23 - 40 32,950,000 325,000 14,950,000 15,480,000 75,000 5.00 - 6.375% 7/1/20 - 32 23,515,000 - 5.00 - 6.375% 7/1/20 - 32 1,515,000 - $ $ 1,230,000 134,165,000 $ $ - 75,000 72 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 8 REVENUE BONDS PAYABLE (Continued) Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2050 Governmental Activities Principal Interest Business-Type Activities Principal Interest $ 1,855,000 1,945,000 1,510,000 1,730,000 1,815,000 10,460,000 11,915,000 15,385,000 - $ 1,244,444 2,292,775 2,206,037 2,126,927 2,041,200 8,762,700 5,979,226 2,505,824 - $ 75,000 520,000 510,000 510,000 500,000 21,650,000 29,170,000 56,285,000 15,800,000 8,820,000 325,000 $ 7,365,025 7,258,481 7,265,506 7,292,306 7,273,162 33,688,897 25,805,373 14,832,113 4,072,250 1,127,285 109,688 54,844 $ 46,615,000 $ 27,159,133 $ 134,165,000 $ 116,144,930 The City issued $26,810,000 of Public Improvement Corporation Municipal Facilities Revenue Refunding Bonds in November 2011 with an average interest rate of 4.68% to refund a portion of the Municipal Facilities Revenue Bonds, Series 2007A, 2007C and 2008. Under the terms of the refunding issue, sufficient assets to pay $23,650,000 of the Series 2007A, $2,605,000 of the Series 2007C and $1,500,000 of the Series 2008 principal and 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 no outstanding balance on these bonds as of June 30, 2012. These bonds have been fully defeased. The transaction resulted in an economic gain (difference between the present value of the debt service on the old and the new bonds) of approximately $1,047,343. The $468,606 deferred amount on retirement of bonds is being amortized over the lives of the refunding bonds on the straight-line basis. 73 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 9 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE Community facilities district bonds payable at June 30, 2012 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, 2012, 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 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 Interest Rate Outstanding Principal June 30, 2012 Maturity $ 6.5 - 7.0% 4.55 - 5.25% 4.6 - 5.3% 3.3 - 5.75% 07/15/21 07/15/23 07/15/25 07/15/28 4.25 - 5.30% 4.25 - 5.80% 07/15/31 07/15/32 3,985,000 3,640,000 120,000 90,000 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 3,335,000 5,910,000 7,470,000 6,820,000 1,085,000 21,850,000 250,000 235,000 140,000 195,000 90,000 445,000 5.875 - 6.5% 5.2 - 5.75% 07/15/22 07/15/23 420,000 515,000 30,000 25,000 6.0 - 7.0% 4.5 - 5.9% 07/15/25 07/15/26 540,000 585,000 25,000 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 4,464,000 3,367,000 4,340,000 7,017,000 11,920,000 6,452,000 287,000 144,000 125,000 212,000 300,000 159,000 4.1 - 5.7% 3.7 - 6.75% 07/15/28 07/15/28 1,435,000 1,135,000 55,000 40,000 5.0 - 5.7% 5.0 - 5.375% 07/15/29 07/15/31 1,455,000 875,000 50,000 20,000 5.50% 4.75 - 5.15% 4.875-6.625% 07/15/29 07/15/31 07/15/32 2,060,000 585,000 700,000 113,555,000 70,000 5,000 15,000 3,597,000 $ 440,000 1,525,000 4,650,000 4,980,000 Due Within One Year $ $ 30,000 90,000 215,000 110,000 74 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 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, 2013 2014 2015 1016 2017 2018-2022 2023-2027 2028-2032 2033 Total Governmental Activities $ $ Principal 3,597,000 3,599,000 3,786,000 3,975,000 4,189,000 24,586,000 30,590,000 32,475,000 6,758,000 113,555,000 $ $ Interest 6,116,306 5,933,214 5,744,420 5,542,321 5,325,454 22,875,978 15,212,658 6,230,398 188,125 73,168,874 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 $51,794 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, 2012 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. 75 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 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: Bond Costs: Governmental Activities General Obligation Bonds Series 2007 Series 2008 Series 2009-Refunding Series 2010 - Build America Series 2012 - Refunding Public Improvement Corporation Series 2007B Series 2007C Series 2011A 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 Series 2011A Series 2011B Revenue Bonds, Series 1999 Revenue Bonds, Series 2009 Revenue Bonds, Series 2010 Revenue Bonds, Series 2011 Beginning Balance $ 71,843 96,751 4,258 8,275 - Additions $ 15,100 30,924 - $ 4,490 5,691 237 447 5,184 $ 67,353 91,060 4,021 7,828 134,816 10,292 6,048 30,924 378 9,052 9,914 1,854,934 - 90,697 1,764,237 217,539 204,430 277,403 11,174 637,458 137,601 354,665 350,337 307,702 94,701 62,695 101,574 82,971 105,860 - 10,359 9,292 15,411 1,118 28,975 6,880 16,121 15,924 13,986 5,261 2,985 4,617 4,610 5,040 207,180 195,138 261,992 10,056 608,483 130,721 338,544 334,413 293,716 89,440 59,710 96,957 78,361 100,820 242,348 174,675 419,324 49,168 37,130 99,304 - 24,234 10,917 15,530 2,731 1,954 5,368 218,114 163,758 403,794 46,437 35,176 93,936 257,367 15,743 4,956 728 4,346 2,692 3,449 13,166 444,675 204,659 248,025 15,570 26,074 16,150 95,129 378,536 702,042 220,402 30,420 18,842 98,578 391,702 $ 140,000 Ending Balance Reductions 7,512,130 252,981 16,298 $ 419,571 $ 647,856 $ 7,283,845 76 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 11 CHANGES IN LONG-TERM LIABILITIES Long-term liabilities activity for the year ended June 30, 2012 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 $ 4,080,331 Additions $ 31,358,457 11,530,000 117,182,000 4,510,000 44,900,000 3,755,628 2,072,679 (59,922) 1,780,000 1,068,664 - $ 207,799,173 $ Beginning Balance Business-type activities Compensated absences General obligation bonds payable Public improvement bonds Revenue bonds payable Loans payable Premiums Discounts Business-type activities long-term liabilities NOTE 12 $ 1,844,345 463,890 $ $ 177,798 25,030,000 233,533 1,757,908 - $ 27,199,239 2,094,643 $ 13,887,821 3,830,033 Due Within One Year $ 1,410,617 29,000,636 3,627,000 3,350,000 1,225,000 2,000,000 123,469 (3,329) - 113,555,000 2,940,000 43,675,000 1,755,628 3,017,874 (56,593) 3,597,000 570,000 1,285,000 1,755,628 - $ 26,304,604 $ 197,717,578 $ 8,618,245 Reductions Ending Balance Due Within One Year Additions 91,121,544 102,300,000 32,245,000 12,554,096 2,343,276 (645,410) $ 240,382,396 16,223,009 Ending Balance Reductions $ 200,766 1,727,180 25,150,000 260,000 879,026 563,240 (22,227) $ 28,757,985 $ 440,922 $ 89,394,364 102,180,000 31,985,000 11,908,603 3,537,944 (623,183) $ 238,823,650 168,211 75,000 - $ 243,211 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At June 30, 2012, interfund balances were as follows: Interfund receivables/payable: Receivable Amount Fund Payable Amount General Fund Non-Major Funds Stadium Fund Internal Service Fund $ 1,671,211 - $ 564,829 961,840 144,542 Total $ 1,671,211 $ 1,671,211 All interfund borrowing resulted from the borrowing of funds to cover cash deficit. 77 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 12 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (Continued) Interfund transfers: Fund General Fund Non-Major Governmental Funds Water and Sewer Fund Sanitation Fund Stadium Fund Transfers Out $ 8,658,827 738,300 3,156,460 1,192,385 - Transfers In $ 4,348,845 1,155,617 8,241,510 Total $ $ 13,745,972 13,745,972 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 13 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, 2012; 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 14 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. 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 funds set aside in the budget for the fiscal year ending June 30, 2013 for any expected claims in excess of $250,000. 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 worker-related accidents. 78 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 15 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. Plan Description Arizona State Retirement Plan - 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 N. Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling (602) 240-2200 or (800) 621-3778. Arizona Public Safety Personnel Retirement System - 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, 3010 E. Camelback Rd., Suite 200, Phoenix, AZ 85016-4416 or by calling (602) 255-5575. Funding Policy Cost-sharing plan – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2012, active ASRS members were required by statute to contribute at the actuarially determined rate of 9.85% (9.6% retirement and 0.25% long-term disability) of the member’s annual covered payroll and the City was required by statute to contribute at the actuarially determined rate of 9.85% (9.01% retirement, 0.59% for health insurance premium, and 0.25% long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2012, 2011, and 2010 were $2,022,865, $1,908,120, and $1,793,509, respectively. The City contribution for the current and two proceeding years, all of which were equal to the required contributions, were as follows: Years ended June 30, 2012 2011 2010 Retirement $ 1,859,002 1,745,397 1,591,262 Long-term Disability Health Insurance $ 118,660 114,293 125,927 $ 45,203 48,430 76,320 Total $ 2,022,865 1,908,120 1,793,509 79 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 15 RETIREMENT PLANS (Continued) Agent plans – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2012, active PSPRS members were required by statute to contribute 7.65% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 13.71% (12.82% retirement and 0.89% health insurance premium) of the covered payroll to the Plan for the Police and 10.41% (9.86% retirement and 0.55% health insurance premium) of the covered payroll to the Plan for the Firefighters. Annual Pension Cost The City’s pension cost for the agent plan for the year ended June 30, 2012, and related information follows: Contribution Rates: PSPRS – Police PSPRS - Fire City – retirement 13.01% 9.82% City – health insurance premium 0.99% 0.67% Plan members 7.65% 7.65% Annual pension cost Retirement $ 782,123 $ 664,242 Health insurance premium $ 59,516 $ 45,320 Retirement $ 782,123 $ 664,242 Health insurance premium $ 59,516 $ Pension contributions made Actuarial valuation date Actuarial cost method 45,320 June 30, 2010 June 30, 2010 Projected Unit Credit Projected Unit Credit Actuarial assumptions: Investment rate of return Projected salary increases 8.5% 8.5% 5.5% - 8.5% 5.5% - 8.5% Includes inflation at cost-of-living adjustment 5.5% 5.5% Amortization method Level Percent Level Percent Remaining amortization period Asset valuation method Post retirement benefit increases Closed Closed 27 years underfunded 27 years underfunded 20 years overfunded 20 years overfunded 7-year smoothed market 7-year smoothed market Based on Income Based on Income 80 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 15 RETIREMENT PLANS (Continued) Trend Information - Information for the PSPRS plan as of the most recent actuarial valuations follows: Annual Pension Cost (APC) Plan PSPRS - Police - Pension June 30, 2012 June 30, 2011 June 30, 2010 $ PSPRS - Police - Health Insurance June 30, 2012 June 30, 2011 June 30, 2010 Percentage of APC Contributed Net Pension Obligation 782,123 926,533 527,906 100.0% 100.0% 100.0% - 59,516 64,322 24,191 100.0% 100.0% 100.0% - PSPRS - Fire - Pension June 30, 2012 664,242 100.0% - June 30, 2011 951,747 100.0% - June 30, 2010 504,370 100.0% - June 30, 2012 45,320 100.0% - June 30, 2011 53,089 100.0% - June 30, 2010 17,782 100.0% - PSPRS - Fire - Health Insurance Schedule of Funding Progress - An analysis of funding progress for each of the agent plans as most recent actuarial valuations; June 30, 2010 reporting period determines the rates for fiscal year 2012. For this valuation, fiscal years prior to 2008 (which were prior to the implementation of GASB Statement Nos. 43 and 45), the pension and health insurance benefit amounts were aggregated. In fiscal year 2008, GASB Statement Nos. 43 and 45 measurements are made and reported, these benefits are disaggregated and reported separately. Actuarial Accrued Liability PSPRS - Goodyear Police Pension Plan: Valuation Date June 30, 2010 2009 2008 Actuarial Accrued Liability (AAL) (b) Actuarial Value of Assets (a) $ 13,654,887 12,239,614 9,709,250 $ 16,599,543 15,500,586 13,516,877 Unfunded AAL (b-a) $ 2,944,656 3,260,972 3,807,627 Annual Covered Payroll (c) Funded Ratio (a/b) 82.3% 79.0% 71.8% $ 6,254,977 6,431,412 6,192,247 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 47.08% 50.70% 61.49% 81 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 15 RETIREMENT PLANS (Continued) PSPRS - Goodyear Police Health Insurance Plan: Valuation Date June 30, 2010 2009 2008 Actuarial Value of Assets (a) $ - $ Actuarial Accrued Liability (AAL) (b) 495,169 445,126 356,659 $ Unfunded AAL (b-a) 495,169 445,126 356,659 Funded Ratio (a/b) 0.0% 0.0% 0.0% Annual Covered Payroll (c) $ 6,254,977 6,431,412 6,192,247 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 7.92% 6.92% 5.76% Funded Ratio (a/b) Annual Covered Payroll (c) Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) PSPRS - Goodyear Fire Pension Plan: Actuarial Value of Plan Assets (a) Valuation Date June 30, 2010 2009 2008 $ 11,710,348 10,127,059 8,177,938 Actuarial Accrued Liability (AAL) (b) $ 11,419,916 10,391,001 9,616,934 Unfunded AAL (b-a) $ (290,432) 263,942 1,438,996 102.5% 97.5% 85.0% $ 6,508,273 7,047,317 6,888,845 0.0% 3.7% 20.9% PSPRS - Goodyear Fire Health Insurance Plan: Valuation Date June 30, 2010 2009 2008 Actuarial Value of Plan Assets (a) $ - $ Actuarial Accrued Liability (AAL) (b) 304,034 235,582 185,457 $ Unfunded AAL (b-a) 304,034 235,582 185,457 Funded Ratio (a/b) 0.0% 0.0% 0.0% Annual Covered Payroll (c) $ 6,508,273 7,047,317 6,888,845 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 4.67% 3.34% 2.69% Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. 82 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 15 RETIREMENT PLANS (Continued) Annual Required Contribution PSPRS - Goodyear Police Health Insurance Plan: Valuation Date June 30, 2010 2009 2008 Fiscal Year Ended 30-Jun 2012 2011 2010 Actuarial Accrued Liability (b) 0.40% 0.34% 0.28% Normal Cost (a) 0.59% 0.55% 0.45% Total (a+b) 0.99% 0.89% 0.73% Dollar Amount $ 68,923 63,709 45,203 Total (a+b) 0.67% 0.55% 0.46% Dollar Amount $ 48,534 43,141 31,689 PSPRS - Goodyear Fire Health Insurance Plan: Valuation Date June 30, 2010 2009 2008 Fiscal Year Ended 30-Jun 2012 2011 2010 Actuarial Accrued Liability (b) 0.24% 0.17% 0.13% Normal Cost (a) 0.43% 0.38% 0.33% The Health Insurance Subsidy payments reported for valuation year 2010 were $2,340 for the Police plan and no Health Insurance Subsidy payments reported for the Fire plan. 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 parttime 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 fiftyfive (55) or twenty years of credited service. This plan was fully vested as of June 30, 2012. As of June 30, 2012, there were 6 eligible employees participating in the plan. The plan is administered by LPL Financial. As of June 30, 2012, the plan’s assets consisted of the following: Cash LGIP Money market US Treasury notes Mutual Funds $ 1,288 22,964 54,686 47,091 289,442 $ 415,471 83 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 15 RETIREMENT PLANS (Continued) 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 16 DEFICIT FUND BALANCE Grants Fund Deficit Fund Balance - At June 30, 2012, the Grants Fund contains a deficit fund balance of $9,854 in the fund financial statements. Future revenues are expected to cover this deficit. NOTE 17 COMMITMENTS The City has active construction projects as of June 30, 2012. The balances for work not yet complete as of June 30, 2012 were as follows: PCL Construction $ 567,455.77 Arrington Watkins Architects 13,861.74 Malcolm Pirnie 45,890.65 Olsson Associates 51,233.49 Crown Castle 12,888.00 Motorola Solutions 470,849.20 Project Design Consultants 19,266.50 Planet Consulting 13,782.50 EMJ Development 59,362.34 US Dept of the Interior 20,000.00 Brown and Associates 12,000.00 $ 1,286,590.19 These commitments are being financed from existing fund balances. NOTE 18 SUBSEQUENT EVENT In September 2012, the City of Goodyear issued $10,500,000 of Municipal Facilities Revenue bonds, Series 2012 due in annual principal ranging from $439,000 to $1,126,000 plus semiannual interest ranging from 2.48% to 3.44% through June 15, 2023. The purpose of the bonds is to finance the acquisition of and improvements to office buildings for which the City is the primary tenant. 84 CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2012 Special Revenue ASSETS Cash and cash equivalents Investments Taxes receivable Interest receivable Accounts receivable Due from other governments Inventories Restricted cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Due to other funds Deferred revenue Total liabilities Fund balances: Nonspendable: Inventories Restricted for: Debt service Highway user funds Community Facilities Districts operations Unassigned Total fund balances Total liabilities and fund balances Highway User Revenue $ 361,288 317,626 412,916 $ 1,091,830 $ 136,285 $ Grants 202,005 1,094,287 3,824 2,792 92,132 1,395,040 $ Community Facilities Districts 1,088,901 13,328 46 1,102,275 $ 2,218 $ 87,296 $ 27,658 114,361 278,304 $ 93,154 1,309,522 1,404,894 412,916 - 400,610 813,526 (9,854) (9,854) 1,091,830 $ $ 1,395,040 471,675 4,894 563,865 538,410 538,410 $ 1,102,275 92 Debt Service 139,476 1,204,903 $ 1,344,379 Total Non-Major Governmental Funds $ 1,652,194 1,094,287 470,430 3,824 2,838 92,132 412,916 1,204,903 $ 4,933,524 $ $ $ 98,269 98,269 27,658 564,829 1,527,046 2,345,332 - 412,916 1,246,110 1,246,110 $ 1,344,379 225,799 1,246,110 400,610 538,410 (9,854) 2,588,192 $ 4,933,524 93 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2012 Special Revenue REVENUES Taxes Intergovernmental Charges for services Investment income (loss) Miscellaneous Total revenues Highway User Revenue $ 3,269,285 9,185 417 167,572 3,446,459 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 $ 3,345,512 2,094 3,347,606 132,894 349,292 4,700 533,809 1,087,652 - 4,364,246 1,020,695 1,087,652 2,326,911 2,180 - - - 1,155,617 - - - 1,155,617 - - Net change in fund balances 237,830 2,326,911 Fund balances, beginning of year 575,696 (2,336,765) Fund balances, end of year $ $ 3,230,514 1,133,732 (917,787) OTHER FINANCING SOURCES (USES) Refunding bonds Refunding bonds premium Payment to refunded bond escrow agent Transfers in Transfers out Total other financing sources (uses) Grants Community Facilities Districts 1,016,011 2,303 71,518 1,089,832 813,526 $ (9,854) 2,180 536,230 $ 538,410 94 $ Debt Service 4,360,329 90 4,360,419 Total Non-Major Government Funds $ 5,376,340 6,614,797 9,185 4,904 239,090 12,244,316 - 1,220,546 349,292 3,230,514 4,700 1,667,541 2,231,024 1,762,438 3,993,462 2,231,024 1,762,438 10,466,055 366,957 1,778,261 11,530,000 949,267 11,530,000 949,267 (11,530,000) (738,300) (11,530,000) 1,155,617 (738,300) 210,967 1,366,584 577,924 3,144,845 668,186 $ 1,246,110 (556,653) $ 2,588,192 95 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS June 30, 2012 Brownfield EPA Cleanup Payshare (Utility Assistance) Fill-A-Need 11,744 11,744 $ $ 11,744 11,744 $ Gain ASSETS Cash and cash equivalents Receivable Total assets $ 475,977 $ 475,977 $ LIABILITIES Accounts payable Deposits held for others Total liabilities $ 313,050 162,927 $ 475,977 $ $ $ $ $ 126 6 132 132 132 $ $ $ Shop With A Cop 2,143 2,143 $ 2,143 2,143 $ $ $ Total 4,348 4,348 $ 494,338 6 $ 494,344 4,348 4,348 $ 324,794 169,550 $ 494,344 99 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS Year Ended June 30, 2012 Brownfield EPA Cleanup: Assets Cash and cash equivalents Liabilities Accounts payable Deposits held for others Total liabilities GAIN: Assets Cash and cash equivalents Liabilities Accounts payable Payshare (Utility Assistance): Assets Cash and cash equivalents Receivable Total assets Liabilities Deposits held for others Fill-A-Need: Assets Cash and cash equivalents Liabilities Deposits held for others Shop With A COP: Assets Cash and cash equivalents Liabilities Deposits held for others Total - All Agency Funds Assets Cash and cash equivalents Receivables Total assets Liabilities Accounts payable Deposits held for others Total liabilities Balance June 30, 2011 Additions $ 684,342 $ $ $ $ 100,092 584,250 684,342 $ 17,778 $ $ 17,778 $ Deletions $ (208,365) $ 475,977 $ $ $ (421,323) (421,323) $ 313,050 162,927 475,977 - $ (6,034) $ 11,744 $ - $ (6,034) $ 11,744 $ $ - $ $ 72 72 $ $ 54 6 60 $ 126 6 132 $ 60 $ 72 $ - $ 132 $ 3,613 $ - $ (1,470) $ 2,143 $ 3,613 $ - $ (1,470) $ 2,143 $ 2,831 $ 1,517 $ - $ 4,348 $ 2,831 $ 1,517 $ - $ 4,348 $ 708,618 6 708,624 $ 1,589 1,589 $ (215,869) (215,869) $ 494,338 6 494,344 212,958 1,589 214,547 $ (6,034) (422,793) (428,827) $ $ $ $ 117,870 590,754 708,624 $ $ $ $ - Balance June 30, 2012 212,958 212,958 $ $ $ $ 324,794 169,550 494,344 100 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, 2012 Budgeted Amounts REVENUES Taxes Investment income Special assessments Contributions Miscellaneous Total revenues EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures Original $ 4,958,208 2,523 4,225,203 2,732,035 11,917,969 Final $ Actual Variance with Final Budget Positive (Negative) 4,958,208 2,523 4,225,203 2,732,035 11,917,969 $ 4,940,099 9,388 2,294,821 2,830,584 6 10,074,898 $ (18,109) 6,865 (1,930,382) 98,549 6 (1,843,071) 4,455,000 7,391,422 11,846,422 4,455,000 7,391,422 11,846,422 3,627,000 6,479,396 10,106,396 71,547 71,547 (31,498) (103,045) 828,000 912,026 1,740,026 OTHER FINANCING SOURCES (USES) Debt issuance Total other financing sources (uses) 200,000 200,000 - (200,000) 200,000 200,000 - (200,000) Net change in fund balance 271,547 271,547 (31,498) (303,045) 14,419,001 14,419,001 14,419,001 $ 14,690,548 $ 14,690,548 $ 14,387,503 Fund balance, beginning of year Fund balance, end of year $ (303,045) 103 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, 2012 Budgeted Amounts REVENUES Investment income Special assessments Total revenues Original $ EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Final 3,550,094 3,550,094 $ 1,225,000 2,325,094 3,550,094 Actual 3,550,094 3,550,094 $ 1,225,000 2,325,094 3,550,094 3,490 3,550,094 3,553,584 Variance with Final Budget Positive (Negative) $ 1,225,000 2,325,697 3,550,697 3,490 3,490 (603) (603) Excess (deficiency) of revenues over (under) expenditures - - 2,887 2,887 Fund balance, beginning of year 72,563 72,563 72,563 - Fund balance, end of year $ 72,563 $ 72,563 $ 75,450 $ 2,887 104 CITY OF GOODYEAR, ARIZONA NON-UTILITY DEVELOPMENT IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2012 Budgeted Amounts REVENUES Charges for services Investment income Total revenues Original $ EXPENDITURES Current: Public safety Public works Culture and recreation Highway and streets Capital outlay Total expenditures 2,445,442 22,204 2,467,646 Final $ 2,445,442 22,204 2,467,646 Actual $ 2,271,804 129,423 2,401,227 1,042 50,900 14,566,695 14,618,637 40,803 76,933 13,261,492 13,379,228 Excess (deficiency) of revenues over (under) expenditures (12,150,991) (10,911,582) Fund balance, beginning of year 21,992,019 21,992,019 21,992,019 9,841,028 $ 11,080,437 $ 21,720,718 Fund balance, end of year $ Variance with Final Budget Positive (Negative) $ 40,803 109,694 2,522,031 2,672,528 (173,638) 107,219 (66,419) (32,761) 10,739,461 10,706,700 (271,301) 10,640,281 $ 10,640,281 105 CITY OF GOODYEAR, ARIZONA HIGHWAY USER REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2012 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment income Miscellaneous Total revenues Original Final Actual $ 3,251,909 12,500 175 22,050 3,286,634 $ 3,251,909 12,500 175 22,050 3,286,634 $ 3,269,285 9,185 417 167,572 3,446,459 4,728,962 135,907 4,864,869 4,935,942 140,907 5,076,849 3,230,514 1,133,732 4,364,246 (1,578,235) (1,790,215) 1,443,832 1,443,832 1,155,617 (288,215) 1,443,832 1,443,832 1,155,617 (288,215) 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 Variance with Final Budget Positive (Negative) $ (346,383) 237,830 575,696 575,696 575,696 $ 229,313 $ 813,526 17,376 (3,315) 242 145,522 159,825 1,705,428 (992,825) 712,603 (917,787) (134,403) 441,293 $ 872,428 584,213 $ 584,213 109 CITY OF GOODYEAR, ARIZONA GRANTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2012 Original Final Actual Variance with Final Budget Positive (Negative) $ 10,200,000 10,200,000 $ 10,200,000 10,200,000 $ 3,345,512 2,094 3,347,606 $ (6,854,488) 2,094 (6,852,394) EXPENDITURES Current General government Public safety Public works Culture and recreation Community development Capital outlay Total expenditures 4,556,362 1,786,000 1,545,645 7,888,007 3,867,566 177,335 5,100 1,891,000 1,992,174 7,933,175 132,894 349,292 4,700 533,809 1,020,695 3,734,672 (171,957) 400 1,891,000 1,458,365 6,912,480 Excess (deficiency) of revenues over (under) expenditures 2,311,993 2,266,825 2,326,911 60,086 Fund balance, beginning of year (2,336,765) (2,336,765) (2,336,765) - Budgeted Amounts REVENUES Intergovernmental Investment income Total revenues Fund balance, end of year $ (24,772) $ (69,940) $ (9,854) $ 60,086 110 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - GENERAL SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2012 Variance with Final BudgetPositive (Negative) Budgeted Amounts REVENUES Taxes Investment income Miscellaneous Total revenues Original Final Actual $ 1,031,640 1,565 171,705 1,204,910 $ 1,031,640 1,565 171,705 1,204,910 $ 1,016,011 2,303 71,518 1,089,832 1,477,364 1,477,364 1,477,364 1,477,364 1,087,652 1,087,652 389,712 389,712 2,180 274,634 EXPENDITURES Current General government Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ (272,454) (272,454) 536,230 536,230 263,776 $ 263,776 $ 536,230 $ 538,410 (15,629) 738 (100,187) (115,078) $ 274,634 111 CITY OF GOODYEAR, ARIZONA DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2012 Budgeted Amounts REVENUES Taxes Investment income Total revenues Original $ EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES Refunding bonds Refunding bonds premium Payment to refunded bond escrow agent Transfers out Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ Final 4,410,854 4,410,854 $ Actual 4,410,854 4,410,854 $ 4,360,329 90 4,360,419 Variance with Final Budget Positive (Negative) $ (50,525) 90 (50,435) 2,537,190 1,774,393 4,311,583 2,537,190 1,774,393 4,311,583 2,231,024 1,762,438 3,993,462 306,166 11,955 318,121 99,271 99,271 366,957 267,686 - - 11,530,000 949,267 11,530,000 949,267 - - (11,530,000) (738,300) 210,967 (11,530,000) (738,300) 210,967 99,271 99,271 577,924 668,186 668,186 668,186 767,457 $ 767,457 $ 1,246,110 478,653 $ 478,653 112 CITY OF GOODYEAR, ARIZONA WATER & SEWER ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2012 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) Variance with Final Budget Positive (Negative) Original Final Actual $ 19,526,371 65,000 19,591,371 $ 19,526,371 65,000 19,591,371 $ 20,105,006 116,744 20,221,750 3,192,713 17,226,038 20,418,751 3,220,904 16,736,886 19,957,790 3,087,652 5,615,793 5,533,888 14,237,333 133,252 11,121,093 (5,533,888) 5,720,457 5,984,417 6,350,836 (827,380) (366,419) $ 578,635 51,744 630,379 Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) 13,146 (9,000,267) 13,146 (9,000,267) 76,021 (6,417,467) 62,875 2,582,800 (8,987,121) (8,987,121) (6,341,446) 2,645,675 Income (loss) before capital contributions and transfers (9,814,501) (9,353,540) (357,029) 8,996,511 Capital contributions Transfers in Transfers out 3,370,491 (2,256,460) 3,370,491 (2,256,460) 9,252,599 (3,156,460) Change in net assets (8,700,470) (8,239,509) 5,739,110 Net assets, beginning of year Net assets, end of year 171,124,432 171,124,432 171,124,432 $ 162,423,962 $ 162,884,923 $ 176,863,542 5,882,108 (900,000) 13,978,619 $ 13,978,619 113 CITY OF GOODYEAR, ARIZONA SANITATION ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2012 Budgeted Amounts Variance with Final Budget Positive (Negative) Original Final Actual $ 6,310,540 1,214 6,311,754 $ 6,310,540 1,214 6,311,754 $ 6,115,977 223 6,116,200 Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 710,904 3,872,849 4,583,753 710,904 4,442,849 5,153,753 623,168 4,387,461 143,572 5,154,201 87,736 55,388 (143,572) (448) Operating income (loss) 1,728,001 1,158,001 961,999 (196,002) 2,500 2,500 2,500 2,500 3,907 3,907 1,730,501 1,160,501 965,906 (1,192,385) (1,192,385) (1,192,385) (31,884) (226,479) Operating revenues: Charges for service Miscellaneous Total operating revenue 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 538,116 1,945,408 1,945,408 1,945,408 $ 2,483,524 $ 1,913,524 $ 1,718,929 $ (194,563) (991) (195,554) 1,407 1,407 (194,595) (194,595) $ (194,595) 114 CITY OF GOODYEAR, ARIZONA STADIUM ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2012 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Original $ 1,560,925 1,560,925 Final $ Actual 1,560,925 1,560,925 $ 1,633,230 136 1,633,366 Variance with Final Budget Positive (Negative) $ 72,305 136 72,441 Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 1,985,881 7,508,661 250,000 9,744,542 2,109,087 7,653,311 250,000 10,012,398 2,074,129 1,609,205 2,653,087 6,336,421 34,958 6,044,106 (2,403,087) 3,675,977 Operating income (loss) (8,183,617) (8,451,473) (4,703,055) 3,748,418 2,000 (5,062,460) (5,060,460) 2,000 (5,062,460) (5,060,460) 13,017 (5,298,070) (5,285,053) (13,244,077) (13,511,933) (9,988,108) 3,523,825 15,088,152 15,088,152 8,241,510 (6,846,642) 1,844,075 1,576,219 (1,746,598) (3,322,817) 19,015,765 19,015,765 19,015,765 20,591,984 $ 17,269,167 Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Change in net assets Net assets, beginning of year Net assets, end of year $ 20,859,840 $ 11,017 (235,610) (224,593) $ (3,322,817) 115 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE June 30, 2012 Governmental funds capital assets Land Land Improvements Right of Way Streetscape Buildings and improvements Vehicles, machinery and equipment Infrastructure Artwork Construction in progress Total governmental funds capital assets Investment in governmental funds capital assets by source: Government funds Total governmental funds capital assets $ 19,426,644 2,549,608 90,128,522 8,775,008 132,306,891 37,755,221 336,565,807 204,750 13,213,915 $ 640,926,366 $ 640,926,366 $ 640,926,366 119 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY June 30, 2012 Function and Activity General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Land, Land Improvements, Art Right of Way Streetscape Buildings and Improvements $ 3,608,908 98,903,530 12,697,973 5,874,121 $ 18,396,870 813,910 8,934,750 $ 121,084,532 $ 28,145,530 120 Improvements other than Buildings Vehicles, Machinery and Equipment Construction in Progress Infrastructure Total $ 194,598 62,073 88,618,165 15,151,775 134,750 $ 7,315,510 18,325,470 5,787,814 2,301,092 4,025,335 $ 336,565,807 - $ 13,053,034 61,170 99,711 - $ 24,172,050 36,784,413 529,936,486 31,064,461 18,968,956 $ 104,161,361 $ 37,755,221 $ 336,565,807 $ 13,213,915 $ 640,926,366 121 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, 2012 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, 2011 Deductions Governmental Funds Capital Assets June 30, 2012 Additions $ 25,018,480 35,976,568 434,217,887 21,812,266 117,571,928 $ 2,678,584 1,217,567 2,578,437 142,641 283,332 $ $ $ 634,597,129 $ 6,900,561 $ (571,326) (43,055) (457,856) (70,415) 27,654,010 36,736,279 436,796,324 21,954,907 117,784,845 $ 640,926,366 122 STATISTICAL SECTION Contents Page Financial Trends (Table 1 - 2) 128 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) 137 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) 162 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) 171 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) 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. 172 City of Goodyear Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2012 2011 2010 2009 Governmental Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Governmental Activities Net Assets $ 329,064,345 108,246,415 25,041,481 462,352,241 $ 327,503,686 110,105,296 18,249,626 455,858,608 $ 317,162,459 115,881,050 19,272,548 452,316,057 $309,491,989 117,787,315 20,522,420 447,801,724 Business-type Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Business-type Activities Net Assets 178,432,900 3,799,026 13,619,712 195,851,638 179,254,929 3,567,237 9,263,439 192,085,605 191,582,614 4,365,725 195,948,339 Primary Government Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Primary Government Net Assets 507,497,245 112,045,441 38,661,193 $ 658,203,879 506,758,615 113,672,533 27,513,065 $ 647,944,213 508,745,073 115,881,050 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 Source: Statement of Net Assets City financial records and reports 128 Table 1 Fiscal Year 2008 2007 2006 2005 2004 2003 $ 256,047,572 70,835,115 36,122,934 363,005,621 $ 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 $ 280,825,544 159,530,687 (13,193,174) 146,337,513 415,578,259 70,835,115 22,929,760 $ 509,343,134 40,297,163 335,000 (4,302,180) 36,329,983 113,314,721 3,058,777 27,499,503 $ 143,873,001 129 City of Goodyear Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2012 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 $ $ $ $ 8,857,442 14,136,863 2,661,635 3,292,093 11,286,370 1,266,469 2,275,991 6,225,917 4,962,070 13,179,678 4,168,252 10,441,684 82,754,464 11,907,022 8,747,778 5,154,201 11,634,491 37,443,492 $ 120,197,956 2011 $ 2010 2009 8,366,129 $ 14,788,614 2,866,494 2,710,111 13,243,603 1,442,029 1,822,793 5,150,677 4,439,181 14,798,670 3,658,756 10,710,302 83,997,359 $ 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 $ 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 12,454,200 8,279,732 4,815,314 11,958,862 37,508,108 $ 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 $ 121,505,467 $ 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. 130 Table 2 Fiscal Year 2008 2007 2006 2005 2004 2003 $ 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 $ 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 $ 11,794,505 5,189,053 4,839,626 861,000 $ 22,684,184 $ 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 $ $ 164,325,142 $ 118,429,294 $ 71,853,403 $ 70,824,565 $ 58,825,760 $ 51,250,831 9,535,629 N/A 1,911,839 $ 11,447,468 Continued 131 City of Goodyear Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2012 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 $ $ 865,484 676,932 130,566 825,971 322,215 4,163,050 7,636,691 9,701,254 24,322,163 2011 $ $ 1,128,675 500,562 128,109 849,060 325,552 3,879,823 5,818,158 13,951,581 26,581,520 2010 $ $ 2009 863,192 336,303 320,967 852,500 287,805 3,615,255 5,648,867 16,436,375 28,361,264 $ 301,151 24,054 240,293 730,571 357,039 4,776,076 4,843,140 102,028,190 $ 113,300,514 $ 10,573,584 9,531,422 6,115,977 1,633,230 9,252,599 37,106,812 $ 9,391,674 8,243,147 5,774,010 1,564,324 4,570,849 29,544,004 $ 9,022,576 7,235,503 5,790,357 1,530,799 6,211,533 29,790,768 $ $ 61,428,975 $ 56,125,524 $ 58,152,032 $ 176,830,064 $ $ (58,432,301) $ (57,415,839) $ (56,407,183) $ (7,964,104) (4,664,190) (336,680) (58,768,981) $ (65,379,943) $ (61,071,373) $ 8,880,151 6,389,190 5,625,426 1,014,221 25,000 41,595,562 63,529,550 20,247,061 33,308,177 53,555,238 132 Table 2 Fiscal Year 2008 $ 2007 3,988,792 57,630 210,707 686,135 343,274 12,183,231 4,587,630 85,108,447 $ 107,165,846 $ $ $ 8,894,793 6,244,742 5,145,922 762,200 27,405,133 48,452,790 $ 155,618,636 $ $ $ 396,770 54,887 128,040 638,390 3,527,777 272,516 13,241,940 895,854 62,732,783 81,888,957 2006 $ $ 286,419 61,456 67,264 529,007 126,800 14,584,804 648,756 26,761,281 43,065,787 2005 $ $ 2004 133,367 434,179 259,993 10,631,653 523,405 16,472,105 28,454,702 $ $ 2003 276,990 38,716 8,425 293,355 1,162,624 8,774,894 109,956 46,863,563 57,528,523 $ $ 5,416,791 45,991 35,035 1,454,454 2,195,739 397,092 9,475,823 19,020,925 7,588,225 6,137,152 4,392,794 20,000 24,414,623 42,552,794 $ 5,952,571 4,846,569 3,185,387 240,000 26,016,946 40,241,473 $ 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 $ 2,334,840 3,729,617 1,939,809 4,813,617 12,817,883 $ 124,441,751 $ 83,307,260 $ 54,764,744 $ 86,723,219 $ 31,838,808 (16,672,751) $ (11,315,672) $ (24,631,103) $ 22,412,692 22,769,529 8,571,282 5,739,941 $ 11,453,857 $ (16,059,821) $ 14,532,701 13,364,758 27,897,459 $ (20,782,438) 1,370,415 $ (19,412,023) (34,475,112) $ 25,768,606 (8,706,506) $ Continued 133 City of Goodyear Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2012 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 $ $ $ 55,301,512 $ 12,704,826 319,017 493,244 (3,892,665) 64,925,934 $ $ 92,945 117,103 3,892,665 4,102,713 $ $ $ 2011 $ 2010 2009 53,595,119 $ 55,623,884 $ 9,699,146 10,907,518 227,446 179,114 827,619 2,026,285 (3,390,940) (7,815,285) 60,958,390 $ 60,921,516 $ $ 71,819 638,611 3,390,940 4,101,370 57,527 4,352,000 100,698 7,815,285 $ 12,325,510 $ 121,900 78,586 7,751,307 7,951,793 69,028,647 $ 65,059,760 $ 73,247,026 $ 72,500,835 64,925,934 4,102,713 69,028,647 $ 3,542,551 $ 4,514,333 (3,862,734) 7,661,320 (320,183) $ 12,175,653 $ $ $ $ 59,003,971 12,236,437 148,687 911,254 (7,751,307) 64,549,042 84,796,103 41,259,970 $ 126,056,073 Source: Statement of Net Assets City financial records and reports 134 Table 2 Fiscal Year 2007 2008 2006 2005 $ 61,251,635 $ 59,428,806 $ 48,726,571 $ 31,498,052 12,654,235 15,053,501 6,997,920 5,973,538 4,268,448 4,723,886 4,436,598 1,079,720 4,075,011 1,029,445 1,486,027 1,641,295 (56,622) (117,062) 634,153 (9,444,077) $ 72,805,252 $ 80,179,016 $ 61,530,054 $ 40,826,758 $ $ 1,447,446 26,683 56,622 1,530,751 $ $ 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 1,379,832 212,708 9,444,077 $ 11,036,617 $ $ 83,841,869 $ 81,709,767 $ 64,329,728 $ 40,288,482 $ 32,396,010 $ 26,668,500 $ 38,330,140 36,375,158 $ 74,705,298 $ 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 $ $ 715,181 1,950,000 17,431 117,062 2,799,674 2004 $ 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) 7,909,349 (652,872) 7,256,477 Concluded 135 Table 3 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) State Shared Revenues - not Restricted to Specific Programs Fiscal Year Property Taxes 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 $ 16,476,434 18,548,550 21,941,576 22,602,319 18,144,197 12,370,983 9,826,690 8,583,676 7,187,270 5,718,332 Sales & Use Taxes $ 36,364,557 32,729,749 31,448,399 34,205,905 42,045,316 45,240,436 37,420,013 21,747,851 17,342,116 14,610,889 Franchise Taxes $ 2,460,521 2,316,820 2,233,909 2,195,747 2,071,378 1,817,387 1,479,868 1,166,525 958,006 781,808 State Shared Taxes* $ 7,195,568 5,201,107 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 2,600,534 2,582,196 2,224,251 State Revenue Sharing Highway User Revenue $ $ 5,509,258 4,498,039 5,966,584 6,880,761 6,503,557 5,252,405 1,979,970 1,738,442 1,705,193 2,012,719 3,269,285 2,752,001 2,769,619 3,008,499 3,401,589 3,493,824 1,792,240 1,634,562 1,469,365 1,351,013 Source: City financial records and reports * Combined State Shared Sales Tax and Vehicle License Tax 137 City of Goodyear Sales & Use Taxes by Industry Classification Last Ten Fiscal Years (Unaudited) Fiscal Year 2012 Mining & Government Construction Manufacturing Utilities Wholesale Trade Retail Trade Restaurant & Bar Real Estate Hotels Services Miscellaneous $ 9,534 4,755,592 701,876 3,469,559 924,842 13,576,350 4,763,951 3,480,031 873,241 1,640,296 1,414,929 Total* $ 35,610,202 2011 $ 5,234 3,251,977 642,255 3,275,325 598,098 12,950,291 4,415,910 3,510,263 764,996 1,771,527 1,055,398 $ 32,241,274 2010 $ 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 $ 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 * 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 138 Table 4 Fiscal Year 2007 $ 2006 1,055 $ 371 19,305,179 15,029,430 405,882 600,356 2,115,344 1,640,534 815,930 746,566 9,789,605 8,727,607 3,996,446 3,441,051 2,603,404 1,506,238 944,488 889,513 3,725,380 643,325 641,428 2,286,662 $ 45,989,375 $ 33,866,419 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 2004 $ 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 $ 14,531,735 139 City of Goodyear Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2012 General Fund Reserved Unreserved Nonspendable: Advances to other funds Inventories Prepaid items Restricted by: Charter mandates Court Law enforcement Assigned to: IT replacement Fleet replacement Risk management insurance Unassigned Total General Fund 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 Nonspendable: Inventories Prepaid items Restricted by: Debt service Development impact fees Highway user funds Community Facilities Districts operations Unassigned Total All Other Governmental Funds $ 2011 - $ 2010 - $ 2009 17,812,619 10,742,777 $ 29,117,875 961,840 16,258 500,911 961,840 3,627 422,681 - - 3,377,572 261,229 125,812 3,209,321 198,457 129,231 - - 437,873 1,730,168 811,244 23,074,844 $ 31,297,751 $ 407,961 383,225 558,310 21,481,088 27,755,741 28,555,396 $ 29,117,875 $ $ 14,891,228 1,393,549 47,213 $ 13,597,749 4,110,554 - - - $ $ - - 20,452,179 - 23,153,403 1,435,331 412,916 45,225 15,663,838 21,720,718 400,610 289,782 46,238 - - 15,113,512 21,992,019 285,914 - - 36,784,169 $ 42,297,037 538,410 (9,854) $ 38,771,863 $ 536,230 (2,336,765) 35,926,930 $ Note: The City implemented GASB 54 for fiscal year ended June 30, 2011. Prior financial statements have not been restated to provide this information. Source: Balance Sheet Governmental Funds City financial records and reports 140 Table 5 Fiscal Year 2008 $ 2007 42,219,809 $ 2006 61,037,128 $ 2005 53,853,901 $ 2004 29,393,457 $ 2003 18,701,153 $ 12,456,038 - - - - - - - - - - - - $ 42,219,809 $ 61,037,128 $ 53,853,901 $ 29,393,457 $ 18,701,153 $ 12,456,038 $ 15,356,746 10,942,787 - $ 8,726,046 7,810,178 - $ 7,833,170 21,303,978 - $ 6,643,132 9,704,731 - $ 6,388,963 - $ 3,027,055 - 25,851,665 27,462,037 20,649,813 10,220,953 19,835,781 3,354,296 14,475,469 46,019,494 8,731,725 21,129,201 4,613,137 32,003,402 - - - - - - - - - - - - $ 79,613,235 $ 47,406,990 $ 52,327,225 $ 76,842,826 $ 36,249,889 $ 39,643,594 141 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment income Special assessments Contributions Miscellaneous Total Revenues Expenditures General Government Police Financial Services Community Services Information Services Fire Municipal Services Human Resources Community Development Culture and Recreation Highways and Streets Public Works Debt Service: Principal retirement Interest and debt cost Capital outlay Total Expenditures Excess of Revenues over (under) Expenditures 2012 2011 2010 2009 $ 55,397,903 4,729,946 19,319,623 3,876,918 825,971 319,017 5,844,915 3,099,952 361,202 93,775,447 $ 53,909,300 4,541,951 15,825,858 3,978,325 849,060 225,588 4,859,749 2,707,926 157,090 87,054,847 $ 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 $ 58,734,426 3,091,729 16,827,730 6,387,350 686,557 148,220 3,065,304 3,403,370 593,684 92,938,370 8,248,394 13,764,506 2,661,635 2,501,280 11,098,327 1,266,469 2,275,991 4,557,391 4,115,701 3,340,208 2,967,386 8,194,510 13,506,835 2,160,642 2,346,507 10,538,180 1,389,266 1,822,793 4,376,985 3,936,203 3,808,328 3,047,742 6,943,802 13,752,875 2,605,931 2,339,204 10,615,080 1,497,249 1,929,973 4,654,052 3,882,621 4,098,986 3,075,759 3,945,126 14,082,452 4,803,801 1,248,219 2,221,606 11,961,508 1,567,179 2,215,237 9,723,957 4,393,748 5,686,483 3,901,157 12,433,024 10,687,152 6,437,600 86,355,064 11,254,524 10,645,162 9,234,659 86,262,336 10,942,758 11,158,130 13,494,149 90,990,569 7,392,618 11,930,502 47,556,824 132,630,417 7,420,383 792,511 1,629,205 (39,692,047) 142 Table 6 Fiscal Year 2008 2007 2006 2005 2004 2003 $ 61,112,204 7,160,922 17,361,565 19,117,473 678,594 4,268,447 2,228,149 8,260,888 4,075,010 124,263,252 $ 59,346,833 8,905,743 16,456,618 14,921,767 584,316 4,723,886 2,228,646 14,245,039 1,046,124 122,458,972 $ 48,669,770 10,593,032 7,691,531 12,590,311 482,604 4,436,598 2,197,445 1,717,842 1,433,513 89,812,646 $ 31,501,700 7,899,726 6,288,957 9,894,288 364,301 1,079,719 2,580,510 2,401,107 1,641,295 63,651,603 $ 25,507,299 6,785,229 5,811,389 9,057,321 332,046 567,142 1,555,984 1,562,190 600,649 51,779,249 $ 21,092,384 3,845,730 5,985,075 5,805,188 365,136 (499,021) 1,654,637 4,940,329 43,189,458 5,486,915 13,295,314 4,850,217 1,329,505 2,834,417 11,277,737 1,547,460 1,995,841 9,262,010 4,667,176 3,994,494 4,261,005 8,637,828 10,262,437 2,209,677 1,255,467 1,622,556 8,842,402 1,102,875 1,973,845 6,028,162 3,431,934 4,756,383 4,294,102 3,871,939 8,674,983 1,550,946 1,190,116 1,593,403 7,332,103 848,612 1,360,762 6,599,788 2,381,569 3,647,507 2,154,782 2,482,603 7,853,958 1,553,016 1,012,533 1,434,932 5,163,911 704,584 1,276,457 6,636,525 2,128,218 2,128,408 1,917,725 3,138,823 6,643,972 1,240,958 787,635 1,138,348 4,529,680 879,352 985,334 5,543,191 1,699,797 1,804,454 2,002,948 4,469,126 6,097,075 1,148,502 189,763 1,907,004 4,879,245 734,689 1,525,546 864,434 1,621,308 2,817,472 2,432,247 5,141,143 10,466,384 135,249,363 215,658,981 4,836,000 5,740,194 71,999,738 136,993,600 3,777,600 5,313,243 14,819,302 65,116,655 5,327,354 5,825,352 10,039,532 55,485,108 2,971,580 4,020,706 40,712,284 78,099,062 3,319,857 3,901,382 11,449,411 47,357,061 (91,395,729) (14,534,628) 24,695,991 8,166,495 (26,319,813) (4,167,603) Continued 143 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2012 Other Financing Sources and (Uses) Transfer in Transfer out Debt issuance Debt premium Refunding bonds Refunding bonds premium 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 2011 2009 5,504,462 $ 8,388,300 $ 6,376,290 $ 4,123,384 (9,397,127) (10,837,705) (14,191,575) (11,874,691) 1,780,000 105,000 604,500 129,958 5,733 5,722 11,530,000 949,267 (11,530,000) - . (3,585,000) (2,449,405) (1,033,440) $ 2010 6,386,943 28.9% $ (7,704,552) (10,726,085) (2,449,405) $ (6,075,347) $ (50,418,132) 27.3% 27.0% 17.5% Source: City financial records and reports 144 Table 6 Fiscal Year 2008 2007 2006 2005 2004 2003 $ 11,561,671 $ 17,288,179 $ 18,210,420 $ 2,933,372 $ 2,242,149 $ 8,994,203 (21,005,748) (17,387,710) (47,966,568) (2,299,219) (3,042,148) (6,736,265) 112,248,000 16,969,302 5,005,000 42,005,000 27,050,000 16,010,000 2,300,192 (72,151) 479,593 272,362 6,415,000 2,300,000 (6,734,459) 104,784,656 16,797,620 $ 13,388,927 $ 2,262,992 6.2% 12.4% (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% Concluded 145 Table 7 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) State Shared Revenues - not Restricted for Specific Programs Fiscal Year 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Property Taxes $ 16,476,434 18,862,731 21,908,223 22,332,774 18,004,766 12,289,010 9,769,889 8,583,676 7,187,270 5,718,332 Sales & Use Taxes $ 36,364,557 32,729,749 31,183,096 34,205,906 41,036,060 45,240,436 37,420,013 22,475,427 17,869,383 15,111,509 Franchise Taxes $ 2,460,521 2,316,820 2,233,909 2,195,748 2,071,378 1,817,387 1,479,868 1,166,525 958,006 781,808 State Shared Sales $ 7,195,568 5,201,107 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 2,600,534 2,582,196 2,224,251 State Revenue Sharing $ 5,509,258 4,498,039 5,966,584 6,880,761 6,503,557 5,252,405 1,979,970 1,738,442 1,705,193 2,012,719 Highway User Revenue $ 3,269,285 2,752,001 2,769,619 3,008,499 3,401,589 3,493,824 1,792,240 1,634,562 1,469,365 1,351,013 Source: City financial records and reports 147 City of Goodyear Property Tax Rates Direct and Overlapping Governments1 Last Seven Fiscal Years (Unaudited) City Direct Rate Overlapping Rates County-Wide Jurisdictions County Fiscal Year 2012 2011 2010 2009 2008 2007 2006 Debt Service Rate Operating Rate $ 0.9446 0.7603 0.6320 0.6678 0.7321 0.7945 0.8222 $ 0.6554 0.6630 0.9679 0.9322 0.8679 0.7991 0.7778 Total City Rate $ 1.6000 1.4233 1.5999 1.6000 1.6000 1.5936 1.6000 County Operating Rate $ 1.2407 1.0508 0.9909 1.0327 1.1046 1.1794 1.1971 Library District Rate $ 0.0492 0.0412 0.0353 0.0353 0.0391 0.0507 0.0521 Fire District Assistance Rate $ 0.0084 0.0066 0.0057 0.0053 0.0053 0.0068 0.0069 County County Flood District Rate Education Equalization Rate $ 0.1780 0.1489 0.1367 0.1367 0.1533 0.2047 0.2119 $ 0.4259 0.3564 0.3306 0.4358 Note: Data not available prior to 2006 1 Source: Maricopa County Assessor's Office 148 Table 8 Overlapping Rates County-Wide Jurisdictions Fiscal Year 2012 2011 2010 2009 2008 2007 2006 Community College Rate $ 1.2082 0.9728 0.8844 0.9386 0.9760 1.0646 1.0315 $ School Districts Central Special Health Arizona Project Rate Care District Rate Total County Rate $ 0.1494 0.1122 0.0914 0.0856 0.0935 0.1184 0.1206 $ 3.3598 2.7889 2.5750 2.3342 2.4718 2.7446 3.1759 0.1000 0.1000 0.1000 0.1000 0.1000 0.1200 0.1200 Agua Fria/ Agua Fria/ Buckeye/ Tolleson/ Avondale Litchfield Liberty Littleton Rate Rate Rate Rate $ 7.4753 5.3923 6.0066 5.7554 6.4298 7.8564 7.8631 $ 3.2590 5.3658 5.3164 4.9382 5.3545 6.8558 6.9430 $ 6.2698 6.1069 5.2568 5.5581 6.7267 7.3005 7.4944 $7.8626 6.1935 5.8681 6.3843 6.8078 7.3586 8.3794 Mobile Rate $4.9490 5.4994 6.2147 8.3984 N/A N/A N/A Continued 149 City of Goodyear Property Tax Rates Direct and Overlapping Governments1 Last Five Fiscal Years (Unaudited) Overlapping Rates Other Special Taxing Districts Fiscal Year 2012 2011 2010 2009 2008 2007 2006 $ West Maricopa Education Central Roosevelt Centerra Community Cortina Community Cottonflower Community Estrella Mtn. Ranch Community Center District Rate Arizona GRD Rate Irrigation District Rate Facilities District Rate Facilities District Rate Facilities District Rate Facilities District Rate 0.0500 0.5000 0.0500 0.0500 0.0500 0.0500 0.0500 $ 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 $ 17.1000 17.1000 17.1000 17.1000 15.0000 15.0000 15.0000 $ 2.1961 2.3797 2.6829 2.6965 3.0000 3.0000 3.0000 $ 2.7298 2.2087 1.2146 0.1520 2.8500 2.8500 2.8500 $ 3.4033 2.9776 2.1198 1.2843 1.7639 3.0000 3.0000 $ 1.3000 1.3000 1.3000 1.3000 1.3000 1.3000 1.3000 150 Table 8 Overlapping Rates Fiscal Year 2012 2011 2010 2009 2008 2007 2006 $ Goodyear Community Facilities Goodyear Community Facilities General District #1 Rate Utilities District #1 Rate 0.8034 0.7570 0.6629 0.5313 0.8040 1.0000 1.0000 $ 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Other Special Taxing Districts Palm King Valley Ranch Community Community Facilities District #3 Rate $ 1.2684 1.2952 0.2165 1.7949 1.6295 2.0000 0.3000 Facilities District Rate $ 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 - $ Wildflower Community Facilities Wildflower Community Facilities General District #1 Rate General District #2 Rate 2.8718 2.2891 1.5905 1.1703 1.3123 2.1340 2.1893 $ 2.9933 2.5496 1.6561 1.3143 1.4154 2.3935 2.3547 Concluded 151 Table 9 City of Goodyear Principal Property Tax Payers Current Fiscal Year and Eight Years Ago (Unaudited) Fiscal Year 2003 2012 Taxable Assessed Value Taxpayer Arizona Public Service Company VHS of South Phoenix, Inc. Macy's Retail Holdings, Inc. DH Goodyear, LLC NNP III Estrella Mountain Ranch, LLC Cardinal Capital Co The Market at Estrella Falls, LLC Southwest Gas Corporation First American Title Insurance Company BT Goodyear LLC Suncor Development Company Rubbermaind, Inc. Sun Chase Estrella LP McLane Company Qwest Communications Byrd Enterprises of Arizona Inc. $ Total $ 20,811,415 9,298,057 7,444,200 6,500,014 5,517,187 5,225,632 5,140,140 4,930,436 4,549,096 4,210,347 73,626,524 Percentage of Total Taxable Assessed Rank Value 1 2 3 4 5 6 7 8 9 10 3.09% 1.38% 1.11% 0.97% 0.82% 0.78% 0.76% 0.73% 0.68% 0.63% 8.67% Taxable Assessed Value $ $ 7,739,112 2,246,121 - Rank Percentage of Total Taxable Assessed Value 3 3.48% 8 1.01% 1,801,345 3,580,451 10 6 0.81% 1.61% 14,143,894 8,339,560 6,560,454 4,492,243 2,646,420 2,068,211 1 2 4 5 7 9 6.36% 3.75% 2.95% 2.02% 1.19% 0.93% 53,617,811 24.11% Note: Data not available prior to 2003 Source: Maricopa County Treasurer 153 City of Goodyear Assessed Value and Estimated Actual Value of Taxable Property1 Last Six Fiscal Years (Unaudited) Fiscal Year Ended June 30 Total Assessed Value Residential Property Total Assessed Value Commercial Property Agricultural/ Vacant Land 2012 2011 2010 2009 2008 2007 2006 $ 357,367,570 405,850,285 497,383,109 586,181,619 464,968,904 259,063,526 219,161,231 $ 252,752,614 297,842,341 284,491,038 211,360,209 159,482,762 131,663,157 109,929,249 $ 206,673,571 308,078,489 374,640,069 323,172,973 221,884,779 164,267,777 97,388,312 Other $ 214,401 33,349 28,842 30,053 30,978 47,639 226,783 Less: Tax-Exempt Property Net Assessed Value $ 144,006,328 163,045,578 173,686,635 120,023,805 82,130,285 60,129,086 35,549,177 $ 673,001,828 848,758,886 982,856,423 1,000,721,049 764,237,138 494,913,013 391,156,398 Note: Data prior to 2006 is not available. 1 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. 154 Table 10 Secondary Tax Rate $ 0.6554 0.6630 0.9679 0.9322 0.8679 0.7991 0.7778 Estimated Actual Taxable Value Assessed Value as Percentage of Actual Value $ 6,130,095,795 7,401,814,203 8,607,745,155 8,799,999,309 6,700,379,823 4,159,221,424 3,254,133,854 11.0% 11.5% 11.4% 11.4% 11.4% 11.9% 12.0% 155 Table 11 City of Goodyear Property Tax Levies and Collections1 Last Ten Fiscal Years (Unaudited) Fiscal Year Taxes Levied Ended June 30 for the Fiscal Year 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 $ 10,743,752 11,650,452 14,959,898 14,460,290 10,843,797 7,424,246 6,070,318 6,049,416 5,096,682 4,287,085 Collected within the Fiscal Year of the Levy Amount Percentage of Levy $ 10,521,745 11,524,990 14,527,751 13,888,743 10,706,881 7,257,013 5,923,200 5,974,482 4,982,963 4,112,585 97.93% 98.92% 97.11% 96.05% 98.74% 97.75% 97.58% 98.76% 97.77% 95.93% Collection in Total Collections to Date Subsequent Years $ 129,172 123,357 96,134 44,605 77,686 49,075 49,184 - Amount $ 10,650,917 11,648,347 14,623,885 13,933,348 10,784,567 7,306,088 5,972,384 5,974,482 4,982,963 4,112,585 Percentage of Levy 99.14% 99.98% 97.75% 96.36% 99.45% 98.41% 98.39% 98.76% 97.77% 95.93% 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. 1 Source: City Financial Records and Reports Schedule includes General and Debt Service Funds 156 Table 12 City of Goodyear Utility Statistical Data Ten Largest Water Users Current Fical Year and Four Fiscal Years Ago (Unaudited) Fiscal Year Entity Canyon Trails HOA Canyon Trails Unit 4 Estrella Joint Committee Canyon Trails 4 - South Cottonflower Goodyear Community Canyon Trails 3 Agua Fria High School Sarival Paseo Joint Community Cancer Treatment Center Park Shadows Avondale School Centerra, LLC Pueblo Verda HOA Evergreen Lawn Sprinklers Estrella Vista HOA Type of User Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association School Homeowner's Association Hospital Apartments School Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association Total Total as a percent of total Water System Operating Revenue Rank 1 2 3 4 5 6 7 8 9 10 2012 Fees & Charges $ 205,109 186,669 176,348 163,706 145,798 136,309 132,095 129,625 103,135 102,081 Rank 2008 Fees & Charges 145,474 5 2 166,139 93,896 173,266 154,195 76,401 105,348 102,443 148,800 64,527 8 1 3 9 6 7 4 10 $ 1,480,877 13.84% $ 1,230,489 13.94% Note: Water information not available prior to FY 2008 Source: City customer service and billing records 157 Table 13 City of Goodyear Utility Statistical Data Ten Largest Wastewater Users Current Fiscal Year and Four Fiscal Years ago (Unaudited) Fiscal Year Entity Arizona State Prison/Perryville Cancer Treatment Center Park Shadows Fairfield Goodyear LL Fairfield Centerra Poore Brothers, Inc. Airport Training Center Avondale Elementary Alliance Residential Pem Investments Fairfield Development Country Air Apartments Agua Fria Union High School District McLane Sunwest Americas Best Value Inn Wal-Mart Stores, Inc. La Jolla Court, Inc. Estrella Joint Committee Type of User Prison Hospital Apartments Apartments Real Estate Food Manufacturer, Snacks Airport Education Real Estate Real Estate Real Estate Apartments Education Grocery Distributor Hotel Grocery Retail Apartments Homeowner's Association Total Total as a percent of total Wastewater System Operating Revenue Rank 1 2 3 4 5 6 7 8 9 10 2012 Fees & Charges Rank $ 386,204 1 79,460 77,420 2 69,594 67,368 56,918 6 46,463 5 39,070 7 38,381 37,088 $ 897,966 9.33% 2008 Fees & Charges $ 317,331 50,512 22,656 22,656 21,794 32,000 19,253 24,273 18,044 17,581 3 8 4 9 10 $ 546,100 8.74% Note: Wastewater information not available prior to FY 2008 Source: City customer service and billing records 159 City of Goodyear Schedule of Existing and Adopted Monthly Water & Sewer Service Charges (2011 - 2013) (Unaudited) Description of Water System Services Base Charge (Meter Size) 3/4 Inch 1 Inch 1 1/2 Inch 2 Inches 3 Inches 4 Inches 6 Inches Monthly Volume Charge - Residential 0 - 6,000 gallons (per thousand) 6,001 - 12,000 (per thousand) 12,001 - 30,000 (per thousand) 30,001+ gallons (per thousand) Monthly Volume Charge - Commercial 0 - 40,000 gallons (per thousand) 40,001 - 100,000 gallons (per thousand) 100,001+ gallons (per thousand) Existing Fees Adopted 2011 Adopted 2012 Adopted 2013 $ 10.05 12.74 19.74 32.02 61.64 99.58 189.08 $ $ 10.05 12.74 19.74 32.02 61.64 99.58 189.08 $ 10.23 14.14 22.86 37.01 70.67 115.24 218.71 $ 1.46 2.92 4.38 5.69 (2) $ (3) (4) (5) 1.32 2.64 3.96 5.15 $ 1.46 2.92 4.38 5.69 $ 1.18 2.36 3.54 5.69 $ 2.60 4.16 5.41 $ 2.30 3.68 4.78 $ 2.60 4.16 5.41 $ 3.00 4.80 6.24 9.94 11.81 16.36 26.22 48.43 83.36 159.83 (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 - 6,000 gallons (per thousand). (3) Monthly volume change for fees is 6,001 - 12,000 gallons (per thousand). (4) Monthly volume change for fees is 12,001 - 30,000 gallons (per thousand). (5) Monthly volume change for fees is 30,001 - and over 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 (2011-2013) Rate Date Increase Fiscal Year 2011 7.50% Fiscal Year 2012 9.40% Fiscal Year 2013 -18.80% Source: City of Goodyear Finance Department. 160 Table 14 Adopted 2011 Adopted 2013 (See below) $ 4.90 $ 4.45 $ 4.90 $ 5.78 General Commercial Sewer Service Base Charge Volume Charge (per 1,000 gallons) (See below) $ 4.90 $ 4.45 $ 4.90 $ 5.78 $ 17.52 23.70 29.75 54.57 84.74 130.37 285.03 $ 18.96 28.02 34.61 67.16 99.68 139.10 328.83 $ 21.12 32.41 39.94 77.58 115.22 152.86 378.70 Base Charge (Meter Size) 3/4 Inch 1 Inch 1 1/2 Inch 2 Inches 3 Inches 4 Inches 6 Inches Existing Fees Adopted 2012 Description of Sewer System Services Residential Sewer Service Base Charge Volume Charge (per 1,000 gallons) $ 18.96 28.02 34.61 67.16 99.68 139.10 328.83 Schedule of Wastewater System Rate Increases (2011-2013) Date Fiscal Year 2011 Fiscal Year 2012 Fiscal Year 2013 Rate Increase 9.30% 9.50% 15.20% Source: City of Goodyear Finance Department. 161 City of Goodyear Ratios of Outstanding Debt by Type Last Seven Fiscal Years (Unaudited) Governmental Activities Public Improvement Greater Arizona Corporation Fiscal Year Ended June 30 2012 2011 2010 2009 2008 2007 2006 General Obligation Bonds $ 29,000,636 31,358,457 33,601,981 35,842,739 41,719,857 36,050,000 27,280,000 Contract Payable $ 1,755,628 3,755,628 5,755,628 11,755,628 - Development Authority Loan $ 3,185,000 3,645,000 Municipal Facilities Revenue Bond $ 2,940,000 4,510,000 5,230,000 5,910,000 6,415,000 3,320,000 3,485,000 McDowell Road Community Corridor Improvement District Facilities District Bonds $ 43,675,000 44,900,000 46,060,000 47,165,000 47,165,000 - $ 113,555,000 117,182,000 122,313,000 127,125,000 131,116,000 76,844,000 73,000,000 Note: Data prior to 2006 is not available. * Applied Geographic Solutions/TIGER Geography Source: City Financial Records and Reports 162 Table 15 Business-Type Activities Public Improvement Corporation General Obligation Bonds $ 89,394,364 91,121,543 92,753,019 88,282,261 88,125,143 54,145,000 28,990,000 Municipal Facilities Revenue Bond $ 102,180,000 102,300,000 102,300,000 102,300,000 67,850,000 Water Infrastructure Revenue Bonds Finance Authority Loan $ 31,910,000 32,245,000 17,040,000 2,370,000 2,345,000 2,460,000 2,580,000 $ 11,908,603 12,554,096 9,925,289 8,866,108 9,443,400 9,985,012 10,505,512 Water Rights Total 10,314,041 11,173,544 - $ 426,319,231 439,926,724 445,292,958 440,790,280 394,179,400 185,989,012 149,485,512 $ Percentage of Personal Income* 22.40% 20.74% 24.79% 24.89% 25.65% 12.34% 11.74% Per Capita 6,340 6,634 6,822 7,047 6,742 3,335 3,007 163 Table 16 City of Goodyear Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (Unaudited) Percentage Fiscal Year Ended June 30 Less: Amounts Available in Debt Service Fund General Obligation Bonds 2012 2011 2010 2009 118,395,000 122,480,000 126,355,000 124,125,000 2008 2007 2006 2005 2004 2003 129,845,000 90,195,000 56,270,000 58,265,000 30,395,000 22,270,000 $ 1,246,110 668,186 828,016 592,244 3,026,753 587,476 210,498 123,863 499 - Total $ Estimated Actual Taxable Value of Property Per Capita 117,148,890 121,811,814 125,526,984 123,532,756 11.00% 11.50% 11.40% 11.40% 1,742 1,830 1,933 1,975 126,818,247 89,607,524 56,059,502 58,141,137 30,394,501 22,270,000 11.40% 11.90% 12.00% 17.77% 11.49% 10.01% 2,169 1,607 1,128 1,410 849 733 Source: City Records (Does not include Enterprise, Special Assessment and CFD bonds) 165 City of Goodyear Direct and Overlapping Governmental Activities Debt As of June 30, 2012 (Unaudited) Secondary Assessed Valuation 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 Littleton Elementary School District #65 Agua Fria Union High School District #216 Buckeye Union High School District #201 Tolleson Union High School District #214 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 $ $ 38,760,296,502 38,760,296,502 380,611,093 197,346,708 644,383,622 254,814,338 1,024,994,715 717,792,695 1,095,580,510 11,105,474 8,800,787 8,149,899 53,740,582 267,669,610 120,814,204 48,541,453 4,584,837 4,613,436 82,364,136,967 Debt Outstanding $ $ 673,001,828 671,250,000 32,270,000 10,140,000 38,250,000 18,955,000 43,295,000 53,240,000 81,235,000 3,345,000 2,330,000 2,570,000 16,260,000 46,470,000 11,595,000 7,625,000 935,000 1,125,000 1,040,890,000 118,395,000 (a) Proportion applicable to the City of Goodyear, Arizona is computed on the ratio of secondary assessed valuation for 2011-2012. Sources: Maricopa County Department of Finance, Maricopa County Assessor's Office and Official Statements Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Goodyear. This process recognizes that when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the county's taxable assessed value that is within the government's boundaries and dividing it by the county's total taxable assessed value. Note: The source for the debt issuance was the OS for the GO refunding bonds issued in March 2012. Tolleson Union was clearly too high in the OS, so I used the ADOR report for FY2011. 166 Table 17 Estimated Percentage Applicable (a) Estimated Share of Overlapping Debt 1.74% $ 1.74% 80.35% 48.62% 41.77% 0.03% 56.22% 13.30% 0.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% $ 11,679,750 25,928,945 4,930,068 15,977,025 5,687 24,340,449 7,080,920 8,124 3,345,000 2,330,000 2,570,000 16,260,000 46,470,000 11,595,000 7,625,000 935,000 1,125,000 182,205,967 100.00% 118,395,000 167 City of Goodyear Legal Debt Margin Information Last Seven Fiscal Years (Unaudited) Fiscal Year 2012 Secondary Assessed Value 20% Limitation Debt Limit Equal to 20% of Assessed Valuation Total Debt Applicable to 20% Limit Legal 20% Debt Margin (Available Borrowing Capacity) $ $ Total net debt applicable to the limit as a percentage of debt limit 6% Limitation Debt Limit Equal to 6% of Assessed Valuation Total Debt Applicable to 6% Limit Legal 6% Debt Margin (Available Borrowing Capacity) Total net debt applicable to the limit as a percentage of debt limit 2011 2010 2009 673,001,828 $ 848,758,886 $ 982,856,423 $ 1,000,721,049 134,600,366 118,130,000 169,751,777 122,205,000 196,571,285 126,070,000 200,144,210 123,830,000 16,470,366 $ 47,546,777 $ 70,501,285 87.76% 71.99% $ 64.13% 76,314,210 61.87% $ 40,380,110 265,000 $ 50,925,533 275,000 $ 58,971,385 285,000 $ 60,043,263 295,000 $ 40,115,110 $ 50,650,533 $ 58,686,385 $ 59,748,263 0.66% 0.54% 0.48% 0.49% Note: Data prior to 2006 is not available. Sources: Maricopa County Treasurer's Office City financial records and reports 168 Table 18 Fiscal Year 2008 2007 2006 $ 764,237,138 $ 494,913,013 $ 391,377,371 152,847,428 129,540,000 98,982,603 90,195,000 78,275,474 47,795,000 8,787,603 $ 30,480,474 $ 23,307,428 84.75% $ 91.12% 61.06% $ 45,854,228 305,000 $ 29,694,781 - $ 23,482,642 8,475,000 $ 45,549,228 $ 29,694,781 $ 15,007,642 0.67% 0.00% 36.09% 169 Table 19 City of Goodyear Pledged-Revenue Coverage Last Seven Fiscal Years (Unaudited) Public Improvement Corporation Municipal Facilities Revenue Bonds* Fiscal Year Ended June 30 2012 2011 2010 2009 2008 Operating Revenue $ 65,501,422 57,697,609 57,363,961 62,281,214 85,680,828 Pledged Revenue $ Debt Service Principal Interest 52,355,875 45,594,775 45,810,806 49,324,646 56,440,267 $ 570,000 745,000 720,000 680,000 505,000 4,925,626 5,562,612 5,594,412 4,907,984 2,019,691 Coverage 9.53 7.23 7.25 8.83 22.36 Water & Sewer Bonds & Loans Fiscal Year Ended Operating Less: Operating Net Operating June 30 Revenue Expenses Revenue 2012 2011 2010 2009 2008 2007 2006 Note: $ 20,221,750 18,271,778 16,378,677 15,300,056 15,151,775 13,760,462 10,816,571 $ 8,703,445 8,965,363 8,350,588 9,733,836 11,424,111 11,008,102 9,629,632 $ 11,518,305 9,306,415 8,028,089 5,566,220 3,727,664 2,752,360 1,186,939 Debt Service Principal $ 1,139,026 1,167,815 1,195,691 877,292 656,612 640,500 502,118 Interest $ 5,554,656 1,802,534 543,662 540,523 474,992 506,104 516,469 Coverage 1.72 3.13 4.62 3.93 3.29 2.40 1.17 Data prior to 2006 is not available. * PIC 2007 Bonds issued in FY2008, PIC 2008 Bonds issued in FY2009 and PIC 2011 Bonds issued in FY 2012 Source: City Financial Records and Reports 170 Table 20 City of Goodyear Demographic and Economic Statistics Last Seven Fiscal Years (Unaudited) Fiscal Year 2012 2011 2010** 2009 2008 2007 2006 Population 67,239 66,309 65,275 62,554 58,462 55,775 49,714 $ Personal Per Capita Income (in thousands) Personal Income* 1,903,133 2,120,960 1,796,433 1,771,217 1,536,966 1,507,375 1,274,269 $ 28,304 31,986 27,521 28,315 26,290 27,026 25,632 Education Median Age 35.2 33.5 35.5 39.1 36.1 36.3 35.7 Level in Years of Schooling 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 Unemployment Rate 8.2% 9.8% 7.1% 6.9% 3.6% 2.1% 2.6% Note: Data prior to 2006 is not available. * Applied Geographic Solutions/TIGER Geography ** obtained from 2010 Census data Source: City Financial Records and Reports 171 Table 21 City of Goodyear Principal Employers1 Current Fiscal Year and Nine Fiscal Years Ago (Unaudited) Fiscal Year 2012 Major Corporation Lockheed Martin Arizona State Prison/Perryville Macy's West Valley Hospital City of Goodyear Cancer Treatment Centers of America McLane Sunwest Amazon.com Sub-Zero / Wolf Wal-Mart Supercenter Newell Rubbermaid, Inc. Timco Aviation Services Cavco Industries, Inc. Fry's Food and Drug Store Aviation Management Systems Target Lufthansa-German Airlines Total Employees 1050 1009 600 550 511 430 373 357 334 328 5,542 - Fiscal Year 2003 Percentage of Total City Rank Employment* Employees 1 2 3 4 5 6 7 8 9 10 - 2.04% 1.96% 1.17% 1.07% 1.00% 0.84% 0.73% 0.70% 0.65% 0.64% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 10.79% 825 200 450 250 430 400 225 220 175 170 3,345 - Rank 1 8 2 5 3 4 6 7 9 10 Percentage of Total City Employment* - 0.00% 6.28% 0.00% 0.00% 1.52% 0.00% 3.42% 0.00% 0.00% 0.00% 1.90% 3.27% 3.04% 1.71% 1.67% 1.33% 1.29% 25.44% Note: This schedule should be current and nine years ago, but the earliest information available is FY 2003. 1 Source: City Records *2012 labor force = 51,350; 2003 labor force = 13,147 172 Table 22 City of Goodyear Full-time Equivalent City Government Employees by Function Last Seven Fiscal Years (Unaudited) 2012 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 2011 2010 2009 2008 2007 2006 52 28 14 52 30 13 53 30 13 47 30 15 52 28 12 52 27 11 41 21 9 94 27 9 94 29 9 97 29 10 97 30 16 89 26 38 72 24 32 72 18 21 91 20 9 0 6 13 65 21 18 7 87 24 7 0 7 8 78 22 17 9 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 10 474 486 498 515 519 444 391 Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 173 City of Goodyear Operating Indicators by Function Last Seven Fiscal Years (Unaudited) Function General Government City Clerk's Office # of records requests 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 Communications & Public Information News releases/media updates Traffic construction alerts 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 Police # Total arrests # Moving violations citations Fire # Emergency responses # Fire extinguished # Inspections Financial Services # accounts payable checks issued # purchase orders # water meters read annually Information Services # documents requests for service (Help Desk tickets) # of SPAM emails blocked from being delivered to the staff # of emails received Planning and Development Customer wait-time (in minutes) at One Stop Shop Total Number of Permits Issued Provide applicant with pre-application meeting within 30 days of submitting request % of inspections performed within 24 hours of request Human Resources # of new hires (FT & PT) HR operating cost as a % of City payroll Fiscal Year 2011 2010 2012 2009 484 550 504 613 3,827 3,380 3,395 2,494 94% 90% 90% 94% 49 307 136 3,709 771,938 2,203,995 262 150 349 144 4,215 703,174 2,104,553 230 235 253 176 4,825 715,285 2,208,180 217 161 1,135 186 5,721 738,949 2,346,423 200 2,402 11,468 2,254 12,581 4,731 11,810 2,829 13,313 7,195 271 212 6,597 235 3,229 5,570 226 4,262 5,328 270 3,953 6,132 1,229 178,466 6,413 1,344 170,657 8,024 1,147 168,647 10,184 918 163,444 5,134 10,624,000 966,000 4,108 5,126,114 6,102,710 3,637 11,948,508 12,857,998 5,045 15,370,086 16,327,382 <1 3,576 <3 3,269 <3 4,232 <5 3,401 1 0.7 1 1 1 1 1 1 118 4.86% 125 4.11% 247 4.18% 158 4.11% 174 Table 23 Fiscal Year 2007 2008 2006 648 576 180 2,469 3,653 2,692 94% 94% 91% 182 462 136 5,788 1,509,717 7,203,478 200 129 215 116 4,296 1,322,259 4,865,081 175 92 267 42 2,520 840,757 5,318,311 140 2,614 11,452 2,814 12,422 2,603 12,175 3,431 143 3,427 3,236 154 2,403 1,960 150 759 9,949 1,043 155,805 9,305 1,002 147,241 9,014 1,067 125,382 6,052 5,214,519 6,008,336 4,000 3,587,184 4,264,236 3,477 878,595 1,246,386 <5 5,874 <5 1,340 <5 7,859 1 1 1 1 1 1 179 4.36% 164 5.50% 174 5.26% Continued 175 City of Goodyear Operating Indicators by Function Last Seven Fiscal Years (Unaudited) Function Parks and Recreation # attending Park & Recreation facilities and Libraries annually # of square feet of medians and rights of way maintained * Economic Vitality Sales Tax growth (% annual change) Bed Tax growth (% annual change) Municipal Services # of homes serviced by Residential Refuse Collection # of citizens serviced by Household Hazardous Waste collection program Fiscal Year 2011 2010 2012 63,256 23,151,438 54,428 22,696,736 2009 52,241 22,175,027 51,844 22,118,000 10.45% 14.15% 4.42% -7.31% -10.40% -3.90% -12.30% -15.00% 22,363 21,489 20,928 20,149 503 729 848 0 Water Service Water Service Connections Drinking Water Supplied (million gallons per day) Reclaimed Water Supplied (million gallons per day) 16,809 11.6 0.32 14,588 11.4 0.366 14,488 11.1 0.226 13,975 11 0.45 Wastewater Sewer Service Connections Sewage Treated (millions gallons per day) 16,856 3.819 16,743 3.73 16,144 3.73 16,144 3.7 24 264 12.5 260 0 372 4 681 Other Public Works Street resurfacing (miles) Potholes repaired Citizen & Neighborhood Resources # of new Code Enforcement cases processed per year 2,069 2,016 2,255 2,155 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 176 Table 23 Fiscal Year 2007 2008 2006 Table 23 49,111 15,320,000 50,093 15,320,000 46,330 15,320,000 -10.25% 6.00% 20.71% 6.98% 70.19% 22.81% 19,811 18,664 17,228 634 510 531 13,500 10.8 0.269 13,051 7 0 11,597 7 0 13,500 3.242 11,398 2 5,037 2 0 783 34 1,096 33 977 2,755 2,092 2,698 Concluded 177 Table 24 City of Goodyear Capital Asset Statistics by Function Last Seven Fiscal Years (Unaudited) Function Public Safety Police: Stations Police Vehicles Fire Stations Highways and Streets Street (miles) Streetlights Traffic signals 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 (MGD) (thousands of gallons) 2012 2011 2010 Fiscal Year 2009 2008 2007 2006 3 125 6 3 130 6 3 124 6 3 130 6 3 125 6 4 146 4 1 107 4 1,250 8,465 77 704 8,438 72 704 8,329 72 563 7,969 67 450 7,391 56 360 7,391 37 360 7,391 30 17 204 1 6 1 17 204 1 6 1 17 204 1 6 1 16 184 1 6 1 16 156 1 6 1 12 117 1 6 1 11 82 1 2 1 311 2,801 16 310 2,791 16 310 2,791 16 307 2,754 16 286 2,481 15 257 2,370 11 173 2,053 12 227 57 5.6 229 57 5.6 223 54 5.6 225 58 5.6 236 80 5.5 152 105 4.6 167 105 11.6 Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 178 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, 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, 2012, which collectively comprise the City’s basic financial statements and have issued our report thereon dated November 19, 2012. 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 Management of the City is responsible for establishing and maintaining effective 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. Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m 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 19, 2012 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 City of Goodyear, Arizona’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of Goodyear, Arizona’s major federal programs for the year ended June 30, 2012. City of Goodyear, Arizona’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 City of Goodyear, Arizona’s management. Our responsibility is to express an opinion on City of Goodyear, Arizona’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 Non-Profit 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, 2012. Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m 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. 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 19, 2012 CITY OF GOODYEAR SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2012 Federal Grant CFDA Number Number Expenditures Community Development Block Grant DG0902 14.218 $ Home Grant UC1014 14.239 U.S. Department of Housing and Urban Development: Passed through Maricopa County Department of Housing 107,807 27,825 Total U.S. Department of Housing and Urban Development 135,632 U.S. Department of Justice: Passed through Governor's Office for Children, Youth & Families STOP Calendar 2011 ST-WSG-09-9365-05Y3 16.588 Bullet Proof Vest Partnership 2009 BVP 16.607 Bullet Proof Vest Partnership 2010 BVP 16.607 20,263 Passed through The Bureau of Justice Assistance: $ 325 9,028 Bullet Proof Vest Partnership Subtotal 9,353 Passed through Coverddell Forensic Science Improvement Digital Image Management System 2010-CD-BX-0098 16.742 150,185 ARRA MCNNET Grant C-50-10-021-3-01 16.738 68,904 ARRA MCNNET OT Grant C-50-10-024-3-02 16.803 6,072 Passed through Maricopa County: JAG Program Cluster JAG Program Cluster Subtotal 74,976 Total U.S. Department of Justice 254,777 U.S. Department of Transportation: Passed through Arizona Department of Transportation: ARRA Yuma Road Bridge TRACS No: SS 544 03D/01C 20.205 2,792 West Valley DUI Task Force Enf OT 2011-410-006 20.601 17,833 West Valley DUI Task Force Enf OT 2012-AL-037 20.600 15,963 Buckle Up Arizona Enforcement Camp 2012-OP-027 20.600 4,811 Passed through Arizona Governor's Office of Highway Safety Highway Safety Cluster Highway Safety Cluster Subtotal 38,607 Total U.S. Department of Transportation 41,399 U.S. Department of Energy ARRA - Energy Efficiency and Conservation Block Grant DE-SC0002957 81.128 204,522 * Total U.S. Department of Energy 204,522 U.S. Department of the Education Passed through Governor's Office of Economic Recovery ARRA - AZAFIS System OER-11-IGA-GS-62 84.397 38,971 Total U.S. Department of the Education 38,971 U.S. Department of Homeland Security: Passed through Arizona Division of Emergency Management CBRNE Response Team Sustainment/Enhancer 777811-02 97.067 Urban Area Assessment TLO Sustainment 777811-01 97.067 44,098 2,669 CBRNE Response Team Sustainment/Enhancer 888812-01 97.067 48,458 Urban Area Assessment TLO Sustainment 888811-02 97.067 309 CBRNE Response Team Sustainment/Enhancer 888811-01 97.067 2,318 Total U.S. Department of Homeland Security Total Expenditures of Federal Awards 97,852 $ 773,153 *Denotes major program See accompanying notes. 185 CITY OF GOODYEAR, ARIZONA NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2012 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. 186 CITY OF GOODYEAR, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2012 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued: Internal control over financial reporting:  Material weakness(es) identified?  Significant deficiency(ies) identified that are not considered to be a material weakness(es)? Noncompliance material to financial statements noted? Unqualified ____ yes __X_ no __ _ yes __X_ none reported yes __X_ no Federal Awards Internal control over major programs:  Material weakness(es) identified?  Significant deficiency(ies) indentified that are not considered to be a material weakness(es)? ____ yes __X_ no __ _ yes __X_ none reported Type of auditors’ report issued on compliance for each major program listed below- Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? ____ yes __X_ no Identification of major programs: CFDA Numbers 81.128 Name of Federal Program or Cluster ARRA - Energy Efficiency and Conservation Block Grant Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee? $300,000 __X_ yes _____ no 187 CITY OF GOODYEAR, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2012 SECTION II – FINDINGS RELATED TO FINANCIAL STATEMENTS REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS None Noted SECTION III – FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS None Noted SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS There were no prior year findings. 188