CITY OF GOODYEAR, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2013 Prepared by the Finance Department Larry A. Lange, Finance Director TABLE OF CONTENTS I. INTRODUCTORY SECTION Page Letter of Transmittal GFOA Certificate of Achievement City of Goodyear Officials Organizational Chart Acknowledgements vii xiv xv xvi xvii II. FINANCIAL SECTION Independent Auditors’ Report 1 A. Management’s Discussion & Analysis 7 B. Basic Financial Statements 21 Government-wide Financial Statements Statement of Net Position Statement of Activities 23 24 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet to the Statement of Net Position 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 30 33 34 37 38 Proprietary Fund Financial Statements Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows 43 44 45 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position 49 50 Notes to Financial Statements 1. Summary of Significant Accounting Policies 2. Cash and Investments 3. Receivables 4. Capital Assets 5. Loans Payable 6. General Obligation Bonds Payable 7. Revenue Bonds Payable 8. Community Facilities Districts Bonds Payable 9. Changes in Long-term Liabilities 10 Interfund Receivables, Payables, and Transfers 11. Contingent Liabilities 12. Risk Management 13. Retirement Plans 14. Deficit Fund Balances 15. Commitments 16. Restatement Page 55 65 69 70 72 73 74 76 78 78 79 79 80 85 85 86 C. Other Supplementary Information Non-Major Governmental Funds – Financial Statements Combining Balance Sheet Combining Statement of Revenues, Expenses and Changes in Fund Balances 94 96 Fiduciary Funds –Financial Statements Combining Statement of Fiduciary Net Position-Agency Funds Combining Statement of Changes in Assets and Liabilities-Agency Funds 101 102 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 Capital Improvement Projects Fund 105 106 107 108 Budgetary Comparison Schedules - Non-Major Governmental Funds Highway User Revenue Fund Grants Community Facilities Districts – General Debt Service 111 112 113 114 Budgetary Comparison Schedules – Enterprise Funds Page Water & Sewer Enterprise Fund Sanitation Enterprise Fund Stadium Enterprise Fund 115 116 117 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 Position by Component Changes in Net Position 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 121 122 124 Table Page 1 2 3 4 5 6 7 8 9 10 11 12 13 130 132 139 140 142 144 149 150 155 156 158 159 161 14 15 16 17 18 19 20 21 22 23 24 162 164 166 167 168 170 171 172 173 174 178 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 November 14, 2013 Honorable Mayor, City Council, City Manager, and Citizens of the City of Goodyear, Arizona: State law requires that cities annually publish after the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards (GAAS) by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) of the City of Goodyear, Arizona (the City) for the fiscal year ended June 30, 2013. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free from any material misstatements. This document represents management’s report to its governing body, constituents, legislative and oversight bodies, investors and creditors. Copies of this report will be sent to elected officials, management personnel, bond rating agencies, Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system (EMMA) and other agencies, which have expressed interest in the City’s financial matters. Copies of this financial report will be placed on the City’s website for use by the general public. The accounting firm of Henry & Horne, LLP, Certified Public Accountants, an independent public accounting firm, performed the City’s annual financial statement audit. The auditors have issued an unqualified (“clean”) opinion on the City’s of Goodyear’s financial statements for the fiscal year ended June 30, 2013. The independent auditor’s report is located at the front of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report on pages 1‐3, and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. CITY OF GOODYEAR PROFILE 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, 2013 projected to be 71,381. 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‐to‐ day operations of the City. A staff of 511 full‐time (equivalent) City employees working within 13 different City departments perform the various functions of Goodyear’s city government and its operation. 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 the Goodyear Ballpark, library, community center, swimming pool, and seventeen parks encompassing 204 acres. The City is community‐driven and includes 1,125 volunteers that serve in various areas and, through their efforts, saved the City nearly $600,000 in fiscal year 2013 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. viii 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. 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 re‐ encumbered as needed in the next fiscal year. LOCAL ECONOMIC CONDITION AND OUTLOOK During fiscal year (FY) 2013, Goodyear, like most of Arizona and the nation, continued its gradual recovery from the economic recession. In FY 2013, the City saw growth in single family residential building permits, as well as the slowing of vacancies and foreclosures. In the fourth quarter of FY 2013, Goodyear was ranked as the third fastest growing city in Arizona. As optimistic as these trends are, the City continues to budget conservatively and monitors 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 of Goodyear’s tax revenue base consists of a variety of tax categories, the most significant being taxes applicable to retail sales. In FY 2013, sales tax and other revenues increased over prior years’ numbers. Sales Tax The City of Goodyear, like all Arizona cities, places significant reliance on City sales tax revenues. Even with the recent 0.25% reduction in the food for home consumption (grocery) ix sales tax rate, City sales tax revenues for FY 2013 increased by approximately 11% over FY 2012 levels. Large capital projects involving the Loop 303 and I‐10 transportation corridor generated significant amounts of construction sales tax revenue to this category. State Shared Revenues 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 2010 Census counts are used in the distribution formula for state shared revenues. As the City’s proportionate share of the state’s population continues to grow over time, the percentage of state shared revenues allocated to it will also increase. The City’s state shared revenues represented about 19% of the general fund revenue for FY 2013. Property Tax In FY 2013, the City’s combined (primary and secondary) property tax rate increased from $1.60 to $1.7750 per $100 of assessed valuation. This increase in the tax rate kept the levy (revenues) consistent, mitigating the impact of the decline in property valuation due to the recession. This stabilization ensured that the City’s ability to service currently outstanding debt and maintain basic infrastructure. For the FY 2014 budget, the Council has adopted a total combined property tax rate of $1.90 per $100 of assessed valuation. With estimates from the Maricopa County Assessor’s Office, City staff anticipates that FY 2014 will be the last year of declines before the city sees an overall assessed valuation increase again in FY 2015. In accordance with its budget policies, the City will sell no new general obligation bonds until the combined property tax rate of $1.60 per $100 of assessed valuation can be achieved. LONG‐TERM FINANCIAL PLANNING During FY 2013, the Council began a process of redefining the long term strategic priorities of the City and adopted the 2013‐2016 City Strategic Action Plan on April 8, 2013. While departments have had individual strategic plans guiding their activities, this is the first citywide plan that has been adopted since 2002. This 2013‐2016 City Strategic Action Plan establishes the City’s vision and mission and also identifies priority focus areas for strategic initiatives that help to define goals and actions for the next three years. The City of Goodyear’s mission is as follows: The City of Goodyear will provide the finest municipal services and promote a quality environment to enhance our community’s prosperity through citizen and employee participation. We are committed to the stewardship of resources and fulfillment of the public trust. x This mission statement provided direction throughout the Strategic Action Plan process. After a number of Council planning sessions, the following four focus priorities were identified: 1. Fiscal and Resource Management: Implement innovative and responsible policies and business practices to effectively manage its fiscal and human resources. The City will maintain a stable financial environment that is transparent and that maintains an outstanding quality of life for our citizens. Business practices will be efficient, business friendly, and ensure exceptional customer service to all stakeholders and citizens. 2. Economic Vitality: Seek diverse, high quality development, and foster local jobs through the strategic pursuit of industries including renewable energy, engineering, technology, aerospace, medical, manufacturing, and internet fulfillment. Business investment and sustainability will be fostered through streamlined processes, strategic marketing, and developing ongoing relationships. 3. Sense of Community: Provide programs, gathering places, and events where the community can come together to participate in opportunities of learning and recreation. Sustainable relationship with the community will be cultivated through citizen engagement, outstanding customer service, and clear, accessible communication. 4. Quality of Life: Implement programs and projects that create a clean, safe, and sustainable environment that provide citizens with opportunities for an engaged, healthy, and active lifestyle. The Strategic Action Plan establishes a road map of key strategic initiatives that best advance the vision for the City and is aligned with many other planning documents used by the City, including departmental plans (which include specific strategic plans, master plans, and operational plans) which guide department priorities and individual employee performance evaluation goals. For each of these four focus priorities, long‐range goals have been identified and assigned to various departments for follow‐up. These priorities are also a key fundamental factor in the development of the City’s annual budget. In FY 2013, the Council also developed a long‐range plan to address the issue of the Goodyear Ballpark debt payments that will jump by $4.7 million in FY 2019. Originally, it was planned for this increase to be paid for with money expected from the Arizona Sports and Tourism Authority (AZSTA) funds. Due to the decline in revenues for the AZSTA during the economic downturn, it is likely these payments will be delayed. Funded with Public Improvement Corporation (PIC) debt paid out of the City’s general fund, the Council agreed to gradually establish operating surpluses in increasing amounts each year, building to the FY 2019 increased payment. These operating surpluses will be available for one‐time costs each year as appropriated by the City Council. With this planning, the City will be financially prepared for the FY 2019 payments and will not face a situation of cutting services or staff in order to meet this commitment. xi MAJOR INITIATIVES The City’s management and Economic Development Division work to recruit new business, as well as assist existing businesses with additional job creation and expansions. A key Council goal continues to be bringing jobs into Goodyear and working to make the city one of the largest employment bases in the West Valley. There are three major corridors forming in the city that will have a great influence on the community’s future: the Airport Gateway Center with 1,200 acres of mixed development, the Palm Valley 303 master planned business park with 2,000 acres, and the 801/85 Employment Center corridor with 1,700 acres for manufacturing and industrial business. Despite the economic challenges that the City has endured throughout the recent recession, Goodyear continues to grow and attract large business. Macy’s Distribution Center is currently under construction to expand operations by 360,000 square feet, with an expected completion in the spring of 2014. Sub‐Zero, Inc., manufacturer of high‐end refrigeration, freezer, and wine storage, also hired more than 100 additional employees and invested $33 million in equipment this year. In the medical sector, the Cancer Treatment Centers of America (CTCA) recently expanded a number of areas within their facility, including more than doubling the outpatient clinic area and expanding its third floor inpatient rooms. The CTCA also purchased three buildings in Goodyear totaling more than 67,000 square feet, one of which is for the relocation of the CTCA’s corporate IT center to the community. These investments by the CTCA will result in more than 100 new high‐paying jobs in Goodyear. The West Valley Hospital also began the first phase of its $50 million expansion which includes adding a new tower to the building for 100 additional beds, as well as renovations and improvements to existing facilities. The City also successfully recruited Cookson Door to construct a new 160,000 square foot building in 2014 that will initially employ 160 and up to 300 over the next few years. Other developments, such as new restaurants, an appliance store, and Winco foods were recruited in FY 2013 and are slated for completion in the next year. AWARDS AND ACKNOWLEDGEMENTS Certificates of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Goodyear, Arizona for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2012. This is the fifth year the City of Goodyear has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. That report must satisfy both generally accepted accounting principles and applicable legal requirements. xii A Certificate of Achievement is valid for one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting this report to the GFOA to determine its eligibility for a certificate for fiscal year ended June 30, 2013. In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document dated 2012‐13. This is the eighteenth consecutive year that the City has received the highest form of recognition in governmental budgeting. Acknowledgement The preparation of this CAFR could not have been accomplished without the efficient and dedicated services of the staff of the Finance Department, especially the Accounting, Community Facilities District, and Utility Customer Service divisions. We also wish to thank the Mayor and members of the City Council, the City’s Audit Committee, and the City Manager’s Office for their interest and support in planning and conducting the financial affairs of the City in a responsible and progressive manner. Sincerely, Larry A. Lange Finance Director xiii xiv CITY OF GOODYEAR LIST OF PRINCIPAL OFFICIALS MAYOR Georgia Lord VICE MAYOR Joe Pizzillo COUNCIL MEMBERS Joanne Osborne Sheri Lauritano Wally Campbell William Stipp Sharolyn Hohman SENIOR MANAGEMENT STAFF Brian Dalke City Manager Michael Simonson Presiding Judge Roric Massey City Attorney Robert Beckley Deputy City Manager Wynette Reed Deputy City Manager Maureen Scott City Clerk Lyman Locket Human Resources Director Paul Luizzi Fire Chief Larry Lange Finance Director Gerald Geier Police Chief Sheri Wakefield-Saenz Development Services Director Daniel Cotterman Information Technology Director David Ramirez Engineering Director Nathan Torres Park & Recreation Director Romina Khananisho Government Relations & Communications Manager Eduardo Cruz Court Administrator Mark Flynn Municipal Services Division Manager Mark Holmes Water Resources Division Manager Mark Seamans Environmental Services Division Manager xv xvi City Clerk Maureen Scott Information Technology Department Daniel Cotterman Director Municpal Court Eduardo Cruz Administrator Police Department Gerald Geier Police Chief Fire Department Paul Luizzi Fire Chief Human Resources Department Lyman Locket Director Deputy City Manager Wynette Reed Presiding Judge Michael Simonson Governmental Relations & Communications Division Romina Khananisho Manager Finance Department Larry Lange Director Development Services Department Sheri Wakefield-Saenz Director City Manager Brian Dalke MAYOR & CITY COUNCIL CITIZENS OF GOODYEAR Environmental Service Division Mark Seamans Manager Water Resources Division Mark Holmes Manager Municipal Services Division Mark Flynn Manager Engineering Department David Ramirez City Engineer Parks & Recreation Department Nathan Torres Director Deputy City Manager Robert Beckley 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 Carla Williamson Kathy Painter Regina Mullaney Sheila Mills Carmelita Evans Marty Eckstaine Anna K. Dizack, MA Kathy Cheff xvii INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Council City of Goodyear, Arizona Report on the Financial Statements 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, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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, 2013, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in accordance 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. Emphasis of Matter As discussed in Note 1 to the financial statements, Governmental Accounting Standards Board (GASB) issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and Statement No. 65, Items Previously Reported as Assets and Liabilities that could have a material impact on the financial statements. For the City of Goodyear, GASB Statement No. 62 has not impacted the financial statements; however, GASB Statement No. 63 has impacted what was previously identified as “Statement of Net Assets” and renamed it to “Statement of Net Position” and GASB Statement No. 65 has impacted the presentation of the financial statements in the reclassification of deferred revenues from liabilities to deferred inflows of resources. As discussed in Note 16 to the financial statements, the adoption of GASB 65 resulted in the restatement of beginning net position. Our opinions are not modified with respect to those matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 7-19 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Goodyear, Arizona’s basic financial statements. The introductory section, other supplementary information, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The 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 basic financial statements. The other supplementary information 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 basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary information and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 14, 2013, on our consideration of the City’s internal control over financial reporting and 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Goodyear, Arizona’s, internal control over financial reporting and compliance. Casa Grande, Arizona November 14, 2013 MANAGEMENT’S DISCUSSION AND ANALYSIS For The Year Ended June 30, 2013 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, 2013. 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-xiii 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 government-wide assets and deferred outflows exceeded its liabilities and deferred inflows by $666.2 million (net position) at the close of fiscal year 2013. Of this amount, $52.4 million represents unrestricted net position, which may be used to meet the City’s ongoing obligations to citizens and creditors.  Total net position of the City increased by $15.3 million due primarily to the economic recovery and debt retirement.  At June 30, 2013, total fund balance of the governmental funds was $78.1 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 42.64% of this total amount ($33.3 million) is unassigned fund balance available for spending at the government’s discretion.  At June 30, 2013, total unassigned fund balance for the General Fund is $33.3 million, an increase of $10.2 million (44.42%) from the prior fiscal year. Due to sustained economic recovery in 2013, revenues from taxes increased by $4.2 million (9.29%), licenses and permits increased by $2.1 million (43.62%), intergovernmental revenues increased by $1.5 million (11.73%) and charges for services increased by $2.2 million (140.45%).  The City’s outstanding long-term debt decreased by $5.0 million during the current fiscal year due to retirement of principal. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are shown in two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. 7 The Statement of Net Position presents information on all of the City’s assets, deferred outflow of resources, liabilities and deferred inflow of resources, with the net of all four categories being reported as the City’s net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information demonstrating how the City’s net position changed during the most recent fiscal year as compared with the previous fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the 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 net revenue (expenses) shows the financial burden that was placed on the City’s taxpayers by each of these functions. Providing this information allows our citizens to consider the cost of each function in comparison to the benefits they believe are provided by that function.  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 government-wide financial statements can be found on pages 23 - 24 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on pages 33 and 37 respectively. The City maintains nine 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, Non-Utility Development Impact Fees and Capital Improvement Projects Fund, 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 94 of this report. The governmental fund financial statements can be found on pages 30 – 38 of this report. 8 Proprietary Funds. The City maintains four 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 water and sewer services, sanitation services and stadium operations. 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 43 - 45 of this report. Fiduciary Funds. The City maintains six 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 49 – 50 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 55 - 86 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 38 - 39 of this report. The combining statements referred to earlier in connection with non-major governmental funds is presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 94 – 97 and 101 – 102 of this report. 9 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, 2013 with comparative information for the previous year. Net Position The following table was derived from the current and prior years Statement of Net Positions: Statement of Net Position as of June 30 Governmental Business-type Total Activities Activities Primary Government 2012 2013 Current and other assets $ 153,942,141 $ 2013 148,045,226 $ 2012 2013 $ 193,163,657 Percent 2012 $ Change 39,221,516 $ 35,463,163 183,508,389 5.26% Capital assets 527,219,634 522,795,760 405,046,599 410,112,347 932,266,233 932,908,107 -0.07% Total assets 681,161,775 670,840,986 444,268,115 445,575,510 1,125,429,890 1,116,416,496 0.81% 349,306 116,619 474,896 510,856 824,202 627,475 31.35% 349,306 116,619 474,896 510,856 824,202 627,475 Deferred outflow of resources Deferred amount on refunding Total deferred outflow of resources Other liabilities 18,318,104 22,150,421 12,289,312 13,199,898 30,607,416 35,350,319 -13.42% 190,524,926 189,560,418 233,924,937 239,159,907 424,449,863 428,720,325 -1.00% 208,843,030 211,710,839 246,214,249 252,359,805 455,057,279 464,070,644 -1.94% 4,684,445 1,788,337 259,787 264,955 4,944,232 2,053,292 140.80% 4,684,445 1,788,337 259,787 264,955 4,944,232 2,053,292 140.80% 333,034,884 329,064,345 178,456,590 178,432,900 511,491,474 507,497,245 0.79% Courts 234,813 261,229 - - 234,813 261,229 -10.11% Law enforcement 208,085 125,812 - - 208,085 125,812 65.39% Highw ays and streets 493,395 400,610 - - 493,395 400,610 23.16% 17,937,344 21,720,718 532,750 1,135,981 18,470,094 22,856,699 -19.19% 32.24% Long-term liabilities outstanding Total liabilities Deferred inflow of resources Deferred revenue Total deferred inflow of resources Net position: Net Investment in Capital Assets Restricted for: Capital projects Community facilities Debt service Transit Unrestricted Total net position 711,980 538,410 - - 711,980 538,410 78,999,381 85,199,636 2,663,381 2,663,045 81,662,762 87,862,681 -7.06% 543,022 - - - 543,022 - 100.00% 31,377,349 67.12% 650,920,035 2.36% 20,147,669 35,820,702 $ 467,983,606 $ 457,458,429 $ 16,616,254 11,229,680 198,268,975 $ 193,461,606 52,436,956 $ 666,252,581 $ The net position over time, may serve as a useful indicator of a government’s financial position. The City’s assets and deferred outflow of resources exceeded liabilities and deferred inflow of resources by $666.2 million at the close of fiscal year 2013 and by $650.9 million in 2012 providing and overall increase in the City’s net position of $15.3 million. Current and other assets increased by $9.7 million. This increase was primarily in restricted cash and cash equivalent because of new bond issuance. The liabilities had a favorable decrease of $9.0 million. It includes a decrease in deposits of $3.3 million because of an increase in housing construction as builders redeem prepaid deposits. In addition, longterm liabilities decreased by $4.3 million due to principal payments in excess of new borrowing. Due to the City’s implementation of GASB statements 63 and 65 deferred outflows of resources are separated from the government’s total assets and the deferred inflows of resources are separated from total liabilities. The 2012 statement of net position (assets) has also been restated to correspond to the new reporting model. In 2013 the current and other liabilities The largest portion of the City’s net position $511.5 million (76.77%) reflects its net 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. 10 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 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 $102.3 million (15.36%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $52.4 million (7.87%) 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 2013, 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 businesstype activities. The same situation held true for the prior fiscal year for investment in capital asset and unrestricted net position. Net Position $507.5 Net investment in capital assets $511.5 $112.0 Restricted FY2012 $102.3 FY2013 $31.4 Unrestricted $52.4 $‐ $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Governmental Activities During the current fiscal year, the net position 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 revenues have increased by $3.6 million because of an increase in construction activity. The State shared revenues have also increased by $3.0 million. Business-type Activities The City business-type activities have also resulted in positive overall net increase of $3.8 million bringing the net position balance to $195.8 million from the prior year. The majority of this increase resulted from capital grants and contributions for infrastructure assets of $4.9 million of which $3.3 million came from the Cotton Lane water line expansion and $1.9 million from the Adaman water connection. The City’s charges for services increased by $2.9 million primarily for water and sewer customers due to an increase in rates. 11 Changes in Net Position. The following table compares the revenues and expenses for the current and previous fiscal year. Changes in Net Position for Year End June 30 Governmental Business-type Total Activities Activities Primary Government 2012 2013 2013 2012 2013 Percent 2012 Change REVENUES: Program revenues: Charges for services $ 10,572,068 $ 6,984,218 $ 30,777,930 $ 27,854,213 $ 41,349,998 $ 34,838,431 18.69% Operating grants and contributions 4,654,268 7,636,691 - - 4,654,268 7,636,691 -39.05% 11,358,824 9,701,254 7,987,680 9,252,599 19,346,504 18,953,853 2.07% Sales taxes 40,222,752 36,364,557 - - 40,222,752 36,364,557 10.61% Property taxes 16,205,387 16,476,434 - - 16,205,387 16,476,434 -1.65% 2,529,456 2,460,521 - - 2,529,456 2,460,521 2.80% 14,194,960 12,704,826 - - 14,194,960 12,704,826 11.73% Capital grants and contributions General revenues: Franchise taxes State shared revenue Investment income 439,982 319,017 95,839 92,945 535,821 411,962 30.07% 1,455,665 493,244 432,983 117,103 1,888,648 610,347 209.44% 101,633,362 93,140,762 39,294,432 37,316,860 140,927,794 130,457,622 8.03% General government 16,291,762 17,087,161 - - 16,291,762 17,087,161 -4.65% Public safety 29,348,288 26,689,702 - - 29,348,288 26,689,702 9.96% Highw ays and streets 14,355,644 13,179,678 - - 14,355,644 13,179,678 8.92% 3,090,345 4,168,252 - - 3,090,345 4,168,252 -25.86% Culture and recreation 5,539,612 4,962,070 - - 5,539,612 4,962,070 11.64% Development Services 7,194,428 6,225,917 - - 7,194,428 6,225,917 15.56% 10,411,562 10,441,684 - - 10,411,562 10,441,684 -0.29% Water and sew er - - 21,912,587 20,654,800 21,912,587 20,654,800 6.09% Sanitation - - 5,246,666 5,154,201 5,246,666 5,154,201 1.79% Stadium - - 12,204,354 11,634,491 12,204,354 11,634,491 4.90% Total expenses 86,231,641 82,754,464 39,363,607 37,443,492 125,595,248 120,197,956 4.49% before transfers 15,401,721 10,386,298 15,332,546 10,259,666 49.44% Transfers (4,876,544) (3,892,665) 4,876,544 3,892,665 - - 0.00% 10,525,177 6,493,633 4,807,369 3,766,033 15,332,546 10,259,666 49.44% 457,458,429 455,858,608 193,461,606 192,085,605 650,920,035 647,944,213 Miscellaneous Total revenues EXPENSES: Program activities: Governmental activities: Public w orks Interest on long-term debt Business activities: Increase in net position Changes in net position Net position, beginning of year Restatement Net position, beginning of year-restated Net position, end of year (4,893,812) 457,458,429 $ 467,983,606 $ (69,175) (126,632) - 457,458,429 193,461,606 457,458,429 $ 198,268,975 (2,390,032) $ - (7,283,844) 0.46% -100.00% 193,461,606 650,920,035 650,920,035 0.00% 193,461,606 $ 666,252,581 $ 650,920,035 2.36% 12 The pie chart below is a depiction of Government-Wide Revenue Sources, governmental activities accounts for 72.1% of total revenues, while business activities account for 27.9% of total revenues. charges for services are the largest source of City revenues at 29.3%, an 18.7% increase from the previous fiscal year. The increase in charges for services represents governmental activities for digital billboards, fire agreement with another city and an increase in building permits. The charges for services for business activities are the result of increased water rates. The second largest increase in revenues are sales taxes at 28.5% of total revenue, which increased by 10.6% over the previous fiscal year. This increase in sales taxes is due to a sustained economic recovery in 2013. The operating grants and contributions decreased by $2.9 million (-39.1%) over the previous fiscal year. This decrease is due to completed grant projects. Government-Wide Revenue Sources Fiscal Year 2013 Operating grants and contributions 3.3% State shared revenue 10.1% Miscellaneous 1.3% Charges for services 29.3% Property taxes 11.5% Franchise taxes 1.8% Capital grants and contributions 13.7% Investment income 0.4% Sales taxes 28.5% 13 The reported expenses for fiscal year 2013 increased by $5.4 million (4.5%) over the prior year. As seen in the following pie chart for Government-Wide Functional Expenses, governmental activities account for 68.7% of total functional expenses, while business-type activities account for 31.3% of total functional expenses. The lines items that experienced notable changes were:  Business activities 31.3% of total government-wide expense. The majority of this increase is attributed to water and sewer $1.3 million (17.5%) for increase water and sewer capacity.  Public safety 23.4% of total government-wide expenses, an increase of $2.7 million (10.0%) from the prior year. This increase is attributed to the continued process of upgrading the Emergency Communication radio system.  Highways and streets 11.4% of total government expenses, an increase of $1.2 million (8.9%) from the prior year. This increase is attributed to increase cost for street maintenance.  Culture and recreation 4.4% of total government expenses, an increase $.6 million (11.64%) from the prior year. This increase is attributed to park renovations. Government-Wide Functional Expenses Fiscal Year 2013 General government 13.0% Business activities 31.3% Highways and streets 11.4% Interest on longterm debt 8.3% Development services 5.7% Public works 2.5% Culture and recreation 4.4% Public safety 23.4% 14 FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental Funds The focus of the City’s governmental funds (pages 30 - 38) 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 94 - 97. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $78.1 million, an increase of $8.0 million (11.4%) from the previous year. The increase in fund balance is due mainly to increase in revenues from taxes, licenses and permits, and charges for services due to sustained economic recovery in fiscal year 2013. Approximately $33.3 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 $2.9 million (2.8%) of total ending fund balance for advance to other funds, inventories and prepaid items, (2) restricted $39.1 million (60.1%) of the total ending fund balance for charter mandates, court, law enforcement, debt service, development impact fees, capital projects, highway user funds, transit, 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 $102.5 million in the fiscal year ended June 30, 2013 which represents an increase of $8.7 million (9.3%) from the prior fiscal year. The majority of this increase is attributed to three revenue categories as stated above. These include taxes ($3.6 million), licenses and permits ($2.1 million), and charges for services ($2.4 million). The increase in revenue was due primarily to the resurgence in sales taxes for residential and commercial construction activity which also impacts the increase in licenses and permits and charges for services. The expenditures for governmental functions totaled $100.5 million an increase of $14.1 million (16.4%) from the prior year. The majority of this increase is attributed to three categories public safety, highways and streets and capital outlay. Public safety accounted for $28.1 million in expenditures an increase of $2.0 million, mainly for the cost of upgrading the Emergency Communication radio system. Highways and streets accounted for $4.7 million in expenditures an increase of $1.3 million because of increased costs for street maintenance. Capital outlay accounted for $18.2 million in expenditures an increase of $11.8 million. The increase in capital outlay in the general, non-utility development impact fees and capital improvement projects funds for the acquisition of vehicles, land and buildings. 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 $33.3 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 56.3% of General Fund expenditures. The City’s general fund balance increased by $11.6 million in the current fiscal year due primarily to revenues exceeding budgeted amounts, which was driven by growth related revenues exceeding expectations. This is a 37.0% increase in fund balance from the prior year. 15 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 43 - 45. The proprietary funds net position was $198.3 million, an increase of $4.8 million from the previous fiscal year. The Water and Sewer fund had a positive increase in net position of $6.4 million. The Water and Sewer and Stadium funds beginning net position were restated by (- $1.4 million and $1.0 million, respectively) due to the adoption of GASB 65. This increase in net position of the proprietary funds is due primarily to an increase in water and sewer and sanitation rates in 2013. 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 38 – 39. The other budgetary comparison schedules can be found in the Other Supplementary Information section on pages 111 - 117. Due the economic recovery the City has increased the budgeted inflows and outflows in 2013. General Fund actual inflows (revenues and other financing sources) of $79.7 million, was more than budgeted inflows of $71.3 million by $8.4 million (11.8%), while expenditures and other financing uses of $68.2 million was only 72.8% of final budgeted outflows of $93.6 million. Revenues increased in all categories, except for intergovernmental revenues which decreased by less than 1.0% of budget. Expenditures are under budget in almost every category except police, building inspection and interest and fiscal charges. Transfer out was less than budgeted because the funds needed for Highway User Revenue and Stadium funds were less than estimated. 16 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City’s capital assets (net of accumulated depreciation) for its governmental and business-type activities as of June 30, 2013 amounted to $932.3 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 $.6 million (-0.1%) from the previous fiscal year. The following schedule presents capital asset balances for the fiscal year ended June 30, 2013 and 2012. Capital Assets at June 30 (Net of depreciation) Governmental Activities 2012 2013 Land Artwork Construction in progress Right of way Water rights Streetscape Infrastructure Building and improvements Vehicles, furniture and equipment Total $ 21,579,127 204,750 10,387,773 90,128,522 8,996,008 259,321,157 128,865,856 7,736,441 $ 527,219,634 Business-type Activities $ 19,426,644 204,750 13,213,915 90,128,522 8,775,008 264,885,391 117,262,522 8,899,008 $ 522,795,760 2013 $ 15,404,260 131,978 3,961,571 16,028,618 172,037,027 192,548,042 4,935,103 $ 405,046,599 Total Primary Government 2012 $ 15,404,260 131,978 42,247,284 16,053,364 154,522,711 177,001,010 4,751,740 $ 410,112,347 2013 $ 36,983,387 336,728 14,349,344 90,128,522 16,028,618 8,996,008 431,358,184 321,413,898 12,671,544 $ 932,266,233 2012 $ Percent Change 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 6.2% 100.0% -74.1% 0.0% -0.2% 2.5% 2.8% 9.2% -7.2% $ 932,908,107 -0.1% The governmental capital assets increase in fiscal 2013 for acquisition the Venida buildings and land. The overall decrease in business capital assets are for the disposable 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 70 - 71 and in the schedules on pages 121 - 124 of this report. 17 Debt Administration At the end of the current fiscal year, the City had total long-term debt outstanding of $425.9 million. Of this amount $111.9 million is general obligation bonds backed by the full faith and credit of the City, $109.8 million is Community Facilities Districts bonds which are paid by the property owners within those districts, $188.7 million of revenue bonds which are payable from user fees and assessments, $11.0 million loan payable to WIFA by user fees, and $4.5 million compensated absences from the City operating funds. The following schedule shows the outstanding debt obligation as of June 30, 2013 and 2012. 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 2013 2012 2013 2012 2013 2012 $ 26,555,569 $ 29,000,636 $ 85,384,431 $ 89,394,364 $ 111,940,000 $ 118,395,000 109,823,000 54,821,467 4,012,520 113,555,000 46,615,000 1,755,628 3,830,033 10,998,942 133,845,000 444,555 11,908,602 134,165,000 440,922 109,823,000 10,998,942 188,666,467 4,457,075 $ 195,212,556 $ 194,756,297 $ 230,672,928 $ 235,908,888 $ 425,885,484 $ 430,665,185 -1.1% $ 191,200,036 $ 189,170,636 $ 230,228,373 $ 235,467,966 $ 421,428,409 $ 424,638,602 -1.2% Change -5.5% 113,555,000 -3.3% 11,908,602 -7.6% 180,780,000 4.4% 1,755,628 -100.0% 4,270,955 4.4% The outstanding revenue bonds include $42.4 million in McDowell Road Corridor Improvement District that is secured by pledges of specific revenue sources of the City. In addition to these are $146.3 million in Public Improvement Corporation bonds $133.8 for the Stadium and $12.4 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 $36.3 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 $121.1 million. The City has $111.9 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, 2013 Type of Debt Moody's Investors Service Standard & Poor's General Obligation Water & Sewer (Revenue) Public Improvement Corporation Improvement District Bonds Aa2 A2 Aa3 A3 AAA+ AABBB Additional information on the City’s long-term debt can be found in Notes 5 – 9 on pages 72 - 78 of this report. 18 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET Unemployment levels are still a concern as recovery in the area of job creation remains low. The unemployment rate for Goodyear for June 2013 was 8.3%, which is higher than state 8.0% and national rate 7.6%. 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 2014 with increase in revenues. Sales taxes are the dominant revenue source for the City and are projected to increase in fiscal year 2014 from $37.7 million to $40.9 million an increase of 6.5%. Property taxes are projected to increase in fiscal year 2014 from $6.7 million to $7.0 million an increase of 4.5%. State shared revenues which are combination of state shared sales tax, state shared income tax and vehicle license tax are projected to increase by $0.8 million from $14.3 million to $15.1 million in fiscal year 2014. The City operational budget is project to increase by the 10.5% in fiscal year 2014 from $79.2 million to $87.5 million due to increase operating cost. The City project capital improvement expenditure is budgeted for $43.7 million includes carryover funds of $6.7 million for projects started in fiscal year 2013 and an additional $37.0 million for new projects. 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. 19 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION June 30, 2013 ASSETS Cash and cash equivalents Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Inventories Prepaid items Restricted cash and cash equivalents Capital assets: Nondepreciable capital assets Other capital assets (net of accumulated depreciation) Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refunding Total deferred outflows of resources LIABILITIES Accounts payable and other current liabilities Accrued payroll and employee benefits Accrued interest payable Deposits 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 Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred revenue Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted for: Courts Law enforcement Highways and streets Capital projects Community facilities Debt service Transit Unrestricted Total net position See accompanying notes. Governmental Activities $ 23,148,779 36,978,381 Business-type Activities $ 7,531,774 13,211,746 Total $ 30,680,553 50,190,127 70,929,160 58,566 961,840 724,280 523,024 20,618,111 3,934,405 (961,840) 592,784 14,912,647 74,863,565 58,566 1,317,064 523,024 35,530,758 129,178,589 19,497,809 148,676,398 398,041,045 681,161,775 385,548,790 444,268,115 783,589,835 1,125,429,890 349,306 349,306 474,896 474,896 824,202 824,202 1,770,083 1,199,659 2,600,755 4,725,956 1,191,753 121,931 3,675,563 6,862,397 2,961,836 1,321,590 6,276,318 11,588,353 1,455,561 6,566,090 162,668 275,000 1,618,229 6,841,090 2,556,960 187,967,966 208,843,030 281,888 10,998,942 221,668,576 975,531 246,214,249 2,838,848 10,998,942 409,636,542 975,531 455,057,279 4,684,445 4,684,445 259,787 259,787 4,944,232 4,944,232 333,034,884 178,456,590 511,491,474 234,813 208,085 493,395 17,937,344 711,980 78,999,381 543,022 35,820,702 $ 467,983,606 532,750 2,663,381 16,616,254 $ 198,268,975 234,813 208,085 493,395 18,470,094 711,980 81,662,762 543,022 52,436,956 $ 666,252,581 23 CITY OF GOODYEAR, ARIZONA STATEMENT OF ACTIVITIES Year Ended June 30, 2013 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Functions/Programs Primary government: Governmental activities: General government Public safety Highways and streets Public works Culture and recreation Development services Interest on long-term debt Total governmental activities $ 16,291,762 29,348,288 14,355,644 3,090,345 5,539,612 7,194,428 10,411,562 86,231,641 Business-type activities: Water and sewer Sanitation Stadium Total business-type activities 21,912,587 5,246,666 12,204,354 39,363,607 22,667,401 6,368,920 1,741,609 30,777,930 $ 125,595,248 $ 41,349,998 Total primary government Expenses $ 2,075,520 1,985,670 304,128 6,206,750 10,572,068 $ 300,877 373,288 3,958,636 4,592 16,875 4,654,268 - $ 4,654,268 $ 467,673 1,381,892 9,509,259 11,358,824 7,987,680 7,987,680 $ 19,346,504 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 position Net position, beginning of year Restatement Net position, beginning of year - restated Net position, end of year See accompanying notes. 24 Net (Expense) Revenue and Changes in Net Position Governmental Activities $ (13,447,692) (26,989,330) (9,015,116) 6,418,914 (5,230,892) (970,803) (10,411,562) (59,646,481) (59,646,481) 40,222,752 16,205,387 2,529,456 14,194,960 439,982 1,455,665 Business-type Activities $ - Totals $ (13,447,692) (26,989,330) (9,015,116) 6,418,914 (5,230,892) (970,803) (10,411,562) (59,646,481) 8,742,494 1,122,254 (10,462,745) (597,997) 8,742,494 1,122,254 (10,462,745) (597,997) (597,997) (60,244,478) - 40,222,752 16,205,387 2,529,456 95,839 432,983 14,194,960 535,821 1,888,648 (4,876,544) 70,171,658 4,876,544 5,405,366 75,577,024 10,525,177 4,807,369 15,332,546 462,352,241 (4,893,812) 457,458,429 $ 467,983,606 195,851,638 (2,390,032) 193,461,606 $ 198,268,975 658,203,879 (7,283,844) 650,920,035 $ 666,252,581 25 CITY OF GOODYEAR, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2013 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 Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits Due to other funds Total liabilities $ $ $ DEFERRED INFLOWS OF RESOURCES Deferred revenue Total deferred inflows of resources FUND BALANCE 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 Transit Community Facilities Districts operations Assigned to: IT replacement Fleet replacement Risk management Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances See accompanying notes. $ General 14,373,989 24,485,804 6,903,669 110,766 1,281,958 661,505 961,840 8,916 486,842 1,174,047 50,449,336 1,087,772 1,168,194 3,363,730 5,619,696 Community Facilities DistrictsDebt Service $ 117,882 19,603,007 36,182 18,514,636 $ 38,271,707 McDowell Road Commercial Corridor Improvement Debt Service $ 42,390,000 95,391 $ 42,485,391 $ $ 104,833 1,118,490 1,223,323 - 1,971,031 1,971,031 22,467,050 22,467,050 961,840 8,916 486,842 36,182 3,528,982 234,813 208,085 543,022 - 14,545,152 - 95,391 - 170,684 3,032,429 357,741 33,325,255 42,858,609 14,581,334 95,391 50,449,336 $ 38,271,707 42,390,000 42,390,000 - $ 42,485,391 30 Non-Utility Development Impact Fees $ 5,109,928 11,399,476 51,569 $ 16,560,973 Capital Improvement Projects Fund $ 1,891,296 14,276 $ 1,905,572 Non-Major Governmental Funds $ 1,773,416 1,093,101 464,616 4,945 748 58,566 595,675 819,761 $ 4,810,828 Total Governmental Funds $ 23,148,629 36,978,381 7,486,167 167,280 1,282,706 61,993,007 58,566 661,505 961,840 604,591 523,024 20,618,111 $ 154,483,807 $ $ $ $ $ 189,954 129,375 319,329 209,872 209,872 177,652 31,465 3,132 114,361 541,666 868,276 1,770,083 1,199,659 3,132 4,725,956 541,666 8,240,496 - - 1,325,859 1,325,859 68,153,940 68,153,940 - - 595,675 - 961,840 604,591 523,024 16,241,644 - 1,695,700 - 841,716 493,395 711,980 3,528,982 234,813 208,085 15,482,259 16,241,644 1,695,700 493,395 543,022 711,980 16,241,644 1,695,700 (26,073) 2,616,693 170,684 3,032,429 357,741 33,299,182 78,089,371 16,560,973 $ 1,905,572 $ 4,810,828 $ 154,483,807 31 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS June 30, 2013 Total governmental fund balances $ 78,089,371 Amounts reported for governmental activities in the Statement of Net Position 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 $ 659,730,890 (132,511,256) 527,219,634 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 1,237,373 259,946 61,972,176 Interest payable on long-term debt is not reported in the governmental funds. 63,469,495 (2,597,623) Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated absences payable Bond refunding amount Bonds payable Net position of governmental activities See accompanying notes. (4,012,521) 349,306 (194,534,056) (198,197,271) $ 467,983,606 33 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended June 30, 2013 REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Investment income Special assessments Contributions Miscellaneous Total revenues $ General 49,271,261 6,793,070 14,194,960 3,837,480 809,334 339,359 431,226 327,382 76,004,072 Community Facilities Districts Debt Service $ 4,853,620 12,683 2,301,100 3,458,495 10,625,898 McDowell Road Commercial Improvement Debt Service $ 20,191 3,544,206 3,564,397 EXPENDITURES Current: General government Public safety Highways and streets Public works Culture and recreation Development services Capital outlay Debt service: Principal retirement Interest and debt cost Total expenditures Excess (deficiency) of revenues over (under) expenditures 16,820,739 OTHER FINANCING SOURCES (USES) Debt issuance Refunding bonds Refunding bonds premium Payment to refunded bond escrow agent Transfers in Transfers out Total other financing sources and uses 3,726,150 (8,986,031) (5,259,881) Net change in fund balances 11,560,858 193,831 19,941 Fund balances, beginning of year 31,297,751 14,387,503 75,450 Fund balances , end of year See accompanying notes. 14,960,933 27,842,263 2,093,312 4,655,928 5,189,875 1,371,384 - 2,764,161 305,477 59,183,333 $ 42,858,609 - 3,732,000 7,092,588 10,824,588 1,285,000 2,259,456 3,544,456 (198,690) 19,941 10,685,000 672,545 (10,965,024) 392,521 $ 14,581,334 - $ 95,391 34 Non-Utility Development Impact Fees $ 2,479,445 21,435 103,270 2,604,150 Capital Improvement Projects Fund $ 7,003 43 7,046 Non-Major Governmental Funds $ 4,845,724 4,528,358 5,100 39,311 134,454 137,144 9,690,091 Total Governmental Funds $ 58,970,605 6,793,070 18,723,318 6,322,025 809,334 439,982 5,845,306 4,024,175 567,839 102,495,654 109,301 224,421 43,124 7,706,378 8,690,351 1,054,612 282,908 4,565,024 4,000 483,926 16,015,545 28,125,171 4,674,325 2,093,312 4,884,349 5,232,999 18,252,039 8,083,224 120,995 8,811,346 2,445,067 1,209,390 10,044,927 10,226,228 10,987,906 100,491,874 (5,479,074) (8,804,300) (354,836) 2,003,780 10,500,000 10,500,000 1,000,000 (616,663) 383,337 10,500,000 10,685,000 672,545 (10,965,024) 4,726,150 (9,602,694) 6,015,977 (5,479,074) 1,695,700 21,720,718 $ 16,241,644 $ 1,695,700 $ 28,501 8,019,757 2,588,192 70,069,614 2,616,693 $ 78,089,371 35 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, 2013 Net change in fund balances - total governmental funds $ 8,019,757 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 $ 1,381,892 18,148,608 (15,106,626) 4,423,874 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 119,378 (13,010) (2,252,981) Bond proceeds provide current financial resources to the governmental funds, but issuing debt increases long-term liabilities in the Statement of Activities. (21,185,000) 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. 363,386 Governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. (179,563) Repayment of long-term debt are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Debt principal retirement Debt principal refunded 10,226,228 10,685,000 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 position of governmental activities See accompanying notes. 318,108 $ 10,525,177 37 CITY OF GOODYEAR, ARIZONA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2013 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 Non-departmental Reserved contingency Public safety Police Fire Municipal court City prosecutor Public works Administration Building services Culture and recreation Parks Recreation and aquatics Development services Economic development Development services Engineering Building inspection Code compliance 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) $ 2,316,672 2,588,570 (94,413) 2,663,580 45,934 228,859 355,226 314,644 8,419,072 Original $ 47,854,589 4,204,500 14,289,373 1,173,900 693,400 110,500 76,000 412,738 68,815,000 Final $ 46,954,589 4,204,500 14,289,373 1,173,900 763,400 110,500 76,000 12,738 67,585,000 Actual $ 49,271,261 6,793,070 14,194,960 3,837,480 809,334 339,359 431,226 327,382 76,004,072 250,689 734,318 926,374 866,007 2,918,561 3,058,255 2,452,556 743,576 7,644,400 16,347,842 250,689 734,318 2,638,374 866,007 2,493,561 3,167,890 3,161,889 550,683 3,747,140 16,347,842 235,887 671,447 2,582,286 683,273 2,202,587 2,868,061 2,884,001 106,487 2,726,904 - 14,205,710 13,471,949 941,182 447,498 14,073,927 12,284,202 1,004,182 447,498 14,290,364 12,191,015 937,538 423,346 (216,437) 93,187 66,644 24,152 587,920 2,799,493 378,851 2,166,244 284,578 1,808,734 94,273 357,510 2,815,739 1,423,666 3,436,928 1,414,986 3,328,985 1,326,943 107,943 88,043 751,640 72,035 2,239,383 1,061,446 4,693,050 673,941 1,234,956 2,240,148 1,151,282 194,893 5,410,433 445,493 1,156,999 2,151,464 1,283,268 152,651 1,371,384 228,448 77,957 88,684 (131,986) 42,242 4,039,049 590,000 29,500 82,072,789 2,784,161 235,051 83,090,076 2,764,161 305,477 59,183,333 20,000 (70,426) 23,906,743 (13,257,789) (15,505,076) 16,820,739 32,325,815 14,802 62,871 56,088 182,734 290,974 299,829 277,888 444,196 1,020,236 16,347,842 38 Original 2,800,000 (8,796,914) Final 3,700,000 (10,546,914) Actual 3,726,150 (8,986,031) Variance with Final Budget Positive (Negative) 26,150 1,560,883 (5,996,914) (6,846,914) (5,259,881) 1,587,033 (19,254,703) (22,351,990) 11,560,858 33,912,848 31,297,751 31,297,751 31,297,751 $ 12,043,048 $ 8,945,761 $ 42,858,609 Budgeted Amounts OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ 33,912,848 39 42 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2013 Business-type Activities-Enterprise Funds ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Accounts receivable Inventories Total current assets Noncurrent assets: Restricted cash and cash equivalents Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refunding Total deferred outflows of resources Water & Sewer $ 5,892,530 11,926,620 53,953 3,123,024 592,784 21,588,911 Sanitation $ 7,585,579 7,834,109 275,511,694 290,931,382 312,520,293 1,058,481 217,238 983 751,614 2,028,316 362,183 362,183 2,390,499 57,531 57,531 - Stadium $ 580,763 1,067,888 4,831 1,653,482 Total $ 7,531,774 13,211,746 59,767 3,874,638 592,784 25,270,709 7,327,068 11,663,700 109,674,913 128,665,681 130,319,163 14,912,647 19,497,809 385,548,790 419,959,246 445,229,955 417,365 417,365 474,896 474,896 Governmental Activities Internal Service Funds $ 150 143,779 143,929 143,929 - LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Due to other funds Deposits Compensated absences payable Revenue bonds payable Total current liabilities 738,378 373,779 79,596 1,191,753 10,608 70,039 971,707 6,858,829 102,714 275,000 9,016,667 10,263 15,979 400,021 41,629 2,703,856 3,568 43,975 2,872,624 121,931 3,675,563 6,862,397 162,668 275,000 12,289,312 13,482 119,839 143,929 Noncurrent liabilities: Accrued interest payable Compensated absences payable Advances from other funds Loan payable Bonds payable Revenue bonds payable Total noncurrent liabilities Total liabilities 975,531 165,923 10,998,942 77,876,664 31,390,000 121,407,060 130,423,727 47,604 47,604 447,625 68,361 961,840 7,714,285 104,687,627 113,432,113 116,304,737 975,531 281,888 961,840 10,998,942 85,590,949 136,077,627 234,886,777 247,176,089 143,929 DEFERRED INFLOWS OF RESOURCES Deferred revenue Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted Capital projects Debt service Unrestricted Total net position See accompanying notes. 259,787 259,787 - - 259,787 259,787 - 164,195,366 362,183 13,899,041 178,456,590 - 2,663,381 15,035,563 $ 181,894,310 1,580,691 1,942,874 532,750 $ 14,431,791 532,750 2,663,381 16,616,254 $ 198,268,975 - $ $ 43 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS Year Ended June 30, 2013 Business-type Activities-Enterprise Funds Water & Sewer 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): Loss on sale of assets Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers $ 22,702,060 431,092 23,133,152 Sanitation $ 6,368,920 574 6,369,494 Stadium $ Total 1,741,609 1,317 1,742,926 $ 30,812,589 432,983 31,245,572 Governmental Activities Internal Service Funds $ 2,025,951 2,025,951 3,345,978 7,491,318 5,453,531 16,290,827 498,447 4,578,610 132,032 5,209,089 2,108,396 1,758,273 2,676,647 6,543,316 5,952,821 13,828,201 8,262,210 28,043,232 510,361 1,515,590 2,025,951 6,842,325 1,160,405 (4,800,390) 3,202,340 - 71,396 (5,656,419) (37,577) 1,117 - 23,326 (5,661,038) (37,577) 95,839 (11,317,457) - (5,585,023) (36,460) (5,637,712) (11,259,195) - (10,438,102) (8,056,855) - 1,257,302 1,123,945 Capital contributions Transfers in Transfers out 7,987,680 (2,800,000) (900,000) 8,602,694 (26,150) 7,987,680 8,602,694 (3,726,150) - Change in net position 6,444,982 223,945 (1,861,558) 4,807,369 - 176,863,542 (1,414,214) 1,718,929 - 17,269,167 (975,818) 195,851,638 (2,390,032) - 175,449,328 1,718,929 16,293,349 193,461,606 - 1,942,874 $ 14,431,791 $ 198,268,975 Net position, beginning of year Restatement Net position, beginning of year Restated Net position, end of year See accompanying notes. $ 181,894,310 $ $ - 44 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2013 Water & Sewer Sanitation Stadium Total Governmental Activities Internal Service Funds $ 22,350,487 (7,712,484) (3,346,595) $ 6,322,380 (4,558,972) (492,123) $ 1,721,996 (1,890,253) (2,113,324) $ 30,394,863 (14,161,709) (5,952,042) $ 2,001,248 (1,490,265) (510,983) 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 Principal paid on long-term debt Interest paid on long-term debt Developer contributions Development impact fees received Net cash (used) for capital and related financing activities 11,291,408 1,271,285 (2,281,581) 10,281,112 - (2,800,000) (900,000) 8,576,544 4,876,544 - (2,800,000) (900,000) 8,576,544 4,876,544 - (1,833,734) (4,811,021) (5,884,967) 2,008,522 (61,736) - (638,868) (428,571) (5,892,490) - (2,534,338) (5,239,592) (11,777,457) 2,008,522 - 5,279,458 - 5,279,458 - (5,241,742) (61,736) (12,263,407) - (6,959,929) Cash flows from investing activities: Investment income received 47,165 1,593 20,477 69,235 - Net cash provided by investing activities 47,165 1,593 20,477 69,235 - 3,296,831 311,142 2,963,484 - Cash and cash equivalents, beginning of year 22,107,898 964,577 9,620,208 32,692,683 Cash and cash equivalents, end of year $ 25,404,729 $ 1,275,719 $ 8,975,719 $ 35,656,167 $ 150 $ 5,892,530 11,926,620 $ 1,058,481 217,238 $ 580,763 1,067,888 $ 7,531,774 13,211,746 $ 150 7,585,579 $ 25,404,729 $ 1,275,719 7,327,068 $ 8,975,719 14,912,647 $ 35,656,167 $ 150 Net change in cash and cash equivalents Cash and cash equivalents Investments Restricted cash and cash equivalents See accompanying notes. (644,489) 150 45 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2013 Business-type Activities-Enterprise Funds Water & Sewer Sanitation Stadium Total $ 6,842,325 $ 1,160,405 $ (4,800,390) $ 3,202,340 5,453,531 132,032 Governmental Activities Internal Service 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 Loss on sale of assets Restatement of deferred bond cost Amortization of bond premium Amortization of deferred loss on refunding See accompanying notes. (293,619) (37,516) (47,114) - (304,490) 19,638 (415) 120,840 (5,168) (483,878) (202) (3,033) 9,357 $ 11,291,408 $ 1,271,285 699,700 - 37,577 2,676,647 - $ 8,262,210 - - (340,733) (37,516) 32,783 (131,980) (416,832) (7,458) 594 (24,498) 3,568 (5,522) (2,854) 120,840 (29,666) (480,310) 3,633 (622) (24,703) - $ (2,281,581) - $ 10,281,112 $ - 699,700 37,577 - 1,414,214 38,469 - 975,818 162,147 2,390,032 200,616 - 3,596 - 32,364 35,960 - 46 CITY OF GOODYEAR, ARIZONA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS June 30, 2013 Pension Trust ASSETS Cash and cash equivalents Interest receivable Investments Total assets $ LIABILITIES Accounts payable Deposits Total liabilities NET POSITION Held in trust for pension benefits See accompanying notes. 9,109 272 436,223 445,604 - $ Agency Funds $ $ 110,737 6 110,743 96,145 14,598 110,743 445,604 49 CITY OF GOODYEAR, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION TRUST FUND Year Ended June 30, 2013 Pension Trust ADDITIONS Other revenue Total other revenue Investment income Net increase in fair value of investments Interest Total investment income Total additions $ - $ 31,859 339 32,198 32,198 DEDUCTIONS Benefits Total deductions 2,230 2,230 Net increase Net position, beginning of year Net position, end of year See accompanying notes. 29,968 $ 415,636 445,604 50 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 55 2. Cash and Investment 65 3. Receivables 69 4. Capital Assets 70 5. Loans Payable 72 6. General Obligation Bonds Payable 73 7. Revenue Bonds Payable 74 8. Community Facilities Districts Bonds Payable 76 9. Changes in Long-Term Liabilities 78 10. Interfund Receivables, Payables, and Transfers 78 11. Contingent Liabilities 79 12. Risk Management 79 13. Retirement Plans 80 14. Deficit Fund Balance 85 15. Commitments 85 16. Restatement 86 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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. 55 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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 position 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, 2013, 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. 56 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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, the City appropriates funding for information technology (IT) replacement, fleet replacement and risk management reserves. Accumulated appropriations which have not been spent are reflected as assigned fund balances. 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 $12.8 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 a minimum of 3 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. 57 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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. Capital Improvement Projects Fund - This fund accounts for acquisition and construction of the government’s major capital facilities, other than those financed by proprietary funds. 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. 58 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for water, wastewater, and sanitation services. Operating expenses for these funds include the administrative expenses, cost of sales and services, and depreciation. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources, as they are needed. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. The City’s non-major funds are as follows: Special Revenue Funds Highway User Revenue Fund (HURF) Grants Fund Community Facilities Districts Debt Service Fund 59 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 1 E. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. 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). 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. 60 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 1 H. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 cash equivalents on the government-wide Statement of Net Position, the Balance Sheet and Proprietary Statement of Net Position because their use is limited by applicable bond covenants. K. 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. 61 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 1 K. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets (Continued) 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. M. 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 position. 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. 62 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 1 O. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 2013. The maximum legal expenditure permitted for the year is the total budget as adopted. All funds of the City have legally adopted budgets. The initial budget for the fiscal year may be amended during the year in a legally permissible manner. The City adopts the budget by departments for the General Fund and by fund for all others. The City Manager is generally authorized to transfer budgeted amounts within any specific department’s expenditure appropriation. Any budget revisions requiring a transfer between departments in the General Fund or a transfer between any other fund must be approved by the City Council. All unencumbered expenditure appropriations expire at the end of the fiscal year. Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office. Budgetary carry forwards are approved by the City Council. The City approves its annual budget consistent with 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. 63 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 1 Q. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Implementation of New GASB Statements In December 2010, the GASB issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. GASBS No. 62 incorporates into the GASB's authoritative literature certain accounting and financial reporting guidance that is included in the following pronouncements issued on or before November 30, 1989, which does not conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins of the American Institute of Certified Public Accountants' (AICPA) Committee on Accounting Procedure. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2011. The City adopted GASBS No. 62 in fiscal year 2013. The adoption of GASBS No. 62 does not have any impact on the City’s financial statements. In June 2011, the GASB issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASBS No. 63 provides guidance for reporting deferred outflows of resources, deferred inflows of resources, and net position in a statement of financial position and related disclosures. The statement of net assets is renamed the statement of net position and includes the following elements: assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2011. The City adopted GASBS No. 63 in fiscal year 2013. The adoption of GASBS No. 63 has impacted the presentation of the City’s financial statements. In March 2012, the GASB issued Statement No. 65, Items previously reported as assets and liabilities. GASBS No. 65 provides reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities, and other related disclosures. In addition, the reporting of such items should be limited to those instances identified by the Governmental Accounting Standards Board. Statement No. 65 also changes the determination of the major fund calculations and limits the use of the term deferred in financial statement presentation. Although the provisions of this Statement are effective for financial statements for periods beginning after December 15, 2012, the City elected to early implement it in fiscal year 2013. The adoption of GASBS No. 65 has impacted the presentation of the City’s financial statements. 64 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 2 CASH AND INVESTMENTS At June 30, 2013, cash and cash equivalents are presented as follows: Cash and cash equivalents Investments Restricted cash and cash equivalents Governmental Activities $ 23,148,779 36,978,381 $ 20,618,111 $ 80,745,271 Business Activities 7,531,774 13,211,746 $ 14,912,647 $ 35,656,167 Fiduciary Fund 119,846 436,223 $ $ 556,069 Total 30,800,399 50,626,350 35,530,758 $ 116,957,507 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, 2013, the City had $8,850 of cash on hand. The carrying amount of the City’s cash in bank totaled $9,299,113 and the bank balance was $10,117,944. Of the bank balance, $595,708 was covered by federal depository insurance, $6,945,476 was covered by collateral held in the pledging bank’s trust department in the City’s name, and $2,576,760 was not insured and uncollateralized; however, subsequent to year end, all of the bank balance was insured or collateralized. No losses were incurred subsequent to June 30, 2013. 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. 65 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 2 CASH AND INVESTMENTS (Continued) 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, 2013 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, 2013, the City’s funds invested with the State Treasurer totaled $32,903,637. 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 $24,119,557 at June 30, 2013. The City also holds $50,250,183 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 $376,167 at June 30, 2013. 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. 66 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 2 CASH AND INVESTMENTS (Continued) 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, 2013, 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 LGIP $ Money Market Funds Federal Agency Securities U.S. Treasury Notes 24,013,184 $ 24,013,184 $ - $ - - $ - - 12,002,004 12,002,004 8,524,825 7,605,470 919,355 - 28,332,120 5,214,659 7,569,869 15,547,592 - 72,872,133 48,835,317 8,489,224 15,547,592 - - - Proprietary funds LGIP Money Market Funds Federal Agency Securities U.S. Treasury Notes 8,881,397 8,881,397 - - - 12,194,036 12,194,036 - - - 3,045,775 2,717,305 328,470 10,122,585 1,863,109 2,704,586 5,554,890 - 34,243,793 25,655,847 3,033,056 5,554,890 - - - Fiduciary Fund 9,056 9,056 - - Money Market Funds LGIP 273,837 88,339 - - 185,498 U.S. Treasury Notes Mutual Funds 60,056 190,669 60,056 - - - 190,669 533,618 157,451 - - 376,167 Total $ 107,649,544 $ 74,648,615 $ 11,522,280 $ 21,102,482 - $ 376,167 At June 30, 2013, 69.34% of the City’s investments have a maturity of less than one year and 30.31% have maturity between two and three years. 67 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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 LGIP Total $ Money market Federal Agency Securities U.S. Treasury Notes AAAF/S1+ 24,013,184 $ 12,002,004 - 8,524,825 - 28,332,120 $ 24,013,184 72,872,133 AAAm $ 24,013,184 12,002,004 Total $ Money market Federal Agency Securities U.S. Treasury Notes AAAF/S1+ 8,881,397 $ 8,881,397 12,194,036 - 3,045,775 - 10,122,585 $ - 28,332,120 $ 34,243,793 AAAm $ 36,856,945 $ 8,881,397 $ - - 3,045,775 12,194,036 $ - $ Unrated - 12,194,036 $ AA+ - Fiduciary funds - 10,122,585 $ 13,168,360 $ - Ratings as of Year-End Investment Type Total $ Money market U.S. Treasury Notes Mutual funds Total - Ratings as of Year-End Investment Type LGIP $ 8,524,825 $ Unrated - - Proprietary funds LGIP $ 12,002,004 $ AA+ - AAAF/S1+ 9,056 $ 9,056 AAAm $ AA+ - $ Unrated - 273,837 - 88,339 - 60,056 - - 60,056 190,669 - - $ 185,498 - - 190,669 $ 533,618 $ 9,056 $ 88,339 $ 60,056 $ 376,167 $ 107,649,544 $ 32,903,637 $ 24,284,379 $ 50,085,361 $ 376,167 68 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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, 2013, the City’s investments are included as follows: Investment Type Total LGIP $ Concentration 32,903,637 30.57% Money Market Funds 24,469,877 22.73% Federal Agency Securities 11,570,600 10.75% U.S. Treasury Notes 38,514,761 35.78% 190,669 0.18% Mutual Funds Total NOTE 3 $ 107,649,544 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 $ 6,903,669 110,766 1,281,958 Community Facilities DistrictsDebt Service Fund $ 117,882 - $ 8,296,393 McDowell Road Commercial Corridor Improvement District Debt Service $ - 19,603,007 $ 19,720,889 Non-Utility Development Impact Fees Fund $ 51,569 - 42,390,000 $ 42,390,000 Non-Major Governmental Fund $ 464,616 4,945 748 $ 51,569 $ $ 470,309 Total 7,486,167 167,280 1,282,706 61,993,007 $ 70,929,160 69 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 3 RECEIVABLES (Continued) The following table summarizes the City’s receivables for the enterprise funds as of June 30, 2013. Water and Receivables: Sanitation Sewer Fund Interest $ Accounts Stadium Fund 53,953 $ Fund 983 $ Total 4,831 $ 59,767 3,154,624 761,542 - 3,916,166 3,208,577 762,525 4,831 3,975,933 Less: Allowance (31,600) Net receivables $ (9,928) 3,176,977 $ - 752,597 $ 4,831 (41,528) $ 3,934,405 Revenues of the Water and Sewer Fund and Sanitation Fund are reported net of uncollectible amounts. Total bad debt expense related to the Water and Sewer Fund revenues and Sanitation Fund revenues for the current period are $76,393 and $16,887, respectively. NOTE 4 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2013 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 $ 19,426,644 204,750 13,213,915 90,128,522 8,775,008 Increases $ 34,892 4,598,535 221,000 Ending Balance Decreases $ (7,424,677) - $ 19,461,536 204,750 10,387,773 90,128,522 8,996,008 131,748,839 4,854,427 (7,424,677) 129,178,589 2,549,608 336,565,808 132,306,890 37,755,221 509,177,527 2,200,576 18,892,472 1,015,912 22,108,960 (734,186) (734,186) 2,549,608 338,766,384 151,199,362 38,036,947 530,552,301 (262,043) (71,680,417) (17,331,933) (28,856,213) (118,130,606) (169,974) (7,764,810) (5,001,573) (2,170,269) (15,106,626) 725,976 725,976 (432,017) (79,445,227) (22,333,506) (30,300,506) (132,511,256) 391,046,921 7,002,334 $ 522,795,760 $ 11,856,761 (8,210) $ (7,432,887) 398,041,045 $ 527,219,634 70 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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 $ 15,404,260 131,978 42,247,284 Increases $ 1,439,845 Ending Balance Decreases $ (39,725,558) $ 15,404,260 131,978 3,961,571 57,783,522 1,439,845 (39,725,558) 19,497,809 188,919,594 186,072,282 14,527,452 18,703,354 408,222,682 21,330,948 19,108,401 963,033 161,130 41,563,512 (602,358) (602,358) 210,250,542 205,180,683 14,888,127 18,864,484 449,183,836 (34,396,883) (9,071,272) (9,775,712) (2,649,990) (55,893,857) (3,816,632) (3,561,369) (708,515) (185,876) (8,272,392) 531,203 531,203 (38,213,515) (12,632,641) (9,953,024) (2,835,866) (63,635,046) 352,328,825 33,291,120 (71,155) 385,548,790 $ 410,112,347 $ 34,730,965 $ (39,796,713) $ 405,046,599 Depreciation expense was charged to functions/programs as follows: Governmental activities: General government $ Public safety Highway and streets 11,667,573 Culture and recreation 694,882 Public works Total depreciation expense 771,753 1,511,680 460,738 $ 15,106,626 $ 5,453,531 Business-type activities: Water and wastewater Sanitation 132,032 Stadium Total depreciation and amortization expense 2,676,647 $ 8,262,210 A transfer of capital equipment occurred between the Stadium fund and the governmental activities causing a reconcilable difference of $10,182 between the depreciation expense and additions to accumulated depreciation for the business-type activities. 71 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 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, 2013, 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, 2013 $ 2,203,065 Due Within One Year $ 4,184,390 $ 4,611,487 10,998,942 - $ - Annual debt service requirements to maturity on the loans payable at June 30, 2013 are summarized as follows: Fiscal year ending Business-Type Activities June 30, 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2030 Total Principal $ $ 941,439 974,404 1,008,601 1,044,078 4,895,739 1,579,147 555,534 10,998,942 Interest $ $ 175,652 334,823 301,241 266,405 230,263 576,553 135,760 9,960 2,030,657 72 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 6 GENERAL OBLIGATION BONDS PAYABLE Bonds payable at June 30, 2013, 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, 2013 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 Outstanding Principal June 30, 2013 Due Within One Year Interest Rate Maturity 3.00 - 5.00% 7/1/08 - 26 4.25 - 6.00% 7/1/09 - 38 7,829,073 - 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 $ 8,261,996 $ $ 9,755,000 26,555,569 $ $ 17,955,000 $ - - 3.50 - 5.00% 7/1/07 - 20 3.00 - 5.00% 7/1/08 - 26 20,088,004 - 4.25 - 6.00% 7/1/09 - 27 32,045,927 - 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 Total $ 4,610,000 85,384,431 $ $ 111,940,000 $ - - Annual debt service requirements to maturity on governmental bonds payable at June 30, 2013 are summarized as follows: Fiscal year ending June 30, Governmental Activities Principal Interest Business-Type Activities Principal Interest 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 $ 2,691,833 2,828,415 2,930,269 3,058,957 5,952,973 5,111,344 1,984,016 1,997,762 $ 1,198,422 1,089,351 989,213 888,470 764,164 2,685,667 1,417,420 628,361 220,604 $ 4,143,167 4,331,585 4,549,731 4,851,043 24,227,027 21,653,656 13,450,984 8,177,238 $ 3,910,138 3,726,952 3,531,948 3,331,166 3,117,115 12,002,056 7,023,192 2,838,933 902,989 Total $ 26,555,569 $ 9,881,672 $ 85,384,431 $ 40,384,489 73 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 7 REVENUE BONDS PAYABLE Revenue bonds payable at June 30, 2013 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, 2013 are presented below. Description Governmental activities: Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007B Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2011A Public Improvement Corporation Municipal Facilities Revenue Tax-Exempt Revenue Bonds, Series 2012A Public Improvement Corporation Municipal Facilities Revenue Taxable Revenue Bonds, Series 2012B McDowell Road Corridor Improvement District Bonds 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 Due Within One Year Interest Rate Maturity 4.00 - 5.00% 7/1/08 - 13 2.00 - 3.00% 7/1/12 - 21 1,780,000 2.48% 6/15/13 - 23 8,995,800 803,123 3.44% 6/15/13 - 23 1,065,667 90,967 5.25% 1/1/10 - 32 42,390,000 1,355,000 Total Governmental Activities Description Business-type activities: Outstanding Principal June 30, 2013 $ $ 590,000 54,821,467 $ 590,000 - $ Outstanding Principal June 30, 2013 2,839,090 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 15,405,000 - 5.00 - 6.375% 7/1/20 - 32 23,515,000 - 5.00 - 6.375% 7/1/20 - 32 1,515,000 - $ $ 985,000 133,845,000 $ - 275,000 $ 275,000 74 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 7 REVENUE BONDS PAYABLE (Continued) Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30, 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2043 2044-2048 2049-2050 Governmental Activities Principal Interest Business-Type Activities Principal Interest $ 2,839,090 2,427,289 2,671,094 2,780,527 2,895,602 16,052,865 12,540,000 12,615,000 - $ 1,434,068 2,436,870 2,333,953 2,223,794 2,108,569 8,632,646 5,353,688 1,698,112 - $ 275,000 510,000 510,000 500,000 475,000 26,350,000 32,310,000 56,175,000 9,765,000 6,650,000 325,000 $ 6,833,991 7,265,507 7,292,307 7,273,163 7,223,032 32,203,876 24,248,327 11,797,242 3,378,101 697,287 109,690 32,889 $ 54,821,467 $ 26,221,700 $ 133,845,000 $ 108,355,412 On September 12, 2012, the City issued $10,500,000 of Public Improvement Corporation Bonds ($9,390,000 Tax-Exempt Bonds & $1,110,000 Taxable Bonds) to acquire approximately 14 acres of land and five existing buildings (approximately 89,000 square feet) currently known a Venida Business Park. The stated interest on the tax exempt bonds is 2.48% and the stated interest on the taxable bonds is 3.44% with semi-annual principal and interest payable over 11 years. 75 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 8 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE Community facilities district bonds payable at June 30, 2013 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, 2013, 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 G.O. Bonds, Series 2013 Refunding 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, 2013 Maturity $ 6.5 - 7.0% 4.55 - 5.25% 4.6 - 5.3% 3.3 - 5.75% 2.0% - 5.0% 07/15/13 07/15/13 07/15/13 07/15/13 07/15/28 4.25 - 5.30% 4.25 - 5.80% 07/15/31 07/15/32 3,865,000 3,550,000 125,000 95,000 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 3,085,000 5,675,000 7,330,000 6,625,000 995,000 21,405,000 260,000 245,000 145,000 205,000 95,000 460,000 5.875 - 6.5% 5.2 - 5.75% 07/15/22 07/15/23 390,000 490,000 30,000 30,000 6.0 - 7.0% 4.5 - 5.9% 07/15/25 07/15/26 515,000 560,000 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 4,124,000 3,196,000 4,215,000 6,787,000 11,620,000 6,256,000 254,000 152,000 135,000 237,000 315,000 164,000 4.1 - 5.7% 3.7 - 6.75% 07/15/28 07/15/28 1,380,000 1,095,000 55,000 45,000 5.0 - 5.7% 5.0 - 5.375% 07/15/29 07/15/31 1,405,000 855,000 55,000 15,000 5.50% 4.75 - 5.15% 4.875-6.625% 07/15/29 07/15/31 07/15/32 1,990,000 580,000 685,000 109,823,000 75,000 5,000 15,000 3,727,000 $ 35,000 90,000 225,000 115,000 10,685,000 Due Within One Year $ $ 35,000 90,000 225,000 115,000 - 76 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 8 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE (Continued) Community Facilities District bonds debt service requirements to maturity are as follows: Governmental Activities Fiscal year ending June 30, 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 Total $ $ Principal 3,727,000 3,620,000 3,887,000 4,116,000 4,358,000 25,553,000 32,177,000 32,385,000 109,823,000 $ $ Interest 5,913,248 5,638,217 5,451,825 5,246,824 5,024,786 21,198,401 13,244,692 4,452,655 66,170,648 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 $41,434 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, 2013 of $5,180 was taken on the deferred amount. On June 12, 2013, Community Facilities General District #1 (CFGD) issued $10,685,000 of General Obligation Bonds, with an average interest rate of 4.33%, to do an advanced refunding for a portion of the CFGD 1996(A), 1998, 2000 and 2003 General Obligation Bonds. Under the terms of the refunding issue, sufficient assets to pay $375,000 of the 1996(A), $1,345,000 of the 1998, $4,210,000 of the 2000 and $4,755,000 of the 2003 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 $10,685,000 outstanding with the trustee on these bonds as of June 30, 2013. $10,685,000 of 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 $939,689. The $280,024 deferred amount on retirement of bonds is being amortized over the shorter of the lives for the refunded or refunding bonds on the straight-line basis. 77 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 9 CHANGES IN LONG-TERM LIABILITIES Long-term liabilities activity for the year ended June 30, 2013 was as follows: Beginning Balance Governmental activities: Compensated absences General obligation bonds payable Community Facilities District bonds payable Public improvement bonds Revenue bonds payable Contracts payable Premiums Discounts Governmental activities long-term liabilities $ 3,830,033 Additions $ 113,555,000 2,940,000 43,675,000 1,755,628 3,017,874 (56,593) $ 197,717,578 NOTE 10 $ 440,922 10,685,000 10,500,000 672,545 $ 23,983,280 $ 296,080 296,080 $ 4,012,521 2,445,067 26,555,569 14,417,000 1,008,533 1,285,000 1,755,628 303,135 (3,329) 109,823,000 12,431,467 42,390,000 3,387,284 (53,264) $ 1,455,561 3,727,000 1,484,090 1,355,000 - $ 198,546,577 $ 8,021,651 Reductions Ending Balance Due Within One Year $ $ 1,943,247 Due Within One Year $ 23,154,281 Additions 89,394,364 102,180,000 31,985,000 11,908,603 3,537,944 (623,183) $ 238,823,650 $ - 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 2,125,735 29,000,636 Ending Balance Reductions 292,447 4,009,933 320,000 909,661 222,843 (22,227) $ 5,732,657 $ 444,555 $ 85,384,431 102,180,000 31,665,000 10,998,942 3,315,101 (600,956) $ 233,387,073 162,668 275,000 - $ 437,668 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At June 30, 2013, interfund balances were as follows: Interfund receivables/payable: Receivable Amount Fund General Fund $ 1,623,345 Payable Amount $ - Non-Major Funds - 541,666 Stadium Fund Internal Service Fund - 961,840 119,839 Total $ 1,623,345 $ 1,623,345 All interfund borrowing resulted from the borrowing of funds to cover cash deficit. 78 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 10 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 $ 8,986,031 616,663 2,800,000 900,000 26,150 Transfers In $ 3,726,150 1,000,000 8,602,694 Total $ $ 13,328,844 13,328,844 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 11 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, 2013; 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 12 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 maximum liability for the City for the fiscal year is $500,000 and the deductible is $250,000 per occurrence. 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 City is insured by the Workers’ Compensation Insurance Fund for potential worker-related accidents. 79 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 13 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, 2013, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.14% (10.90% retirement and 0.24% 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 11.14% (10.25% retirement, 0.65% for health insurance premium, and 0.24% long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2013, 2012, and 2011 were $2,133,623, $2,022,865, and $1,908,120, respectively. The City contribution for the current and two preceding years, all of which were equal to the required contributions, were as follows: Years ended June 30, 2013 2012 2011 Retirement $ 1,969,820 1,859,002 1,745,397 Long-term Disability Health Insurance $ 117,973 118,660 114,293 $ 45,830 45,203 48,430 Total $ 2,133,623 2,022,865 1,908,120 80 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 13 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, 2013, active PSPRS members were required by statute to contribute 9.55% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 16.30% (15.35% retirement and 0.95% health insurance premium) of the covered payroll to the Plan for the Police and 12.63% (11.93% retirement and 0.70% 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, 2013, and related information follows: Contribution Rates: PSPRS – Police PSPRS - Fire City – retirement 15.35% 11.93% City – health insurance premium 0.95% 0.70% Plan members 9.55% 9.55% Annual pension cost Retirement $ 1,012,173 $ 852,786 Health insurance premium $ 62,643 $ 50,038 Retirement $ 1,012,173 $ 852,786 Health insurance premium $ 62,643 $ Pension contributions made Actuarial valuation date Actuarial cost method 50,038 June 30, 2011 June 30, 2011 Entry Age Normal Entry Age Normal Actuarial assumptions: Investment rate of return Projected salary increases 8.25% 8.25% 5.0% - 8.0% 5.0% - 8.0% Includes inflation at cost-of-living adjustment 5.0% 5.0% Amortization method Level Percent Level Percent Remaining amortization period Asset valuation method Post retirement benefit increases Closed Closed 25 years underfunded 25 years underfunded 20 years overfunded 20 years overfunded 7-year smoothed market 7-year smoothed market Based on Income Based on Income 81 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 13 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, 2013 June 30, 2012 June 30, 2011 $ Percentage of APC Contributed Net Pension Obligation 1,012,173 782,123 926,533 100.0% 100.0% 100.0% - 62,643 59,516 64,322 100.0% 100.0% 100.0% - June 30, 2013 852,786 100.0% - June 30, 2012 664,242 100.0% - June 30, 2011 951,747 100.0% - June 30, 2013 50,038 100.0% - June 30, 2012 45,320 100.0% - June 30, 2011 53,089 100.0% - PSPRS - Police - Health Insurance June 30, 2013 June 30, 2012 June 30, 2011 PSPRS - Fire - Pension 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, 2011 reporting period determines the rates for fiscal year 2013. 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, 2011 2010 2009 Actuarial Accrued Liability (AAL) (b) Actuarial Value of Assets (a) $ 15,226,911 13,654,887 12,239,614 $ 19,399,303 16,599,543 15,500,586 Unfunded AAL (b-a) $ 4,172,392 2,944,656 3,260,972 Annual Covered Payroll (c) Funded Ratio (a/b) 78.5% 82.3% 79.0% $ 6,032,600 6,254,977 6,431,412 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 69.16% 47.08% 50.70% 82 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 13 RETIREMENT PLANS (Continued) PSPRS - Goodyear Police Health Insurance Plan: Valuation Date June 30, 2011 2010 2009 Actuarial Value of Assets (a) $ - $ Actuarial Accrued Liability (AAL) (b) 605,373 496,169 445,126 Unfunded AAL (b-a) $ 605,373 496,169 445,126 Funded Ratio (a/b) 0.0% 0.0% 0.0% Annual Covered Payroll (c) $ 6,032,600 6,254,977 6,431,412 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 10.04% 7.93% 6.92% 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, 2011 2010 2009 $ 13,550,733 11,710,348 10,127,059 Actuarial Accrued Liability (AAL) (b) $ 14,397,115 11,419,916 10,391,001 Unfunded AAL (b-a) $ 846,382 (290,432) 263,942 94.1% 102.5% 97.5% $ 6,395,339 6,508,273 7,047,317 13.2% 0.0% 3.8% PSPRS - Goodyear Fire Health Insurance Plan: Valuation Date June 30, 2011 2010 2009 Actuarial Value of Plan Assets (a) $ - $ Actuarial Accrued Liability (AAL) (b) 470,529 304,034 235,582 Unfunded AAL (b-a) $ 470,529 304,034 235,582 Funded Ratio (a/b) 0.0% 0.0% 0.0% Annual Covered Payroll (c) $ 6,395,339 6,508,273 7,047,317 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 7.36% 4.67% 3.34% 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. 83 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 13 RETIREMENT PLANS (Continued) Annual Required Contribution PSPRS - Goodyear Police Health Insurance Plan: Valuation Date June 30, 2011 2010 2009 Fiscal Year Ended 30-Jun 2013 2012 2011 Actuarial Accrued Liability (b) 0.54% 0.40% 0.34% Normal Cost (a) 0.41% 0.59% 0.55% Total (a+b) 0.95% 0.99% 0.89% Dollar Amount $ 63,184 68,923 63,709 Total (a+b) 0.70% 0.67% 0.55% Dollar Amount $ 49,356 48,534 43,141 PSPRS - Goodyear Fire Health Insurance Plan: Valuation Date June 30, 2011 2010 2009 Fiscal Year Ended 30-Jun 2013 2012 2011 Actuarial Accrued Liability (b) 0.40% 0.24% 0.17% Normal Cost (a) 0.30% 0.43% 0.38% The Health Insurance Subsidy payments reported for valuation year 2011 were $6,613 and $3,120 for the Police plan and the Fire plan, respectively. 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 fifty (50) or fifteen years of credited service. This plan was fully vested as of June 30, 2013. As of June 30, 2013, there were 6 eligible employees participating in the plan. The plan is administered by LPL Financial. As of June 30, 2013, the plan’s assets consisted of the following: Cash LGIP Money market US Treasury notes Mutual Funds $ 53 9,056 185,498 60,056 190,669 $ 445,332 84 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 13 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 14 DEFICIT FUND BALANCE Grants Fund Deficit Fund Balance - At June 30, 2013, the Grants Fund contains a deficit fund balance of $26,073 in the fund financial statements. Future revenues are expected to cover this deficit. NOTE 15 COMMITMENTS The City has active construction projects as of June 30, 2013. The balances for work not yet complete as of June 30, 2013 were as follows: ADOT $ AJP Electric 294,377 55,000 Arrington Watkins Architects 2,815,814 Burgess and Niple 183,631 C3 Construction 116,603 D.L. Withers 3,308,813 Felix Construction 751,816 Foresite Design & Construction 916,217 HDR Engineering, Inc 255,892 MGC Contractors, Inc. 430,606 Motorola 303,670 Plan-Etcommunities PLLC 192,403 TischlerBise 59,906 United Fire Equipment 110,000 Water Works Engineers 740,010 $ 10,534,758 These commitments are being financed from existing fund balances. 85 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 16 RESTATEMENT The City adopted GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, in the current year. As a result, the effect on fiscal year 2012 is as follows: Governmental Activities 2012 Previously Presented Deferred charges Interest on long-term debt Change in net position Net position, end of year $ 4,893,812 10,441,684 6,493,633 462,352,241 Business-type Activities 2012 Previously Presented Deferred charges Interest on long-term debt Change in net position Net position, end of year $ 2,390,032 11,715,537 3,766,033 195,851,638 Water & Sewer Fund: 2012 Previously Presented Deferred charges Interest expense Change in net position Net position, end of year $ 1,414,214 6,417,467 5,739,110 176,863,542 Stadium Fund: 2012 Previously Presented Deferred charges Interest expense Change in net position Net position, end of year $ 975,818 5,298,070 (1,746,598) 17,269,167 2012 Restated Restatement $ (4,893,812 ) (134,160 ) 134,160 (4,893,812 ) $ — 10,307,524 6,627,793 457,458,429 2012 Restated Restatement $ (2,390,032 ) (93,902 ) 93,902 (2,390,032 ) $ — 11,621,635 3,859,935 193,461,606 2012 Restated Restatement $ (1,414,214 ) (70,730 ) 70,730 (1,414,214 ) $ — 6,346,737 5,809,840 175,449,328 2012 Restated Restatement $ (975,818 ) (23,172 ) 23,172 (975,818 ) $ — 5.274.898 1,723,426 16,293,349 86 CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2013 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 Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits Due to other funds Total liabilities Highway User Revenue $ 407,821 338,098 595,675 1,341,594 $ $ $ $ 1,297 $ 69,657 $ 31,465 114,361 252,524 DEFERRED INFLOWS OF RESOURCES Deferred revenue Total deferred inflows of resources FUND BALANCE Nonspendable: Inventories Restricted for: Debt service Highway user funds Community Facilities Districts operations Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances 106,698 $ Grants 111,020 1,093,101 4,945 58,566 1,267,632 Community Facilities Districts 1,254,575 15,711 748 1,271,034 - 595,675 1,341,594 55,035 56,332 486,631 556,288 1,237,373 1,237,373 2,766 2,766 - 493,395 1,089,070 $ $ - (26,073) (26,073) $ 1,267,632 711,980 711,980 $ 1,271,034 94 Debt Service 110,807 819,761 $ 930,568 Total Non-Major Governmental Funds $ 1,773,416 1,093,101 464,616 4,945 748 58,566 595,675 819,761 4,810,828 $ $ $ $ 3,132 3,132 31,465 3,132 114,361 541,666 868,276 85,720 85,720 1,325,859 1,325,859 - 595,675 841,716 841,716 $ 177,652 930,568 841,716 493,395 711,980 (26,073) 2,616,693 $ 4,810,828 95 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2013 Special Revenue REVENUES Taxes Intergovernmental Charges for services Investment income Contributions Miscellaneous Total revenues Highway User Revenue $ 3,767,109 5,100 734 60,132 3,833,075 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 Grants $ $ 4,470,247 87,284 282,908 94,777 4,000 396,642 1,054,612 - 4,557,531 778,327 1,054,612 (724,456) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) 761,249 859 762,108 Community Facilities Districts 979,521 37,195 134,454 77,012 1,228,182 (16,219) 173,570 1,000,000 - - - 1,000,000 - - Net change in fund balances 275,544 (16,219) 173,570 Fund balances, beginning of year 813,526 (9,854) 538,410 Fund balances, end of year $ 1,089,070 $ (26,073) $ 711,980 96 $ Debt Service 3,866,203 523 3,866,726 Total Non-Major Government Funds $ 4,845,724 4,528,358 5,100 39,311 134,454 137,144 9,690,091 - 1,054,612 282,908 4,565,024 4,000 483,926 2,445,067 1,209,390 3,654,457 2,445,067 1,209,390 10,044,927 212,269 (354,836) (616,663) 1,000,000 (616,663) (616,663) 383,337 (404,394) 28,501 1,246,110 $ 841,716 2,588,192 $ 2,616,693 97 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS June 30, 2013 Brownfield EPA Cleanup ASSETS Cash and cash equivalents Receivable Total assets LIABILITIES Accounts payable Deposits held for others Total liabilities $ $ $ $ Payshare (Utility Assistance) Fill-A-Need 9,030 9,030 $ 198 6 204 $ 9,030 9,030 $ 204 204 $ Gain 88,339 88,339 $ 87,115 1,224 88,339 $ $ $ $ $ $ $ Shop With A Cop 4,654 4,654 $ 4,654 4,654 $ $ $ Total 8,516 8,516 $ 110,737 6 $ 110,743 8,516 8,516 $ 96,145 14,598 $ 110,743 101 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS Year Ended June 30, 2013 Balance 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 Additions Deletions Balance June 30, 2013 $ 475,977 $ - $ (387,638) $ 88,339 $ $ $ (225,935) (161,703) (387,638) $ $ - $ $ 313,050 162,927 475,977 $ 87,115 1,224 88,339 $ 11,744 $ - $ (2,714) $ 9,030 $ 11,744 $ - $ (2,714) $ 9,030 $ $ 72 $ $ 72 $ - $ $ 126 6 132 $ 198 6 204 $ 132 $ 72 $ - $ 204 $ 2,143 $ 2,511 $ - $ 4,654 $ 2,143 $ 2,511 $ - $ 4,654 $ 4,348 $ 4,168 $ - $ 8,516 $ 4,348 $ 4,168 $ - $ 8,516 $ 494,338 6 494,344 $ 6,751 6,751 $ (390,352) (390,352) $ 110,737 6 110,743 324,794 169,550 494,344 $ 6,751 6,751 $ (228,649) (161,703) (390,352) $ $ $ $ - $ $ $ $ $ $ 96,145 14,598 110,743 102 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, 2013 Budgeted Amounts Original REVENUES Taxes Investment income Special assessments Contributions Total revenues $ 5,055,789 1,665 5,011,439 1,001,810 11,070,703 Final $ 5,055,789 1,665 5,011,439 1,001,810 11,070,703 $ 4,853,620 12,683 2,301,100 3,458,495 10,625,898 3,732,000 7,092,588 10,824,588 EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures 5,810,000 7,648,572 13,458,572 5,810,000 7,648,572 13,458,572 Excess (deficiency) of revenues over (under) expenditures (2,387,869) (2,387,869) OTHER FINANCING SOURCES (USES) Debt issuance Refunding bonds Refunding bonds premium Payment to refunded bond escrow agent Total other financing sources (uses) Actual 400,000 - 400,000 - 400,000 400,000 $ 2,189,179 10,685,000 672,545 (10,965,024) (400,000) 10,685,000 672,545 (10,965,024) 392,521 (1,987,869) (1,987,869) Fund balance, beginning of year 14,387,503 14,387,503 14,387,503 $ 12,399,634 $ 12,399,634 $ 14,581,334 (202,169) 11,018 (2,710,339) 2,456,685 (444,805) 2,078,000 555,984 2,633,984 (198,690) Net change in fund balance Fund balance, end of year Variance with Final Budget Positive (Negative) (7,479) 193,831 2,181,700 $ 2,181,700 105 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, 2013 Budgeted Amounts Original REVENUES Investment income Special assessments Total revenues $ EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ 3,581,500 3,581,500 Final $ 3,581,500 3,581,500 Actual $ 20,191 3,544,206 3,564,397 Variance with Final Budget Positive (Negative) $ 20,191 (37,294) (17,103) 1,285,000 2,292,938 3,577,938 1,285,000 2,292,938 3,577,938 1,285,000 2,259,456 3,544,456 33,482 33,482 3,562 3,562 19,941 16,379 75,450 75,450 75,450 - 79,012 $ 79,012 $ 95,391 $ 16,379 106 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, 2013 Budgeted Amounts Original REVENUES Charges for services Investment income Miscellaneous Total revenues EXPENDITURES Current: Public safety Culture and recreation Highway and streets Development services Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ 2,053,467 12,707 2,066,174 Final $ 2,053,467 12,707 2,066,174 Actual $ 2,479,445 21,435 103,270 2,604,150 Variance with Final Budget Positive (Negative) $ 425,978 8,728 103,270 537,976 1,042 181,420 57,710 12,177,744 12,417,916 231,420 117,710 16,250,094 16,599,224 224,421 109,301 43,124 7,706,378 8,083,224 6,999 8,409 (43,124) 8,543,716 8,516,000 (10,351,742) (14,533,050) (5,479,074) 9,053,976 21,720,718 21,720,718 21,720,718 7,187,668 $ 16,241,644 $ 11,368,976 $ $ 9,053,976 107 CITY OF GOODYEAR, ARIZONA CAPITAL IMPROVEMENT PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2013 Variance with Final Budget Positive (Negative) Budgeted Amounts Original REVENUES Investment income Miscellaneous Total revenues $ EXPENDITURES Capital outlay Debt service Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Debt issuance Total other financing sources (uses) - - $ 7,003 43 7,046 $ 7,003 43 7,046 23,469,952 8,690,351 14,779,601 32,770,150 23,469,952 120,995 8,811,346 (120,995) 14,658,606 (32,770,150) (23,469,952) (8,804,300) 14,665,652 32,770,150 32,425,519 10,500,000 (21,925,519) 32,770,150 32,425,519 10,500,000 (21,925,519) 8,955,567 1,695,700 (7,259,867) - Fund balance, beginning of year $ $ Actual 32,770,150 Net change in fund balance Fund balance, end of year Final - $ 8,955,567 $ 1,695,700 $ (7,259,867) 108 CITY OF GOODYEAR, ARIZONA HIGHWAY USER REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2013 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment income Miscellaneous Total revenues Original Final Actual $ 3,746,638 10,000 25,000 3,781,638 $ 3,673,514 10,000 25,000 3,708,514 $ 3,767,109 5,100 734 60,132 3,833,075 4,690,155 110,313 4,800,468 4,801,390 87,288 4,888,678 4,470,247 87,284 4,557,531 (1,018,830) (1,180,164) 1,000,000 1,000,000 1,000,000 - 1,000,000 1,000,000 1,000,000 - 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) (18,830) (180,164) 275,544 Fund balance, beginning of year 813,526 813,526 813,526 633,362 $ 1,089,070 $ 794,696 $ $ 93,595 (4,900) 734 35,132 124,561 331,143 4 331,147 (724,456) Net change in fund balance Fund balance, end of year Variance with Final Budget Positive (Negative) 455,708 455,708 $ 455,708 111 CITY OF GOODYEAR, ARIZONA GRANTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2013 Budgeted Amounts REVENUES Intergovernmental Investment income Total revenues Original Final $ 2,000,000 2,000,000 $ 2,000,000 2,000,000 2,000,000 30,000 2,030,000 1,386,411 85,894 95,000 30,000 527,695 2,125,000 EXPENDITURES Current General government Public safety Highway and streets Culture and recreation Development services Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ Actual $ 761,250 859 762,109 $ (1,238,750) 859 (1,237,891) 282,908 94,777 4,000 396,642 778,327 1,386,411 (197,014) 223 (4,000) 30,000 131,053 1,346,673 108,782 (30,000) (125,000) (16,218) (9,855) (9,855) (9,855) (39,855) $ (134,855) $ Variance with Final Budget Positive (Negative) (26,073) $ 108,782 112 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - GENERAL SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2013 Variance with Final BudgetPositive (Negative) Budgeted Amounts REVENUES Taxes Investment income Contributions Miscellaneous Total revenues Original Final $ 1,025,264 405 275,843 1,301,512 $ 1,025,264 405 275,843 1,301,512 1,360,756 1,360,756 1,360,756 1,360,756 EXPENDITURES Current General government Total expenditures Actual $ 979,521 37,195 134,454 77,012 1,228,182 306,144 306,144 232,814 (59,244) (59,244) 173,570 Fund balance, beginning of year 538,410 538,410 538,410 $ 479,166 $ 479,166 $ (45,743) 36,790 134,454 (198,831) (73,330) 1,054,612 1,054,612 Net change in fund balance Fund balance, end of year $ 711,980 $ 232,814 113 CITY OF GOODYEAR, ARIZONA DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2013 Budgeted Amounts Original REVENUES Taxes Investment income Total revenues $ EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures $ 2,880,998 1,626,715 4,507,713 Excess (deficiency) of revenues over (under) expenditures (489,277) 1,246,110 $ 756,833 $ - (489,277) Fund balance, beginning of year 4,018,436 4,018,436 (489,277) - Net change in fund balance Actual 2,880,998 1,626,715 4,507,713 (489,277) OTHER FINANCING SOURCES Transfers out Total other financing sources Fund balance, end of year 4,018,436 4,018,436 Final 1,246,110 $ 756,833 3,866,203 523 3,866,726 Variance with Final Budget Positive (Negative) $ 2,445,067 1,209,390 3,654,457 435,931 417,325 853,256 212,269 701,546 (616,663) (616,663) (616,663) (616,663) (404,394) 84,883 1,246,110 $ (152,233) 523 (151,710) 841,716 $ 84,883 114 CITY OF GOODYEAR, ARIZONA WATER & SEWER ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2013 Budgeted Amounts Variance with Final Budget Positive (Negative) Original Final Actual $ 22,560,595 1,546,998 24,107,593 $ 21,712,000 141,629 21,853,629 $ 22,702,060 431,092 23,133,152 Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 3,360,560 15,252,415 18,612,975 3,500,794 16,178,816 19,679,610 3,345,978 7,491,318 5,453,531 16,290,827 154,816 8,687,498 (5,453,531) 3,388,783 Operating income (loss) 5,494,618 2,174,019 6,842,325 4,668,306 8,506 (10,904,449) 8,506 (10,904,449) 71,396 (5,656,419) 62,890 5,248,030 (10,895,943) (10,895,943) (5,585,023) 5,310,920 (5,401,325) (8,721,924) 1,257,302 9,979,226 Capital contributions Transfers in Transfers out 3,768,553 1,207,943 (3,107,943) 3,768,553 1,207,943 (3,107,943) 7,987,680 (2,800,000) 4,219,127 (1,207,943) 307,943 Change in net position (3,532,772) (6,853,371) 6,444,982 13,298,353 Operating revenues: Charges for service Miscellaneous Total operating revenue Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers $ 990,060 289,463 1,279,523 Net position, beginning of year Restatement 176,863,542 - 176,863,542 - 176,863,542 (1,414,214) (1,414,214) Net position, beginning of year - restated 176,863,542 176,863,542 175,449,328 (1,414,214) $ 173,330,770 $ 170,010,171 $ 181,894,310 Net position, end of year $ 11,884,139 115 CITY OF GOODYEAR, ARIZONA SANITATION ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2013 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Loss on sale of assets Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Transfers out Change in net position Net position, beginning of year Net position, end of year Variance with Final Budget Positive (Negative) Original Final Actual $ 6,153,230 6,153,230 $ 6,153,230 6,153,230 $ 6,368,920 574 6,369,494 743,070 4,502,691 5,245,761 743,070 4,572,691 5,315,761 498,447 4,578,610 132,032 5,209,089 244,623 (5,919) (132,032) 106,672 907,469 837,469 1,160,405 322,936 - - (37,577) 1,117 (36,460) 907,469 837,469 (900,000) (900,000) (900,000) (62,531) 223,945 7,469 $ (37,577) 1,117 (36,460) 1,123,945 1,718,929 1,718,929 1,718,929 $ 1,726,398 $ 1,656,398 $ 1,942,874 215,690 574 216,264 286,476 286,476 $ 286,476 116 CITY OF GOODYEAR, ARIZONA STADIUM ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2013 Budgeted Amounts Original Operating revenues: Charges for service Miscellaneous Total operating revenue $ 1,560,925 1,560,925 Final $ Actual 1,560,925 1,560,925 $ 1,741,609 1,317 1,742,926 Variance with Final Budget Positive (Negative) $ 180,684 1,317 182,001 Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 2,064,443 7,210,133 250,000 9,524,576 2,117,767 7,538,566 250,000 9,906,333 2,108,396 1,758,273 2,676,647 6,543,316 9,371 5,780,293 (2,426,647) 3,363,017 Operating income (loss) (7,963,651) (8,345,408) (4,800,390) 3,545,018 2,000 (5,535,263) (5,533,263) 2,000 (5,535,263) (5,533,263) 23,326 (5,661,038) (5,637,712) (13,496,914) (13,878,671) (10,438,102) 7,796,914 - 7,796,914 - 8,602,694 (26,150) Change in net position (5,700,000) (6,081,757) (1,861,558) Net position, beginning of year Restatement 17,269,167 - 17,269,167 - 17,269,167 (975,818) (975,818) Net position, beginning of year - restated 17,269,167 17,269,167 16,293,349 (975,818) 11,187,410 $ 14,431,791 Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Transfers out Net position, end of year $ 11,569,167 $ 21,326 (125,775) (104,449) 3,440,569 805,780 (26,150) 4,220,199 $ 3,244,381 117 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE June 30, 2013 Governmental funds capital assets Land Land Improvements Right of Way Streetscape Buildings and improvements other than buildings 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 $ 19,461,536 2,549,608 90,128,522 8,996,008 151,199,362 38,036,947 338,766,384 204,750 10,387,773 $ 659,730,890 $ 659,730,890 $ 659,730,890 121 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY June 30, 2013 Function and Activity General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Land, Land Improvements, Artwork, Right of Way, Streetscape $ 3,608,908 34,892 99,124,530 12,697,973 5,874,121 $ 121,340,424 Buildings $ 18,432,268 813,910 21,231,465 $ 40,477,643 Improvements Other Than Buildings $ 159,200 62,074 89,999,256 15,151,775 5,349,414 $ 110,721,719 122 Vehicles, Machinery and Equipment Infrastructure $ $ 7,571,053 18,186,121 5,935,189 2,395,396 3,949,188 $ 38,036,947 338,766,384 - $ 338,766,384 Construction in Progress $ Total 9,854,270 78,901 454,602 - $ 21,193,431 36,715,355 533,904,260 31,513,656 36,404,188 $ 10,387,773 $ 659,730,890 123 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, 2013 Governmental Funds Capital Assets July 1, 2012 Additions $ 16,787,300 36,882,718 532,161,011 30,962,080 24,133,257 $ 4,424,331 498,071 1,743,249 551,576 12,339,683 $ (18,200) (665,434) (68,752) $ Total governmental funds capital assets $ 640,926,366 $ 19,556,910 $ (752,386) $ 659,730,890 Function and Activity General Government Public Safety Highways and Streets Culture and Recreation Public Works Deductions Governmental Funds Capital Assets June 30, 2013 21,193,431 36,715,355 533,904,260 31,513,656 36,404,188 124 STATISTICAL SECTION Contents Page Financial Trends (Table 1 - 2) 130 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) 139 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) 164 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 This page intentionally left blank. City of Goodyear Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2013 2012* 2011 2010 Governmental Activities Net investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position $ 333,034,884 99,128,020 35,820,702 467,983,606 $ 329,064,345 108,246,415 20,147,669 457,458,429 $ 327,503,686 110,105,296 18,249,626 455,858,608 $ 317,162,459 115,881,050 19,272,548 452,316,057 Business-type Activities Net investment in capital assets Restricted Unrestricted Total Business-type Activities Net Position 178,456,590 3,196,131 16,616,254 198,268,975 178,432,900 3,799,026 11,229,680 193,461,606 179,254,929 3,567,237 9,263,439 192,085,605 191,582,614 4,365,725 195,948,339 511,491,474 102,324,151 52,436,956 $ 666,252,581 507,497,245 112,045,441 31,377,349 $ 650,920,035 506,758,615 113,672,533 27,513,065 $ 647,944,213 508,745,073 115,881,050 23,638,273 $ 648,264,396 Primary Government Net investment in capital assets Restricted Unrestricted Total Primary Government Net Position Source: Statement of Net Position City financial records and reports *Net position adusted for adoption of GASB Statement 65 130 Table 1 Fiscal Year 2009 2008 2007 2006 2005 2004 $ 309,491,989 117,787,315 20,522,420 447,801,724 $ 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 31,059,204 229,697,044 101,366,083 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 $ 280,825,544 199,696,564 (11,409,545) 188,287,019 509,188,553 117,787,315 9,112,875 $ 636,088,743 159,530,687 (13,193,174) 146,337,513 415,578,259 70,835,115 22,929,760 $ 509,343,134 131 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2013 Expenses Governmental Activities: General Government Police Financial Services Community Services Information Services Fire Municipal Services Human Resources Development Services 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 Expenses $ $ $ $ 2012 7,402,342 15,448,830 2,687,728 3,317,691 12,538,574 1,360,884 2,884,001 7,194,428 5,539,612 14,355,644 3,090,345 10,411,562 86,231,641 $ 11,570,223 10,342,364 5,246,666 12,204,354 39,363,607 $ $ 125,595,248 $ 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 $ $ $ 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 2010 $ $ $ 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 $ 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 $ 121,505,467 $ 119,223,405 Note: * Stadium Fund did not have operating activity until 2008 N/A data was not separated in these years 132 Table 2 Fiscal Year 2008 2009 2007 2006 2005 2004 $ 4,701,916 15,580,923 2,842,884 1,248,219 2,743,877 12,249,685 1,636,533 2,222,189 9,583,326 5,435,750 8,436,341 14,370,096 12,001,714 $ 93,053,453 $ 9,260,326 18,491,397 2,751,164 1,290,021 2,931,295 8,840,019 1,484,507 1,998,317 14,731,322 1,909,303 9,104,717 59,138,044 9,710,526 $ 141,640,958 $ 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 $ 11,608,878 7,046,385 5,090,150 6,475,960 $ 30,221,373 $ 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 $ 123,274,826 $ 164,325,142 $ 118,429,294 $ 71,853,403 $ 70,824,565 $ 58,825,760 Continued 133 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2013 Program Revenue Governmental Activities: Charges for Services: General Government Fire Police Municipal Services Public Works Culture and recreation Developmental Services 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 $ $ 2,075,520 817,463 358,873 809,334 304,128 6,206,750 4,654,268 11,358,824 26,585,160 2012 $ $ 865,484 676,932 130,566 825,971 322,215 4,163,050 7,636,691 9,701,254 24,322,163 2011 $ $ 2010 1,128,675 500,562 128,109 849,060 325,552 3,879,823 5,818,158 13,951,581 26,581,520 $ $ 863,192 336,303 320,967 852,500 287,805 3,615,255 5,648,867 16,436,375 28,361,264 $ 11,746,194 10,921,207 6,368,920 1,741,609 7,987,680 38,765,610 $ 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 Total Primary Government Revenues $ 65,350,770 $ 61,428,975 $ 56,125,524 $ 58,152,032 Net (Expense)/Revenue Governmental Activities Business-type Activities Total Primary Government Net Revenues $ (59,646,481) $ (58,432,301) $ (57,415,839) $ (336,680) (7,964,104) (597,997) $ (60,244,478) $ (58,768,981) $ (65,379,943) $ (56,407,183) (4,664,190) (61,071,373) 134 Table 2 Fiscal Year 2008 2009 $ 2007 301,151 24,054 240,293 730,571 357,039 4,776,076 4,843,140 102,028,190 $ 113,300,514 $ 3,988,792 57,630 210,707 686,135 343,274 12,183,231 4,587,630 85,108,447 $ 107,165,846 $ $ $ $ 8,880,151 6,389,190 5,625,426 1,014,221 25,000 41,595,562 63,529,550 8,894,793 6,244,742 5,145,922 762,200 27,405,133 48,452,790 $ 176,830,064 $ 155,618,636 $ $ $ 20,247,061 33,308,177 53,555,238 $ 2006 396,770 54,887 128,040 638,390 3,527,777 272,516 13,241,940 895,854 62,732,783 81,888,957 $ 7,588,225 6,137,152 4,392,794 20,000 24,414,623 42,552,794 $ 124,441,751 $ (34,475,112) $ 25,768,606 (8,706,506) $ 2005 286,419 61,456 67,264 529,007 126,800 14,584,804 648,756 26,761,281 43,065,787 $ $ 5,952,571 4,846,569 3,185,387 240,000 26,016,946 40,241,473 $ 83,307,260 2004 133,367 434,179 259,993 10,631,653 523,405 16,472,105 28,454,702 $ $ 8,895,239 3,775,636 2,786,148 10,853,019 26,310,042 $ 10,525,392 3,631,132 2,335,547 12,702,625 29,194,696 $ 54,764,744 $ 86,723,219 (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 $ $ $ 276,990 38,716 8,425 293,355 1,162,624 8,774,894 109,956 46,863,563 57,528,523 Continued 135 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2013 Revenues and Other Changes in Net Position 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 Position Governmental Activities Business-type Activities Total Primary Government $ $ $ 2012 58,957,595 $ 14,194,960 439,982 1,455,665 (4,876,544) 70,171,658 $ $ $ $ 92,945 117,103 3,892,665 4,102,713 $ 75,577,024 $ $ 10,525,177 4,807,369 15,332,546 $ $ 2010 55,301,512 $ 53,595,119 $ 12,704,826 9,699,146 319,017 227,446 493,244 827,619 (3,892,665) (3,390,940) 64,925,934 $ 60,958,390 $ 95,839 432,983 4,876,544 5,405,366 $ 2011 $ 55,623,884 10,907,518 179,114 2,026,285 (7,815,285) 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 69,028,647 $ 65,059,760 $ 73,247,026 6,493,633 3,766,033 10,259,666 $ 3,542,551 $ (3,862,734) (320,183) $ 4,514,333 7,661,320 12,175,653 $ $ Source: Statement of Net Assets City financial records and reports 136 Table 2 Fiscal Year 2009 2008 2007 2006 2005 $ 59,003,971 $ 61,251,635 $ 59,428,806 $ 48,726,571 $ 31,498,052 12,236,437 12,654,235 15,053,501 6,997,920 5,973,538 148,687 4,268,448 4,723,886 4,436,598 1,079,720 911,254 4,075,011 1,029,445 1,486,027 1,641,295 (9,444,077) (56,622) (117,062) 634,153 (7,751,307) $ 64,549,042 $ 72,805,252 $ 80,179,016 $ 61,530,054 $ 40,826,758 $ $ $ $ 72,500,835 $ 83,841,869 $ 81,709,767 $ 64,329,728 $ 40,288,482 $ 32,396,010 $ 84,796,103 41,259,970 $ 126,056,073 $ 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 $ 1,447,446 26,683 56,622 1,530,751 $ $ 715,181 1,950,000 17,431 117,062 2,799,674 $ $ 25,487,392 5,756,754 556,145 408,114 (799,999) $ 31,408,406 1,379,832 212,708 9,444,077 $ 11,036,617 $ 121,900 78,586 7,751,307 7,951,793 2004 $ 88,211 $ 7,666 (634,153) (538,276) $ 119,849 67,756 799,999 987,604 Concluded 137 Table 3 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Property Taxes $ 16,205,387 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 Sales & Use Taxes $ 40,222,752 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 State Shared Revenues - not Restricted to Specific Programs State Shared State Revenue Taxes* Sharing Franchise Taxes $ 2,529,456 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 $ 7,527,259 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 $ 6,667,701 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 Highway User Revenue $ 3,892,784 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 Source: City financial records and reports * Combined State Shared Sales Tax and Vehicle License Tax 139 City of Goodyear Sales & Use Taxes by Industry Classification Last Ten Fiscal Years (Unaudited) Fiscal Year 2013 Mining & Government Construction Manufacturing Utilities Wholesale Trade Retail Trade Restaurant & Bar Real Estate Hotels Services Miscellaneous $ 970 7,027,296 759,858 3,656,309 977,475 14,265,735 5,079,528 4,405,695 885,571 1,700,258 873,005 Total* $ 39,631,700 2012 $ 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 $ 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 * 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 140 Table 4 Fiscal Year 2008 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 $ 6,391 17,256,194 451,147 2,397,905 775,843 9,526,853 3,740,867 2,698,200 1,006,334 1,451,721 1,035,306 $ 40,346,762 2007 $ 1,055 19,305,179 405,882 2,115,344 815,930 9,789,605 3,996,446 2,603,404 944,488 3,725,380 2,286,662 $ 45,989,375 2006 $ 371 15,029,430 600,356 1,640,534 746,566 8,727,607 3,441,051 1,506,238 889,513 643,325 641,428 $ 33,866,419 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 $ 17,413,095 141 City of Goodyear Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2013 General Fund Reserved Unreserved Nonspendable: Advances to other funds Inventories Prepaid items Restricted by: Charter mandates Court Law enforcement Transit 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 Capital Projects Community Facilities Districts operations Unassigned Total All Other Governmental Funds $ 2012 - $ 2011 - $ 2010 - $ 17,812,619 10,742,777 961,840 8,916 486,842 961,840 16,258 500,911 961,840 3,627 422,681 - 3,528,982 234,813 208,085 543,022 3,377,572 261,229 125,812 - 3,209,321 198,457 129,231 - - 170,684 3,032,429 357,741 33,325,255 $ 42,858,609 437,873 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 $ $ $ - $ 14,891,228 1,393,549 47,213 - - - - - 20,452,179 - 595,675 36,182 412,916 45,225 289,782 46,238 - 15,482,259 15,663,838 16,241,644 21,720,718 493,395 400,610 1,695,700 711,980 538,410 (9,854) (26,073) $ 35,230,762 $ 38,771,863 $ 15,113,512 21,992,019 285,914 536,230 (2,336,765) 35,926,930 $ 36,784,169 Source: Balance Sheet Governmental Funds City financial records and reports 142 Table 5 Fiscal Year 2008 2009 $ 29,117,875 $ 2007 42,219,809 $ 2006 61,037,128 $ 2005 53,853,901 $ 2004 29,393,457 $ 18,701,153 - - - - - - - - - - - - $ 29,117,875 $ 42,219,809 $ 61,037,128 $ 53,853,901 $ 29,393,457 $ 18,701,153 $ 13,597,749 4,110,554 - $ 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 - 23,153,403 1,435,331 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 - - - - - - $ 42,297,037 $ 79,613,235 $ 47,406,990 $ 52,327,225 $ 76,842,826 $ 36,249,889 143 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 Technology Fire Municipal Services Human Resources Development Services 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 2013 2012 2011 2010 $ 58,970,605 6,793,070 18,723,318 6,322,025 809,334 439,982 5,845,306 4,024,175 567,839 102,495,654 $ 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 8,060,892 14,516,164 2,202,587 2,868,061 12,248,125 1,360,884 2,884,003 5,232,999 4,884,349 4,674,325 2,093,312 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 10,226,228 10,987,906 18,252,039 100,491,874 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 2,003,780 7,420,383 792,511 1,629,205 144 Table 6 Fiscal Year 2009 2008 2007 2006 2005 2004 $ 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 $ 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 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 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 7,392,618 11,930,502 47,556,824 132,630,417 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 (39,692,047) (91,395,729) (14,534,628) 24,695,991 8,166,495 (26,319,813) Continued 145 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2013 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 2012 2010 4,726,150 $ 5,504,462 $ 8,388,300 $ 6,376,290 (9,602,694) (9,397,127) (10,837,705) (14,191,575) 10,500,000 1,780,000 105,000 129,958 5,733 10,685,000 11,530,000 672,545 949,267 (11,530,000) - . (10,965,024) 6,015,977 $ 2011 8,019,757 25.8% (1,033,440) $ 6,386,943 28.9% (2,449,405) (7,704,552) $ (2,449,405) $ (6,075,347) 27.3% 27.0% Source: City financial records and reports 146 Table 6 Fiscal Year 2009 $ 2008 2007 2006 2005 2004 4,123,384 $ 11,561,671 $ 17,288,179 $ 18,210,420 $ 2,933,372 $ 2,242,149 (11,874,691) (21,005,748) (17,387,710) (47,966,568) (2,299,219) (3,042,148) 604,500 112,248,000 16,969,302 5,005,000 42,005,000 27,050,000 5,722 2,300,192 (72,151) 479,593 6,415,000 (6,734,459) (3,585,000) (10,726,085) 104,784,656 16,797,620 $ (50,418,132) $ 13,388,927 $ 2,262,992 17.5% 6.2% 12.4% (24,751,148) $ 43,118,746 (55,157) $ 51,285,241 17.9% 18.7% 26,250,001 $ (69,812) 18.8% Concluded 147 Table 7 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Property Taxes $ 16,218,397 16,572,825 18,862,731 21,908,223 22,332,774 18,004,766 12,289,010 9,769,889 8,583,676 7,187,270 Sales & Use Taxes $ 40,222,752 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 Franchise Taxes $ 2,529,456 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 State Shared Revenues - not Restricted for Specific Programs State Shared State Revenue Sales Sharing $ 14,194,960 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 $ 6,667,701 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 Highway User Revenue $ 3,892,784 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 Source: City financial records and reports 149 City of Goodyear Property Tax Rates Direct and Overlapping Governments 1 Last Eight Fiscal Years (Unaudited) City Direct Rate Overlapping Rates County-Wide Jurisdictions Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 Operating Rate 1.1115 0.9446 0.7603 0.6320 0.6678 0.7321 0.7945 0.8222 Debt Service Rate 0.6635 0.6554 0.6630 0.9679 0.9322 0.8679 0.7991 0.7778 Total City Rate 1.7750 1.6000 1.4233 1.5999 1.6000 1.6000 1.5936 1.6000 County Operating Rate 1.2407 1.2407 1.0508 0.9909 1.0327 1.1046 1.1794 1.1971 County Library District Rate 0.0492 0.0492 0.0412 0.0353 0.0353 0.0391 0.0507 0.0521 Fire District Assistance Rate 0.0110 0.0084 0.0066 0.0057 0.0053 0.0053 0.0068 0.0069 County Flood District Rate 0.1780 0.1780 0.1489 0.1367 0.1367 0.1533 0.2047 0.2119 County Education Equalization Rate 0.4717 0.4259 0.3564 0.3306 0.4358 Note: Data not available prior to 2006 1 Source: Maricopa County Assessor's Office 150 Table 8 Overlapping Rates County-Wide Jurisdictions Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 Community College Rate 1.3778 1.2082 0.9728 0.8844 0.9386 0.9760 1.0646 1.0315 Central Arizona Project Rate 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1200 0.1200 Special Health Care District Rate 0.1494 0.1122 0.0914 0.0856 0.0935 0.1184 0.1206 School Districts Total County Rate 3.4284 3.3598 2.7889 2.5750 2.3342 2.4718 2.7446 3.1759 Agua Fria/ Agua Fria/ Avondale Litchfield Rate Rate 7.4945 3.8863 7.4753 3.2590 5.3923 5.3658 6.0066 5.3164 5.7554 4.9382 6.4298 5.3545 7.8564 6.8558 7.8631 6.9430 Buckeye/ Tolleson/ Liberty Littleton Rate Rate 6.9607 9.2259 6.2698 7.8626 6.1069 6.1935 5.2568 5.8681 5.5581 6.3843 6.7267 6.8078 7.3005 7.3586 7.4944 8.3794 Mobile Rate 6.9350 4.9490 5.4994 6.2147 8.3984 N/A N/A N/A Continued 151 City of Goodyear Property Tax Rates Direct and Overlapping Governments 1 Last Eight Fiscal Years (Unaudited) Overlapping Rates Other Special Taxing Districts Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 West Maricopa Education Center District Rate 0.0500 0.0500 0.5000 0.0500 0.0500 0.0500 0.0500 0.0500 Central Arizona GRD Rate 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Roosevelt Irrigation District Rate 17.1000 17.1000 17.1000 17.1000 17.1000 15.0000 15.0000 15.0000 Centerra Community Facilities District Rate 3.2961 2.1961 2.3797 2.6829 2.6965 3.0000 3.0000 3.0000 Cortina Community Facilities District Rate 2.8500 2.7298 2.2087 1.2146 0.1520 2.8500 2.8500 2.8500 Cottonflower Community Facilities District Rate 3.8528 3.4033 2.9776 2.1198 1.2843 1.7639 3.0000 3.0000 Estrella Mtn. Ranch Community Facilities District Rate 1.3000 1.3000 1.3000 1.3000 1.3000 1.3000 1.3000 1.3000 152 Table 8 Overlapping Rates Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 Goodyear Community Facilities General District #1 Rate 1.0000 0.8034 0.7570 0.6629 0.5313 0.8040 1.0000 1.0000 Goodyear Community Facilities Utilities District #1 Rate 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Other Special Taxing Districts Palm King Wildflower Valley Ranch Community Community Community Facilities Facilities Facilities General District #3 District District #1 Rate Rate Rate 1.8035 0.3000 3.3150 1.2684 0.3000 2.8718 1.2952 0.3000 2.2891 0.2165 0.3000 1.5905 1.7949 0.3000 1.1703 1.6295 0.3000 1.3123 2.0000 0.3000 2.1340 0.3000 2.1893 Wildflower Community Facilities General District #2 Rate 3.3467 2.9933 2.5496 1.6561 1.3143 1.4154 2.3935 2.3547 Concluded 153 Table 9 City of Goodyear Principal Property Tax Payers Current Fiscal Year and Nine Years Ago (Unaudited) Fiscal Year 2013 Taxpayer Arizona Public Service Company Taxable Assessed Value 2004 Percentage of Total Taxable Assessed Rank Value Taxable Assessed Value $ 20,690,805 1 3.42% $ 7,187,379 VHS of South Phoenix, Inc. 8,559,046 2 1.41% - NNP III Estrella Mountain Ranch, LLC 4,942,368 3 0.82% - DH Goodyear, LLC 5,232,509 4 0.86% - Macy's Retail Holdings, Inc. 5,211,997 5 0.86% - Cardinal Capital Co 5,039,173 6 0.83% - First American Title Insurance Company 4,032,152 7 0.67% The Market at Estrella Falls, LLC 4,653,392 8 0.77% - BT Goodyear LLC 4,265,960 9 0.70% - Southwest Gas Corporation 4,331,101 10 0.72% - Percentage of Total Taxable Assessed Rank Value 2 3,953,222 2.72% 5 1.49% Suncor Development Company - 13,407,371 1 5.07% Rubbermaind, Inc. - 4,332,598 4 1.64% Sun Chase Estrella LP - 5,845,800 3 2.21% McLane Company - 3,650,355 6 1.38% Snyders of Hanover - 3,466,087 7 1.31% Qwest Communications - 2,962,696 8 1.12% Byrd Enterprises of Arizona Inc. - 2,589,594 9 0.98% CHI Construction Company - 2,390,814 10 0.90% Total $ 66,958,503 11.06% $ 49,785,916 18.81% Source: Maricopa County Treasurer 155 City of Goodyear Assessed Value and Estimated Actual Value of Taxable Property 1 Last Eight Fiscal Years (Unaudited) Total Assessed Value Residential Property Fiscal Year Ended June 30 2013 2012 2011 2010 2009 2008 2007 2006 $ 339,165,652 357,367,570 405,850,285 497,383,109 586,181,619 464,968,904 259,063,526 219,161,231 Total Assessed Value Commercial Property $ 228,812,312 252,752,614 297,842,341 284,491,038 211,360,209 159,482,762 131,663,157 109,929,249 Agricultural/ Vacant Land $ 167,084,029 206,673,571 308,078,489 374,640,069 323,172,973 221,884,779 164,267,777 97,388,312 Other $ 244,254 214,401 33,349 28,842 30,053 30,978 47,639 226,783 Less: Tax-Exempt Property $ 129,664,064 144,006,328 163,045,578 173,686,635 120,023,805 82,130,285 60,129,086 35,549,177 Net Assessed Value $ 605,642,183 673,001,828 848,758,886 982,856,423 1,000,721,049 764,237,138 494,913,013 391,156,398 Note: Data prior to 2006 is not available. 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. 156 Table 10 Estimated Actual Taxable Value Secondary Tax Rate $ 0.6635 0.6554 0.6630 0.9679 0.9322 0.8679 0.7991 0.7778 $ 5,583,052,641 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 Assessed Value as Percentage of Actual Value 10.8% 11.0% 11.5% 11.4% 11.4% 11.4% 11.9% 12.0% 157 Table 11 City of Goodyear Property Tax Levies and Collections 1 Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Collected within the Fiscal Year of the Levy Percentage Amount of Levy Taxes Levied for the Fiscal Year $ 10,714,099 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 $ 10,414,268 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 97.20% 97.93% 98.92% 97.11% 96.05% 98.74% 97.75% 97.58% 98.76% 97.77% Collection in Subsequent Years $ (29,011) $ 129,172 123,357 96,134 44,605 77,686 49,075 49,184 - Total Collections to Date Percentage Amount of Levy 10,385,257 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 96.93% 99.14% 99.98% 97.75% 96.36% 99.45% 98.41% 98.39% 98.76% 97.77% Note: Data not availabe for FY2004 & FY2005. All secondary collections are reported as current collections. Delinquent tax collections are shown in the year collected. Source: City Financial Records and Reports Schedule includes General and Debt Service Funds 158 Table 12 City of Goodyear Utility Statistical Data Ten Largest Water Users Current Fical Year and Five Fiscal Years Ago (Unaudited) Fiscal Year Entity Canyon Trails HOA Canyon Trails 4 - South Canyon Trails Unit 4 Canyon Trails 3 Cottonflower Goodyear Community Las Brisas Community Assoc Avondale Elementary School Agua Fria High School Cancer Treatment Center Sarival Paseo Joint Community Evergreen Lawn Sprinklers Centerra, LLC Estrella Joint Committee Park Shadows 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 School Hospital Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association Apartments 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 2013 Fees & Charges $ 292,061 249,963 207,683 206,507 192,421 160,246 157,016 142,771 112,051 111,695 $ 1,832,414 15.47% Rank 2 5 8 6 1 3 4 7 9 10 2008 Fees & Charges 166,139 145,474 93,896 105,348 173,266 154,195 148,800 102,443 76,401 64,527 $ 1,230,489 13.94% Note: Water information not available prior to FY 2008 Source: City customer service and billing records 159 Table 13 City of Goodyear Utility Statistical Data Ten Largest Wastewater Users Current Fiscal Year and Five Fiscal Years ago (Unaudited) Fiscal Year Entity Arizona State Prison/Perryville Saint Gobain Glass Corp Cancer Treatment Center Fairfield Centerra LLC Park Shadows Fairfield Goodyear LLC Poore Brothers, Inc. Pem Investments Airport Training Center Alliance Residential Avondale Elementary 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 Manufacturer Hospital Real Estate Apartments Apartments Food Manufacturer, Snacks Apartments Airport Real Estate Education Real Estate Apartments Education Grocery Distributor Hotel Grocery Retail Apartments Homeowner's Association Total Total as a percent of total Wastewater System Operating Revenue 2013 2008 Fees & Fees & Rank Charges Rank Charges 1 $ 469,723 1 $ 317,331 2 $ 94,900 $ 3 85,127 4 78,888 5 78,240 2 50,512 6 74,012 7 64,458 6 22,656 8 46,475 9 44,899 5 22,656 10 42,792 7 21,794 3 32,000 8 19,253 4 24,273 9 18,044 10 17,581 $ 1,079,515 9.51% $ 546,100 8.74% Note: Wastewater information not available prior to FY 2008 Source: City customer service and billing records 161 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) Adopted 2011 Existing Fees Adopted 2012 Adopted 2013 $ 10.05 12.74 19.74 32.02 61.64 99.58 189.08 $ 9.94 11.81 16.36 26.22 48.43 83.36 159.83 $ 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 (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. 162 Table 14 Description of Sewer System Services Residential Sewer Service Base Charge Volume Charge (per 1,000 gallons) General Commercial Sewer Service Base Charge Volume Charge (per 1,000 gallons) Base Charge (Meter Size) 3/4 Inch 1 Inch 1 1/2 Inch 2 Inches 3 Inches 4 Inches 6 Inches Adopted 2011 Adopted 2012 Adopted 2013 (See below) $ 4.90 $ 4.45 $ 4.90 $ 5.78 (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 Existing Fees $ 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. 163 City of Goodyear Ratios of Outstanding Debt by Type Last Eight Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2013 2012 2011 2010 2009 2008 2007 2006 $ 26,555,569 29,000,636 31,358,457 33,601,981 35,842,739 41,719,857 36,050,000 27,280,000 Governmental Activities Public Greater Improvement Arizona Corporation Development Municipal Authority Facilities Loan Revenue Bond Contract Payable $ 1,755,628 3,755,628 5,755,628 11,755,628 - $ 3,185,000 3,645,000 $ 12,431,467 2,940,000 4,510,000 5,230,000 5,910,000 6,415,000 3,320,000 3,485,000 McDowell Road Corridor Improvement District $ 42,390,000 43,675,000 44,900,000 46,060,000 47,165,000 47,165,000 - Community Facilities District Bonds $ 109,823,000 113,555,000 117,182,000 122,313,000 127,125,000 131,116,000 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 164 Table 15 General Obligation Bonds $ 85,384,431 89,394,364 91,121,543 92,753,019 88,282,261 88,125,143 54,145,000 28,990,000 Business-Type Activities Public Improvement Corporation Municipal Facilities Revenue Revenue Bond Bonds $ 102,180,000 102,180,000 102,300,000 102,300,000 102,300,000 67,850,000 $ 31,390,000 31,985,000 32,245,000 17,040,000 2,370,000 2,345,000 2,460,000 2,580,000 Water Infrastructure Finance Authority Loan $ 10,998,942 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 - $ 421,153,409 426,394,231 439,926,724 445,292,958 440,790,280 394,179,400 185,989,012 149,485,512 $ Percentage of Personal Income* 21.26% 22.40% 20.74% 24.79% 24.89% 25.65% 12.34% 11.74% Per Capita 5,900 6,341 6,634 6,822 7,047 6,742 3,335 3,007 165 Table 16 City of Goodyear Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Less: Amounts Available in Debt Service Fund General Obligation Bonds 111,940,000 118,395,000 122,480,000 126,355,000 124,125,000 129,845,000 90,195,000 56,270,000 58,265,000 30,395,000 $ 841,716 1,246,110 668,186 828,016 592,244 3,026,753 587,476 210,498 123,863 499 Total $ Percentage Estimated Actual Taxable Value of Property 111,098,284 117,148,890 121,811,814 125,526,984 123,532,756 126,818,247 89,607,524 56,059,502 58,141,137 30,394,501 10.80% 11.00% 11.50% 11.40% 11.40% 11.40% 11.90% 12.00% 17.77% 11.49% Per Capita 1,556 1,742 1,830 1,933 1,975 2,169 1,607 1,128 1,410 849 Source: City Records (Does not include Enterprise, Special Assessment and CFD bonds) 166 Table 17 City of Goodyear Direct and Overlapping Governmental Activities Debt As of June 30, 2013 (Unaudited) Secondary Assessed Valuation Governmental Unit Debt repaid with property taxes and special assessment liens Debt Outstanding Estimated Share of Overlapping Debt Estimated Percentage Applicable (a) 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 $ 34,400,455,716 34,400,455,716 326,985,080 179,773,102 584,148,304 229,140,680 911,133,384 670,741,653 940,359,360 9,805,019 8,277,737 7,685,916 53,347,101 244,227,432 105,258,644 41,665,744 4,144,951 4,212,326 $ 73,121,817,865 766,085,000 28,840,000 8,595,000 35,675,000 17,270,000 60,220,000 49,925,000 65,420,000 3,255,000 2,260,000 2,475,000 35,391,000 45,115,000 11,150,000 7,415,000 880,000 1,075,000 $ 1,141,046,000 1.76% 1.76% 81.40% 49.92% 41.72% 0.03% 55.94% 13.39% 0.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 13,483,096 23,475,760 4,290,624 14,883,610 5,181 33,687,068 6,684,958 6,542 3,255,000 2,260,000 2,475,000 35,391,000 45,115,000 11,150,000 7,415,000 880,000 1,075,000 $ 205,532,839 Direct Debt: City of Goodyear $ $ 100.00% $ 111,940,000 605,642,183 $ 111,940,000 $ (a) Proportion applicable to the City of Goodyear, Arizona is computed on the ratio of secondary assessed valuation for 2012-2013 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: Mobile Elementary School District #86 has a 2012-13 SAV of 10,601,947 and overlaps the City of Goodyear approximately 36.62%. However, Mobile ESD has no outstanding debt at this time. 167 City of Goodyear Legal Debt Margin Information Last Eight Fiscal Years (Unaudited) Fiscal Year 2013 2012 2011 2010 $ 605,642,183 $ 673,001,828 $ 848,758,886 $ 982,856,423 20% Limitation Debt Limit Equal to 20% of Assessed Valuation 121,128,437 134,600,366 169,751,777 196,571,285 Total Debt Applicable to 20% Limit 111,690,000 118,130,000 122,205,000 126,070,000 9,438,437 $ 16,470,366 $ 47,546,777 $ 70,501,285 Secondary Assessed Value 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 $ 92.21% 87.76% 71.99% 64.13% $ 36,338,531 $ 40,380,110 $ 50,925,533 $ 58,971,385 Total Debt Applicable to 6% Limit 250,000 265,000 275,000 285,000 Legal 6% Debt Margin (Available Borrowing Capacity) $ 36,088,531 $ 40,115,110 $ 50,650,533 $ 58,686,385 Total net debt applicable to the limit as a percentage of debt limit 0.69% 0.66% 0.54% 0.48% Note: Data prior to 2006 is not available. Sources: Maricopa County Treasurer's Office City financial records and reports 168 Table 18 Fiscal Year 2009 2008 2007 2006 $ 1,000,721,049 $ 764,237,138 $ 494,913,013 $ 391,377,371 200,144,210 152,847,428 98,982,603 78,275,474 123,830,000 129,540,000 90,195,000 47,795,000 76,314,210 $ 23,307,428 8,787,603 $ 30,480,474 $ 61.87% $ $ 84.75% $ 91.12% 61.06% 60,043,263 $ 45,854,228 $ 29,694,781 $ 23,482,642 295,000 305,000 - 8,475,000 59,748,263 $ 45,549,228 $ 29,694,781 $ 15,007,642 0.49% 0.67% 0.00% 36.09% 169 Table 19 City of Goodyear Pledged-Revenue Coverage Last Eight Fiscal Years (Unaudited) Public Improvement Corporation Municipal Facilities Revenue Bonds* Fiscal Year Ended June 30 2013 2012 2011 2010 2009 2008 Operating Revenue $ 76,004,072 65,501,422 57,697,609 57,363,961 62,281,214 85,680,828 Pledged Revenue $ Debt Service Principal Interest 57,756,502 52,355,875 45,594,775 45,810,806 49,324,646 56,440,267 $ 1,484,090 570,000 745,000 720,000 680,000 505,000 5,711,236 4,925,626 5,562,612 5,594,412 4,907,984 2,019,691 Coverage 8.03 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 2013 2012 2011 2010 2009 2008 2007 2006 Note: $ 23,133,152 20,221,750 18,271,778 16,378,677 15,300,056 15,151,775 13,760,462 10,816,571 $ 10,837,296 8,703,445 8,965,363 8,350,588 9,733,836 11,424,111 11,008,102 9,629,632 $ 12,295,856 11,518,305 9,306,415 8,028,089 5,566,220 3,727,664 2,752,360 1,186,939 Debt Service Principal $ 1,504,661 1,139,026 1,167,815 1,195,691 877,292 656,612 640,500 502,118 Interest $ 5,819,924 5,554,656 1,802,534 543,662 540,523 474,992 506,104 516,469 Coverage 1.68 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 PIC 2011 Bonds issued in FY 2012 and PIC 2012 issued in FY2013 Source: City Financial Records and Reports 170 Table 20 City of Goodyear Demographic and Economic Statistics Last Eight Fiscal Years (Unaudited) Fiscal Year 2013 2012 2011 2010** 2009 2008 2007 2006 Personal Income (in thousands) Population 71,381 67,239 66,309 65,275 62,554 58,462 55,775 49,714 $ 1,980,537 1,903,133 2,120,960 1,796,433 1,771,217 1,536,966 1,507,375 1,274,269 Per Capita Personal Income* $ 27,746 28,304 31,986 27,521 28,315 26,290 27,026 25,632 Median Age 38.4 35.2 33.5 35.5 39.1 36.1 36.3 35.7 Education Level in Years of Schooling 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 Unemployment Rate 8.3% 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 Employers 1 Current Fiscal Year and Nine Fiscal Years Ago (Unaudited) Fiscal Year 2013 Major Corporation Lockheed Martin Arizona State Prison/Perryville Employees 1,000 825 Rank Percentage of Total City Employment* 1 3.40% 2 2.81% Fiscal Year 2004 Percentage of Total City Employees Rank Employment* 825 0.00% 1 6.08% West Valley Hospital 600 3 2.04% - 0.00% Cancer Treatment Centers of America 600 4 2.04% - 0.00% Macy's 550 5 1.87% - 0.00% City of Goodyear 511 6 1.74% Amazon.com 500 7 1.70% - 0.00% Sub-Zero / Wolf 400 8 1.36% - 0.00% McLane Sunwest 360 9 1.22% 450 2 3.32% Cavco Industries, Inc. 230 10 0.78% 400 3 2.95% Newell Rubbermaid, Inc. 250 4 1.84% Fry's Food and Drug Store 225 5 1.66% Aviation Management Systems 220 6 1.62% Target 175 8 1.29% Lufthansa-German Airlines 170 9 1.25% Arizona Galvanizing 150 10 1.11% Total 5,576 18.97% 200 3,065 7 1.47% 22.60% 1 Source: City Records *2013 labor force = 29,389; 2004 labor force = 13,564 172 Table 22 City of Goodyear Full-time Equivalent City Government Employees by Function Last Eigth Fiscal Years (Unaudited) 2013 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 2012 2011 2010 2009 2008 2007 2006 55 29 14 52 28 14 52 30 13 53 30 13 47 30 15 52 28 12 52 27 11 41 21 9 94 30 25 94 27 9 94 29 9 97 29 10 97 30 16 89 26 38 72 24 32 72 18 21 90 7 10 0 4 13 73 23 17 5 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 10 489 474 486 498 515 519 444 391 Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 173 City of Goodyear Operating Indicators by Function Last Eight 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 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 Parks and Recreation # attending Park & Recreation facilities and Libraries annually # of square feet of medians and rights of way maintained * Fiscal Year 2012 2013 2011 2010 470 484 550 504 2,514 3,827 3,380 3,395 94% 94% 90% 90% 59 198 112 5,356 804,542 2,185,489 254 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 2,532 10,259 2,402 11,468 2,254 12,581 4,731 11,810 5,604 243 969 7,195 271 212 6,597 235 3,229 5,570 226 4,262 6,298 1,238 184,638 6,132 1,229 178,466 6,413 1,344 170,657 8,024 1,147 168,647 <1 3,529 <1 3,576 <3 3,269 <3 4,232 1 1 1 0.7 1 1 1 1 178 5.01% 118 4.86% 125 4.11% 247 4.18% 69,596 23,151,438 63,256 23,151,438 54,428 22,696,736 52,241 22,175,027 174 Table 23 Fiscal Year 2008 2009 2007 2006 613 648 576 180 2,494 2,469 3,653 2,692 94% 94% 94% 91% 161 1,135 186 5,721 738,949 2,346,423 200 182 462 136 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 2,829 13,313 2,614 11,452 2,814 12,422 2,603 12,175 5,328 270 3,953 3,431 143 3,427 3,236 154 2,403 1,960 150 759 10,184 918 163,444 9,949 1,043 155,805 9,305 1,002 147,241 9,014 1,067 125,382 <5 3,401 <5 5,874 <5 1,340 <5 7,859 1 1 1 1 1 1 1 1 158 4.11% 179 4.36% 51,844 22,118,000 49,111 15,320,000 164 5.50% 50,093 15,320,000 174 5.26% 46,330 15,320,000 Continued 175 City of Goodyear Operating Indicators by Function Last Eight Fiscal Years (Unaudited) Function 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 Water Service Water Service Connections Drinking Water Supplied (million gallons per day) Reclaimed Water Supplied (million gallons per day) Wastewater Sewer Service Connections Sewage Treated (millions gallons per day) Other Public Works Street resurfacing (miles) Potholes repaired Citizen & Neighborhood Resources # of new Code Enforcement cases processed per year Fiscal Year 2012 2013 2011 2010 11.29% 1.41% 10.45% 14.15% 4.42% -7.31% -10.40% -3.90% 23,387 22,363 21,489 20,928 546 503 729 848 17,533 9.6 0.39 16,809 11.6 0.32 14,588 11.4 0.37 14,488 11.1 0.23 16,918 4.15 16,856 3.82 16,743 3.73 16,144 3.73 30 296 24 264 13 260 0 372 2,841 2,069 2,016 2,255 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 2008 2009 2007 2006 -12.30% -15.00% -10.25% 6.00% 20.71% 6.98% 70.19% 22.81% 20,149 19,811 18,664 17,228 510 531 0 634 13,975 11.00 0.45 13,500 10.80 0.27 13,051 6.86 0.09 11,597 6.86 0.09 16,144 3.70 13,500 3.24 11,398 2.48 5,037 2.48 4 681 0 783 34 1,096 33 977 2,755 2,092 2,155 2,698 Concluded 177 Table 24 City of Goodyear Capital Asset Statistics by Function Last Eight 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) 2013 2012 2011 Fiscal Year 2010 2009 2008 2007 2006 3 126 6 3 125 6 3 130 6 3 124 6 3 130 6 3 125 6 4 146 4 1 107 4 934 8,660 84 934 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 17 204 1 6 1 16 184 1 6 1 16 156 1 6 1 12 117 1 6 1 11 82 1 2 1 308 2,796 16 308 2,791 16 308 2,791 16 308 2,791 16 307 2,754 16 286 2,481 15 257 2,370 11 173 2,053 12 229 57 5.6 227 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 INDEPENDENT AUDITORS’ 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 To the Honorable Mayor and Council City of Goodyear, Arizona We have audited, in accordance with the 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, 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, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated November 14, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. 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. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 from 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Casa Grande, Arizona November 14, 2013 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 To the Honorable Mayor and Council City of Goodyear, Arizona Report on Compliance for Each Major Federal Program We have audited the City of Goodyear’s (the City) 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 the City’s major federal programs for the year ended June 30, 2013. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. 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 on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance. 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 Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of 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, 2013. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Casa Grande, Arizona November 14, 2013 CITY OF GOODYEAR SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2013 Grant Number U.S. Department of Housing & Urban Development: Passed through Maricopa County Department of Housing Community Development Block Grant Passed through Maricopa County Department of Housing Home Grant Home Grant Home Grant Home Grant Subtotal Total U.S. Department of Housing and Urban Development U.S. Department of Transportation: Passed through Arizona Governor's Office of Highway Safety West Valley DUI Overtime and ERE HMEP Passed through Arizona Governor's Office of Highway Safety Highway Safety Cluster West Valley DUI Task Force Enf OT West Valley DUI Task Force Enf OT Buckle Up Arizona Enforcement Campaign Highway Safety Cluster Subtotal Total U.S. Department of Transportation U.S. Department of Justice: Passed through The Bureau of Justice Assistance: Bullet Proof Vest Partnership Passed through Maricopa County Jag Program Cluster JAG Program 2011 JAG Program 2012 Jag Program Cluster Subtotal Total U.S. Department of Justice U.S. Department of Energy ARRA ‐ Energy Efficiency and Conservation Block Grant U.S. Department of Homeland Security: Passed through Arizona Division of Emergency Management CBRNE Response Team TLO Sustainment CBRNE Response Team TLO Sustainment Total for U.S. Department of Homeland Security Total Expenditures of Federal Awards Federal CFDA Number DG1003 14.218 UC0914 UC1014 UC1114 14.239 14.239 14.239 Expenditures $ 238,291 * 4,307 45,000 27,715 77,022 315,313 2013‐164‐037 HZ007 20.608 20.703 2012‐AL‐037 2013‐HF‐004 2013‐OP‐017 20.600 20.601 20.600 12,548 4,200 3,493 24,000 4,999 32,492 49,240 2012 BPV 16.607 2011‐DJ‐BX‐3298 2012‐DJ‐BX‐1182 16.738 16.738 5,183 7,356 2,900 10,256 15,439 DE‐SC0002957 81.128 81,330 888812‐01 888811‐02 888811‐01 999809‐02 97.067 97.067 97.067 97.067 9,816 1,572 48,575 2,769 62,732 $ 524,054 *Denotes major program 185 CITY OF GOODYEAR, ARIZONA NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2013 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 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2013 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? Unmodified __ _ 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 Unmodified 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 14.218 Name of Federal Program or Cluster Community Development Block Grant Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? __X_ yes _____ no 187 CITY OF GOODYEAR, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2013 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 None noted 188