Table of Contents I. INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement City of Goodyear Officials Organizational Chart Page i viii ix x II. FINANCIAL SECTION Independent Auditors’ Report 1 A. Management’s Discussion & Analysis 5 B. Basic Financial Statements 19 Government‐wide Financial Statements Statement of Net Position 21 Statement of Activities 22 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balance Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual‐General Fund 28 31 32 35 36 Proprietary Fund Financial Statements Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows 40 42 44 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position 49 50 Notes to Financial Statements 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Summary of Significant Accounting Policies Cash and Investments Receivables Capital Assets Loans Payable General Obligation Bonds Payable Revenue Bonds Payable Community Facilities Districts Bonds Payable Changes in Long‐term Liabilities Interfund Receivables, Payables, and Transfers Contingent Liabilities Risk Management Retirement Plans Deficit Fund Balances Fund Balance Classifications Commitments Restatement Page 55 64 67 68 70 71 73 75 77 78 79 79 80 94 95 95 96 C. Required Supplementary Information –Pension Plans Schedule of the Proportionate Share of the Net Pension Liability Schedule of Contributions Schedule of Funding Progress Schedule of Changes in the Net Pension Liability and Related Ratios (Police) Schedule of Changes in the Net Pension Liability and Related Ratios (Fire) Note to Required Supplementary Information 100 101 102 103 104 105 D. Other Supplementary Information Non‐Major Governmental Funds – Financial Statements Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 114 116 Fiduciary Funds – Financial Statements Combining Statement of Assets and Liabilities – Agency Funds Combining Statement of Changes in Assets and Liabilities‐Agency Funds 122 124 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 127 128 129 Budgetary Comparison Schedules – Non‐Major Governmental Funds Page Highway User Revenue Fund Grants Community Facilities Districts – General Debt Service Community Facilities Districts – Capital Projects Capital Improvement Projects 133 134 135 136 137 138 Budgetary Comparison Schedules – Enterprise Funds Water & Sewer Enterprise Fund Sanitation Enterprise Fund Stadium Enterprise Fund 139 140 141 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 Excise Tax Collection Sales & Use Taxes Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Property Tax Rates Principal Property Taxpayers 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 Principal Employers Full‐Time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function 145 146 148 Table Page 1 2 3 4 5 6 7 8 9 10 11 12 13 152 154 161 162 164 166 168 172 177 178 180 181 183 14 15 16 17 18 19 20 21 22 23 24 184 186 188 189 190 192 193 194 195 196 200 INTRODUCTORY SECTION The Introductory Section includes the City’s Transmittal Letter, the Certificate of Achievement for Excellence in Financial Reporting, and the City’s Organizational Chart. November 25, 2015 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) to the City of Goodyear, Arizona (City) for the fiscal year ended June 30, 2015. 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 Heinfeld, Meech & Co., P.C., Certified Public Accountants, an independent public accounting firm, performed the city's annual financial statement audit. The auditors have issued an unmodified ("clean") opinion of the City of Goodyear's financial statements for the fiscal year ended June 30, 2015. 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 5-18 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. 190 N. Litchfield Road, Goodyear AZ 85338 goodyearaz.gov CITY OF GOODYEAR PROFILE The City of Goodyear, incorporated in 1946 and chartered in 1988, started as a small town cultivating 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, 2015 to be approximately 77,000. 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. In fiscal year 2015 a staff of 527 full-time employees working within 15 different departments performed 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 wastewater 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 18 parks encompassing 204 acres. The city is community-driven and includes hundreds of volunteers that serve in various areas and, through their efforts, saved the city more than $645,736 in fiscal year 2015 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. ii 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, 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 projects 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. 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 funds must be approved In addition to maintaining budgetary control via a formal by the City Council. 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 Goodyear continues its gradual recovery from the economic recession. During fiscal year 2015 there were 894 new single-family resident permits issued which represents an increase of 34 permits from the prior fiscal year. At June 30, 2015, Goodyear was ranked sixth in market-share for single-family starts in the Phoenix area. Goodyear's sales tax revenues remain strong and continue to increase year over year. With the lasting uncertainty, the city continues to budget conservatively and monitor the changes taking place in the national and local economies, as adaptation is imperative to keeping the budget balanced and positioning the city for future growth. iii Sales Tax Goodyear, like all Arizona cities, places significant reliance on city sales tax revenues. City sales tax revenues for fiscal year 2015 increased by approximately 4% over fiscal year 2014 levels. The 4% rate increase during fiscal year 2015 compared to fiscal year 2014 is the annual target growth increase as anticipated. State Shared Revenues The city receives revenue allocations from the State. These state shared revenues include allocations of the state-collected income tax, sales tax, fuel tax, and motor vehicle in-lieu taxes. A significant portion of this revenue is placed in the city's general fund where it is used to support day-to-day activities. The city's state shared revenues represented about 20% of the general fund revenue for fiscal year 2015. During fiscal year 2016 the City of Goodyear is participating in the Special Census. Arizona Cities and Towns receive money from state-shared revenue, which is divided amongst all cities according to their population. This allocation currently is based on population figures from the 2010 census at which time Goodyear had 65,275 residents. Based on the number of new dwelling units constructed since 2010, the city now estimates the population to be closer to 77,000. As a result of this increase, the city could see its annual revenue increase by as much as $1.5 million. Property Tax In fiscal year 2015, the city's combined (primary and secondary) property tax rate decreased from $1.90 to $1.87 per $100 of assessed valuation. This decrease 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 the city's ability to service currently outstanding debt and maintain basic infrastructure. For the fiscal year 2016 budget, the Mayor and Council have adopted a total combined property tax rate of $1.87 per $100 of assessed valuation, no change from the fiscal year 2015 combined rate. 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 In 2013, the Council began a process of redefining the long-term strategic priorities of the city and adopted the first City Strategic Action Plan since 2002. During fiscal year 2014, the Council re-affirmed this plan and adopted the FY15-17 City Strategic Action Plan. The plan establishes the city's vision and mission and also identifies priority focus areas for strategic initiatives that help to define its goals and actions. The City of Goodyear's mission is as follows: iv 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. Four focus priorities are identified within the Strategic Action Plan: 1. Fiscal and Resource Management: The City of Goodyear will 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: The City of Goodyear will seek diverse, high quality development, and will 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, developing ongoing relationships, and encouraging tourism. 3. Sense of Community: The City of Goodyear will provide programs, gathering places, and events where the community can come together to participate in opportunities of learning and recreation. Sustainable relationships with the community will be cultivated through citizen engagement, outstanding customer service, and clear, accessible communication. 4. Quality of Life: The City of Goodyear will implement programs and projects that create a clean, well-maintained, safe, and sustainable environment and that provides 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 p!ans, 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. MAJOR INITIATIVES The city's management and the Economic Development Department work to recruit new business, as well as assist existing businesses with additional job creation and expansions. The Council adopted the Economic Development's "Focus on Success" strategic plan in fiscal year 2014, providing guidance and strategies for achieving key v goals such as bringing jobs into Goodyear and working to make the city one of the largest employment bases in the West Valley. One of the strategies recommended in the strategic plan was a marketing and branding campaign. In the spring of 2015, the Economic Development Department rolled out the "Goodyear is Geared for Growth" campaign to a crowd of over 300 business leaders. The Geared for Growth campaign highlights major corridors in the city that will have a great influence on the community's future: the Phoenix-Goodyear Airport/GYR corridor with 1,200 acres of mixed use development, the Loop 303 corridor with 2,000 acres, and the 801/85 Employment Center corridor with 1,700 acres for manufacturing and industrial business. Economic Development's "Focus on Success" plan identifies strategic industries to focus on to build these corridors including aviation/aerospace, medical, hightech manufacturing, and higher education. Goodyear continues to grow and attract a variety of business. In fiscal year 2014-2015, the Economic Development Department assisted in the location or expansion of 18 companies, creating 1,300 jobs and $172 million in capital investment. This included, among others, Recreational Equipment, Inc. (REI), Michael Lewis Company, Macy's, Snyder's of Hanover, and the renovation of Hangar 18 at the Phoenix-Goodyear Airport by Aeroturbine. In addition, Harkins Theatres broke ground on a 16-screen megaplex theater beginning the first phase of the Estrella Falls Mall with the theater slated to open in the spring of 2016. 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, 2014. This is the seventh year the city 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 iegai requirements. A Certificate of Achievement is valid for one year only. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements and we are submitting this report to the GFOA to determine its eligibility for a certificate for fiscal year ended June 30, 2015. In addition, the city also received the GFOA's Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning 2014. This is the twentieth year that the city has received the highest form of recognition in governmental budgeting. vi Acknowledgement The preparation of this Comprehensive Annual Financial Report 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 vii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Goodyear Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2014 Executive Director/CEO viii CITY OF GOODYEAR LIST OF PRINCIPAL OFFICIALS MAYOR Georgia Lord VICE MAYOR Sheri Lauritano COUNCIL MEMBERS Joanne Osborne Joe Pizzillo 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 Christopher Baker Development Services Director Daniel Cotterman Information Technology Director Rebecca Zook Engineering Director Nathan Torres Park & Recreation Director Michelle Lawrie Economic Development Director Vacant Public Works Director ix CITIZENS OF GOODYEAR MAYOR & CITY COUNCIL Presiding Judge City Manager City Attorney Michael Simonson Brian Dalke Roric Massey Deputy City Manager Deputy City Manager Wynette Reed Police Department Gerald Geier Police Chief Fire Department Paul Luizzi Fire Chief City Manager's Office Finance Department Larry Lange Director Economic Development Michelle Lawrie Director Director Parks & Recreation Department Nathan Torres Director Engineering Rebecca Zook Director Development Services Human Resources Lyman Locket Robert Beckley Intergovernmental Relations Christopher Baker Director Public Works City Clerk's Office Maureen Scott Vacant City Clerk Director Information Technology Department Daniel Cotterman Director Municipal Court Communications Division x FINANCIAL SECTION The Financial Section includes the Independent Auditor’s Report, Management’s Discussion and Analysis, the Audited Financial Statements, Notes to the Audited Financial Statements, and Supplemental Information. 3033 N. Central Ave., Suite 300 Phoenix, Arizona 85012 Tel (602) 277-9449 Fax (602) 277-9297 INDEPENDENT AUDITOR’S REPORT Honorable Mayor and Members of the City Council City of Goodyear, Arizona Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of City of Goodyear, Arizona (City) as of and for the year ended June 30, 2015, 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. Auditor’s 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 auditor’s 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. 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, business-type activities each major fund, and the aggregate remaining fund information of the City of Goodyear, Arizona, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Page 1 TUCSON • PHOENIX • FLAGSTAFF www.heinfeldmeech.com Change in Accounting Principle As described in Note 1, the City implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, for the year ended June 30, 2015, which represents a change in accounting principle. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, and net pension liability information, as listed in the table of contents, 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’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 Other Supplementary Information is the responsibility of management and was derived from and relates 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 is fairly stated in all material respects in relation to the basic financial statements as a whole. The Introductory Section and Statistical Section 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 25, 2015, on our consideration of City of Goodyear, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Goodyear, Arizona’s internal control over financial reporting and compliance. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants November 25, 2015 Page 2 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS For The Year Ended June 30, 2015 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, 2015. 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 i-vi 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 $661.2 million (net position) at the close of fiscal year 2015. Of this amount, $19.9 million represents unrestricted net position, which may be used to meet the City’s ongoing obligations to citizens and creditors.  The $18.4 million decrease in the net position of the City as of June 30, 2014 is the result of a $14.8 million decrease in the net position of the governmental activities and of a $3.6 million decrease in the net position of the business type activities. The decrease in the net position of the governmental activities is primarily the result of restating beginning net position to recognize net pension liability of $38.6 million (per the implementation of GASB No. 68 as of June 30, 2015) which is offset by an increase of $7.7 million in contributions over the prior fiscal year totals. The decrease in the net position of the business type activities is primarily the result of recognizing net pension liability of $6.3 million (per the implementation of GASB No. 68 as of June 30, 2015) which is offset by an increase of $8.5 million in capital contributions over the prior fiscal year total.  As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $89.9 million, an increase of $11.7 million (14.9%) in comparison with the prior year fund balance of $78.2 million. Approximately 55.3% of this amount ($49.7 million) is available for spending at the government’s discretion (unassigned fund balance).  At June 30, 2015, total unassigned fund balance for the general fund is $49.7 million, an increase of $6.1 million (13.9%) from the prior fiscal year. This increase is mainly due to actual revenues exceeding estimated revenues and to capital outlay & one-time expenditures not completed at the end of the fiscal year being carried over for fiscal year 2016. The unassigned fund balance is approximately 70.7% of total general fund expenditures. 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 of three components: 1) governmentwide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 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 Page 5 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. The Statement of Net Position presents information on all of the City’s assets, deferred outflow of resources, and liabilities, with the net of all 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) show 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 development services. These activities are generally supported by taxes and general revenues.  Business-type activities – The services provided by the City included here are water, wastewater, sanitation, and stadium services. These activities are primarily supported through user charges or fees. The government-wide financial statements include not only the City itself (known as the primary government), but also include the operations of numerous Community Facilities Districts. Although legally separate from the City, these component units are blended with the primary government because of their governance and financial relationship to the City. Separate financial statements may be obtained at the City of Goodyear’s Finance Department, 190 North Litchfield Road, Goodyear, Arizona 85338. The government-wide financial statements can be found on pages 21-23 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements. Since 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 decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this Page 6 comparison between governmental funds and governmental activities. These reconciliations are on pages 31 and 35, 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, and Non-Utility Development Impact Fees, all of which are considered to be major funds. Data from the other five 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 114 of this report. The governmental fund financial statements can be found on pages 28-33 of this report. 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 wastewater 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 40-45 of this report. Fiduciary Funds. The City maintains five 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 method used for fiduciary funds is similar to the accounting method 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 for 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 55-96 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 progress in funding its obligation to provide pension benefits to its employees. The required supplementary information can be found on pages 100-105 of this report. The combining statements referred to earlier in connection with non-major governmental funds is presented immediately following the notes to the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 114-117 and 133138 of this report. Page 7 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, 2015 with comparative information for the previous year. Net Position The following table was derived from the current and prior years Statement of Net Position: Statement of Net Position as of June 30 Governmental Business-type Total Activities Activities Primary Government 2014 2015 Current and other assets: $ 170,613,815 $ 2015 152,815,195 $ 2014 39,923,777 $ 2015 41,863,365 $ 210,537,592 Percent 2014 $ Change 194,678,560 8.15% Capital assets 533,818,875 530,755,574 397,169,523 399,600,310 930,988,398 930,355,884 0.07% Total assets 704,432,690 683,570,769 437,093,300 441,463,675 1,141,525,990 1,125,034,444 1.47% Deferred outflows of resources: Pension plan items Loss on refunding Total deferred outflow of resources Other liabilities: Long-term liabilities outstanding Total liabilities 8,448,657 - 968,037 - 9,416,694 - 100.00% 790,358 670,993 471,090 520,672 1,261,448 1,191,665 5.86% 9,239,015 670,993 1,439,127 520,672 10,678,142 1,191,665 20,443,998 24,241,258 10,686,261 11,922,064 31,130,259 36,163,322 -13.92% 223,240,487 182,212,131 228,561,872 228,256,456 451,802,359 410,468,587 10.07% 243,684,485 206,453,389 239,248,133 240,178,520 482,932,618 446,631,909 8.13% 6,997,526 - 1,105,228 - 8,102,754 - 100.00% 6,997,526 - 1,105,228 - 8,102,754 - 100.00% 365,019,949 345,513,895 176,380,867 177,274,142 541,400,816 522,788,037 3.56% 100.00% Deferred inflows of resources: Pension plan items Total deferred inflow of resources Net position: Net Investment in Capital Assets Restricted for: Charter Mandates 3,841,444 - - - 3,841,444 - Courts 240,631 221,290 - - 240,631 221,290 8.74% Law enforcement 309,112 274,392 - - 309,112 274,392 12.65% Highways and streets 174,025 697,914 - - 174,025 697,914 -75.06% Capital projects 9,833,567 8,166,897 5,139,404 2,976,525 14,972,971 11,143,422 34.37% Community facilities 1,111,964 803,837 - - 1,111,964 803,837 38.33% 75,991,785 74,438,000 2,468,498 2,663,967 78,460,283 77,101,967 1.76% 745,210 644,135 - - 745,210 644,135 15.69% 65,919,206 -69.79% 679,594,200 -2.71% Debt service Transit Unrestricted Total net position 5,722,007 $ 462,989,694 47,028,013 $ 477,788,373 14,190,297 $ 198,179,066 18,891,193 $ 201,805,827 19,912,304 $ 661,168,760 $ The net position over time, may serve as a useful indicator of a government’s financial position. The City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $661.2 million at the close of fiscal year 2015 and by $679.6 million in 2014, providing an overall decrease in the City’s net position of $18.4 million. Current and other assets increased by $15.9 million. This increase is primarily due to an increase in contributions. Long-term liabilities increased by $34.9 million. The increase in long term liabilities is primarily the result of recognizing net pension liability of $44.9 million (per the implementation of GASB No. 68 as of June 30, 2015) and a decrease of $9.3 million in bonds payable. The largest portion of the City’s net position totaling $541.4 million (81.9% of total net position) reflects its net investment in capital assets (e.g., land and improvements, buildings, machinery, equipment, vehicles, artwork, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. Page 8 An additional portion of the City’s net position totaling $99.8 million (15.10% of total net position) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $19.9 million (3.0% of total net position) is unrestricted and may be used to meet the City’s ongoing obligations to its citizens and creditors. The large decrease in unrestricted net position between fiscal year 2014 and 2015 is due to the recognition of net pension liability of $45 million (per the implementation of GASB No. 68 as of June 30, 2015). At the end of the fiscal year 2015, the City is able to report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year for investment in capital assets, restricted net position, and unrestricted net position. Governmental Activities During the current fiscal year, the net position for governmental activities decreased $14.8 million from the prior fiscal year for an ending balance of $462.9 million. The City’s sales tax revenue increased $1.6 million due to an increase in retail activity. State shared revenue also increased by $1.1 million. The City had more operating grants and contributions this current fiscal year increasing revenue by $3.2 million. A decrease of $37.3 million in net position resulted primarily due to a prior fiscal year restatement per the implementation of GASB No. 68 as of June 30, 2015. Business-type Activities The City business-type activities reported a decrease of $3.6 million in net position bringing the total net position to $198.2 million. Capital grants and contributions increased revenue by $8.5 million. A decrease of $9.0 million in net position resulted primarily due to a prior fiscal year restatement per the implementation of GASB No. 68 as of June 30, 2015. Page 9 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 2014 2015 2015 2014 2015 Percent 2014 Change REVENUES: Program revenues: Charges for services $ 10,161,786 $ 10,650,768 $ 33,810,471 $ 33,591,024 $ 43,972,257 $ 44,241,792 -0.61% Operating grants and contributions 10,777,134 7,565,511 - - 10,777,134 7,565,511 42.45% 8,252,449 6,171,185 14,454,883 5,962,050 22,707,332 12,133,235 87.15% Sales taxes 45,333,649 43,775,464 - - 45,333,649 43,775,464 3.56% Property taxes 18,171,606 17,109,458 - - 18,171,606 17,109,458 6.21% 2,718,204 2,611,061 - - 2,718,204 2,611,061 4.10% 16,361,588 15,285,440 - - 16,361,588 15,285,440 7.04% 361,146 414,689 151,405 136,531 512,551 551,220 -7.02% Capital grants and contributions General revenues: Franchise taxes State shared revenue Investment income Special Assessments 4,980,000 2,189,906 - - 4,980,000 2,189,906 127.41% 975,258 1,183,618 103,482 222,911 1,078,740 1,406,529 -23.30% 118,092,820 106,957,100 48,520,241 39,912,516 166,613,061 146,869,616 13.44% General government 18,168,821 16,728,173 - - 18,168,821 16,728,173 8.61% Public safety 33,289,918 32,198,189 - - 33,289,918 32,198,189 3.39% Highways and streets 17,941,162 19,368,539 - - 17,941,162 19,368,539 -7.37% Public works 3,361,822 2,773,348 - - 3,361,822 2,773,348 21.22% Culture and recreation 6,422,764 5,827,309 - - 6,422,764 5,827,309 10.22% Development Services 7,005,308 5,836,254 - - 7,005,308 5,836,254 20.03% Interest on long-term debt 8,763,353 9,282,269 - - 8,763,353 9,282,269 -5.59% Water and sewer - - 25,489,522 23,511,395 25,489,522 23,511,395 8.41% Sanitation - - 5,802,163 5,472,534 5,802,163 5,472,534 6.02% Stadium - - 12,407,494 12,529,987 12,407,494 12,529,987 -0.98% 94,953,148 92,014,081 43,699,179 41,513,916 138,652,327 133,527,997 3.84% 23,139,672 14,943,019 4,821,062 (1,601,400) 109.58% Miscellaneous Total revenues EXPENSES: Program activities: Governmental activities: Business activities: Total expenses Increase in net position before transfers Transfers (5,138,252) (582,797) 27,960,734 13,341,619 582,797 5,138,252 - - 0.00% 109.58% 22,556,875 9,804,767 5,403,859 3,536,852 27,960,734 13,341,619 Net position, beginning of year 477,788,373 467,983,606 201,805,827 198,268,975 679,594,200 666,252,581 2.00% Restatement* (37,355,554) - 100.00% - 100.00% 679,594,200 -2.71% Changes in net position Net position, beginning of year-restated Net position, end of year - 440,432,819 $ 462,989,694 (9,030,620) $ 477,788,373 - 192,775,207 $ 198,179,066 (46,386,174) $ 201,805,827 633,208,026 $ 661,168,760 $ *For fiscal year ended June 30, 2015 the City adopted GASB Statement No. 68, which resulted in a restatement. For more information please refer to the Comprehensive Annual Financial Report for the Year Ended June 30, 2015. Page 10 The pie chart below is a depiction of Government-Wide Revenue Sources, governmental activities accounts for 70.9% of total revenues, while business activities account for 29.1% of total revenues. Sales tax revenue is the largest source of City revenues at 27.2%, a 3.5% increase from the previous fiscal year. This is a result of the gradual economic recovery with the leading category of growth being retail sales. The second largest source of City revenues are charges for services at 26.4% of total revenue, which decreased slightly (.6%) over the previous fiscal year. Government-Wide Revenue Sources Fiscal Year 2015 Operating grants and contributions 6.5% State shared revenue 9.8% Special Assessments 3.0% Miscellaneous 0.6% Charges for services 26.4% Property taxes 10.9% Franchise taxes 1.6% Capital grants and contributions 13.6% Page 11 Investment income 0.3% Sales taxes 27.2% The reported expenses for fiscal year 2015 increased by $5.1 million (3.8%) over the prior year. As seen in the following pie chart for Government-Wide Functional Expenses, governmental activities account for 68.5% of total functional expenses, while business-type activities account for 31.5% of total functional expenses. The lines items that experienced notable changes were:  Public safety expenses account for 24.0% of the total government-wide expenses, an increase of $1.1 million (3.4%) from the prior year. This increase is mainly due to an increase in operational costs within the fire department. There were various modest increases which include training, equipment, and contractual obligations for fiscal year 2015. There were also modest increases in personnel costs due to constant staffing related to wildfire and training coverage.  Development services account for 5.1% of the total government-wide expenses, an increase of $1.2 million (20.0%) from the prior year. This increase incorporates several new positions added for fiscal year 2015 and funding for the mid-decade census to meet the City’s growing demands.  Business activities expenses account for 31.5% of the total government-wide expenses, an increase of $2.2 million (5.26%) from the prior year. This increase is attributed to implementing water conservation projects. Government-Wide Functional Expenses Fiscal Year 2015 General government 13.1% Business activities 31.5% Highways and streets 12.9% Interest on longterm debt 6.3% Development services 5.1% Public works 2.4% Page 12 Culture and recreation 4.6% Public safety 24.0% 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 28-33) is to provide information on near-term inflows, outflows, and balances of spendable resources. All major governmental funds are discreetly presented on these financial statements, while non-major funds are combined into a single column. The combining statements for non-major funds may be found on pages 114-117. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $89.9 million, an increase of 14.9% from the previous year. The increase in fund balance is due to revenues being slightly higher than expenditures. Revenues increased by $3.4 million and expenditures decreased by $3.8 million. Approximately 55.3% of the fund balance ($49.7 million) constitutes unassigned fund balance, which is available for spending at the government’s discretion. The remainder of the fund balance is either non-spendable, restricted or assigned to indicate that it is 1) not in spendable form ($2.0 million), 2) restricted for particular purposes ($34.5 million) or 3) assigned for particular purposes ($3.7 million). Revenues for governmental functions overall totaled $109.3 million in the fiscal year ended June 30, 2015, which represents an increase of $3.4 million (3.2%) from the prior fiscal year. The most significant reason for this increase is due primarily to increase of tax revenue of $2.6 million. The increase in tax revenue was due primarily to the resurgence in sales taxes for retail. Intergovernmental revenues increased $2.4 million (12.5%) from the prior fiscal year. The increase is due to an increase in state shared revenue. The expenditures for governmental functions totaled $97.5 million, a decrease of $3.8 million (3.8%) from the prior year. The majority of this decrease is attributed to capital outlay. Capital outlay accounted for $11.3 million in expenditures for the current fiscal year, which resulted in a decrease of $7.2 million from the prior fiscal year’s total for capital outlay expenditures. The decrease in capital outlay expenditures for fiscal year 2015 is due to the majority of projects being carried forward into fiscal year 2016. Page 13 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 $49.8 million, while total fund balance increased to $60.1 million. As a measure of the general funds liquidity, it may be useful to compare both unassigned fund balance and total fund balance to general fund expenditures. The unassigned fund balance represents approximately 70.7% of general fund expenditures, while total fund balance represents approximately 85.5% of that same amount. Page 14 The fund balance of the City’s general fund balance increased by $6.4 million in the current fiscal year due primarily to an increases of $2.2 million in contributions and intergovernmental revenues. This was driven by growth related revenues exceeding expectations. This is an 11.9% increase in fund balance from the prior year. The non-utility development impact fee fund had an increase in fund balance during the current fiscal year of $1.9 million to bring the year end fund balance to $9.8 million. The increase in fund balance is predominantly due to 1% of construction sales tax being previously reported in the general fund ($1.4 million) and now reported in the non-utility development impact fee fund to comply with requirements of the impact fee study effective August 1, 2014. Proprietary Funds The proprietary fund financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statements, but provide additional detail since each major enterprise fund is shown discretely. The proprietary funds statements can be found on pages 40-45. The proprietary funds net position totals $198.2 million, resulting from a decrease of $3.6 million from the previous fiscal year. The Water and Wastewater fund had a positive increase in net position of $5.8 million. This increase in net position of the proprietary funds is due primarily to an increase in contributed capital. The Stadium fund had a net position decrease of $9.3 million. This decrease is contributable to the stadium infrastructure project being completed during fiscal year 2015. The stadium infrastructure project transferred capital assets of $5.48 million to the governmental funds. 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 page 36. The other budgetary comparison schedules can be found in the Other Supplementary Information section on pages 127-140. During the fiscal year there were two General Fund expenditure sources that came in significantly below estimates as shown below: ITS Capital Outlay Estimated expenditures $5,193,689 24,701,995 Actual expenditures $3,410,264 8,624,515 Difference $1,783,425 16,077,480 Due to the economic recovery, the City has increased the budgeted inflows and outflows in 2015. General Fund actual inflows (revenues and other financing sources) of $85.5 million, was more than budgeted inflows of $82.8 million by $2.7 million (3.2%), while expenditures and other financing uses of $79.1 million was only 64.8% of final budgeted outflows of $122.0 million. Page 15 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City’s investment in capital assets (net of accumulated depreciation) for its governmental and business-type activities as of June 30, 2015 amounts to $931 million. Capital assets include land and improvements, artwork, construction in progress, right of way, water rights, streetscape, infrastructure, buildings and improvements and vehicles, furniture and equipment. In total, there was a slight increase of $600 thousand from the prior year. Capital Assets at June 30 (Net of depreciation) Governmental Activities 2015 2014 Business-type Activities 2015 2014 Total Primary Government Percent 2015 Change 2014 Land and improvements $ 24,867,068 $ 21,409,153 $ 15,435,875 $ 15,404,260 $ 40,302,943 $ 36,813,413 Artwork 204,750 204,750 146,978 146,978 351,728 351,728 Construction in progress 10,026,474 8,648,103 2,802,773 4,308,014 12,829,247 12,956,117 Right of way 90,397,883 89,451,622 90,397,883 89,451,622 Water rights 17,856,614 16,055,937 17,856,614 16,055,937 Streetscape 9,061,008 9,061,008 9,061,008 9,061,008 Infrastructure 252,174,241 256,586,014 178,574,586 169,012,558 430,748,827 425,598,572 Building and improvements 131,044,931 132,432,832 177,666,157 189,926,512 308,711,088 322,359,344 12,962,091 4,686,541 4,746,050 20,729,062 17,708,141 Vehicles, furniture and equipment 16,042,521 Total $ 533,818,876 $ 530,755,573 $ 397,169,524 $ 399,600,309 $ 930,988,400 $ 930,355,882 9.5% 0.0% -1.0% 1.1% 11.2% 0.0% 1.2% -4.2% 17.1% 0.1% The governmental capital assets increased in fiscal 2015 for land and improvements & vehicles, furniture, and equipment. The increase in land and improvements of $3.5 million is due to land improvements for a public works yard ($1.3 million), police operations facility ($1.2 million), and park improvements ($1.0 million). The increase in vehicles, furniture and equipment of $3.1 million is due to replacement of aging vehicles. The overall decrease in business capital assets of $2.4 million is primarily contributable to the correction of overstatement of assets in previous years. Please see Note 17 for the restatement total. 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 68-69 and in the schedules on pages 143-146 of this report. Page 16 Debt Administration At the end of the current fiscal year, the City had total long-term debt outstanding of $396.1 million. Of this amount $97.8 million is general obligation bonds backed by the full faith and credit of the City, $106.9 million is Community Facilities Districts bonds which are paid by the property owners within those districts, $182.4 million of revenue bonds which are payable from user fees and assessments, and $9.1 million loan payable to Water Infrastructure Finance Authority of Arizona (WIFA) by user fees. The following schedule shows the outstanding debt obligation as of June 30, 2015 and 2014: Outstanding Debt as of June 30 Governmental Activities General obligation debt Community Facilities Districts bonds Loan payable Revenue bonds Total outstanding bonds Business-type Activities Total Percent 2015 2014 2015 2014 2015 2014 Change $ 21,035,322 $ 23,863,737 $ 76,754,678 $ 81,161,263 $ 97,790,000 $ 105,025,000 -6.9% 106,856,000 49,555,088 $ 177,446,410 105,912,000 51,982,376 $ 181,758,113 9,096,237 132,840,000 $ 218,690,915 10,064,007 133,340,000 $ 224,565,270 106,856,000 9,096,237 182,395,088 $ 396,137,325 105,912,000 10,064,007 185,322,376 $ 406,323,383 0.9% -9.6% -1.6% -2.5% The outstanding revenue bonds listed under Governmental Activities include $39.6 million in McDowell Road Corridor Improvement District that is secured by pledges of specific revenue sources of the City. The additional revenue bonds of $142.8 million are for Public Improvement Corporation bonds totaling $102.2 million for the Stadium, $9.9 million for City municipal buildings, and $30.7 million for Water & Wastewater Revenue bonds. 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 percent debt limitation for the City is $39.6 million. In addition, the State constitution limits allows a city to issue an additional 20 percent of its total assessed valuation for water, wastewater, lights, transportation, public safety, open space preserves, parks, playgrounds and recreational facilities. The current 20% debt limitation for the City is $131.9 million. The City has $97.8 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, 2015 Type of Debt General Obligation Water & Sewer (Revenue) Public Improvement Corporation Improvement District Bonds Moody's Investors Service Standard & Poor's Aa2 A2 Aa3 A3 AA AAAAA Additional information on the City’s long-term debt can be found in Notes 5 – 9 on pages 70-77 of this report. Page 17 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The unemployment rate for Goodyear for June 2015 was 5.7%, which is lower than the state rate of 6.9% but higher than the national rate of 5.3%. 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 projecting a positive outlook for budgeted revenues in fiscal year 2016 in comparison to budgeted revenues for fiscal year 2015. Sales taxes are the dominant revenue source for the City and are projected to increase from $42.8 million to $45.4 million, which is an increase of 6.1%. Property taxes are projected to increase in from $7.5 million to $7.8 million, which is an increase of 4%. State shared revenues which are a combination of state shared sales tax, state shared income tax, and vehicle license tax are projected to increase from $16.1 million to $16.7 million in fiscal year 2016. The City’s operational budget is projected to increase by 2.6%, from $106.1 million in fiscal year 2015 to $108.9 million in fiscal year 2016, due to increased operating costs. The City’s capital improvement project expenditures are budgeted for $66.3 million which includes carryover funds of $36.1 million for projects started prior to fiscal year 2016 and an additional $34.9 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 www.goodyearaz.gov/cafr. 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. Page 18 Basic Financial Statements Government‐Wide Financial Statements ‐ includes the Statement of Net Position and Statement of Activities that use the accrual basis of accounting for financial reporting. Governmental Funds Financial Statements ‐ includes the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for the governmental funds that use the modified accrual basis of reporting. This section also includes the reconciliations to the government‐wide financial statements. Proprietary Funds Financial Statements ‐ includes the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows for the business‐type activities that use the accrual basis of accounting for financial reporting. Fiduciary Funds Financial Statements ‐ includes the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position for assets being held for the benefit of parties outside of the City. Notes to the Financial Statements CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2015 Governmental Activities ASSETS Current assets: Cash and cash equivalents Investments Receivables Due from other governments Internal balances Inventories Prepaids Total current assets $ Noncurrent assets: Restricted cash and cash equivalents Restricted investments Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets $ LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits Unearned revenue Compensated absences payable Bonds payable Total current liabilities Noncurrent liabilities: Accrued interest payable Non-current portion of long-term obligations Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Pension plan items $ 4,518,431 15,018,582 4,212,604 $ 40,642,641 59,591,973 75,015,770 99,912 23,319,733 1,211,943 573,473 177,135,712 130,896,467 402,922,408 550,616,711 704,432,690 15,046,371 1,557,673 18,385,626 378,783,897 413,773,567 437,093,300 31,844,207 1,557,673 149,282,093 781,706,305 964,390,278 1,141,525,990 790,358 8,448,657 9,239,015 471,090 968,037 1,439,127 1,261,448 9,416,694 10,678,142 3,232,941 1,839,263 2,371,239 6,930,853 4,535,452 1,534,250 6,553,094 26,997,092 1,916,866 215,308 3,497,359 4,829,350 12,050 215,328 290,000 10,976,261 5,149,807 2,054,571 5,868,598 11,760,203 4,547,502 1,749,578 6,843,094 37,973,353 216,687,393 216,687,393 243,684,485 626,464 227,645,408 228,271,872 239,248,133 626,464 444,332,801 444,959,265 482,932,618 6,997,526 1,105,228 8,102,754 365,019,949 176,380,867 541,400,816 3,841,444 9,833,567 1,111,964 75,991,785 745,210 723,768 5,722,007 462,989,694 5,139,404 2,468,498 $ 14,190,297 198,179,066 The notes to the basic financial statements are an integral part of this statement. Page 21 Total (961,840) 531,956 16,797,836 DEFERRED OUTFLOWS OF RESOURCES Loss on refunding Pension plan items Total deferred outflows of resources NET POSITION Net investment in capital assets Restricted for: Charter mandates Capital projects Community facilities Debt service Transit Other purposes Unrestricted Total net position 36,124,210 44,573,391 70,803,166 99,912 961,840 679,987 573,473 153,815,979 Business-type Activities $ 3,841,444 14,972,971 1,111,964 78,460,283 745,210 723,768 19,912,304 661,168,760 CITY OF GOODYEAR, ARIZONA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Net (Expense) Revenue and Changes in Net Position Program Revenues 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 Business-type activities: Water and sewer Sanitation Stadium Total business-type activities Total primary government Expenses $ $ 18,168,821 $ 33,289,918 17,941,162 3,361,822 6,422,764 7,005,308 8,763,353 94,953,148 25,489,522 5,802,163 12,407,494 43,699,179 138,652,327 $ Charges for Services 1,906,661 $ 2,484,740 416,607 5,353,778 10,161,786 24,650,687 6,922,425 2,237,359 33,810,471 43,972,257 $ Operating Grants and Contributions Capital Grants and Contributions 389,771 $ 400,543 4,011,401 296,725 1,695,140 3,983,554 10,777,134 Governmental Activities $ (15,872,389) (30,359,691) (8,142,955) (3,065,097) (6,006,157) 2,420,699 2,464,309 (4,779,799) 8,252,449 (65,761,779) 44,944 5,786,806 13,747,067 10,777,134 $ 707,816 14,454,883 22,707,332 (65,761,779) General revenues: Taxes: Sales taxes Property taxes Franchise taxes State shared revenues Investment income Special assessments Miscellaneous Transfers Total general revenues and transfers 45,333,649 18,171,606 2,718,204 16,361,588 361,146 4,980,000 975,258 (582,797) 88,318,654 Changes in net position 22,556,875 Net position, beginning of year, as restated Net position, end of year The notes to the basic financial statements are an integral part of this statement. Page 22 440,432,819 $ 462,989,694 Net (Expense) Revenue and Changes in Net Position Business-type Activities $ Totals $ (15,872,389) (30,359,691) (8,142,955) (3,065,097) (6,006,157) 2,464,309 (4,779,799) (65,761,779) 12,908,232 1,120,262 (9,462,319) 4,566,175 4,566,175 151,405 103,482 582,797 837,684 $ 12,908,232 1,120,262 (9,462,319) 4,566,175 (61,195,604) 45,333,649 18,171,606 2,718,204 16,361,588 512,551 4,980,000 1,078,740 89,156,338 5,403,859 27,960,734 192,775,207 633,208,026 198,179,066 $ 661,168,760 Page 23 Page 24 Governmental Funds Financial Statements Major 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 Improvement Assessments. Non‐Utility Development Impact Fee Fund This fund accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities. Non ‐ Major Funds Other governmental funds not listed above are non‐major funds that are classified as special revenue, capital projects, and debt service funds. Page 27 CITY OF GOODYEAR, ARIZONA BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2015 General 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 Prepaids Notes receivable Restricted cash and cash equivalents Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Deposits Due to other funds Unearned revenue Total liabilities $ 22,114,387 40,068,364 5,322,640 81,846 971,856 Community Facilities Districts Debt Service $ $ $ $ 864,993 961,840 21,656 573,473 1,675,250 255,426 72,911,731 2,396,664 1,767,910 6,703,302 16,542,410 39,170,124 $ $ 86,232 $ 1,773,549 1,861,875 1,556,969 5,136,397 3,704,854 49,783,760 60,181,980 72,911,731 $ 48,721 22,506,078 39,610,000 22,554,799 39,610,000 13,698,518 111,692 13,698,518 111,692 39,170,124 The notes to the basic financial statements are an integral part of this statement. Page 28 39,721,692 2,830,575 2,916,807 88,326 $ 39,610,000 $ 10,867,876 Fund balances (deficits): Nonspendable Restricted Assigned Unassigned Total fund balances 111,692 118,142 22,509,572 Deferred inflows of resources: Unavailable revenues - property taxes Unavailable revenues - special assessments Unavailable revenues - intergovernmental Unavailable revenues - other Total deferred inflows of resources Total liabilities, deferred inflows of resources and fund balances McDowell Road Commercial Corridor ID Debt Service $ 39,721,692 Non-Utility Development Impact Fees $ 6,616,256 3,394,530 Non-Major Governmental Funds Total Governmental Funds $ $ 7,305 7,281,725 1,110,497 504,038 2,390 127 99,912 487,413 $ 10,018,091 $ 9,486,102 $ $ 109,524 $ 634,319 49,338 152,551 722,142 1,704,877 3,263,227 $ 75,000 184,524 61,476 103,501 $ 487,413 5,698,448 9,833,567 (66,487) 6,119,374 10,018,091 Page 29 $ 9,486,102 3,226,739 1,817,248 6,930,853 722,142 4,535,452 17,232,434 198,523 62,116,078 42,025 1,773,549 64,130,175 42,025 9,833,567 36,124,060 44,573,391 5,944,820 91,541 971,983 62,119,572 99,912 864,993 961,840 509,069 573,473 1,675,250 16,797,836 171,307,740 2,044,382 34,478,622 3,704,854 49,717,273 89,945,131 $ 171,307,740 Page 30 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2015 Total governmental fund balances $ 89,945,131 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 funds. Governmental capital assets Less accumulated depreciation $ 686,432,146 (152,613,271) 533,818,875 Some receivables will not be available to pay for current period expenditures and, therefore, are reported as unavailable revenues in the funds. Property taxes Special Assessments Intergovernmental Other 198,523 62,116,078 42,025 1,773,549 64,130,175 Interest payable on long-term debt, is not due and payable in the current period and, therefore, is not reported in the funds. (2,371,239) Deferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds. Deferred outflows of resources related to pensions Deferred inflows of resources related to pensions 8,448,657 (6,997,526) 1,451,131 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Bonds payable Loss on refunding Net pension liability Compensated absences payable (181,698,503) 790,358 (38,624,568) (4,451,666) Net position of governmental activities The notes to the basic financial statements are an integral part of this statement. Page 31 (223,984,379) $ 462,989,694 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015 General Revenues: Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment income Special assessments Contributions Miscellaneous Total revenues $ $ 5,072,509 $ 2,481 3,543,685 7,972,770 3,546,166 1,425,000 2,117,681 70,387,921 4,036,000 5,329,348 267,507 9,632,855 12,284,243 (1,660,085) 3,485 15,674,612 30,523,969 2,268,109 5,074,871 6,933,854 8,624,515 1,002,288 285,703 Excess (deficiency) of revenues over expenditures Other financing sources (uses): CFD bond issuance Refunding bonds issued Refunding bonds premium Payment to refunded bond escrow agent Discount on sale of bonds Transfer in Transfer out Total other financing sources (uses): 3,542,681 7,015,000 452,099 (7,168,901) Changes in fund balances Fund balances, beginning of year $ 2,800,000 (8,697,848) (5,897,848) 418,784 6,386,395 (943,103) 3,485 53,795,585 14,641,621 108,207 60,181,980 716,982 $ 13,698,518 The notes to the basic financial statements are an integral part of this statement. Page 32 McDowell Road Commercial Corridor ID Debt Service 7,174 2,218,610 674,477 1,695,140 118,502 82,672,164 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 Bond issuance costs Total expenditures Fund balances, end of year 54,028,726 6,558,607 16,361,588 2,741,727 860,313 307,561 Community Facilities Districts Debt Service $ 111,692 Non-Utility Development Impact Fees $ $ 1,428,486 Non-Major Governmental Funds Total Governmental Funds $ $ 5,673,719 66,203,440 6,558,607 21,749,386 4,576,618 860,313 361,146 5,762,295 2,976,642 243,473 109,291,920 1,833,752 5,387,798 1,139 30,741 13,189 4,500 3,297,479 607,025 120,471 11,803,341 159,587 988,244 400,543 5,334,500 190,083 500 1,007,033 1,694,555 16,662,856 30,924,512 5,494,087 2,268,109 5,265,454 6,933,854 11,326,103 1,356,703 2,828,415 1,019,711 303,252 12,569,720 9,291,703 8,752,443 570,759 97,489,880 1,940,776 (766,379) 11,802,040 4,980,000 (39,461) 1,369,235 (1,225,400) 5,084,374 4,980,000 7,015,000 452,099 (7,168,901) (39,461) 4,588,019 (9,923,248) (96,492) 1,940,776 4,317,995 11,705,548 7,892,791 1,801,379 78,239,583 9,833,567 Page 33 $ 6,119,374 $ 89,945,131 Page 34 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Net changes in fund balances - total governmental funds $ 11,705,548 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report the portion of capital outlay for capitalized assets as expenditures. However, in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. Capital contributions Expenditures for capitalized assets Less current year depreciation 11,047,313 10,010,311 (16,546,781) 4,510,843 Issuance of bonds provides current financial resources to governmental funds, but the issuance increases long term liabilities in the Statement of Net Position. (12,407,638) Some revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes Special assessments Intergovernmental Other 20,019 2,526,782 (40,001) 731,785 3,238,585 Interest expense in the Statement of Activities differs from the amount reported in the 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. (23,971) Repayments of bond principal are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Bond principal retirement Bond principal refunded 9,291,703 7,168,901 16,460,604 Governmental funds report pension contributions as expenditures. However, they are reported as deferred outflows of resources in the Statement of Net Position. The change in the net pension liability, adjusted for deferred pension items, is reported as pension expense in the Statement of Activities. Current year pension contributions Pension expense 4,039,377 (4,039,483) (106) (769,165) (438,393) (1,207,558) Some 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. Disposal of capital assets Compensated absences Premiums, discounts, and losses on refunding are sources and uses of current financial resources for governmental fund reporting, but are amortized over the life of the debt in the Statement of Activities. Changes in net position in governmental activities The notes to the basic financial statements are an integral part of this statement. Page 35 280,568 $ 22,556,875 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final Revenues: Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeitures Investment earnings Contributions Miscellaneous Total revenues Expenditures: General Government Mayor and council City clerk City manager City attorney Finance ITS Human resources Non-departmental Reserved for 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 inspections Code compliance Capital outlay Debt service: Principal retirement Interest and debt cost Total expenditures $ 53,952,877 5,824,797 16,107,687 1,768,000 787,850 115,500 505,000 56,350 79,118,061 $ 53,952,877 5,824,797 16,107,687 1,768,000 787,850 115,500 505,000 56,350 79,118,061 Variance with Final Budget Positive (Negative) Actual $ 54,028,726 6,558,607 16,361,588 2,741,727 860,313 307,561 1,695,140 118,502 82,672,164 $ 75,849 733,810 253,901 973,727 72,463 192,061 1,190,140 62,152 3,554,103 304,901 764,331 2,880,115 945,675 3,095,233 3,435,416 2,764,313 7,290,795 16,347,842 304,901 764,331 2,865,215 945,675 3,095,233 5,193,689 3,258,125 4,536,211 16,347,842 244,425 630,946 2,752,029 710,980 2,301,997 3,410,264 2,953,546 2,670,425 17,065,677 13,229,337 1,344,691 458,621 16,547,797 13,229,124 1,344,691 458,621 15,827,210 13,277,993 1,022,066 396,700 720,587 (48,869) 322,625 61,921 361,294 2,005,463 377,134 2,005,463 356,038 1,912,071 21,096 93,392 3,757,745 1,455,238 4,204,641 1,446,138 3,655,403 1,419,468 549,238 26,670 571,520 1,679,674 2,550,299 1,320,138 283,373 24,217,957 821,340 1,908,458 3,092,603 1,249,305 283,373 24,701,995 810,424 1,667,276 2,910,850 1,275,325 269,979 8,624,515 10,916 241,182 181,753 (26,020) 13,394 16,077,480 1,147,289 327,133 109,604,070 1,147,289 327,133 110,456,327 1,002,288 285,703 70,387,921 145,001 41,430 40,068,406 Excess (deficiency) of revenues over expenditures (30,486,009) (31,338,266) 12,284,243 43,622,509 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) 3,700,000 (11,558,300) (7,858,300) 3,700,000 (11,558,300) (7,858,300) 2,800,000 (8,697,848) (5,897,848) Changes in fund balances (38,344,309) (39,196,566) 6,386,395 53,795,586 53,795,586 53,795,585 Fund balances, beginning of year Fund balances (deficits), end of year Page 36 $ 15,451,277 $ 14,599,020 $ 60,181,980 The notes to the basic financial statements are an integral part of this statement. 60,476 133,385 113,186 234,695 793,236 1,783,425 304,579 1,865,786 16,347,842 (900,000) 2,860,452 1,960,452 45,582,961 $ 45,582,961 Proprietary Funds Financial Statements Business‐type Activities‐Enterprise Funds Water and Wastewater Fund This fund accounts for the City’s water and wastewater utility operations, including the Utility Development Impact Fees. 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. Governmental Activities‐Internal Service Fund Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the government on a cost reimbursement basis. Fleet Management Fund This is the City’s only internal service fund which provides preventative maintenance, repairs, and safety inspections for City vehicles and equipment. Page 39 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2015 Enterprise Funds Water & Sewer ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Accounts receivable Due from other funds Inventories Total current assets $ Noncurrent assets: Restricted cash and cash equivalents Restricted investments Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets DEFERRED OUTFLOWS OF RESOURCES Loss on refunding Pension plan items Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits Due to other funds Unearned revenue Compensated absences payable Revenue bonds payable Total current liabilities Noncurrent liabilities: Accrued interest payable Advances from other funds Non-current portion of long-term obligations Total noncurrent liabilities Total liabilities $ 1,678,168 220,695 475 800,497 $ 954,175 2,054 25,296 2,699,835 981,525 7,797,412 1,557,673 7,010,570 273,525,127 289,890,782 314,230,066 7,248,959 224,797 224,797 2,924,632 11,375,056 105,033,973 123,657,988 124,639,513 118,453 603,958 722,411 65,612 65,612 352,637 298,467 651,104 946,887 128,781 793,503 4,804,034 420,321 18,681 136,879 290,000 7,100,084 16,989 549,658 67,846 2,703,856 25,316 3,739,071 12,050 61,460 455,991 7,159,257 114,023,554 114,650,018 121,750,102 373,597 373,597 829,588 961,840 113,248,257 114,210,097 121,369,354 698,039 58,170 349,019 170,553,653 224,797 5,602,417 $ 4,175,886 2,468,498 15,306,299 192,504,336 963,518 $ 1,877,689 2,102,486 The notes to the basic financial statements are an integral part of this statement. Page 40 Stadium 626,464 DEFERRED INFLOWS OF RESOURCES Pension plan items NET POSITION Net investment in capital assets Restricted for: Capital projects Debt service Unrestricted Total net position 2,840,263 13,843,712 37,547 3,346,735 3,739,071 531,956 24,339,284 Sanitation $ (2,993,691) 3,572,244 Enterprise Funds Totals $ 4,518,431 15,018,582 40,076 4,172,528 3,739,071 531,956 28,020,644 Governmental Activities: Internal Service Funds $ 150 170,918 171,068 15,046,371 1,557,673 18,385,626 378,783,897 413,773,567 441,794,211 171,068 471,090 968,037 1,439,127 1,916,866 215,308 3,497,359 4,829,350 3,739,071 12,050 215,328 290,000 14,715,332 6,202 22,015 142,851 171,068 626,464 961,840 227,645,408 229,233,712 243,949,044 171,068 1,105,228 176,380,867 $ 5,139,404 2,468,498 14,190,297 198,179,066 Page 41 $ CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Enterprise Funds Water & Sewer Operating revenues: Charges for services Miscellaneous Total operating revenues $ Operating expenses: Administration Costs of sales and services Depreciation and amortization Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Gain on sale of assets Interest expense Loss on disposal of assets Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers 24,650,687 98,115 24,748,802 Sanitation $ 6,922,425 4,149 6,926,574 Stadium $ 2,237,359 1,218 2,238,577 3,898,977 9,506,676 7,138,670 20,544,323 537,917 5,186,168 72,363 5,796,448 2,376,654 1,681,215 2,740,654 6,798,523 4,204,479 1,130,126 (4,559,946) 139,389 9,501 (4,954,700) 2,591 (4,805,810) (5,715) (3,124) 9,425 13,166 (5,622,137) (5,484,998) (11,084,544) (601,331) 1,127,002 (15,644,490) Capital contributions Transfer in Transfer out 14,479,633 505,119 (1,900,000) (900,000) 707,816 8,135,229 (505,119) Changes in net position 12,483,421 227,002 (7,306,564) 180,020,915 1,875,484 10,878,808 Total net position, beginning of year, as restated Total net position, end of year $ 192,504,336 $ 2,102,486 The notes to the basic financial statements are an integral part of this statement. Page 42 $ 3,572,244 Enterprise Funds Totals $ 33,810,471 103,482 33,913,953 Governmental Activities: Internal Service Funds $ 6,813,548 16,374,059 9,951,687 33,139,294 52,592 2,000,380 2,052,972 774,659 151,405 22,667 (10,576,837) (5,490,713) (15,893,478) (15,118,819) 15,187,449 8,640,348 (3,305,119) 5,403,859 192,775,207 $ 198,179,066 Page 43 2,042,882 10,090 2,052,972 $ CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 Water & Sewer Cash flows from operating activities: Receipts from customers Payments to suppliers for goods and services Payments to employees for services Net cash provided (used) by operating activities $ 24,531,660 (10,695,236) (3,828,750) 10,007,674 Cash flows from noncapital financing activities: Transfers in Transfers out Due to/from other funds Net cash provided (used) for noncapital financing activities 505,119 (1,900,000) (3,739,071) (5,133,952) Cash flows from capital and related financing activities: Principal paid on long-term debt Interest and fiscal fees Change in capital assets Development impact fees received Net cash provided (used) for capital and related financing activities (5,404,967) (5,408,245) (3,519,744) 7,960,177 (6,372,779) Cash flows from investing activities: Investment income received Sanitation $ 6,881,220 (5,164,510) (540,100) 1,176,610 (1,351,922) Cash and cash equivalents, beginning of year 27,390,982 $ 2,377,363 (1,222,655) (2,344,795) (1,190,087) 8,135,229 (5,990,117) 3,739,071 5,884,183 (900,000) (900,000) (469,388) (5,751,920) 12,370 684,707 (5,524,231) (45,697) (45,697) 147,135 Net increase (decrease) in cash and cash equivalents Stadium 2,680 10,152 233,592 (819,983) 1,665,271 9,023,117 Cash and cash equivalents, end of year $ 26,039,060 $ 1,898,863 $ 8,203,134 Cash and cash equivalents Investments Restricted cash and cash equivalents Restricted investments $ $ 1,678,168 220,695 $ 2,840,263 13,843,712 7,797,412 1,557,673 26,039,060 $ 1,898,863 $ 8,203,134 $ 4,204,479 $ 1,130,126 $ (4,559,946) 954,175 7,248,959 Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization (Increase) decrease in accounts receivable (Increase) decrease in inventories Increase (decrease) in accounts payable Increase (decrease) in accrued payroll and benefits Increase (decrease) in Due to other funds Increase (decrease) in Unearned Revenue Increase (decrease) in Deposits held for others Increase (decrease) in Compensated absences payable Increase (decrease) in pension expense Net cash provided (used) by operating activities Noncash investing, capital and financing activities: Contributions of capital assets Amortization of bond premiums and discounts Amortization of deferred loss on refunding Page 44 7,138,670 (214,231) 139,560 21,457 15,444 $ $ (2,911) (1,349,577) 35,616 19,167 10,007,674 72,363 (45,355) 2,740,654 112,732 21,658 3,948 $ 7,554 (13,685) 1,176,610 6,519,457 95,614 17,219 The notes to the basic financial statements are an integral part of this statement. 458,560 1,262 $ $ 12,050 14,004 17,502 13,095 (1,190,087) 13,241 162,147 32,364 Total $ 33,790,243 (17,082,400) (6,713,645) 9,994,197 Governmental Activities-Internal Service Funds $ 8,640,348 (8,790,117) (149,769) 2,052,972 (1,990,973) (48,259) 13,740 (13,740) (13,740) (5,874,355) (11,160,165) (3,553,072) 8,644,884 (11,942,707) 159,967 (1,938,313) - 38,079,370 150 $ 36,141,057 $ 150 $ $ 150 $ 4,518,431 15,018,582 15,046,371 1,557,673 36,141,057 $ 150 $ 774,659 $ 9,951,687 (146,854) 139,560 501,675 20,654 $ $ Page 45 9,139 (1,335,573) 60,672 18,577 9,994,197 448 9,121 (162) 4,333 $ 13,740 6,532,698 257,761 49,583 The notes to the basic financial statements are an integral part of this statement. Page 46 Fiduciary Funds Financial Statements Pension Trust Fund This fund is used to account for the City’s Volunteer Firefighter’s Relief and Pension 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. The agency funds account for monies donated for G.A.I.N., Fill‐A‐Need, Payshare, Shop With A Cop, and Arizona in Action. CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2015 Agency Pension Trust ASSETS Cash and cash equivalents Investments: Mutual Fund Interest receivable Total assets $ 86,622 $ 30,034 364,929 11 451,562 $ 30,034 $ $ 30,034 30,034 LIABILITIES Deposits held for others Total liabilities NET POSITION Held in trust $ Page 49 The notes to the basic financial statements are an integral part of this statement. 451,562 CITY OF GOODYEAR, ARIZONA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2015 Pension Trust Deductions: Benefits Investment loss Total deductions $ (7,158) Changes in net position 458,720 Net position, beginning of year Net position, end of year 4,939 2,219 7,158 $ 451,562 The notes to the basic financial statements are an integral part of this statement. Page 50 Notes to the Financial Statements 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 Investments 64 3. Receivables 67 4. Capital Assets 68 5. Loans Payable 70 6. General Obligation Bonds Payable 71 7. Revenue Bonds Payable 73 8. Community Facilities Districts Bonds Payable 75 9. Changes in Long-Term Liabilities 77 10. Interfund Receivables, Payables, and Transfers 78 11. Contingent Liabilities 79 12. Risk Management 79 13. Retirement Plans 80 14. Deficit Fund Balance 94 15. Fund Balance Classifications 95 16. Commitments 95 17. Restatement 96 Page 53 Page 54 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 six-member governing council (council). As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its blended component units, entities for which the City is considered financially accountable. In accordance with GASB Statement No. 14, and as amended by GASB Statement No. 61, the component units discussed below have been included in the City’s reporting entity because of the significance of their operational or financial relationship with the city. 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. Although it is legally separate from the City, the Districts are reported as if it is part of the primary government because the District’s governing body is substantively the same as the governing body of the City and management of the City has operational responsibility for the Districts. Complete financial statements for each of the individual component units may be obtained at the entities’ administrative offices. Page 55 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. 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, 2015, 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. Page 56 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. 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 - includes all spendable amounts not contained in the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance. In other governmental funds, other than the general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. The General Fund has Unassigned Funds consisting of a Stabilization Arrangement in the amount of $12.5 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 are generally recognized when the related fund 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. Page 57 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. 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, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the government. 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 Improvement District. Non-Utility Development Impact Fees Fund - This fund collects fees to defray the costs of development of infrastructure. Proprietary funds distinguish operating revenues and expenses from non-operating 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 non-operating revenues and expenses. The City reports the following proprietary funds: Water and Wastewater Fund - This fund accounts for the City’s water and wastewater utility operations, including the utility development impact fees. 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. Internal Service Fund – This fund is used to account for citywide 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. Page 58 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. 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. The five funds account for monies donated by individuals for the GAIN, Payshare (Utility Assistance), Fill-A-Need, Shop With A Cop, and Arizona in Action activities. 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 Capital Projects Funds Capital Improvement Projects Fund Community Facilities Districts Capital Projects Page 59 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) E. Cash and Cash Equivalents Cash represents amounts in demand deposits and amounts held in trust by financial institutions. The funds held in trust are available to the City upon demand. The City considers short-term investments (including restricted assets) in the State of Arizona investment pool, mutual fund-money market, U.S. Treasury bills and notes with maturities of three months or less at acquisition date to be cash equivalents. F. Investments Goodyear maintains investment accounts for funds that are not legally required to be maintained separately. Each fund's equity in investments represents that fund's position in the consolidated accounts and determines that fund's allocation of interest earned. The Arizona Revised Statutes regulate the investment of surplus cash. Goodyear limits its investments to U.S. government securities, certificates of deposit, bonds, repurchase agreements, corporate notes, commercial paper, and money market accounts. Investments are stated at fair value based on quoted market prices and cash equivalents are stated at amortized cost. 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 inter-fund loans) or “advances to/from other funds” (i.e., the non-current portion of the inter-fund 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 of 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. A lien attaches to the property on the first day of January preceding the assessment and levy of taxes. Delinquent amounts bear interest at the rate of 16 percent. Maricopa County, at no charge to the taxing entities, bills and collects all property taxes. Public auctions of properties which have delinquent real estate taxes are held in February. H. Inventory Inventories are valued at average cost using the first-in, first-out (FIFO) flow method. Inventory, which consists of expendable supplies and vehicle repair parts, is recorded as an expenditure at the time individual inventory items are consumed rather than when purchased. I. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures when consumed rather than when purchased. Page 60 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 the life of the asset are not capitalized. Major outlays for capital assets and improvements are capitalized as projects as they are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Certain capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Infrastructure Land Improvements Buildings and Improvements Vehicles, Machinery and Equipment Water Rights Years 20-65 15 7-50 3-20 100 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. Page 61 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) L. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government only has two items that qualify for reporting in this category. It is the deferred charge on refunding and deferred outflows related to pensions reported in the government-wide statement of net position. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government only has two items that qualify for reporting in this category. It is unavailable revenue, which arises only under a modified accrual basis of accounting, and the deferred inflow related to pensions. M. 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 for compensated absences. N. Long-term Obligations In the government-wide financial statements and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities on the statement of net position. Bond premiums and discounts, as well as, the difference between the reacquisition price and the net carrying amount of the old debt, are deferred and amortized over the life of the bonds using the straight-line method over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Page 62 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. Inter-fund Activity Flows of cash from one fund to another without a requirement for repayment are reported as inter-fund transfers. Inter-fund transfers between governmental funds are eliminated in the Statement of Activities. Inter-fund services provided and used are not eliminated in the process of consolidation. Inter-fund transfers in the fund statements are reported as other financing sources/uses in governmental funds and follow below the non-operating revenues/expenses in the proprietary funds. P. 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. Q. 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. A public meeting is 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 2015. 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 through the budgetary process. Page 63 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Q. Budgetary Data (continued) The budgets are adopted on a basis differing from GAAP in that for budgetary purposes: (1) bond proceeds for proprietary funds are considered revenue; (2) capital outlays for enterprise funds are treated as expenditures; (3) debt service principal payments are treated as expenditures for enterprise funds; (4) accrued compensated absences are not recognized as expenditures; (5) depreciation and amortization are not recognized as expenditures. R. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. S. Change in Accounting Principle During the year ended June 30, 2015, the City implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. This Statement requires governments providing defined benefit pensions to recognize the long-term obligation for pension benefits as a liability, and to more comprehensively and comparably measure the annual costs of pension benefits. This Statement also enhances accountability and transparency through revised note disclosures and new required supplementary information. NOTE 2 CASH AND INVESTMENTS At June 30, 2015, cash and cash equivalents are presented as follows: Governmental Activities Cash and cash equivalents Restricted cash and cash equivalents $ $ 36,124,210 16,797,836 52,922,046 Business Activities $ 4,518,431 15,046,371 $ 19,564,802 Fiduciary Funds $ $ 33,244 33,244 Total $ 40,675,885 31,844,207 $ 72,520,092 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. The City also restricts cash and cash equivalents for Utility Development Fees which are reserved for the purpose of major capital improvements. Page 64 NOTE 2 CASH AND INVESTMENTS (Continued) Deposits The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the government-wide Statement of Net Position, and on the fund financial statements, as “Cash and cash equivalents” and “Investments”. At June 30, 2015, the City had $13,400 of cash on hand. The carrying amount of the City’s cash in bank totaled $7,891,345 and the bank balance was $8,649,372. Of the bank balance, $500,015 was covered by federal depository insurance and the remaining balance of $8,149,357 was covered by the Statewide Pooled Collateral Program. Cash Equivalents The City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The City’s highly liquid investments that are reflected in the financial statements as cash equivalents total $65,282,109. The investments presented on the statement of cash flows have a maturity in excess of three months, but are callable at any time. 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, 2015 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, 2015, the City’s funds invested with the State Treasurer totaled $43,201,803. The City’s investment in the State of Arizona’s local government investment po ol is stated at fair value which also approximates the value of the investment upon withdrawal. LGIP Total Total $ 43,201,803 $ 43,201,803 Remaining Maturity (In Years) Less Concentration Than 1 of Credit Risk $ 43,201,803 100.00% $ 43,201,803 100.00% Investment Type LGIP Total Total $ 43,201,803 $ 43,201,803 Rating as of Year End AAAF/S1+ $ 43,201,803 $ 43,201,803 Investment Type Page 65 NOTE 2 CASH AND INVESTMENTS (Continued) Investments The City’s portfolio complies with Arizona Revised Statutes (ARS) and the City’s investment policy. The Arizona Revised Statutes regulate the investment of surplus cash. Goodyear limits its investments to U.S. government securities, certificates of deposit, bonds, repurchase agreements, corporate notes, commercial paper, and money market accounts. Investments are stated at fair value based on quoted market prices and cash equivalents are stated at amortized cost. At June 30, 2015 the City’s investments included the following: Investment Type U.S. Treasuries Federal Agency Securities Corporate Notes Commercial Paper Mutual Fund Goldman Sachs Govt Fund Total Total $ 43,792,163 7,598,958 9,784,387 2,622,684 364,928 186,240 $ 64,349,360 Less Than 1 $ 2,829,692 1,217,108 2,622,684 364,928 186,240 $ 7,220,652 Investment Type U.S. Treasuries Federal Agency Securities Corporate Notes Commercial Paper Mutual Fund Goldman Sachs Govt Fund Total $43,792,164 7,598,958 9,784,387 2,622,684 364,928 186,240 $64,349,360 AA+ $ 43,792,164 7,598,958 2,412,578 $ 53,803,700 Remaining Maturity (In Years) More Concentration 1 to 2 than 2 of Credit Risk $ 21,282,643 $ 19,679,828 68.05% 4,871,314 2,727,644 11.81% 6,150,621 2,416,657 15.21% 4.08% 0.56% 0.29% $ 32,304,579 $ 24,824,129 100.00% Ratings as of Year End AA AA$ $ 1,219,637 2,547,151 $ 1,219,637 $ 2,547,151 A+ $ A - 1,224,277 $1,224,277 $ A-1 - 2,380,743 $2,380,743 $ AAAm - 2,622,684 $2,622,684 $ - 186,240 $186,240 Not Rated $ 364,928 $364,928 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 treasury money market accounts through the trust department of Wells Fargo, US Bank, Zions Bank and Bankers Trust. The money market accounts have a value of $18,662,171 at June 30, 2015. 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 has adopted an average portfolio duration limitation (ranging from 90 days to 3 years) consistent with the primary investment objective of safety, liquidity and yield. As of June 30, 2015 the average portfolio duration was 1.7 years. 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. Page 66 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. NOTE 3 RECEIVABLES Receivables, net of allowance for uncollectibles, as of year-end for the City’s individual major governmental funds and non-major governmental funds in the aggregate are as follows: Receivables: Taxes Interest Accounts Special assessments Total receivables General Fund $ 5,322,640 81,846 971,856 $ 6,376,342 Community Facilities DistrictsDebt Service Fund $ 118,142 - McDowell Road Commerical Corridor Improvement District Debt Service Fund $ - 22,509,572 39,610,000 $ 22,627,714 $ 39,610,000 Non-Utility Development Impact Fees Fund $ 7,305 - Non-Major Governmental Fund $ 504,038 2,390 127 $ - 7,305 $ 506,555 Total $ 5,944,820 91,541 971,983 62,119,572 $ 69,127,916 The following table summarizes the City’s receivables for the enterprise funds as of June 30, 2015: Receivables: Interest Accounts Water and Wastewater Fund $ 37,547 3,392,549 Sanitation Fund $ 475 814,562 Stadium Fund $ 2,054 25,296 3,430,096 815,037 27,350 (14,065) - Less: Allowance Net receivables (45,814) $ 3,384,282 $ 800,972 $ 27,350 $ Total 40,076 4,232,407 4,272,483 (59,879) $ 4,212,604 Revenues of the Water & Wastewater Fund and Sanitation Fund are reported net of uncollectible amounts. Total bad debt expense related to the Water & Wastewater Fund revenues and Sanitation Fund revenues for the current year are $49,942 and $533, respectively. Page 67 NOTE 4 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2015 follows: Beginning Balance (as restated) Governmental Activities Ending Increases Decreases Balance Capital assets, not being depreciated: Land $ Artwork Construction in progress 19,461,536 $ 2,240,970 204,750 - $ (496,154) $ (8,551,694) 21,206,352 204,750 8,648,104 9,930,064 Right of Way 89,451,622 946,261 - 10,026,474 90,397,883 Streetscape 9,061,008 - - 9,061,008 126,827,020 13,117,295 Total capital assets not being depreciated (9,047,848) 130,896,467 Capital assets, being depreciated: Land improvements 2,549,608 1,893,563 - 4,443,171 Infrastructure 343,846,392 3,565,282 - 347,411,674 Buildings and improvements 159,861,711 5,750,660 - 165,612,371 44,665,460 4,590,972 (11,187,969) 38,068,463 550,923,171 15,800,478 (11,187,969) 555,535,679 Vehicles, furniture and equipment Total capital assets being depreciated Less accumulated depreciation for: Land improvements Infrastructure (601,991) (180,464) (782,455) (87,280,686) (7,956,748) (95,237,434) Buildings and improvements (28,949,059) (5,618,382) Vehicles, furniture and equipment (30,345,104) (2,791,188) 11,110,350 (22,025,942) (34,567,441) Total accumulated depreciation (147,176,840) (16,546,781) 11,110,350 (152,613,271) Total capital assets, being depreciated, net (746,303) 403,746,331 (77,619) 402,922,408 (9,125,467) $ 533,818,876 Governmental activities capital assets, net Page 68 $ 530,573,351 $ 12,370,992 $ NOTE 4 CAPITAL ASSETS (Continued) Beginning Balance (as restated) Business-Type Activities Ending Increases Decreases Balance Capital assets, not being depreciated: Land $ - $ - $ 146,978 7,869,338 (9,374,580) $ 2,802,773 19,859,252 7,900,953 (9,374,580) Infrastructure 210,970,779 10,391,726 (1,365) 221,361,139 Buildings & improvements 206,089,719 314,950 (5,502) 206,399,167 Vehicles, machinery and equipment 14,700,050 658,513 (454,029) 14,904,533 Water rights 19,079,324 236,324 450,839,872 11,601,512 Artwork Construction in progress 15,404,260 $ 31,615 146,978 - 4,308,014 $ 15,435,875 Total capital assets not being depreciated 18,385,626 Capital assets, being depreciated: Total capital assets being depreciated (460,896) 19,315,648 461,980,487 Less accumulated depreciation for: Infrastructure (38,525,433) (4,262,485) 1,365 (42,786,553) Buildings and improvements (23,941,721) (4,796,791) 5,502 (28,733,010) Vehicles, machinery and equipment (9,953,993) (702,736) 438,737 (10,217,992) Water rights amortization (1,269,355) (189,679) - (1,459,034) (73,690,502) (9,951,691) 445,604 (83,196,589) 377,149,370 1,649,821 (15,292) 378,783,898 (9,389,871) $ 397,169,524 Total accumulated depreciation Total capital assets, being depreciated, net Business-Type activities capital assets, net $ 397,008,622 $ 9,550,774 $ Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Highway and streets Culture and recreation Public works Total depreciation expense Business-type activities Water and wastewater Sanitation Stadium Total depreciation expense Page 69 $ 702,277 2,111,290 11,916,448 787,813 1,028,953 $ 16,546,781 $ 7,138,673 72,363 2,740,655 $ 9,951,691 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 was used for expansion of an effluent wastewater facility and to rehabilitate an existing effluent lift station. The loans payable at June 30, 2015, are as follows: Description Business-type activities: Water Infrastructure Finance Authority Loan Water Infrastructure Finance Authority Loan Water Infrastructure Finance Authority Loan Interest Rate (Including Fees) Maturity 4.06% 7/1/07 - 21 4.06% 2.00% Outstanding Principal June 30, 2015 1,719,183 $ - 7/1/07 - 21 3,265,329 - 7/1/10 - 29 4,111,725 - 9,096,237 $ - Total Business-type activities $ Due Within One Year $ Annual debt service requirements to maturity on the loans payable at June 30, 2015 are summarized as follows: Business-Type Activities Fiscal Year Ending June 30, Page 70 Principal Interest 2016 2017 2018 2019 2020 2021-2025 2026-2030 $ 1,001,834 1,037,176 1,073,846 1,111,895 3,270,623 1,600,863 $ 301,438 266,735 230,730 193,370 154,604 309,102 81,311 Total $ 9,096,237 $ 1,537,290 NOTE 6 GENERAL OBLIGATION BONDS PAYABLE Bonds payable at June 30, 2015, 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, 2015 are presented below. Description Governmental activities: General Obligation Bonds Series 2007 General Obligation Bonds Series 2008 General Obligation Refunding Bonds Series 2009 General Obligation Bonds Series 2010 (Build America Bonds) General Obligation Refunding Bonds Series 2012 Interest Rate Maturity 3.00 - 5.00% 7/1/08 - 26 - 4.25 - 6.00% 7/1/09 - 38 7,382,399 - 5.25 - 5.125% 7/1/27 - 30 604,500 - 5.40 - 6.30% 7/1/20 - 30 105,000 3.90 - 4.25% 7/1/13 - 18 5,665,000 3.00 - 5.00% 7/1/08 - 26 $ Due Within One Year 7,278,423 $ Total Governmental activities Business-type activities: General Obligation Bonds Series 2007 General Obligation Bonds Series 2008 General Obligation Refunding Bonds Series 2009 General Obligation Bonds Series 2010 (Build America Bonds) General Obligation Refunding Bonds Series 2010 General Obligation Refunding Bonds Series 2014 Outstanding Principal June 30, 2015 $ 21,035,322 $ $ 17,696,577 $ - - 4.25 - 6.00% 7/1/09 - 27 30,217,601 - 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% 7/1/21 - 30 4,610,000 - 13,545,000 - 2.00% 7/1/14 - 20 Total Business-type activities $ 76,754,678 $ - Total $ 97,790,000 $ - Page 71 NOTE 6 GENERAL OBLIGATION BONDS PAYABLE (Continued) Annual debt service requirements to maturity on general obligation bonds payable at June 30, 2015 are summarized as follows: Fiscal Year Ending Governmental Activities June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2038 Total Page 72 Principal $ Interest Business-Type Activities Principal Interest $ 2,930,269 3,058,957 2,095,540 872,305 5,141,660 3,952,218 1,727,795 1,256,578 978,175 $ 877,431 753,125 639,137 568,467 2,123,754 987,657 457,884 81,984 $ 4,589,911 4,856,043 5,054,461 5,627,695 21,603,345 21,552,591 8,327,208 5,143,424 3,388,413 3,222,407 3,048,038 2,864,749 2,670,548 10,384,971 5,434,123 1,906,019 335,578 $ 21,035,322 $ 7,467,614 $ 76,754,678 $ 33,254,846 NOTE 7 REVENUE BONDS PAYABLE Revenue bonds payable at June 30, 2015 consisted of the outstanding revenue bonds and refunding bonds presented below. The bonds are generally callable after 10 years with interest payable semiannually. The bonds payable at June 30, 2015 are presented below: Description Governmental activities: 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 Interest Rate Maturity 2.00 - 3.00% 7/1/14 - 21 2.48% Total Business-type activities Page 73 $ Due Within One Year 1,695,000 $ 230,000 6/15/13 - 6/15/23 7,369,511 843,706 3.44% 6/15/13 - 6/15/23 880,577 97,388 5.25% 1/1/10 - 32 39,610,000 1,500,000 $ 49,555,088 $ 2,671,094 $ 535,000 $ - Total Governmental activities Business-type activities: Revenue Bonds, Series 1999 Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007A Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2008 Revenue Bonds, Series 2009 Revenue Bonds, Series 2010 Revenue Bonds, Series 2011 Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2011A Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2011B Outstanding Principal June 30, 2015 4.47 - 6.73% 7/1/07 - 18 4.50 - 5.00% 7/1/19 - 32 44,200,000 - 5.00 - 6.375% 6.75% 5.00 - 5.625% 2.00 - 5.500% 7/1/19 - 31 7/1/2049 7/1/22 - 39 7/1/12 - 41 32,950,000 325,000 14,950,000 14,850,000 290,000 2.00 - 5.25% 7/1/23 - 27 23,515,000 - 3.00% 7/1/2018 1,515,000 - $ 132,840,000 $ 290,000 NOTE 7 REVENUE BONDS PAYABLE (Continued) Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending Governmental Activities Principal June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2050 Total $ 2,671,094 $ 2,780,527 2,895,602 3,011,337 3,122,750 14,553,778 13,890,000 6,630,000 - $ 49,555,088 $ Interest 2,333,953 $ 2,223,794 2,108,569 1,988,333 1,862,771 7,304,169 4,002,600 526,574 - Business-Type Activities Principal Interest 290,000 $ 500,000 475,000 1,995,000 5,585,000 30,025,000 44,575,000 36,245,000 10,890,000 1,935,000 325,000 7,292,307 7,273,163 7,223,032 7,198,568 6,777,856 28,877,252 20,288,920 6,781,703 2,226,768 217,627 98,719 22,350,763 $ 132,840,000 $ 94,255,915 Pledged Revenue A. Revenue Bonds Revenue bonds are collateralized by a pledge of the gross revenues of the utility systems, as defined in the bond indentures. The bonds are payable solely from wastewater and water customer net revenues. Proceeds of the bonds were used for improvements to the City’s wastewater and water system. Principal and interest paid for the current year and total wastewater and water customer net revenues were $3,675,184 and $11,343,149, respectively. B. Public Improvement Corporation Municipal Facilities Revenue Bonds The public improvement corporation municipal facilities revenue bonds for business-type activities are secured by excise taxes or other undesignated general fund revenues and the governmental activity revenue bonds are secured by the property referred to as Goodyear Municipal Complex. Proceeds from the bonds were used to construct a major league baseball training facility as well as other municipal facilities. Principal and interest paid for the current year and total pledged revenues for business type activity revenue bonds were $5,688,563 and $59,861,110, respectively. C. McDowell Road Corridor Improvement District bonds The City acts as an administrator for the McDowell Road Corridor Improvement District whereby it collects the assessments levied against owners of property within the established district and disburses the amounts collected to retire the bonds issued to finance the improvements. At June 30, 2015, the special assessments receivable, together with amounts paid in advance and interest to be received over the life of the assessment period, is adequate for the scheduled maturities of the bonds payable and the related interest. The McDowell Road Corridor Improvement District bonds are collateralized by properties within the district. In the event of default by the property owner(s), the City may enforce an auction sale to satisfy the debt service requirements of the improvement bonds. The City is contingently liable on the bonds to the extent that proceeds from auction sales are insufficient to retire outstanding bonds. Page 74 NOTE 8 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE Community Facilities District General Obligation Bonds are issued by Community Facilities Districts (CFDs), which are special purpose districts created specifically to acquire and improve public infrastructure in specified land areas. CFD bonds are repaid by ad valorem taxes levied directly by the districts and collected by the county. Property owners in the districts are assessed for district taxes and thus for all costs associated with the districts. The City has no liability for CFD bonds. Community facilities district bonds payable at June 30, 2015 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, 2015, are presented below. Description General District No. 1: G.O. Refunding Bonds, Series 2013 Palm Valley: GO Bond Series 2006 GO Bond Series 2007 Utilities District No. 1: G.O. Bond Series 2007 G.O. Refunding Bonds, Series 2014 G.O. Refunding Bonds, Series 2015 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 Cottonflower: G.O. Bonds, Series 2003 G.O. Bonds, Series 2004 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) Assessment Bonds, Series 2015(M2) Centerra: G.O. Bonds, Series 2005 G.O. Bonds, Series 2006 G.O. Bonds, Series 2008 Cortina: G.O. Bonds, Series 2005 G.O. Bonds, Series 2006 Total Page 75 Interest Rate Maturity Outstanding Principal June 30, 2015 2.0% - 5.0% 07/15/28 $ 10,350,000 4.25 - 5.30 % 4.25 - 5.80 % 07/15/31 07/15/32 3,610,000 3,355,000 135,000 105,000 4.00 - 5.00 % 2.0% - 4.0% 2.000% - 4.125% 07/15/32 07/15/28 07/15/29 20,460,000 14,755,000 7,015,000 500,000 770,000 - 5.875 - 6.5 % 5.2 - 5.75 % 07/15/22 07/15/23 330,000 430,000 35,000 30,000 6.0 - 7.0 % 4.5 - 5.9 % 07/15/25 07/15/26 460,000 505,000 30,000 30,000 4.1 - 5.70 % 3.7 - 6.75 % 07/15/28 07/15/28 1,265,000 1,005,000 65,000 45,000 7.875% 7.375% 5.0 - 5.8 % 4.65 - 5.80 % 4.50 - 6.20 % 6.00 - 6.75 % 2.0% - 5.0% 07/01/25 07/01/27 07/15/30 07/01/32 07/15/32 07/01/32 07/01/39 3,382,000 2,833,000 3,940,000 6,210,000 10,975,000 5,816,000 4,980,000 254,000 174,000 150,000 241,000 345,000 223,000 130,000 5.5% 4.75 - 5.15 % 4.875 - 6.625 % 07/15/29 07/15/31 07/15/32 1,835,000 570,000 660,000 80,000 10,000 15,000 5.0 - 5.7 % 5.0 - 5.375 % 07/15/29 07/15/31 1,295,000 820,000 $ 106,856,000 60,000 20,000 $ 3,882,000 Due Within One Year $ 435,000 NOTE 8 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE (Continued) Community Facilities District bonds debt service requirements to maturity are as follows: Fiscal year ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2039 Total $ $ Governmental Activities Principal Interest 3,882,000 $ 5,288,881 4,327,000 5,198,598 4,582,000 4,985,726 4,814,000 4,754,290 5,079,000 4,506,903 29,325,000 18,249,797 32,850,000 10,100,339 20,747,000 2,149,798 1,250,000 160,000 106,856,000 $ 55,394,332 On June 10, 2015, Community Facilities Utilities District No. 1 (CFUD) issued $7,015,000 of General Obligation Bonds, with an average interest rate of 3.79%, to do an advanced refunding for the remaining outstanding principal of the CFUD 2005 and CFUD Refunding 2005 General Obligation Bonds. Under the terms of the refunding issue, sufficient assets to pay $6,210,000 of the 2005 and $805,000 of the Refunding 2005 principal and interest on the refunding bonds issued 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 an amount sufficient for future payment of principal and interest of the issues refunded. The transaction will reduce total debt service payments by $484,553 and result in an economic gain (difference between the present value of the debt service on the old and the new bonds) of approximately $500,095. The $238,955 deferred amount on retirement of bonds is being amortized over the shorter of the lives for the refunding bonds on a straight-line basis. Page 76 NOTE 9 CHANGES IN LONG-TERM LIABILITIES Long-term liabilities activity for the year ended June 30, 2015 was as follows: Beginning Balance Governmental Activities: Compensated absences General obligation bonds payable Community Facilities Districts bonds payable Public improvement bonds Revenue bonds payable Premiums Discounts Net Pension Liability Governmental activities long-term liabilities Business-type Activities: Compensated absences General obligation bonds payable Public improvement bonds Revenue bonds payable Loans payable Premiums Discounts Net Pension Liability Business-type activities long-term liabilities Page 77 $ 4,013,273 Ending Balance Additions Reductions $ 2,406,332 $ 1,967,939 - 2,828,415 21,035,322 11,051,000 1,002,288 1,425,000 365,039 (49,935) 2,370,139 106,856,000 9,945,088 39,610,000 4,291,554 (39,461) 38,624,568 23,863,737 $ 4,451,666 Due Within One Year $ 1,534,250 - . 105,912,000 10,947,376 41,035,000 4,204,494 (49,935) 40,994,707 11,995,000 452,099 (39,461) - $ 230,920,652 $ 14,813,970 $ 20,959,885 $ 224,774,737 Beginning Balance Additions Reductions Ending Balance $ 510,003 $ 81,161,263 102,180,000 31,160,000 10,064,007 3,405,323 (578,729) 6,850,923 $ 234,752,790 261,750 - $ 261,750 $ 201,077 4,406,585 500,000 967,770 279,989 (22,227) 530,609 $ 6,863,803 $ 570,676 3,882,000 1,171,094 1,500,000 $ Due Within One Year $ 76,754,678 102,180,000 30,660,000 9,096,237 3,125,334 (556,502) 6,320,314 $ 228,150,737 8,087,344 215,328 290,000 - $ 505,328 NOTE 10 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At June 30, 2015, interfund balances were as follows: Receivable Amount Fund General Fund $ 1,826,833 Non-Major Governmental Funds $ - Water and Sewer Fund $ 722,142 3,739,071 - - 4,700,911 142,851 Stadium Fund Internal Service Fund Total Payable Amount 5,565,904 $ 5,565,904 All interfund borrowing resulted from the borrowing of funds to cover cash deficit, except for the $961,840 payable amount in the Stadium Fund. This amount is an interfund borrowing transaction from the general fund for the commercial retail liners at the ballpark and will be paid back when the commercial retail liners are sold to enterprises. Transfers Out Fund General Fund $ 8,697,848 CFD-Debt Service Transfers In $ 2,800,000 $ 418,784 Non-Major Governmental Funds 1,225,400 1,369,235 Water and Wastewater Fund 1,900,000 505,119 900,000 505,119 8,135,229 Sanitation Fund Stadium Fund Total $ 13,228,367 $ 13,228,367 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. Page 78 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, 2015; 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. Commitments - The City is contingently liable for $1.7 million to be paid from the general fund to entities that the City has entered into job credit agreements for establishing businesses within the City. These credits will be paid out when the established criteria are met for job creation and other economic growth factors as specified by the development agreements. Each year the City appropriates for these obligations through the budget process. 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, 2015 for any expected claims in excess of $250,000. The City has workers compensation insurance through CopperPoint Mutual Insurance Company for potential work-related accidents. Page 79 NOTE 13 RETIREMENT PLANS The City contributes to the pension plans described below. The plans are component units of the State of Arizona. The City reported $3,840,976 of pension expenditures in the governmental funds and $472,935 in the proprietary funds related to all pension plans to which it contributes. A. Arizona State Retirement System Plan Description City employees not covered by the other pension plans described after this section participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing multiple-employer defined benefit pension plan, a cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plan, and a cost-sharing multiple-employer defined benefit long-term disability (OPEB) plan. The Arizona State Retirement System Board governs the ASRS according to the provisions of A.R.S. Title 38, Chapter 5, Articles 2 and 2.1. The ASRS issues a publicly available financial report that includes its financial statements and required supplementary information. The report is available on the ASRS website at www.azasrs.gov. Benefits Provided The ASRS provides retirement, health insurance premium supplement, long-term disability, and survivor benefits. State statute establishes benefit terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: Retirement Initial Membership Date: Before July 1, 2011 On or After July 1, 2011 Years of service and age required Sum of years and age equals 80 30 years age 55 to receive benefit 10 years age 62 25 years age 60 5 years age 50* 10 years age 62 Any years age 65 5 years age 50* Any years age 65 Final average salary is based on Highest 36 months of last 120 months Highest 60 months of last 120 months Benefit percent per year of service 2.1% to 2.3% 2.1% to 2.3% *With actuarially reduced benefits Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic cost-of-living adjustments based on excess investment earnings. Members with a membership date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are payable upon a member’s death. For retired members, the survivor benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to the member’s account balance that includes the member’s contributions and employer’s contributions, plus interest earned. Page 80 NOTE 13 RETIREMENT PLANS (Continued) A. Arizona State Retirement System (Continued) Contributions In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. For the current fiscal year, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.60 percent (11.48 percent for retirement and 0.12 percent for long-term disability) of the members’ annual covered payroll, and the City was required by statute to contribute at the actuarially determined rate of 11.60 percent (10.89 percent for retirement, 0.59 percent for health insurance premium benefit, and 0.12 percent for long-term disability) of the members’ annual covered payroll. In addition for the current fiscal year, the City was required by statute to contribute at the actuarially determined rate of 9.57 percent (9.51 for retirement and 0.06 percent for long-term disability) of annual covered payroll of retired members who worked in positions that would typically be filled by an employee who contributes to ASRS. The City’s contributions for the current and two preceding years for the Arizona State Retirement System OPEB, all of which were equal to the required contributions, were as follows: Health Benefit Supplement Fund Years Ended June 30: 2015 2014 2013 $ 128,393 121,012 117,973 Long-Term Disability Fund $ 26,114 48,402 45,830 Pension Liability At June 30, 2015, the City reported a liability of $33,264,817 for its proportionate share of the ASRS net pension liability. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was determined using update procedures to roll forward the total pension liability from an actuarial valuation as of June 30, 2013, to the measurement date of June 30, 2014. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2014 the City’s proportion was .224814 percent, which was an increase of .007918 from its proportion measured as of June 30, 2013. Page 81 NOTE 13 RETIREMENT PLANS (Continued) A. Arizona State Retirement System (Continued) Pension Expense and Deferred Outflows/Inflows of Resources For the year ended June 30, 2015, the City recognized pension expense for ASRS of $2,369,823 and reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Difference between expected and actual experience Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between city contributions and proportionate share of contributions Contributions subsequent to the measurement date Total $ 1,690,615 $ Deferred Inflows of Resources 5,816,990 915,190 $ 2,369,823 4,975,628 $ 5,816,990 The deferred outflows of resources related to ASRS pensions resulting from contributions subsequent to the measurement date as reported in the table above will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pensions will be recognized in pension expense as follows: Year Ending June 30: 2016 2017 2018 Thereafter $ 321,289 321,289 1,114,360 1,454,247 Actuarial Assumptions The significant actuarial assumptions used to measure the total ASRS pension liability are as follows: Actuarial valuation date Actuarial roll forward date Actuarial cost method Investment rate of return Projected salary increases Inflation Permanent benefit increase Mortality rates Page 82 June 30, 2013 June 30, 2014 Entry age normal 8% 3-6.75% 3% Included 1994 GAM Scale BB NOTE 13 RETIREMENT PLANS (Continued) A. Arizona State Retirement System (Continued) Actuarial Assumptions (Continued) The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2012. The purpose of the experience study was to review actual experience in relation to the actuarial assumptions in effect. The ASRS Board adopted the experience study recommended changes which were applied to the June 30, 2013, actuarial valuation. The study did not include an analysis of the assumed investment rate of return. The long-term expected rate of return on ASRS pension plan investments was determined to be 8.79 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class of ASRS are summarized in the following table: Asset Class Equity Fixed income Real estate Commodities Total Target Allocation 63% 25 8 4 100% Long-Term Expected Real Rate of Return 7.03% 3.20 4.75 4.50 Discount Rate The discount rate used to measure the ASRS total pension liability was 8.0 percent, which is less than the long term expected rate of return of 8.79 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statue. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Page 83 NOTE 13 RETIREMENT PLANS (Continued) A. Arizona State Retirement System (Continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 8.0 percent, as well as what the proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (7.0 percent) or 1 percentage point higher (9.0 percent) than the current rate: Proportionate share of the net pension liability 1% Decrease (7.0%) $ 42,045,023 Current Discount Rate (8.0%) $ 33,264,817 1% Increase (9.0%) $ 28,501,115 Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued ASRS financial report. The report is available on the ASRS website at www.azasrs.gov. B. Public Safety Personnel Retirement System Plan Descriptions City public safety employees who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS). The PSPRS administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) plan. A seven-member board known as the Board of Trustees and the participating local boards govern the PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. PSPRS issues publicly available financial reports that include their financial statements and required supplementary information. The reports are available on the PSPRS website at www.psprs.com. Benefits Provided PSPRS provides retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefits terms. Certain retirement and disability benefits are calculated on the basis of age, average monthly compensation, and service credit as follows. See the publicly available PSPRS financial reports for additional benefits information. Page 84 NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Public Safety Personnel Retirement System: Years of service and age required to receive benefit Before January 1, 2012 20 years any age 15 years age 62 Retirement Initial Membership Date: On or After January 1, 2012 25 years and age 52.5 Final average salary is based on Highest 36 months of last 20 years Highest 60 months of last 20 years Normal retirement 50% less 2.0% for each year of credited service less than 20 years 04 plus 2.0% to 2.5% for each year of credited service over 20 years, not to exceed 80% 2.5% per year of crfedited service, not to exceed 80% Accidental disability retirment 50 % or normal retirement, whichever is greater Survivor benefit: Retired members Active members 80% of retired member's pension benefit 80% of accidental disability retirement benefit or 100% of average monthly compensation if death was the result of injuries received on the job Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess investment earning. PSPRS also provides temporary disability benefits of 50 percent of the member’s compensation for up to 12 months. Employees Covered by Benefit Terms At June 30, 2015, the following employees were covered by the agent pension plans’ benefit terms: Inactive employees or beneificiaries currently receiving benefits Inactive employees entitled to but not yet receiving benefits Active employees Total Page 85 PSPRS Police 17 9 88 114 PSPRS Fire 2 1 90 93 NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Contributions and Annual OPEB Cost State statues establish the pension contribution requirements for active PSPRS employees. In accordance with state statues, annual actuarial valuations determine employer contribution requirements for PSPRS pension and health insurance premium benefits. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2015 are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members ‐ pension City of Goodyear: Pension Health insurance PSPRS Police 11.05% PSPRS Fire 11.05% 17.08 0.96 12.62 0.70 For the agent plans, the contributions to the pension plan and annual OPEB cost and contributions for the health insurance premium benefit for the year ended June 30, 2015, were: PSPRS Police Pension: Contributions made Health insurance premium benefit: Annual OPEB cost Contributions made $ 1,173,949 65,983 PSPRS Fire $ 968,539 53,722 Pension Liability At June 30, 2015, the City reported the following net pension liabilities: PSPRS ‐ Police PSPRS ‐ Fire $ 9,549,374 2,130,691 The net pension liabilities were measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2014, reflects changes of benefit terms and actuarial assumptions for a court ruling for funding permanent benefit increases and decrease in the wage growth assumption. Page 86 NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Actuarial Assumptions The significant actuarial assumptions used to measure the total pension liability are as follows: Actuarial valuation date Actuarial cost method Discount rate Projected salary increases Inflation Permanent benefit increase Mortality rates PSPRS June 30, 2014 Entry age normal 7.85% 4.0 - 8.0% 4.00% Included RP-2000 mortality table, adjusted by 105% for both males and females Actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2011. The long-term expected rate of return on PSPRS pension plan investments was determined to be 7.85 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. The target allocation and best estimates of geometric real rates of return for each major asset class for all agent pension plans are summarized in the following table: Asset Class Short-term investments Absolute return Risk parity Fixed income Real assets GTAA Private equity Real estate Credit opportunities Non-U.S. equity U.S. equity Total Page 87 Target Allocation 2% 4 4 7 8 10 11 11 13 14 16 100% Long-Term Expected Real Rate of Return 3.25% 6.75 6.04 4.75 5.96 5.73 9.50 6.50 8.00 8.63 7.60 NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Pension Discount Rates The following discount rates were used to measure the total pension liabilities: Discount rates PSPRS Police 7.85% PSPRS Fire 7.85% The projection of cash flows used to determine the PSPRS discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the Goodyear Police Department and the Goodyear Fire Department pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the Agent Plans Net Pension Liability: PSPRS – Police Balances at June 30, 2014 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other Changes Net changes Balances at June 30, 2015 Page 88 Total Pension Liability $ 25,016,493 Increase/Decrease Plan Fiduciary Net Position $ 16,740,654 Net Pension Liability $ 8,275,839 1,278,071 1,966,048 186,683 1,278,071 1,966,048 186,683 260,090 1,746,183 1,116,495 704,171 2,330,439 260,090 1,746,183 (1,116,495) (704,171) (2,330,439) (1,220,650) (18,769) 31,204 2,942,890 19,683,544 18,769 (31,204) 1,273,535 $ 9,549,374 (1,220,650) 4,216,425 $ 29,232,918 $ NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Changes in the Agent Plans Net Pension Liability: PSPRS – Fire Balances at June 30, 2014 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other Net changes Balances at June 30, 2015 Increase/Decrease Plan Fiduciary Net Position $ 16,848,036 Total Pension Liability $ 20,360,336 Net Pension Liability $ 3,512,300 1,405,013 1,640,015 (18,156) 1,405,013 1,640,015 (18,156) (813,497) 619,565 948,481 754,465 2,393,724 (813,497) 619,565 (948,481) (754,465) (2,393,724) (341,865) (19,278) 137,157 3,872,684 20,720,720 19,278 (137,157) (1,381,609) $ 2,130,691 (341,865) 2,491,075 $ 22,851,411 $ Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s net pension liabilities calculated using the discount rates noted above, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate: 1% Decrease Current Discount Rate 1% Increase PSPRS-Police: Rate Net Pension Liability 6.85% $ 13,692,936 7.85% $ 9,549,374 8.85% $ 6,148,482 PSPRS-Fire: Rate Net Pension Liability 6.85% $ 5,905,259 7.85% $ 2,130,691 8.85% (957,746) Page 89 $ NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Pension Plan Fiduciary Net Position Detailed information about the pension plans’ fiduciary net position is available in the separately issued PSPRS financial reports. The reports are available on the PSPRS website at www.psprs.com. Pension Expense For the year ended June 30, 2015, the City recognized the following pension expense: PSPRS - Police PSPRS - Fire Pension Expense $ 1,417,714 526,374 Pension Deferred Outflows/Inflows of Resources At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PSPRS - Police: Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total PSPRS - Fire: Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total Page 90 Deferred Outflows of Resources $ 224,868 1,509,711 Deferred Inflows of Resources $ - 762,263 1,173,949 $ 2,908,528 $ 762,263 Deferred Outflows of Resources $ 563,999 Deferred Inflows of Resources $ 740,538 782,963 968,539 $ 1,532,538 $ 1,523,501 NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) The amounts reported as deferred outflows of resources related to pension resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (or an increase in the net pension asset) in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ending June 30: 2016 2017 2018 2019 2020 Thereafter PSPRS Police $ 81,128 81,128 81,128 81,128 271,694 376,110 PSPRS Fire $ (213,134) (213,134) (213,134) (213,134) (17,393) (89,573) Agent Plan OPEB Trend Information The table below presents the annual OPEB cost information for the health insurance premium benefit for the current and two preceding years: Plan PSPRS - Police - Health Insurance June 30, 2015 June 30, 2014 June 30, 2013 PSPRS - Fire - Health Insurance June 30, 2015 June 30, 2014 June 30, 2013 Page 91 Annual OPEB Cost Percentage of Annual Cost Contributed Net OPEB Obligation 65,983 63,164 50,038 100.0% 100.0% 100.0% - 53,722 46,653 50,038 100.0% 100.0% 100.0% - NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) Agent Plan OPEB Actuarial Assumptions Actuarial valuations involve estimates of the reported amounts’ value and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions are subject to continual revision as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress for the health insurance premium benefit presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on (1) the plans as understood by the City and plans’ members and include the types of benefits inforce at the valuation date, and (2) the pattern of sharing benefit costs between the City and plans’ members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The significant actuarial methods and assumptions used are the same for all PSPRS plans and related benefits (unless noted), and the actuarial methods and assumptions used to establish the fiscal year 2015 contribution requirements, are as follows: Actuarial valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases includes inflation at Page 92 PSPRS June 30, 2013 Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess 23 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value (80%/120% market) 7.85% 4.5%-8.5% 4.50% NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) The funded status of the all the PSPRS health insurance premium benefit plans in the June 30, 2014, actuarial valuation was determined using the following actuarial methods and assumptions, applied to all periods included in the measurement. PSPRS Actuarial valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases includes inflation at June 30, 2014 Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess 22 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value (80%/120% market) 7.85% 4%-8% 4.00% Agent Plan OPEB Funded Status The following table represents the funded status of the health insurance premium benefit plans as of the most recent valuation date, June 30, 2014. Actuarial value of assets Actuarial accrued liability Unfunded actuarial accrued liability (funding excess) Funded ratio Annual Covered Payroll Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll Page 93 PSPRS-Police $ 638,160 732,738 94,578 $ 87.1% 6,630,426 1.43% $ $ PSPRS-Fire 466,897 634,667 167,770 73.6% 7,338,828 2.29% NOTE 13 RETIREMENT PLANS (Continued) C. Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan The Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan is a single-employer defined contribution plan, which was approved by the City Council on February 27, 1990, under Arizona Revised Statutes Section 9-981. The authority to establish and amend benefit provisions rests with the City Council. In December 1999, the council revised the pension and benefit program for the part-time firefighters. The City discontinued using part-time firefighters as of December 1, 2005. The assets of the plan are valued annually and the earnings or loss is distributed among the participant’s accounts in the plan. The only expenditures being made from this fund are administration fees, benefit payments, and refunds to those firefighters who leave the service of the Fire Department before becoming eligible for pension benefits. The cost of administering the plan is financed from investment earnings. Retirement with full benefits can be at age fifty (50) or fifteen years of credited service. This plan was fully vested as of June 30, 2015. As of June 30, 2015, there were 6 eligible employees participating in the plan. The plan is administered by TD Ameritrade. As of June 30, 2015, the plan’s assets consisted of the following: Cash and Cash Equivalents Investments Interest Receivable $ $ 3,210 448,341 11 451,562 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 BALANCES Grants Fund Deficit Fund Balance - At June 30, 2015, the Grants Fund contains a deficit fund balance of $24,178 in the fund financial statements. Future revenues are expected to cover this deficit. Debt Service Deficit Fund Balance – At June 30, 2015, the Debt Service fund reported a deficit of $42,309 in fund balance. The deficit arose because of timing differences between when the debt payments were made and the related tax collections were received. Future revenues are expected to cover this deficit. Page 94 NOTE 15 FUND BALANCE CLASSIFICATIONS General Fund balances (deficits): Nonspendable: Advances to other funds Inventories Prepaid items Restricted: Charter mandates Court Law enforcement Debt Service Development impact fees Capital projects Highway user funds Transit Community facilities districts operations Assigned: IT replacement Fleet replacement Risk management Unassigned Total fund balances $ Community Facilities Districts Debt Service McDowell Road Commerical Corridor Improvement Debt Service Non-Utility Development Impact Fees Non-Major Governmental Funds 961,840 21,656 573,473 $ 487,413 3,841,444 240,631 309,112 13,698,518 111,692 9,833,567 4,414,851 174,025 745,210 1,109,572 108,301 2,508,319 1,088,234 49,783,760 $ 60,181,980 Total Governmental Funds $ 13,698,518 $ 111,692 $ 9,833,567 $ (66,487) 6,119,374 961,840 509,069 573,473 3,841,444 240,631 309,112 13,810,210 9,833,567 4,414,851 174,025 745,210 1,109,572 108,301 2,508,319 1,088,234 49,717,273 $ 89,945,131 NOTE 16 COMMITMENTS The City has active construction projects as of June 30, 2015. The balances for work not yet complete as of June 30, 2015 were as follows: Goodyear Blvd NW Quad Improvement Phase 1 and 2 PD Operations Building ‐ Phase 1 Bullard Wash LOMR Library Building Improvements Bullard Avenue Infrastructure Remediated Waterline Transportation Master Plan Roadway to Sonoran Valley Sarival: VanBuren to I‐10 Van Buren: Estrella to Cotton Lane Water Master Plan Aeration Dome ‐ Corgett GWRF 2 MGD Expansion Design $ $ 1,083,494 386,456 63,748 54,929 36,617 49,737 30,482 14,965 35,495 8,339 353,805 45,936 868,481 3,032,484 These commitments are being financed from existing fund balances. Page 95 NOTE 17 RESTATEMENT Net position as of July 1, 2014, has been restated as follows for the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date and to correct overstatements for capital assets reported in prior years. Governmental Activities Net position, June 30, 2014, as previously reported Net pension liability Deferred outflows-contributions made during fiscal year 2014 Correction for overstatement of assets in prior years Net position, July 1, 2014, as restated Page 96 $ $ 477,788,373 $ (40,994,706) 3,821,378 (182,223) 440,432,819 $ Business-type Activities 201,805,827 $ (6,850,923) 411,995 (2,591,692) 192,775,207 $ Total 679,594,200 (47,845,629) 4,233,371 (2,773,914) 633,208,026 Required Supplementary Information Page 99 CITY OF GOODYEAR SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET PENSION LIABILITY ARIZONA STATE RETIREMENT SYSTEM YEAR ENDED JUNE 30, 2015 2015 City of Goodyear's proportion of the net pension liability (asset) 2014 2013 0.22% City of Goodyear's proportionate share of the net pension liability (asset) $ 33,264,817 $ $ City of Goodyear's covered-employee payroll $ 20,166,796 $ $ City of Goodyear's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability Page 100 164.95% 69.49% See accompanying notes to this schedule. CITY OF GOODYEAR SCHEDULE OF CONTRIBUTIONS ALL PENSION PLANS YEAR ENDED JUNE 30, 2015 2015 Arizona State Retirement System: Actuarially determined contribution $ Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) 2,369,823 2013 $ 21,761,494 Contributions as a percentage of covered-employee payroll 2011 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 10.89% Public Safety Personnel Retirement System - Police: Actuarially determined contribution $ 1,173,949 Contributions in relation to the actuarially determined contribution 1,173,949 Contribution deficiency (excess) $ City of Goodyear's covered-employee payroll $ Contributions as a percentage of covered-employee payroll 6,957,993 16.87% Public Safety Personnel Retirement System - Fire: Actuarially determined contribution $ 968,539 Contributions in relation to the actuarially determined contribution 968,539 Contribution deficiency (excess) $ Town's covered-employee payroll $ 7,674,635 12.62% Note: Data prior to 2015 is not available. Page 101 2012 2,369,823 City of Goodyear's covered-employee payroll Contributions as a percentage of covered-employee payroll 2014 See accompanying notes to this schedule. CITY OF GOODYEAR SCHEDULE OF FUNDING PROGRESS PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM OTHER POSTEMPLOYMENT BENEFITS LAST THREE ACTUARIAL VALUATIONS Actuarial Valuation Date Actuarial Valuation of Assets Actuarial Accrued Liability (AAL) Unfunded AAL (UAAL) Funded Ratio Covered Payroll UAAL as a percentage of Covered Payroll Public Safety Personnel Retirement System - Police: 2014 $ 638,160 $ 732,738 $ (94,578) 2013 708,612 (708,612) 2012 699,552 (699,552) 87.09 - % $ 6,630,426 6,582,586 6,321,537 1.43 % 10.76 11.07 Public Safety Personnel Retirement System - Fire: 2014 $ 466,897 $ 634,667 $ (167,770) 2013 543,584 (543,584) 2012 475,476 (475,476) 73.57 - % $ 7,338,828 7,232,076 6,662,566 2.29 % 7.52 7.14 Page 102 See accompanying notes to this schedule. CITY OF GOODYEAR SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - POLICE YEAR ENDED JUNE 30, 2015 2015 Total pension liability Service cost Interest Changes of benefit terms Differences between expected and actual Changes of assumptions Benefit payments, including refunds Net change in total pension liability Total pension liability—beginning Total pension liability—ending Plan fiduciary net position Contributions—employer Contributions—employee Net investment income Benefit payments, including refunds Administrative expense Other Net change in plan fiduciary net position Plan fiduciary net position—beginning Plan fiduciary net position—ending Net pension liability—ending $ $ $ $ $ $ $ $ $ $ $ 9,549,374 $ $ 67.33% 6,630,426 144.02% Note: Data prior to 2015 is not available. Page 103 $ $ $ Net pension liability as a percentage of coveredemployee payroll 1,278,071 1,966,048 186,683 260,090 1,746,183 (1,220,650) 4,216,425 25,016,493 29,232,918 2013 1,116,495 704,171 2,330,439 (1,220,650) (18,769) 31,204 2,942,890 16,740,654 19,683,544 Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll 2014 See accompanying notes to this schedule. $ $ CITY OF GOODYEAR SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - FIRE YEAR ENDED JUNE 30, 2015 2015 Total pension liability Service cost Interest Changes of benefit terms Differences between expected and actual Changes of assumptions Benefit payments, including refunds Net change in total pension liability Total pension liability—beginning Total pension liability—ending Plan fiduciary net position Contributions—employer Contributions—employee Net investment income Benefit payments, including refunds Administrative expense Other Net change in plan fiduciary net position Plan fiduciary net position—beginning Plan fiduciary net position—ending Net pension liability—ending $ $ $ $ $ $ $ $ $ $ $ 2,130,691 $ $ 90.68% 7,338,828 29.03% Note: Data prior to 2015 is not available. Page 104 $ $ $ Net pension liability as a percentage of coveredemployee payroll 1,405,013 1,640,015 (18,156) (813,497) 619,565 (341,865) 2,491,075 20,360,336 22,851,411 2013 948,481 754,465 2,393,724 (341,865) (19,278) 137,157 3,872,684 16,848,036 20,720,720 Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll 2014 See accompanying notes to this schedule. $ $ CITY OF GOODYEAR, ARIZONA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2015 NOTE 1 – PENSION PLAN SCHEDULES Actuarial Assumptions for Valuations Performed. The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated, which is the most recent actuarial valuation. The actuarial assumptions used are disclosed in the notes to the financial statements. Factors that Affect Trends. The actuarial assumptions used in the June 30, 2013, valuation for ASRS were based on the results of an actuarial experience study for the five-year period ended June 30, 2012. The purpose of the experience study was to review actual experience in relation to the actuarial assumptions in effect. The ASRS Board adopted the experience study recommended changes which were applied to the June 30, 2013, actuarial valuation. The study did not include an analysis of the assumed investment rate of return. The actuarial assumptions used in the June 30, 2014, valuation for PSPRS were based on the results of an actuarial experience study for the 5-year period ended June 30, 2011. The total pension liability used to calculate the net pension liability for PSPRS was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2014, reflects changes of benefit terms and actuarial assumptions for a court ruling for funding permanent benefit increases and a decrease in the wage growth assumption from 4.5% to 4.0%. Page 105 Page 106 Other Supplementary Information Combining Statements and Budgetary Schedules Non‐Major Governmental Funds Financial Statements Special Revenue Funds  Highway User Revenue Fund (HURF) – Funded through fuel taxes distributed from the State of Arizona.  Grants Fund ‐ Based on application to granting agencies by the City and availability of funding by grantors.  Community Facilities Districts – CFD’s represent special districts formed for the purpose of financing the acquisition, construction, operation, and maintenance of the public infrastructure benefiting the community. Debt Service Fund This fund was established for the accumulation of resources and the servicing of long‐term debt not being financed by the proprietary funds. Revenues are generated from the secondary property tax levy sufficient to meet the debt service. Capital Improvement Projects Fund This fund accounts for acquisition and construction of the government’s major capital facilities, other than those financed by proprietary fund. Page 113 CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2015 Special Revenue Highway User Revenue ASSETS Cash and cash equivalents Investments Taxes receivable Interest receivable Accounts receivable Due from other governments Inventories Total assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Deposits Due to other funds Unearned revenue Total liabilities $ 126,850 Grants $ $ 1,715,933 18,096 2,390 127 99,912 $ $ 487,413 991,813 128,486 49,338 152,551 $ 1,824,452 $ 1,734,156 $ 4,819 $ 88,576 96,909 1,704,877 1,806,605 330,375 533,617 622,193 2,391 42,025 42,025 Fund balances (deficits): Nonspendable Restricted Unassigned Total fund balances Page 114 611,653 1,110,497 377,550 Deferred inflows of resources: Unavailable revenues - property taxes Unavailable revenues - intergovernmental Total deferred inflows of resources Total liabilities, deferred inflows of resources and fund balances Community Facilities Districts 2,391 487,413 174,025 1,109,572 (24,178) (24,178) 661,438 $ 991,813 $ 1,824,452 1,109,572 $ 1,734,156 Debt Service Capital Projects Debt Service Community Facilities Districts Capital Projects Total NonMajor Governmental Funds $ 4,827,289 $ $ 4,827,289 $ $ 412,438 $ $ 108,392 $ 108,392 $ 91,616 91,616 412,438 59,085 487,413 5,698,448 (66,487) 6,119,374 4,414,851 (42,309) (42,309) 108,392 Page 115 634,319 49,338 152,551 722,142 1,704,877 3,263,227 61,476 42,025 103,501 59,085 $ 7,281,725 1,110,497 504,038 2,390 127 99,912 487,413 9,486,102 4,414,851 $ 4,827,289 $ 9,486,102 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015 Special Revenue Highway User Revenue Revenues: Taxes Intergovernmental Charges for services Investment income Contributions Miscellaneous Total revenues $ Grants $ 4,041,402 1,139 451 Other financing sources (uses): CFD bond issuance Discount on sale of bonds Transfer in Transfer out Total other financing sources (uses): 1,160,933 8,271 1,745 1,354,667 93,235 1,255,913 950,178 140,992 38,066 400,543 10,000 500 856,382 5,465,492 1,305,491 950,178 (1,405,711) 49,176 305,735 5,324,500 Excess (deficiency) of revenues over expenditures $ 1,346,396 16,789 4,059,781 Expenditures: Current General government Public safety Highways and streets Culture and recreation Capital outlay Debt service Principal retirement Interest and debt cost Bond issuance costs Total expenditures Community Facilities Districts 1,369,235 1,369,235 Changes in fund balances (36,476) 49,176 305,735 Fund balances (deficits), beginning of year 697,914 (73,354) 803,837 Fund balances (deficits), end of year Page 116 $ 661,438 $ (24,178) $ 1,109,572 Debt Service Debt Service $ 4,512,786 Capital Projects Community Facilities Districts Capital Projects $ Capital Improvement Projects $ 771 1,760 607,025 4,513,557 608,785 Total NonMajor Governmental Funds $ 10,447 10,638 5,673,719 5,387,798 1,139 13,189 607,025 120,471 11,803,341 284,744 988,244 400,543 5,334,500 500 1,694,555 191 412,437 2,828,415 1,019,711 3,848,126 303,252 715,689 284,744 2,828,415 1,019,711 303,252 12,569,720 665,431 (106,904) (274,106) (766,379) 4,980,000 (39,461) (806,616) (806,616) (418,784) 4,521,755 (141,185) 4,414,851 4,980,000 (39,461) 1,369,235 (1,225,400) 5,084,374 98,876 $ (42,309) Page 117 $ 4,414,851 $ (274,106) 4,317,995 274,106 1,801,379 $ 6,119,374 Page 118 Fiduciary Fund Financial Statements Combining Statement of Net Position Statement of Changes in Net Position Agency Funds      G.A.I.N. Fill‐A‐Need Payshare (Utility Assistance) Shop With A Cop Arizona in Action Page 121 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS JUNE 30, 2015 Fill-A-Need GAIN Shop With A Cop ASSETS Cash and cash equivalents Total assets $ $ 9,030 9,030 $ $ 6,084 6,084 $ $ 11,690 11,690 LIABILITIES Deposits held for others Total liabilities $ $ 9,030 9,030 $ $ 6,084 6,084 $ $ 11,690 11,690 Page 122 Arizona in Action Totals $ $ 3,230 3,230 $ $ 30,034 30,034 $ $ 3,230 3,230 $ $ 30,034 30,034 Page 123 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS YEAR ENDED JUNE 30, 2015 Balance June 30, 2014 Page 124 Additions GAIN: Assets Cash and cash equivalents $ 9,030 $ - Liabilities Deposits held for others $ 9,030 $ Deletions - Balance June 30, 2015 $ 9,030 - $ - $ 9,030 - $ - $ (299) $ (6) (305) $ - - $ (305) $ - Payshare: Assets Cash and cash equivalents Receivable Total Assets $ 299 $ 6 305 $ Liabilities Deposits held for others $ 305 $ Fill-A-Need: Assets Cash and cash equivalents $ 7,717 $ 7,718 $ (9,352) $ 6,084 Liabilities Deposits held for others $ 7,717 $ 7,718 $ (9,352) $ 6,084 Shop With A Cop: Assets Cash and cash equivalents $ 8,665 $ 8,746 $ (5,721) $ 11,690 Liabilities Deposits held for others $ 8,665 $ 8,746 $ (5,721) $ 11,690 Arizona in Action: Assets Cash and cash equivalents $ 3,230 $ - $ - $ 3,230 Liabilities Deposits held for others $ 3,230 $ - $ - $ 3,230 (15,372) $ (6) (15,378) $ 30,034 30,034 (15,378) $ (15,378) $ 30,034 30,034 $ Total - All Agency Funds Assets Cash and cash equivalents Receivable Total Assets $ 28,941 $ 16,464 $ 6 28,947 $ 16,464 $ Liabilities Deposits held for others Total liabilities $ $ 28,947 28,947 $ 16,464 $ 16,464 $ Budgetary Comparison Schedules Major Governmental Funds CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COMMUNITY FACILITIES DISTRICTS DEBT SERVICE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original & Final Revenues: Taxes Investment income Special assessments Contributions Total revenues Expenditures: Debt service Principal retirement Interest and debt cost Bond issuance costs Total expenditures Excess (deficiency) of revenues over expenditures $ 5,072,732 1,745 4,712,449 796,675 10,583,601 Actual $ 8,195,000 8,419,546 5,072,509 7,174 2,218,610 674,477 7,972,770 Variance with Final Budget Positive (Negative) $ (223) 5,429 (2,493,839) (122,198) (2,610,831) 16,614,546 4,036,000 5,329,348 267,507 9,632,855 4,159,000 3,090,198 (267,507) 6,981,691 (6,030,945) (1,660,085) 4,370,860 403,000 403,000 7,015,000 452,099 (7,168,901) 418,784 716,982 6,612,000 452,099 (7,168,901) 418,784 313,982 Changes in fund balances (5,627,945) (943,103) 4,684,842 Fund balances, beginning of year 14,641,621 14,641,621 Other financing sources (uses): Refunding bonds issued Refunding bonds premium Payment to refunded bond escrow agent Transfer in Total other financing sources (uses): Fund balances, end of year Page 127 $ 9,013,676 $ 13,698,518 $ 4,684,842 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL MCDOWELL ROAD COMMERCIAL CORRIDOR ID DEBT SERVICE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original & Final Revenues: Investment income Special assessments Total revenues $ Expenditures: Debt service Principal retirement Interest and debt cost Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year Page 128 $ Actual $ Variance with Final Budget Positive (Negative) 3,541,932 3,541,932 2,481 3,543,685 3,546,166 1,427,975 2,116,932 3,544,907 1,425,000 2,117,681 3,542,681 2,975 (749) 2,226 (2,975) 3,485 6,460 108,207 108,207 105,232 $ 111,692 $ $ 2,481 1,753 4,234 6,460 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON-UTILITY DEVELOPMENT IMPACT FEES YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Revenues: Taxes Charges for services Investment income Miscellaneous Total revenues $ Final 4,430,055 5,400 4,430,055 5,400 4,435,455 4,435,455 1,428,486 1,833,752 30,741 4,500 3,297,479 Expenditures: Current Highways and streets Culture and recreation Capital outlay Total expenditures 743,601 10,620,881 11,364,482 405,159 362,100 5,264,185 6,031,444 159,587 190,083 1,007,033 1,356,703 245,572 172,017 4,257,152 4,674,741 Changes in fund balances (6,929,027) (1,595,989) 1,940,776 3,536,765 7,892,793 7,892,793 7,892,791 (2) Fund balances, beginning of year Fund balances, end of year Page 129 $ $ Actual 963,766 $ $ Variance with Final Budget Positive (Negative) 6,296,804 $ 9,833,567 $ $ 1,428,486 (2,596,303) 25,341 4,500 (1,137,976) 3,536,763 Page 130 Budgetary Comparison Schedules Non‐Major Governmental Funds and Enterprise Funds CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL HIGHWAY USER REVENUE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Revenues: Intergovernmental Charges for services Investment income Miscellaneous Total revenues $ Expenditures: Current Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfer in Total other financing sources (uses): 3,715,086 10,000 Final $ 25,000 3,750,086 25,000 3,750,086 4,041,402 1,139 451 16,789 4,059,781 5,982,932 370 5,983,302 5,846,749 200,000 6,046,749 5,324,500 140,992 5,465,492 522,249 59,008 581,257 (2,233,216) (2,296,663) (1,405,711) 890,952 2,233,216 2,233,216 2,233,216 2,233,216 1,369,235 1,369,235 (863,981) (863,981) (63,447) (36,476) 26,971 697,914 697,914 Changes in fund balances 697,914 Fund balances, beginning of year Fund balances, end of year Page 133 $ 697,914 $ 3,715,086 10,000 Actual 634,467 $ Variance with Final Budget Positive (Negative) $ 661,438 $ $ 326,316 (8,861) 451 (8,211) 309,695 26,971 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GRANTS YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Revenues: Intergovernmental Investment income Total revenues $ Expenditures: Current General government Public safety Highways and streets Culture and recreation Capital outlay Total expenditures Changes in fund balances Fund balances (deficits), beginning of year Fund balances (deficits), end of year Page 134 $ 2,300,000 Final 2,300,000 2,300,000 1,346,396 8,271 1,354,667 2,000,000 539,070 2,539,070 633,072 506,025 10,000 500 1,399,473 2,549,070 38,066 400,543 10,000 500 856,382 1,305,491 543,091 1,243,579 (239,070) (249,070) 49,176 298,246 (73,354) (73,354) (73,354) (312,424) $ $ 2,300,000 Actual (322,424) $ Variance with Final Budget Positive (Negative) $ (24,178) $ (953,604) 8,271 (945,333) 595,006 105,482 $ 298,246 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COMMUNITY FACILITIES DISTRICTS YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original & Final Revenues: Taxes Investment income Miscellaneous Total revenues $ 1,162,545 500 319,853 1,482,898 Actual $ 1,160,933 1,745 93,235 1,255,913 Variance with Final Budget Positive (Negative) $ (1,612) 1,245 (226,618) (226,985) Expenditures: Current General government Total expenditures 1,510,515 1,510,515 950,178 950,178 560,337 560,337 Changes in fund balances (27,617) 305,735 333,352 Fund balances, beginning of year 803,838 803,837 (1) Fund balances, end of year Page 135 $ 776,221 $ 1,109,572 $ 333,351 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL DEBT SERVICE YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original & Final Revenues: Taxes Investment income Total revenues $ 4,527,418 Actual $ Variance with Final Budget Positive (Negative) 4,527,418 4,512,786 771 4,513,557 Expenditures: Debt service Principal retirement Interest and debt cost Total expenditures 3,505,727 1,327,406 4,833,133 2,828,415 1,019,711 3,848,126 677,312 307,695 985,007 Excess (deficiency) of revenues over expenditures (305,715) 665,431 971,146 (806,616) (806,616) (806,616) (806,616) (305,715) (141,185) 164,530 98,876 98,876 Other financing sources (uses): Transfer out Total other financing sources (uses): Changes in fund balances Fund balances, beginning of year Fund balances (deficits), end of year Page 136 $ (206,839) $ (42,309) $ $ (14,632) 771 (13,861) 164,530 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COMMUNITY FACILITIES DISTRICTS CAPITAL PROJECTS YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original & Final Revenues: Investment income Contributions Total revenues $ Expenditures: Capital outlay Debt service Interest and debt cost Bond issuance costs Total expenditures Actual $ Variance with Final Budget Positive (Negative) 432,000 432,000 1,760 607,025 608,785 $ 6,099,000 412,437 5,686,563 6,529,000 303,252 715,689 430,000 (303,252) 5,813,311 (6,097,000) (106,904) 5,990,096 6,097,000 4,980,000 (39,461) (418,784) 4,521,755 (1,117,000) (39,461) (418,784) (1,575,245) 4,414,851 4,414,851 430,000 Excess (deficiency) of revenues over expenditures Other financing sources (uses): CFD bond issuance Discount on sale of bonds Transfer out Total other financing sources (uses): 6,097,000 Changes in fund balances 1,760 175,025 176,785 Fund balances, beginning of year Fund balances, end of year Page 137 $ $ 4,414,851 $ 4,414,851 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL CAPITAL IMPROVEMENT PROJECTS YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Revenues: Investment income Miscellaneous Total revenues $ Expenditures: Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): CFD bond issuance Total other financing sources (uses): Changes in fund balances Fund balances, beginning of year Fund balances (deficits), end of year Page 138 $ Final $ Actual $ 191 10,447 10,638 Variance with Final Budget Positive (Negative) $ 191 10,447 10,638 18,880,665 18,880,665 20,262,614 20,262,614 284,744 284,744 19,977,870 19,977,870 (18,880,665) (20,262,614) (274,106) 19,988,508 18,619,059 18,619,059 18,619,059 18,619,059 (261,606) (1,643,555) (274,106) 274,106 274,106 274,106 12,500 $ (1,369,449) (18,619,059) (18,619,059) $ 1,369,449 $ 1,369,449 CITY OF GOODYEAR, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER AND SEWER ENTERPRISE FUND YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final Operating revenues: Charges for services Miscellaneous Total operating revenues $ 24,653,815 96,000 24,749,815 $ 24,653,815 96,000 24,749,815 Operating expenses: Administration Cost of sales and services Depreciation Total operating expenses 3,868,253 27,242,590 3,868,253 31,067,299 31,110,843 Operating income (loss) (6,361,028) Actual $ 24,650,687 98,115 24,748,802 Variance with Final Budget Positive (Negative) $ (3,128) 2,115 (1,013) 34,935,552 3,898,977 9,506,676 7,138,670 20,544,323 (30,724) 21,560,623 (7,138,670) 14,391,229 (10,185,737) 4,204,479 14,390,216 112,489 9,501 5,629,671 5,751,661 20,141,877 Nonoperating revenues (expenses): Investment income Gain on sale of assets Interest and debt cost Total nonoperating revenues (expenses) (10,584,371) (10,557,471) (10,584,371) (10,557,471) 139,389 9,501 (4,954,700) (4,805,810) Income before capital contributions and transfers (16,918,499) (20,743,208) (601,331) 8,690,420 1,865,733 (3,948,390) 8,690,420 1,284,289 (3,948,390) 14,479,633 505,119 (1,900,000) Change in net position (10,310,736) (14,716,889) 12,483,421 27,200,310 Net position, beginning of year, as restated 186,650,501 186,650,501 180,020,915 (6,629,586) $ 176,339,765 $ 171,933,612 $ 192,504,336 Capital contributions Transfers in Transfers out Net position, end of year Page 139 26,900 26,900 5,789,213 (779,170) 2,048,390 $ 20,570,724 CITY OF GOODYEAR, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SANITATION ENTERPRISE FUND YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final Operating revenues: Charges for services Miscellaneous Total operating revenues $ Operating expenses: Administration Cost 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 before transfers Transfers out Change in net position Net position, beginning of year, as restated Net position, end of year Page 140 $ 6,809,482 3,500 6,812,982 $ 6,809,482 3,500 6,812,982 569,775 5,259,410 569,775 5,259,410 5,829,185 Actual $ 6,922,425 4,149 6,926,574 Variance with Final Budget Positive (Negative) $ 112,943 649 113,592 5,829,185 537,917 5,186,168 72,363 5,796,448 31,858 73,242 (72,363) 32,737 983,797 983,797 1,130,126 80,855 2,500 2,500 2,500 2,500 986,297 986,297 (900,000) (900,000) (900,000) 86,297 86,297 227,002 2,214,375 2,214,375 1,875,484 2,300,672 $ 2,300,672 (5,715) 2,591 (3,124) (5,715) 91 (5,624) 1,127,002 $ 2,102,486 140,705 140,705 (338,891) $ (198,186) CITY OF GOODYEAR, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL STADIUM ENTERPRISE FUND YEAR ENDED JUNE 30, 2015 Budgeted Amounts Original Final Operating revenues: Charges for services Miscellaneous Total operating revenues $ Operating expenses: Administration Cost of sales and services Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Gain on sale of assets Interest and debt cost Total nonoperating revenues (expenses) 1,740,926 $ 1,740,926 1,740,926 1,740,926 2,230,082 7,038,808 2,336,330 8,193,015 9,268,890 (7,527,964) 2,000 Actual $ 2,237,359 1,218 2,238,577 Variance with Final Budget Positive (Negative) $ 496,433 1,218 497,651 10,529,345 2,376,654 1,681,215 2,740,654 6,798,523 (40,324) 6,511,800 (2,740,654) 3,730,822 (8,788,419) (4,559,946) 4,228,473 (5,362,263) (5,360,263) (5,362,263) (5,360,263) 9,425 13,166 (5,622,137) (5,599,546) (12,888,227) (14,148,682) (10,159,492) 3,989,190 7,896,513 7,896,513 707,816 8,135,229 (5,990,117) (707,816) (238,716) 5,990,117 Change in net position (4,991,714) (6,252,169) (7,306,564) (1,054,395) Net position, beginning of year, as restated 12,940,953 12,940,953 10,878,808 (2,062,145) Income before transfers Capital contributions Transfers in Transfers out Net position, end of year Page 141 $ 7,949,239 2,000 $ 6,688,784 $ 3,572,244 7,425 13,166 (259,874) (239,283) $ (3,116,540) Page 142 CAPITAL ASSET SCHEDULES CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE For the fiscal year ended June 30, 2015 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 Page 145 $ 21,206,352 4,443,171 90,397,883 9,061,008 165,612,371 38,068,463 347,411,674 204,750 10,026,474 $ 686,432,146 $ 686,432,146 $ 686,432,146 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION For the fiscal year ended June 30, 2015 Function General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Page 146 Land, Land Improvements, Artwork, Right of Way, Streetscape $ 3,608,908 1,992,706 99,458,891 13,218,409 7,034,251 $ 125,313,164 Buildings $ 25,557,510 813,910 25,417,046 $ 51,788,466 Improvements Other Than Buildings $ 2,380,333 89,024 89,196,862 15,924,236 6,233,450 $ 113,823,905 Vehicles, Machinery and Equipment Infrastructure $ $ 7,136,701 20,995,179 6,808,809 1,440,419 1,687,355 $ 38,068,463 Page 147 347,411,674 - $ 347,411,674 Construction in Progress $ Total 2,039,491 7,466,938 520,045 - $ 15,165,433 48,634,418 550,343,175 31,917,019 40,372,101 $ 10,026,474 $ 686,432,146 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION For the fiscal year ended June 30, 2015 Function General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Page 148 Governmental Funds Capital Assets July 1, 2014 Additions $ 20,583,147 49,320,526 537,781,900 32,691,542 37,373,075 $ 3,585,540 5,276,716 12,990,397 1,559,545 5,505,577 $ 677,750,191 $ 28,917,775 Deductions $ Governmental Funds Capital Assets June 30, 2015 (9,003,254) (5,962,823) (429,122) (2,334,068) (2,506,551) $ 15,165,433 48,634,418 550,343,175 31,917,019 40,372,101 $ (20,235,817) $ 686,432,146 STATISTICAL SECTION STATISTICAL SECTION Contents Page Financial Trends (Table 1 – 7) 152 These schedules contain trend information to help the reader understand how the City’s financial performance and position has changed over time. Revenue Capacity (Table 8 – 14) 168 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) 184 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 – 21) 192 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 22 – 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. Page 151 194 City of Goodyear Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2015 2014** 2013 2012* 2011 Governmental Activities Net investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position $ 365,019,949 92,247,738 5,722,007 462,989,694 $ 345,513,895 85,246,465 9,672,461 440,432,822 $ 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 Business-type Activities Net investment in capital assets Restricted Unrestricted Total Business-type Activities Net Position 176,380,867 7,607,902 14,190,297 198,179,066 177,274,142 5,640,492 9,860,573 192,775,207 178,456,590 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 9,263,439 192,085,605 541,400,816 99,855,640 19,912,304 $ 661,168,760 522,788,037 90,886,957 19,533,034 $ 633,208,029 511,491,474 102,324,151 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 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 adjusted for adoption of GASB Statement No. 65 **Net position adjusted for adoption of GASB Statement No. 68 Page 152 Table 1 Fiscal Year 2010 2009 2008 2007 2006 $ 317,162,459 115,881,050 19,272,548 452,316,057 $ 309,491,989 117,787,315 20,522,420 447,801,724 $ 256,047,572 70,835,115 36,122,934 363,005,621 $ 206,294,183 60,388,579 57,992,720 324,675,482 $ 144,405,463 67,199,030 49,858,294 261,462,787 101,366,083 8,166,207 109,532,290 61,259,814 24,329,033 85,588,847 307,660,266 60,388,579 66,158,927 $ 434,207,772 205,665,277 67,199,030 74,187,327 $ 347,051,634 191,582,614 4,365,725 195,948,339 508,745,073 115,881,050 23,638,273 $ 648,264,396 Page 153 199,696,564 (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 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2015 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 $ $ $ $ 5,155,702 17,513,485 3,016,233 4,136,129 14,321,199 1,455,235 5,860,757 7,005,308 6,422,764 17,941,162 3,361,822 8,763,353 94,953,148 14,565,710 10,923,812 5,802,163 12,407,494 43,699,179 $ 138,652,327 2014 $ $ $ $ 7,924,693 17,827,312 2,740,549 3,511,275 12,882,880 1,487,996 2,551,655 5,836,254 5,827,309 19,368,539 2,773,348 9,282,269 92,014,081 13,832,573 9,678,822 5,472,534 12,529,987 41,513,916 $ 133,527,997 2013 $ $ $ 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 $ 2012 $ $ $ 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 $ $ $ 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 $ 11,907,022 8,747,778 5,154,201 11,634,491 37,443,492 $ 12,454,200 8,279,732 4,815,314 11,958,862 37,508,108 $ 120,197,956 $ 121,505,467 Note: * Stadium Fund did not have operating activity until 2008 ** Community Services was reorganized into General Government and Development Services for fiscal year 2011 Page 154 2011 Table 2 Fiscal Year 2009 2010 2008 2007 2006 $ 6,469,757 16,050,100 3,190,931 454,550 2,722,449 11,413,558 1,497,249 1,929,973 2,555,353 4,023,639 12,179,531 11,070,853 11,210,504 $ 84,768,447 $ 4,701,916 15,580,923 2,842,884 1,248,219 2,743,877 12,249,685 1,636,533 2,222,189 9,583,326 5,435,750 8,436,341 14,370,096 12,001,714 $ 93,053,453 $ 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 $ 10,475,189 7,649,704 4,782,565 11,547,500 $ 34,454,958 $ 11,608,878 7,046,385 5,090,150 6,475,960 $ 30,221,373 $ 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 $ 119,223,405 $ 123,274,826 $ 164,325,142 $ 118,429,294 $ 71,853,403 continued Page 155 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2015 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 2013 $ 11,691,267 12,959,420 6,922,425 2,237,359 14,454,883 48,265,354 Total Primary Government Revenues $ 77,456,723 Net (Expense)/Revenue Governmental Activities Business-type Activities Total Primary Government Net Revenues $ (65,761,779) $ (67,626,617) $ (59,646,481) $ (58,432,301) $ (1,960,842) (597,997) (336,680) 4,566,175 $ (61,195,604) $ (69,587,459) $ (60,244,478) $ (58,768,981) $ Page 156 $ $ 12,417,092 12,350,336 6,641,318 2,182,278 5,962,050 39,553,074 $ 63,940,538 $ 2,075,520 817,463 358,873 809,334 304,128 6,206,750 4,654,268 11,358,824 26,585,160 $ $ 11,746,194 10,921,207 6,368,920 1,741,609 7,987,680 38,765,610 $ 65,350,770 2011 $ $ 1,734,895 546,613 168,001 868,828 433,384 6,899,047 7,565,511 6,171,185 24,387,464 2012 1,906,661 1,458,534 165,893 860,313 416,607 5,353,778 10,777,134 8,252,449 29,191,369 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 $ 2014 $ 865,484 676,932 130,566 825,971 322,215 4,163,050 7,636,691 9,701,254 24,322,163 $ $ 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 $ 61,428,975 $ 56,125,524 $ $ 1,128,675 500,562 128,109 849,060 325,552 3,879,823 5,818,158 13,951,581 26,581,520 (57,415,839) (7,964,104) (65,379,943) Table 2 Fiscal Year 2009 2010 $ 2008 $ 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 $ $ 9,022,576 7,235,503 5,790,357 1,530,799 6,211,533 29,790,768 $ $ 8,894,793 6,244,742 5,145,922 762,200 27,405,133 48,452,790 $ 7,588,225 6,137,152 4,392,794 20,000 24,414,623 42,552,794 $ 5,952,571 4,846,569 3,185,387 240,000 26,016,946 40,241,473 $ 58,152,032 $ 176,830,064 $ 155,618,636 $ 124,441,751 $ 83,307,260 $ $ (56,407,183) $ (4,664,190) (61,071,373) $ 8,880,151 6,389,190 5,625,426 1,014,221 25,000 41,595,562 63,529,550 20,247,061 33,308,177 53,555,238 $ $ $ (34,475,112) $ 25,768,606 (8,706,506) $ 396,770 54,887 128,040 638,390 3,527,777 272,516 13,241,940 895,854 62,732,783 81,888,957 2006 863,192 336,303 320,967 852,500 287,805 3,615,255 5,648,867 16,436,375 28,361,264 $ $ 2007 $ $ 286,419 61,456 67,264 529,007 126,800 14,584,804 648,756 26,761,281 43,065,787 (16,672,751) $ (11,315,672) 22,412,692 22,769,529 5,739,941 $ 11,453,857 continued Page 157 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2015 Revenues and Other Changes in Net Position Governmental Activities: Taxes Intergovernmental Interest and Investment Income Special Assessments* 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 $ $ $ 66,223,459 $ 16,361,588 361,146 4,980,000 975,258 (582,797) 88,318,654 $ $ 151,405 103,482 582,797 837,684 $ $ $ 2014 $ 2013 63,495,983 $ 15,285,440 414,689 2,189,906 1,183,618 (5,138,252) 77,431,384 $ $ $ 95,839 432,983 4,876,544 5,405,366 89,156,338 $ 82,929,078 $ 22,556,875 5,403,859 27,960,734 $ 9,804,767 3,536,852 13,341,619 $ $ $ $ 71,819 638,611 3,390,940 4,101,370 75,577,024 $ 69,028,647 $ 65,059,760 10,525,177 4,807,369 15,332,546 $ $ 3,542,551 (3,862,734) (320,183) $ 6,493,633 3,766,033 $ 10,259,666 Page 158 $ 53,595,119 9,699,146 227,446 827,619 (3,390,940) 60,958,390 92,945 117,103 3,892,665 4,102,713 *Prior to fiscal year 2014 Special Assessments were shown in Public Works-Capital Grants and Contributions Source: Statement of Net Assets City financial records and reports 2011 58,957,595 $ 55,301,512 $ 14,194,960 12,704,826 439,982 319,017 1,455,665 493,244 (4,876,544) (3,892,665) 70,171,658 $ 64,925,934 $ 136,531 222,911 5,138,252 5,497,694 $ $ 2012 $ Table 2 Fiscal Year 2009 2010 2008 2007 2006 $ 55,623,884 $ 59,003,971 $ 61,251,635 $ 59,428,806 $ 48,726,571 10,907,518 12,236,437 12,654,235 15,053,501 6,997,920 179,114 148,687 4,268,448 4,723,886 4,436,598 2,026,285 911,254 4,075,011 1,029,445 1,486,027 (7,815,285) (7,751,307) (9,444,077) (56,622) (117,062) $ 60,921,516 $ 64,549,042 $ 72,805,252 $ 80,179,016 $ 61,530,054 $ 57,527 4,352,000 100,698 7,815,285 $ 12,325,510 $ 121,900 78,586 7,751,307 7,951,793 1,379,832 212,708 9,444,077 $ 11,036,617 $ $ 73,247,026 $ 72,500,835 $ 83,841,869 $ 81,709,767 $ 64,329,728 $ $ 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 4,514,333 7,661,320 $ 12,175,653 $ $ $ 1,447,446 26,683 56,622 1,530,751 $ $ 715,181 1,950,000 17,431 117,062 2,799,674 concluded Page 159 Page 160 Table 3 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year Property Taxes 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 $ 18,171,606 17,109,458 16,218,397 16,572,825 18,862,731 21,908,223 22,332,774 18,004,766 12,289,010 9,769,889 Sales & Use Taxes $ 45,333,649 43,775,464 40,222,752 36,364,557 32,729,749 31,448,398 34,205,906 41,036,060 45,240,435 37,420,012 Source: City financial records and reports Page 161 Franchise Taxes $ 2,718,204 2,611,061 2,529,456 2,460,521 2,316,821 2,233,908 2,195,748 2,071,378 1,817,387 1,479,868 State Shared Revenues - not Restricted for Specific Programs State Shared State Revenue Highway User Sales Sharing Revenue $ 8,459,645 8,009,713 7,527,259 7,195,568 5,201,106 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 $ 7,901,942 7,275,727 6,667,701 5,509,258 4,498,039 5,966,584 6,855,644 6,503,557 5,246,824 1,979,970 $ 4,041,402 3,681,156 3,575,158 3,269,285 2,752,001 2,626,096 2,771,889 3,173,351 3,296,069 1,614,364 City of Goodyear Excise Tax Collections Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2015 2014 2013 2012 2011 City Privilege (Sales) Tax State-Shared Sales Tax State-Shared Income Tax State-Share Vehicle License Tax Fines and Forfeitures Franchise Taxes $ 45,333,649 5,965,400 7,901,942 2,494,245 860,313 2,718,204 $ 43,775,464 5,681,717 7,275,727 2,327,996 884,735 2,611,016 $ 40,222,752 5,342,879 6,667,701 2,184,380 809,334 2,529,456 $ 36,364,557 5,100,608 5,509,258 2,094,960 825,971 2,460,521 $ 32,729,749 3,661,678 4,498,039 1,539,429 849,060 2,316,820 Total $ 65,273,754 $ 62,556,655 $ 57,756,502 $ 52,355,875 $ 45,594,775 Source: City Financial Records and Reports Page 162 Table 4 Fiscal Year 2010 2009 2008 2007 2006 $ 31,448,398 3,391,361 5,966,584 1,549,573 846,143 2,233,909 $ 34,205,906 3,676,853 6,855,644 1,678,823 686,557 2,195,748 $ 41,036,060 4,247,158 6,503,557 1,854,435 678,594 2,071,378 $ 45,240,435 4,392,400 5,246,824 1,914,872 584,316 1,817,387 $ 37,420,012 2,213,645 1,979,970 1,012,065 482,604 1,479,868 $ 45,435,968 $ 49,299,531 $ 56,391,182 $ 59,196,234 $ 44,588,164 Page 163 City of Goodyear Sales & Use Taxes by Industry Classification Last Ten Fiscal Years (Unaudited) Fiscal Year 2015 Mining & Government Construction Manufacturing Utilities Wholesale Trade Retail Trade Restaurant & Bar Real Estate Hotels Services Miscellaneous $ 7,159 5,559,142 1,318,999 4,051,837 1,130,527 16,348,224 6,343,415 5,480,481 1,067,357 2,424,312 1,032,464 Total* $ 44,763,917 2014 $ 4,024 7,988,471 931,362 3,819,536 1,072,608 15,787,043 5,450,424 4,467,373 849,052 1,764,488 968,896 $ 43,103,277 2013 $ 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 $ 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 * 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 Page 164 Table 5 Fiscal Year 2009 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 Page 165 $ 11,412 12,779,596 508,454 2,448,686 538,279 9,568,935 3,687,991 2,227,491 854,203 1,176,780 622,042 $ 34,423,869 2008 $ 6,391 17,256,194 451,147 2,397,905 775,843 9,526,853 3,740,867 2,698,200 1,006,334 1,451,721 1,035,306 $ 40,346,762 2007 $ 1,055 19,305,179 405,882 2,115,344 815,930 9,789,605 3,996,446 2,603,404 944,488 3,725,380 2,286,662 $ 45,989,375 2006 $ 371 15,029,430 600,356 1,640,534 746,566 8,727,607 3,441,051 1,506,238 889,513 643,325 641,428 $ 33,866,419 City of Goodyear Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2015 General Fund Reserved Unreserved $ 2014 - $ 2013 - $ 2012 - $ 2011 * - $ - Nonspendable: Advances to other funds Inventories Prepaid items 961,840 961,840 961,840 961,840 21,656 25,261 8,916 16,258 961,840 3,627 573,473 504,865 486,842 500,911 422,681 3,209,321 Restricted by: 3,841,444 3,676,547 3,528,982 3,377,572 Court Charter mandates 240,631 221,290 234,813 261,229 198,457 Law enforcement 309,112 274,392 208,085 125,812 129,231 Transit 745,210 644,135 543,022 - - Assigned to: IT replacement 108,301 1,484,148 170,684 437,873 407,961 Fleet replacement 2,508,319 1,502,483 3,032,429 1,730,168 383,225 Risk management insurance 1,088,234 792,947 357,741 811,244 558,310 49,783,760 43,707,677 33,325,255 23,074,844 21,481,088 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 $ 60,181,980 $ 53,795,585 $ 42,858,609 $ 31,297,751 $ 27,755,741 $ - $ - $ - $ - $ - - - - - - 487,413 650,344 595,675 412,916 289,782 - - 36,182 45,225 46,238 13,810,210 14,848,703 15,482,259 15,663,838 15,113,512 9,833,566 7,892,792 16,241,644 21,720,718 21,992,019 174,025 47,570 493,395 400,610 285,914 4,414,851 274,106 1,695,700 - - 1,109,573 (66,487) 803,837 (73,354) 538,410 (9,854) 536,230 (2,336,765) 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 $ 29,763,151 $ 24,443,998 711,980 (26,073) $ 35,230,762 $ 38,771,863 Source: Balance Sheet Governmental Funds City financial records and reports *Starting with fiscal year 2011, fund balances were stated in classification required by GASB Statement No. 54 Page 166 $ 35,926,930 Table 6 Fiscal Year 2010 2009 $ 17,812,619 10,742,777 $ 2008 29,117,875 $ 2007 42,219,809 $ 2006 61,037,128 $ 53,853,901 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ 28,555,396 $ 29,117,875 $ 42,219,809 $ 61,037,128 $ 53,853,901 $ 14,891,228 1,393,549 47,213 $ 13,597,749 4,110,554 - $ 15,356,746 10,942,787 - $ $ 20,452,179 - 23,153,403 1,435,331 25,851,665 27,462,037 20,649,813 10,220,953 19,835,781 3,354,296 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 42,297,037 $ 79,613,235 $ 47,406,990 $ 52,327,225 $ 36,784,169 Page 167 $ 8,726,046 7,810,178 - 7,833,170 21,303,978 - 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 Page 168 2015 2014 2013 2012 2011 $ 66,203,440 6,558,607 21,749,386 4,576,618 860,313 361,146 5,762,295 2,976,642 243,473 109,291,920 $ 63,577,425 7,460,830 19,325,653 4,658,927 884,735 414,689 5,839,886 2,408,357 1,327,008 105,897,510 $ 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 7,997,049 16,099,443 2,301,997 3,410,264 13,406,303 1,418,766 2,953,546 6,933,854 5,265,454 5,494,087 2,268,109 7,030,866 15,733,974 2,740,549 3,511,275 12,576,848 1,060,930 2,551,655 5,823,318 4,975,947 5,585,966 2,045,578 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 9,291,703 9,323,202 11,326,103 97,489,880 9,441,923 9,765,514 18,496,444 101,340,788 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 11,802,040 4,556,722 2,003,780 7,420,383 792,511 Table 7 Fiscal Year 2010 2009 2008 2007 2006 $ 55,590,530 629,979 16,464,531 7,402,083 846,143 178,715 6,522,924 3,042,851 1,942,018 92,619,774 $ 58,734,426 3,091,729 16,827,730 6,387,350 686,557 148,220 3,065,304 3,403,370 593,684 92,938,370 $ 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 6,943,802 13,752,875 2,605,931 2,339,204 10,615,080 1,497,249 1,929,973 4,654,052 3,882,621 4,098,986 3,075,759 3,945,126 14,082,452 4,803,801 1,248,219 2,221,606 11,961,508 1,567,179 2,215,237 9,723,957 4,393,748 5,686,483 3,901,157 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 10,942,758 11,158,130 13,494,149 90,990,569 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 1,629,205 (39,692,047) (91,395,729) (14,534,628) 24,695,991 continued Page 169 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2015 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 Source: City financial records and reports Page 170 2014 2012 2011 4,588,019 $ 5,356,364 $ 4,726,150 $ 5,504,462 $ 8,388,300 (9,923,248) (10,494,616) (9,602,694) (9,397,127) (10,837,705) 4,980,000 10,500,000 1,780,000 (39,461) 129,958 7,015,000 14,755,000 10,685,000 11,530,000 452,099 1,114,908 672,545 949,267 (7,168,901) (15,138,166) (10,965,024) (11,530,000) - (4,406,510) (96,492) $ 2013 11,705,548 20.6% $ 150,212 22.3% 6,015,977 $ 8,019,757 25.8% (1,033,440) $ 6,386,943 28.9% (2,449,405) $ (1,656,894) 27.3% Table 7 Fiscal Year 2010 2009 2008 2007 2006 $ 6,376,290 $ 4,123,384 $ 11,561,671 $ 17,288,179 $ 18,210,420 (14,191,575) (11,874,691) (21,005,748) (17,387,710) (47,966,568) 105,000 604,500 112,248,000 16,969,302 5,005,000 5,733 5,722 2,300,192 (72,151) 6,415,000 (3,585,000) (6,734,459) . (7,704,552) (10,726,085) 104,784,656 16,797,620 $ (6,075,347) $ (50,418,132) $ 13,388,927 $ 2,262,992 27.0% 21.5% 11.0% 12.4% (24,751,148) $ (55,157) 17.9% concluded Page 171 City of Goodyear Property Tax Rates Direct and Overlapping Governments 1 Last Ten Fiscal Years (Unaudited) Overlapping Rates City Direct Rate County-Wide Jurisdictions Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Debt Operating Service Rate Rate 1.1836 0.6864 1.1994 0.7006 1.1115 0.6635 0.9446 0.6554 0.7603 0.6630 0.6320 0.9679 0.6678 0.9322 0.7321 0.8679 0.7945 0.7991 0.8222 0.7778 1 Page 172 Total City Rate 1.8700 1.9000 1.7750 1.6000 1.4233 1.5999 1.6000 1.6000 1.5936 1.6000 County Operating Rate 1.3209 1.2807 1.2407 1.2407 1.0508 0.9909 1.0327 1.1046 1.1794 1.1971 Source: Maricopa County Assessor's Office County Library Fire District District Assistance Rate Rate 0.0556 0.0113 0.0438 0.0121 0.0492 0.0110 0.0492 0.0084 0.0412 0.0066 0.0353 0.0057 0.0353 0.0053 0.0391 0.0053 0.0507 0.0068 0.0521 0.0069 County County Flood Education District Equalization Rate Rate 0.1392 0.5089 0.1392 0.5123 0.1780 0.4717 0.1780 0.4259 0.1489 0.3564 0.1367 0.3306 0.1367 0.1533 0.2047 0.2119 0.4358 continued Table 8 Overlapping Rates County-Wide Jurisdictions Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Community College Rate 1.5187 1.5340 1.3778 1.2082 0.9728 0.8844 0.9386 0.9760 1.0646 1.0315 Central Arizona Project Rate 0.1400 0.1400 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 Agua Fria/ County Avondale Litchfield Rate Rate Rate 3.6946 10.0022 3.7780 3.6621 8.2090 3.9772 3.4284 7.4945 3.8863 3.3598 7.4753 3.2590 2.7889 5.3923 5.3658 2.5750 6.0066 5.3164 2.3342 5.7554 4.9382 2.4718 6.4298 5.3545 2.7446 7.8564 6.8558 3.1759 7.8631 6.9430 Buckeye/ Tolleson/ Liberty Littleton Rate Rate 8.0102 10.4333 7.1092 11.4641 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 7.8876 7.7572 6.9350 4.9490 5.4994 6.2147 8.3984 N/A N/A N/A continued Page 173 City of Goodyear Property Tax Rates Direct and Overlapping Governments 1 Last Ten Fiscal Years (Unaudited) Overlapping Rates Other Special Taxing Districts Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 West Maricopa Education Center District Rate 0.0810 0.0592 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 1.0000 1.0000 Centerra Cortina Cottonflower Roosevelt Community Community Community Irrigation Facilities Facilities Facilities District District District District Rate Rate Rate Rate 27.1000 3.0361 2.6034 3.2768 17.1000 3.3559 2.8500 3.9890 17.1000 3.2961 2.8500 3.8528 17.1000 2.1961 2.7298 3.4033 17.1000 2.3797 2.2087 2.9776 17.1000 2.6829 1.2146 2.1198 17.1000 2.6965 0.1520 1.2843 15.0000 3.0000 2.8500 1.7639 15.0000 3.0000 2.8500 3.0000 15.0000 3.0000 2.8500 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 1.3000 1.3000 continued Page 174 Table 8 Overlapping Rates Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Other Special Taxing Districts Goodyear Goodyear Palm King Wildflower Wildflower Community Community Valley Ranch Community Community Facilities Facilities Community Community Facilities Facilities General Utilities Facilities Facilities General General District #1 District #1 District #3 District District #1 District #2 Rate Rate Rate Rate Rate Rate 0.7334 1.0162 1.2592 0.3000 2.7761 3.0227 1.0000 1.0000 1.7844 0.3000 3.4365 3.8922 1.0000 1.0000 1.8035 0.3000 3.3150 3.3467 0.8034 1.0000 1.2684 0.3000 2.8718 2.9933 0.7570 1.0000 1.2952 0.3000 2.2891 2.5496 0.6629 1.0000 0.2165 0.3000 1.5905 1.6561 0.5313 1.0000 1.7949 0.3000 1.1703 1.3143 0.8040 1.0000 1.6295 0.3000 1.3123 1.4154 1.0000 1.0000 2.0000 0.3000 2.1340 2.3935 1.0000 1.0000 0.3000 2.1893 2.3547 concluded Page 175 Page 176 Table 9 City of Goodyear Principal Property Tax Payers Current Fiscal Year and Nine Years Prior (Unaudited) Fiscal Year 2006 2015 Taxable Assessed Value Taxpayer Arizona Public Service Company $ Rank Percentage of Total Taxable Assessed Value 21,114,158 1 3.20% 12,121,447 2 First American Title Insurance Company 7,771,023 Macy's Retail Holdings, Inc. Taxable Assessed Value 9,142,805 3 2.34% 1.84% 7,647,436 4 1.95% 3 1.18% 3,616,550 7 0.92% 7,770,796 4 1.18% - Cardinal Capital Co 7,465,061 5 1.13% - The Market at Estrella Falls, LLC 4,848,713 6 0.74% - Southwest Gas Corporation 4,805,489 7 0.73% - Broadway Goodyear, LLC 4,782,845 8 0.73% - DH Goodyear LLC 4,681,851 9 0.71% - TPP 211 Canyon Trails LLC 4,173,031 10 0.63% - VHS of South Phoenix, Inc. $ Rank Percentage of Total Taxable Assessed Value Sun Chase Estrella LP - 17,519,218 1 4.48% BT Goodyear LLC - 9,583,848 2 2.45% Suncor Development Company - 5,260,780 5 1.34% PVPW Corporation - 3,944,260 6 1.01% Qwest Communications - 3,191,327 8 0.82% Snyders of Hanover - 3,077,579 9 0.79% McLane Company - 2,829,601 10 0.72% Total Source: Maricopa County Treasurer Page 177 $ 79,534,414 12.06% $ 65,813,404 16.82% City of Goodyear Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (Unaudited) Total Assessed Value Residential Property Fiscal Year Ended June 30 Total Assessed Value Commercial Property Other Less: Tax-Exempt Property 192,119,198 196,638,563 $158,537,781 169,043,455 $ 1,158,177 1,167,249 $ 115,918,333 122,400,093 Net Assessed Value 2015 Primary Secondary $ 393,827,703 416,834,896 2014 Primary Secondary 340,280,668 342,294,870 205,111,305 211,390,271 161,905,429 165,979,539 273,421 275,521 122,898,455 129,681,549 584,672,368 590,258,652 2013 Primary Secondary 338,747,451 339,165,652 220,657,668 228,812,312 163,082,414 167,084,029 240,243 244,254 120,560,037 129,664,064 602,167,739 605,642,183 2012 Primary Secondary 357,230,458 357,367,570 238,218,141 252,752,614 194,223,071 206,673,571 226,506 214,401 122,548,914 144,006,328 667,349,262 673,001,828 2011 Primary Secondary 404,164,550 405,850,285 265,580,527 297,842,341 246,048,945 308,078,489 70,064 33,349 126,711,288 163,045,578 789,152,798 848,758,886 2010 Primary Secondary 482,286,104 497,383,109 233,187,882 284,491,038 248,660,120 374,640,069 63,427 28,842 113,281,184 173,686,635 850,916,349 982,856,423 2009 Primary Secondary 434,868,600 586,181,619 179,455,120 211,360,209 191,759,294 323,172,973 62,183 30,053 71,196,812 120,023,805 734,948,385 1,000,721,049 2008 Primary Secondary 464,968,904 159,482,762 221,884,779 30,978 82,130,285 569,933,790 764,237,138 Primary Secondary 259,063,526 131,663,157 164,267,777 47,639 60,129,086 448,211,802 494,913,013 Primary Secondary 219,161,231 109,929,249 97,388,312 226,783 35,549,177 361,667,417 391,156,398 2007 2006 $ Agricultural/ Vacant Land Note: Detail data prior to 2009 for "primary" 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. Page 178 $ 629,724,526 661,284,070 Table 10 Estimated Actual Taxable Value Total Direct Tax Rate $ $ 1.1836 0.6864 $ Assessed Value as Percentage of Actual Value 6,012,798,998 6,332,435,414 10.5% 10.4% 5,485,036,603 5,562,951,789 10.7% 10.6% 5,513,086,956 5,583,052,641 10.9% 10.8% 0.9446 0.6554 5,978,258,706 6,130,095,795 11.2% 11.0% 0.7603 0.6630 6,843,890,271 7,401,814,203 11.5% 11.5% 0.6320 0.9679 7,439,067,045 8,607,745,155 11.4% 11.4% 0.6678 0.9322 6,329,622,800 8,799,999,309 11.6% 11.4% 0.7321 0.8679 6,700,379,823 11.4% 0.7945 0.7991 4,159,221,424 11.9% 0.8222 0.7778 3,254,133,854 12.0% 1.1994 0.7006 1.1115 0.6635 Page 179 $ Table 11 City of Goodyear Property Tax Levies and Collections Last Ten Fiscal Years (Unaudited) Fiscal Year Taxes Levied Ended for the June 30 Fiscal Year (a) 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 $ 11,992,446 11,185,149 10,714,099 10,743,752 11,650,452 14,959,898 14,460,290 10,843,797 7,424,246 6,070,318 Collected within the Collection in Fiscal Year of the Levy Percentage Subsequent Amount of Levy Years $ 11,808,563 10,949,615 10,523,654 10,454,308 11,291,963 14,328,617 13,724,436 10,450,881 7,188,488 5,874,193 98.47% 97.89% 98.22% 97.31% 96.92% 95.78% 94.91% 96.38% 96.82% 96.77% $ 69,418 50,831 101,115 24,310 317,632 345,993 212,377 157,676 99,539 Total Collections to Date Percentage Amount of Levy $ 11,808,563 11,019,033 10,574,485 10,555,423 11,316,273 14,646,249 14,070,429 10,663,258 7,346,164 5,973,732 98.47% 98.51% 98.70% 98.25% 97.13% 97.90% 97.30% 98.34% 98.95% 98.41% (a) Tax levy is reported by the Treasurer as of August of each fiscal year. Amount does not include adjustments made to levy amounts after the August report. Source: Maricopa County Treasurer's Office Page 180 Table 12 City of Goodyear Utility Statistical Data Ten Largest Water Users Current Fiscal Year and Seven Fiscal Years Ago (Unaudited) Fiscal Year Entity Canyon Trails 4 - South Canyon Trails HOA Canyon Trails HOA Unit 4 Sarival Paseo Joint Community Canyon Trails HOA Unit 3 Las Brisas Community Assoc Agua Fria Union High School Dist. Cancer Treatment Center Avondale Elementary School Dist. Cottonflower Goodyear Community Evergreen Lawn Sprinklers Centerra, LLC 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 Hospital School Homeowner's Association Homeowner's Association Homeowner's Association Apartments Homeowner's Association Total Total as a percent of total Water System Operating Revenue Note: Water information not available prior to FY 2008 Source: City customer service and billing records Page 181 2008 2015 Fees & Fees & Rank Charges Rank Charges 1 $ 281,998 2 $ 166,139 2 238,517 3 210,435 5 145,474 4 189,034 3 154,195 5 184,634 8 93,896 6 178,383 7 167,713 1 173,266 8 160,816 9 157,459 6 105,348 10 125,343 4 148,800 7 102,443 9 76,401 10 64,527 $ 1,894,333 16.14% $ 1,230,489 13.94% Page 182 Table 13 City of Goodyear Utility Statistical Data Ten Largest Wastewater Users Current Fiscal Year and Seven Fiscal Years ago (Unaudited) Fiscal Year Entity Arizona State Prison/Perryville Cancer Treatment Center Park Shadows Poore Brothers, Inc. Schoeller Arca Systems Inc Fairfield Goodyear LLC Fairfield Centerra LLC HSL Encantada Goodyear LLC Avondale Elementary Airport Training Center Agua Fria Union High School District Wal-Mart Stores McLane Sunwest La Jolla Court, Inc. Estrella Joint Committee 2015 2008 Fees & Fees & Type of User Rank Charges Rank Charges Prison 1 $ 554,273 1 $ 317,331 Hospital 2 121,682 Apartments 3 90,148 2 50,512 Food Manufacturer, Snacks 4 79,858 6 22,656 Manufacturer 5 76,641 Apartments 6 75,124 Real Estate 7 69,377 Apartments 8 49,812 Education 9 49,215 7 21,794 Airport 10 47,700 5 22,656 Education 3 32,000 Retail 4 24,273 Grocery Distributor 8 19,253 Apartments 9 18,044 HOA - 10 17,581 Total Total as a percent of total Wastewater System Operating Revenue Note: Wastewater information not available prior to FY 2008 Source: City customer service and billing records Page 183 $ 1,213,829 9.30% $ 546,100 8.74% City of Goodyear Schedule of Existing and Adopted Monthly Water & Sewer Service Charges (2011 - 2015) (Unaudited) Adopted Adopted Adopted Adopted 2011 2012 2013 2015 Existing Fees Description of Water System Services Base Charge (Meter Size) 3/4 Inch 9.94 $ 10.05 $ 10.23 $ 11.24 1 Inch $ 11.24 15.54 $ 11.81 12.74 14.14 15.54 1 1/2 Inch 25.12 16.36 19.74 22.86 25.12 2 Inches 40.67 26.22 32.02 37.01 40.67 3 Inches 77.67 48.43 61.64 70.67 77.67 4 Inches 126.65 83.36 99.58 115.24 126.65 6 Inches 240.36 159.83 189.08 218.71 240.36 Monthly Volume Charge - Residential 0 - 6,000 gallons (per thousand) 1.30 (2) $ 1.32 6,001 - 12,000 (per thousand) $ 2.59 (3) 2.64 $ 1.46 2.92 $ 1.18 2.36 $ 1.30 2.59 12,001 - 30,000 (per thousand) 3.89 (4) 3.96 4.38 3.54 3.89 30,001+ gallons (per thousand) 6.25 (5) 5.15 5.69 5.69 6.25 Monthly Volume Charge - Commercial 0 - 40,000 gallons (per thousand) $ 3.30 $ 2.30 $ 2.60 $ 3.00 $ 3.30 40,001 - 100,000 gallons (per thousand) 5.28 3.68 4.16 4.80 5.28 100,001+ gallons (per thousand) 6.86 4.78 5.41 6.24 6.86 Note: Rates shown are for customers within city limits. The rates for customers outside of the city limits are 25% greater than the customers within city limits. Rate increases are adopted at the direction of City Council. (1) Rates were updated during January 2015 (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). Schedule of Water System Rate Increases (2011-2015) Rate Date Increase Fiscal Year 2011 7.50% Fiscal Year 2012 9.40% Fiscal Year 2013 0.00% Fiscal Year 2014 N/A Fiscal Year 2015 10.00% Source: City Financial Records, Reports and Water & Sewer Rate Study. The table above reflects only certain fees and charges of the City's water system and is not a comprehensive statement of all such fees. Page 184 (1) Table 14 Description of Sewer System Services Existing Fees Adopted Adopted Adopted 2011 2012 2013 Residential Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 5.78 $ 4.45 $ 4.90 $ 5.78 General Commercial Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 5.78 $ 4.45 $ 4.90 $ 5.78 $ 21.12 $ 17.52 $ 18.96 $ 21.12 Base Charge (Meter Size) 3/4 Inch 1 Inch 32.41 23.70 28.02 32.41 1 1/2 Inch 39.94 29.75 34.61 39.94 2 Inches 77.58 54.57 67.16 77.58 3 Inches 115.22 84.74 99.68 115.22 4 Inches 152.86 130.37 139.10 152.86 6 Inches 378.70 285.03 328.83 378.70 Schedule of Wastewater System Rate Increases (2011-2015) Rate Date Fiscal Year 2011 Page 185 Increase 9.30% Fiscal Year 2012 9.50% Fiscal Year 2013 15.20% Fiscal Year 2014 N/A Fiscal Year 2015 N/A City of Goodyear Ratios of Outstanding Debt by Type Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 $ 21,638,323 24,616,149 26,555,569 29,000,636 31,358,457 33,601,981 35,842,739 41,719,857 36,050,000 27,280,000 Contract Payable $ 1,755,628 3,755,628 5,755,628 11,755,628 - Governmental Activities Public Greater Improvement Arizona Corporation Development Municipal Authority Facilities Loan Revenue Bond $ 3,185,000 3,645,000 $ 10,037,745 11,047,495 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 Community Facilities District Bonds $ 40,881,328 42,383,378 42,390,000 43,675,000 44,900,000 46,060,000 47,165,000 47,165,000 - $ 108,520,857 107,194,657 109,823,000 113,555,000 117,182,000 122,313,000 127,125,000 131,116,000 76,844,000 73,000,000 Source: US Census Bureau, Applied Geographic Solutions/TIGER Geography, and City Financial Records Page 186 Table 15 Business-Type Activities Public Improvement Corporation General Obligation Bonds Municipal Facilities Revenue Bond Revenue Bonds $ 77,607,211 82,113,973 85,384,431 89,394,364 91,121,543 92,753,019 88,282,261 88,125,143 54,145,000 28,990,000 $ 103,970,274 104,096,689 102,180,000 102,180,000 102,300,000 102,300,000 102,300,000 67,850,000 - $ 30,114,933 30,596,520 31,390,000 31,985,000 32,245,000 17,040,000 2,370,000 2,345,000 2,460,000 2,580,000 Page 187 Water Infrastructure Finance Authority Loan $ 9,096,237 10,064,007 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 - $ 401,866,908 412,112,868 421,153,409 426,394,231 439,926,724 445,292,958 440,790,280 394,179,400 185,989,012 149,485,512 $ Percentage of Personal Income 20.07% 20.81% 22.13% 20.10% 24.49% 25.14% 24.89% 25.65% 12.34% 11.74% Per Capita 5,377 5,773 6,264 6,430 6,740 7,119 7,047 6,742 3,335 3,007 Table 16 City of Goodyear Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 $ 99,245,534 106,730,122 111,940,000 118,395,000 122,480,000 126,355,000 124,125,000 129,845,000 90,195,000 56,270,000 Less: Amounts Available in Debt Service Fund $ (42,309) 98,876 841,716 1,246,110 668,186 828,016 592,244 3,026,753 587,476 210,498 Total $ $ $ $ $ $ $ $ $ $ 99,287,843 106,631,246 111,098,284 117,148,890 121,811,814 125,526,984 123,532,756 126,818,247 89,607,524 56,059,502 Percentage Estimated Actual Taxable Value of Property 15.01% 18.07% 18.34% 17.41% 14.35% 12.77% 12.34% 16.59% 18.11% 14.39% Source: City Records (Does not include Enterprise, Special Assessment and CFD bonds) Page 188 Per Capita $ 1,328 1,444 1,556 1,742 1,830 1,933 1,975 2,169 1,607 1,128 Table 17 City of Goodyear Direct and Overlapping Governmental Activities Debt As of June 30, 2015 (Unaudited) Secondary Assessed Valuation Overlapping Jurisdiction Maricopa County Maricopa County Community College District Western Maricopa Education Center Liberty Elementary School District No. 25 Avondale Elementary School District No. 44 Littleton Elementary School District No. 65 Litchfield Elementary School District No. 79 Mobile Elementary School District No. 86 Buckeye Union High School District No. 201 Tolleson Union High School District No. 214 Agua Fria Union High School District No. 216 Wildflower Ranch Community Facilities District No. 1 Wildflower Ranch Community Facilities District No. 2 Community Facilities General District No. 1 Community Facilities Utility District No. 1 Estrella Mountain Ranch Community Facilities District Cottonflower Community Facilities District Centerra Community Facilities District Cortina Community Facilities District Palm Valley Community Facilties District Subtotal of overlapping debt: Direct Debt: City of Goodyear (b) $ $ Debt Outstanding 35,079,646,593 35,079,646,593 13,001,468,671 195,374,149 322,479,123 222,598,992 652,775,053 9,886,432 720,101,358 945,905,222 975,254,176 4,490,701 4,491,838 107,667,651 274,057,952 66,296,235 8,497,582 10,755,841 9,168,527 54,837,082 87,745,399,771 $ 654,190,000 59,075,000 19,570,000 33,725,000 23,705,000 45,675,000 None 68,375,000 43,300,000 58,270,000 760,000 965,000 10,350,000 42,230,000 14,915,000 2,270,000 3,065,000 2,115,000 6,965,000 $ 1,089,520,000 659,588,897 97,790,000 (a) Proportion applicable to the City of Goodyear, Arizona is computed on the ratio of secondary assessed valuation for 2014/15. (b) Direct debt includes General Obligation Bonds that are currently being paid by property tax and utility rates. This presentation is consistent with the city's official statements. Sources: Maricopa County Department of Finance, Maricopa County Assessor's Office, Wedbush Securities 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. Page 189 Estimated Percentage Applicable (a) 1.84 % $ 1.84 5.07 54.84 81.96 0.03 43.62 32.99 14.88 0.01 56.30 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 $ 100.00 % Net Debt Amount 12,037,096 2,995,103 10,732,188 27,641,010 7,112 19,923,435 None 10,174,200 4,330 32,806,010 760,000 965,000 10,350,000 42,230,000 14,915,000 2,270,000 3,065,000 2,115,000 6,965,000 199,955,484 105,025,000 City of Goodyear Legal Debt Margin Information Last Ten Fiscal Years (Unaudited) Fiscal Year 2015 2014 2013 2012 $ 659,588,897 $ 590,258,652 $ 605,642,183 $ 673,001,828 131,917,779 118,051,730 121,128,437 134,600,366 Total Debt Applicable to 20% Limit 97,570,000 104,775,000 111,690,000 118,130,000 Legal 20% Debt Margin (Available Borrowing Capacity) $ 34,347,779 $ 13,276,730 9,438,437 $ 16,470,366 Secondary Assessed Value 20% Limitation Debt Limit Equal to 20% of Assessed Valuation Total net debt applicable to the limit as a percentage of debt limit 6% Limitation Debt Limit Equal to 6% of Assessed Valuation 73.96% 88.75% $ 92.21% 87.76% $ 39,575,334 $ 35,415,519 $ 36,338,531 $ 40,380,110 Total Debt Applicable to 6% Limit 220,000 250,000 250,000 265,000 Legal 6% Debt Margin (Available Borrowing Capacity) $ 39,355,334 $ 35,165,519 $ 36,088,531 $ 40,115,110 Total net debt applicable to the limit as a percentage of debt limit Sources: Maricopa County Treasurer's Office City financial records and reports Page 190 0.56% 0.71% 0.69% 0.66% Table 18 Fiscal Year 2010 2009 2008 2007 2006 982,856,423 $ 1,000,721,049 $ 764,237,138 $ 494,913,013 $ 391,377,371 169,751,777 196,571,285 200,144,210 152,847,428 98,982,603 78,275,474 122,205,000 126,070,000 123,830,000 129,540,000 90,195,000 47,795,000 76,314,210 $ 23,307,428 8,787,603 $ 30,480,474 2011 $ 848,758,886 $ 47,546,777 $ $ 71.99% $ 50,925,533 0.54% Page 191 $ 64.13% $ 58,971,385 61.87% $ 285,000 275,000 $ 50,650,533 70,501,285 $ 58,686,385 0.48% $ 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% Table 19 City of Goodyear Pledged-Revenue Coverage Last Ten Fiscal Years (Unaudited) Public Improvement Corporation Municipal Facilities Revenue Bonds* Fiscal Year Ended June 30 Operating Revenue Pledged Revenue 2015 2014 2013 2012 2011 2010 2009 2008 $ 82,672,164 81,109,035 76,004,072 65,501,422 57,697,609 57,363,961 62,281,214 85,680,828 $ 59,861,110 62,768,755 57,969,777 52,566,675 45,808,725 45,979,781 49,326,896 56,445,817 Debt Service Principal Interest $ 230,000 85,000 590,000 570,000 745,000 720,000 680,000 505,000 $ Coverage 5,458,563 5,702,661 5,505,685 4,925,626 5,562,612 5,594,412 4,907,984 2,019,691 10.52 10.85 9.51 9.57 7.26 7.28 8.83 22.36 Debt Service Principal Interest 1,467,770 $ 2,207,414 1,439,935 2,212,948 1,504,661 5,819,924 1,139,026 5,554,656 1,167,815 1,802,534 1,195,691 543,662 877,292 540,523 656,612 474,992 640,500 506,104 502,118 516,469 Coverage 3.09 3.37 1.68 1.72 3.13 4.62 3.93 3.29 2.40 1.17 Water & Sewer Bonds & Loans Fiscal Year Ended Operating Revenue June 30 2015 $ 24,748,802 2014 24,989,997 2013 23,133,152 2012 20,221,750 2011 18,271,778 2010 16,378,677 2009 15,300,056 2008 15,151,775 2007 13,760,462 2006 10,816,571 Note: Less: Operating Expenses $ 13,405,653 12,684,374 10,837,296 8,703,445 8,965,363 8,350,588 9,733,836 11,424,111 11,008,102 9,629,632 Net Operating Revenue $ 11,343,149 12,305,623 12,295,856 11,518,305 9,306,415 8,028,089 5,566,220 3,727,664 2,752,360 1,186,939 *Public Improvement Corporation Municipal Facilities Revenue Bonds did not exist prior to 2008. The PIC 2007 Bonds were issued during 2008. Source: City Financial Records and Reports Page 192 $ Table 20 City of Goodyear Demographic and Economic Statistics Last Ten Fiscal Years (Unaudited) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Population 74,743 73,832 71,381 67,239 66,309 65,275 62,554 58,462 55,775 49,714 Personal Income (in thousands) $ 2,001,907 1,879,673 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 $ 26,784 25,459 27,746 28,304 31,986 27,521 28,315 26,290 27,026 25,632 Median Age 35.6 36.5 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 13 to 16 13 to 16 Unemployment Rate 5.7% 7.2% 8.3% 8.2% 9.8% 7.1% 6.9% 3.6% 2.1% 2.7% Source: US Census Bureau, Applied Geographic Solutions/TIGER Geography, and City Financial Records Page 193 Table 21 City of Goodyear Principal Employers Current Fiscal Year and Nine Fiscal Years Prior (Unaudited) Major Corporation Fiscal Year 2015 Percentage of Total City Employees Rank Employment* Fiscal Year 2006 Percentage of Total City Employees Rank Employment* Arizona State Prison/Perryville 850 1 2.44% 750 2 4.47% West Valley Hospital 750 2 2.16% 350 8 2.08% Cancer Treatment Centers of America 650 3 1.87% Macy's 600 4 1.73% City of Goodyear 527 5 1.52% 471 6 2.81% Amazon.com 500 6 1.44% Sub-Zero / Wolf 428 7 1.23% McLane Sunwest 360 8 1.04% 500 4 2.98% Aeroturbine 300 9 0.86% Lockheed Martin 250 10 0.72% 800 1 4.76% Rudolfo Brothers 562 3 3.35% Cavco Industries, Inc. 475 5 2.83% WalMart Supercenter 400 7 2.38% Safeway 210 9 1.25% Target 160 10 0.95% Total 5,215 Source: City Records *2015 labor force = 34,769 ; 2006 labor force = 16,791 Page 194 15.00% 4,678 27.86% Table 22 City of Goodyear Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years (Unaudited) 2015 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 2014 2012 2011 2010 2009 2008 2007 2006 69 28 18 55 27 15 55 29 14 52 28 14 52 30 13 53 30 13 47 30 15 52 28 12 52 27 11 41 21 9 93 30 21 91 29 23 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 12 10 0 5 13 87 26 19 6 91 8 10 0 4 10 75 24 20 5 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 10 527 487 489 474 486 498 515 519 444 391 Source: City Financial Records and Reports Page 195 2013 City of Goodyear Operating Indicators by Function Last Ten 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 Total newsletter pages sent to citizens Number of visits to website Number of web pages viewed Number of graphics/photography projects completed 2015 Fiscal Year 2013 2014 598 504 470 3,623 3,170 2,514 95% 95% 94% 136 633,643 1,855,914 135 76 114 491,540 1,850,471 275 59 112 804,542 2,185,489 254 Police # of total arrests # of moving violations citations 2,846 5,919 2,612 10,586 2,532 10,259 Fire # of emergency responses # of fires extinguished # of inspections 6,972 205 1,539 8,298 242 752 5,604 243 969 6,254 1,009 196,863 6,403 1,091 191,189 6,298 1,238 184,638 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 budgeted operating cost as a % of City budgeted payroll Parks and Recreation # attending Park & Recreation facilities and Libraries annually # of square feet of medians and rights of way maintained * Page 196 <1 2,868 <1 3,580 <1 3,529 1 0.96 1 1 1 1 144 5.05% 180 4.85% 178 5.01% 23,151,438 74,527 23,151,438 69,596 23,151,438 Table 23 2011 2012 2010 Fiscal Year 2008 2009 2007 2006 484 550 504 613 648 576 180 3,827 3,380 3,395 2,494 2,469 3,653 2,692 94% 90% 90% 94% 94% 94% 91% 49 136 771,938 2,203,995 262 150 144 703,174 2,104,553 230 235 176 715,285 2,208,180 217 161 186 738,949 2,346,423 200 182 136 1,509,717 7,203,478 200 129 116 1,322,259 4,865,081 175 92 42 840,757 5,318,311 140 2,402 11,468 2,254 12,581 4,731 11,810 2,829 13,313 2,614 11,452 2,814 12,422 2,603 12,175 7,195 271 212 6,597 235 3,229 5,570 226 4,262 5,328 270 3,953 3,431 143 3,427 3,236 154 2,403 1,960 150 759 6,132 1,229 178,466 6,413 1,344 170,657 8,024 1,147 168,647 10,184 918 163,444 9,949 1,043 155,805 9,305 1,002 147,241 9,014 1,067 125,382 <1 3,576 <3 3,269 <3 4,232 <5 3,401 <5 5,874 <5 1,340 <5 7,859 1 0.7 1 1 1 1 1 1 1 1 1 1 1 1 118 4.86% 125 4.11% 247 4.18% 158 4.11% 179 4.36% 164 5.50% 63,256 23,151,438 54,428 22,696,736 52,241 22,175,027 51,844 22,118,000 49,111 15,320,000 50,093 15,320,000 174 5.26% 46,330 15,320,000 continued Page 197 City of Goodyear Operating Indicators by Function Last Ten 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 2015 Fiscal Year 2013 2014 3.85% 25.71% 8.76% -4.12% 11.29% 1.41% 25,320 24,346 23,387 536 550 546 Water Service # of residential customers # of multifamily customers # of commercial customers Water Service Connections Drinking Water Supplied (million gallons per day) Reclaimed Water Supplied (million gallons per day) 15,404 36 1,055 17,533 12.70 0.63 14,959 35 1,025 17,533 11.70 0.32 14,430 36 999 17,533 9.60 0.39 Wastewater # of residential customers # of multifamily customers # of commercial customers Sewer Service Connections Sewage Treated (millions gallons per day) 15,335 69 373 17,139 3.81 14,877 36 370 16,918 4.20 14,231 38 382 16,918 4.15 Other Public Works Street resurfacing (miles) Potholes repaired 83.23 1,253 19.20 1,166 30.00 296 Citizen & Neighborhood Resources # of new Code Enforcement cases processed per year 2,863 3,018 2,841 Source: City Financial Records and Reports Page 198 Table 23 2011 2012 2010 2009 Fiscal Year 2008 2007 2006 10.45% 14.15% 4.42% -7.31% -10.40% -3.90% -12.30% -15.00% -10.25% 6.00% 20.71% 6.98% 70.19% 22.81% 22,363 21,489 20,928 20,149 19,811 18,664 17,228 503 729 848 0 634 510 531 13,755 36 976 16,809 11.60 0.32 13,319 36 963 14,588 11.40 0.37 13,051 36 742 14,488 11.10 0.23 12,394 36 781 13,975 11.00 0.45 12,214 36 709 13,500 10.80 0.27 11,811 9 571 13,051 6.86 0.09 10,699 9 480 11,597 6.86 0.09 13,599 36 364 16,856 3.82 13,298 36 363 16,743 3.73 12,962 36 372 16,144 3.73 12,322 36 370 16,144 3.70 9,445 38 307 13,500 3.24 7,865 36 234 11,398 2.48 6,481 7 191 5,037 2.48 24.00 264 12.50 260 372 4.00 681 783 34.20 1,096 33.00 977 2,069 2,016 2,255 2,155 2,698 2,755 2,092 Page 199 Table 24 City of Goodyear Capital Asset Statistics by Function Last Ten 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) Source: City Financial Records and Reports Page 200 2015 2014 2013 2012 Fiscal Year 2011 2010 2009 2008 2007 2006 4 133 6 3 119 6 3 126 6 3 125 6 3 130 6 3 124 6 3 130 6 3 125 6 3 146 4 1 107 4 934 10,622 86 934 8,832 86 934 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 18 206 1 6 1 17 204 1 6 1 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 1 406 2,951 16 308 2,808 16 308 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 12 242 55 5.6 239 63 5.6 229 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