Comprehensive Annual Financial Report FOR THE FISCAL YEAR ENDED JUNE 30, 2016 City of Goodyear Finance Department CITY OF GOODYEAR COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 Table of Contents I. INTRODUCTORY SECTION Page Letter of Transmittal GFOA Certificate of Achievement City of Goodyear Officials Organizational Chart v x xi xii II. FINANCIAL SECTION Independent Auditor’s Report 1 A. Management’s Discussion & Analysis 3 B. Basic Financial Statements 19 Government-wide Financial Statements Statement of Net Position Statement of Activities 19 20 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 24 27 28 31 Proprietary Fund Financial Statements Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows 34 36 38 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position i 41 42 Notes to the Financial Statements Page 1. Summary of Significant Accounting Policies 2. Cash and Investments 3. Receivables 4. Capital Assets 5. Loans Payable 6. General Obligation Bonds Payable 7. Revenue Bonds Payable 8. Community Facilities Districts Bonds Payable 9. Changes in Long-term Liabilities 10. Interfund Receivables, Payables, and Transfers 11. Contingent Liabilities 12. Risk Management 13. Retirement Plans 14. Deficit Fund Balances 15. Fund Balance Classifications 16. Commitments 17. Subsequent Events 45 54 57 58 60 61 63 65 68 69 70 70 71 85 86 86 87 C. Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget to Actual General Fund Schedule of the Proportionate Share of the Net Pension Liability-Arizona State Retirement System Schedule of Contributions-All Pension Plans Schedule of Funding Progress-Public Safety Personnel Retirement System Schedule of Changes in the Net Pension Liability and Related RatiosPublic Safety Personnel Retirement System-Police Schedule of Changes in the Net Pension Liability and Related RatiosPublic Safety Personnel Retirement System-Fire Notes to Required Supplementary Information 89 90 91 92 93 94 95 D. Other Supplementary Information Non-Major Governmental Funds – Financial Statements Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 98 100 Fiduciary Funds – Financial Statements Combining Statement of Assets and Liabilities – Agency Funds Combining Statement of Changes in Assets and Liabilities-Agency Funds ii 104 106 Budgetary Comparison Schedules – Other Major Governmental Funds Page McDowell Road Commercial Corridor Improvement District-Debt Service Community Facilities Districts – Debt Service Non-Utility Development Impact Fees 107 108 109 Budgetary Comparison Schedules – Non-Major Governmental Funds Highway User Revenue Fund LTAF I Park and Ride Marquee Court Enhancement JCEF Fill The Gap Officer Safety Equipment Community Facilities Districts - General Grants Debt Service Capital Improvement Projects Community Facilities Districts – Capital Projects 111 112 113 114 115 116 117 118 119 120 121 122 Budgetary Comparison Schedules – Enterprise Funds Water & Wastewater Enterprise Fund Sanitation Enterprise Fund Stadium Enterprise Fund 123 124 125 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 Collections 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 & Wastewater Service Charges iii 127 128 130 Table Page 1 2 3 4 5 6 7 8 9 10 11 12 13 132 134 141 142 144 146 148 152 157 158 160 161 163 14 164 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 iv Table 15 16 17 18 19 20 21 22 23 24 Page 166 168 169 170 172 173 174 175 176 180 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 INTRODUCTORY SECTION INTRODUCTORY SECTION The Introductory Section includes the City’s Transmittal Letter, the Certificate of Achievement for Excellence in Financial Reporting, List of Principal Officials, and the City’s Organizational Chart. City of Goodyear Finance Department December 1, 2016 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, 2016. 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 made available 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, 2016. 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 3-17 and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. CITY OF GOODYEAR PROFILE The City of Goodyear, incorporated in 1946 and chartered in 1988, started as a small town 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 190 N. Litchfield Road, Goodyear, AZ 85338 goodyearaz.gov atmosphere, convenient access to the central valley, and outstanding school districts. The population as of the 2015 census was 75,557. 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 City 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 2016 a staff of 531 full-time employees working within 14 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 17 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 $661,717 in fiscal year 2016 alone. In addition, Goodyear continues to attract major employers with its availability of land, access to the central valley, and available commercial space. FINANCIAL CONTROLS Internal Controls The management of the City of Goodyear is responsible for establishing and maintaining a system of internal controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the city’s financial statements. All internal control evaluations occur within the above framework. The city’s internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. 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 of Home Rule 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 vi 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 major program area 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 major program areas in the General Fund or a transfer between funds must be approved by the City Council. In addition to maintaining budgetary control via a formal appropriation, the city maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal year-end and are reencumbered as needed in the next fiscal year. LOCAL ECONOMIC CONDITION AND OUTLOOK During fiscal year 2016 there were 1,014 new single-family resident permits issued which represents an increase of 120 permits from the prior fiscal year. Fiscal year 2016 was the first year since before the recession that single-family resident permits were over 1,000. Goodyear’s sales tax revenues remain strong and continue to increase year over year. The City continues to budget conservatively and monitors the changes taking place in the local, regional, and national economies in order to be ready to adapt to any changes and to position ourselves for future growth. Sales Tax Goodyear, like all Arizona cities, places significant reliance on city sales tax revenues. City sales tax revenues for fiscal year 2016 increased by 8.8% over fiscal year 2015 levels. 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 19% of the general fund revenue for fiscal year 2016. Property Tax In fiscal year 2016, the city’s combined (primary and secondary) property tax rate remained $1.87 per $100 of assessed valuation. Although the tax rate remained the same, assessed values increased resulting in a property tax levy increase of $607,383. The stabilization in the tax rate ensured the city’s ability to service currently outstanding debt and maintain basic infrastructure. For the fiscal year 2017 budget, the Mayor and Council have adopted a total combined property tax rate of $1.86 per $100 of assessed valuation, which is a slight decrease from fiscal year 2016. In accordance with its budget policies, the city will sell no new general obligation bonds until a combined property tax rate of $1.74 per $100 of assessed valuation can be achieved. vii 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 reaffirmed 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: 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 plans, master plans, and operational plans) which guide department priorities and individual employee performance evaluation goals. For each of these four focus priorities, long-range goals have been identified and assigned to various departments for follow-up. These priorities are also a key fundamental factor in the development of the city’s annual budget. MAJOR INITIATIVES Goodyear was fortunate during fiscal year 2016 to be named one of the top ten cities in which to live by 24/7 Wall Street. This ranking was based on Goodyear’s high average household income, low poverty rate, low incidence of crime and positive employment growth. The city’s management and the Economic Development Department leverages these opportunities to market the city viii toward attracting new businesses, retaining and facilitating expansions for current Goodyear businesses, and assisting in the formation of new businesses. During fiscal year 2016, more than one million square feet of commercial buildings were under construction, including the expansion of Sub-Zero and the construction of a new fixed-base operator facility, offices and new hangar space at the Phoenix Goodyear Airport. Goodyear’s Oregano’s Pizza Bistro continued to be its busiest location in Arizona, and has already undergone an expansion since its 2015 opening. More than 150 entrepreneurs were assisted through Goodyear’s InnovationHub during fiscal year 2016. The InnovationHub is designed to create a place for individuals who have an idea for a new business to receive mentoring. Small business activity was also in high-gear during fiscal year 2016, when more than 100 small business owners were assisted through various stages of the city’s development processes. At the end of the fiscal year, nearly 100 active business attraction prospects were evaluating Goodyear for expansion or relocation. 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, 2015. The City has received this prestigious award each year since 2007. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. That report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for one year only. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting this report to the GFOA to determine its eligibility for a certificate for fiscal year ended June 30, 2016. In addition, the city also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning 2015. The City has received the highest form of recognition in governmental budgeting each year since 1994. Acknowledgement The preparation of this Comprehensive Annual Financial Report could not have been accomplished without the dedicated commitment of every member of the Finance Department. 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 continued support in planning and conducting the financial affairs of the city in a responsible and progressive manner. Sincerely, Doug Sandstrom Finance Director ix Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Text38: City of Goodyear Arizona For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015 Executive Director/CEO x 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 Dan Cotterman Deputy City Manager Wynette Reed Deputy City Manager Maureen Scott City Clerk Lyman Locket Human Resources Director Paul Luizzi Fire Chief Doug Sandstrom Finance Director Gerald Geier Police Chief Christopher Baker Development Services Director Dan Cotterman Information Technology Director (interim) Rebecca Zook Engineering Director Nathan Torres Park & Recreation Director xi Organizational Chart Departments (14) Citizens Mayor & Council Municipal Judge Michael Simonson City Manager Brian Dalke Legal Services Courts Deputy City Manager Wynette Reed City Attorney Roric Massey Assistant to the City Manager Pam Weir Deputy City Manager Dan Cotterman Development Services Christopher Baker City Manager’s Office City Clerk Maureen Scott Engineering Rebecca Zook Economic Development Michelle Lawrie Human Resources Lyman Locket Fire Paul Luizzi Finance Doug Sandstrom Information & Technology Services (Vacant) Parks & Recreation Nathan Torres Governmental Relations Division Rob Bohr Public Works Javier Setovich Courts Crystal McCreery (Acting) Police Jerry Geier Communications Division Sherine Zaya xii City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 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, Required Supplementary Information, and Other Supplementary Information. FINANCIAL SECTION 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, 2016, 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, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Page 1 Change in Accounting Principle As described in Note 1, the City implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application, for the year ended June 30, 2016, 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, budgetary comparison information 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 December 1, 2016, 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. Phoenix, Arizona December 1, 2016 Page 2 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Management’s Discussion and Analysis Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS For The Year Ended June 30, 2016 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, 2016. 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 v-ix of this report and is designed to be read in conjunction with the transmittal letter as well as the financial statements beginning on page 19 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 $679.3 million (net position) at the close of fiscal year 2016. Of this amount, $26.5 million represents unrestricted net position, which may be used to meet the City’s ongoing obligations to citizens and creditors.  The $18.1 million increase in net position of the City is the result of a $10.2 million increase in net position of governmental activities and $8.0 million increase in net position of business-type activities. The increase in net position of governmental activities and business-type activities is $9.8 million less than that seen in fiscal year 2015 due to an increase in the City’s pension obligation of $5.9 million and the expenditure of $4.4 million in special assessment bond proceeds.  As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $93.6 million, an increase of $3.7 million (4.1%) in comparison with the prior year fund balance of $89.9 million. Approximately 56.2% of this amount ($52.6 million) is available for spending at the government’s discretion (unassigned fund balance).  At June 30, 2016, total unassigned fund balance for the general fund is $52.6 million, an increase of $2.8 million (5.7%) from the prior fiscal year. This increase is primarily due to actual revenues exceeding estimated revenues and capital projects budgeted, but not completed as of fiscal year end. The unassigned fund balance is approximately 68.5% 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) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are shown in two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. The Statement of Net Position presents information on all of the City’s assets, deferred outflow of resources, liabilities, and deferred inflow of resources, with the net of all categories being reported as Page 3 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 that 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 the operations of 10 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 19-21 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City 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 comparison between governmental funds and governmental activities. These reconciliations are on pages 27 and 31 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, McDowell Road Commercial Corridor Improvement District – Debt Service, Community Facilities Districts – Debt Service, and Non-Utility Development Impact Fees, all of which are considered to be major funds. Data from the other five Page 4 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 98 of this report. The governmental fund financial statements can be found on pages 24-31 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 34-39 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 41-42 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 43-88 of this report. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budget to actual comparison and progress in funding its obligation to provide pension benefits to its employees. The required supplementary information can be found on pages 89-95 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 98-101 and 111-122 of this report. Budget to actual comparison schedules for the enterprise funds are presented in the other supplementary information section on pages 123-125 of this report. Additional schedules related to capital assets are also presented in this section on pages 127-130 of this report. Page 5 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, 2016 with comparative information for the previous year. Net Position The following table was derived from the current and prior year Statement of Net Position: Statement of Net Position as of June 30 Governmental Business-type Total Activities Activities Primary Government 2016 Current and other assets $ 2015 170,613,815 $ 50,132,038 $ 2016 39,923,777 $ Percent 2015 220,865,012 $ Change 210,537,592 4.91% 533,089,517 533,818,875 396,494,737 397,169,523 929,584,254 930,988,398 -0.15% Total assets 703,822,491 704,432,690 446,626,775 437,093,300 1,150,449,266 1,141,525,990 0.78% 11,868,720 9,239,015 1,591,183 1,439,127 13,459,903 10,678,142 26.05% -6.91% Current and other liabilities $ 2015 Capital assets Deferred outflow s of resources 170,732,974 2016 17,791,141 18,909,748 9,558,392 10,470,933 27,349,533 29,380,681 Long-term liabilities 221,432,440 224,774,737 231,882,497 228,777,200 453,314,937 453,551,937 -0.05% Total liabilities 239,223,581 243,684,485 241,440,889 239,248,133 480,664,470 482,932,618 -0.47% 3,303,597 6,997,526 624,697 1,105,228 3,928,294 8,102,754 -51.52% 361,739,970 365,019,949 180,640,162 176,380,867 542,380,132 541,400,816 0.18% Deferred inflow s of resources Net position: Net investment in capital assets Restricted for: 4,009,183 3,841,444 - - 4,009,183 3,841,444 4.37% Court Charter mandates 178,351 240,631 - - 178,351 240,631 -25.88% Law enforcement 427,243 309,112 - - 427,243 309,112 38.22% 721 174,025 - - 721 174,025 -99.59% Highw ay user funds Grants Development impact fees Community facilities operations Debt service Transit Unrestricted Total net position 6,988 - - - 6,988 - 100.00% 12,882,857 9,833,567 13,545,609 5,139,404 26,428,466 14,972,971 76.51% 1,442,536 1,111,964 - - 1,442,536 1,111,964 29.73% 72,480,741 75,991,785 4,586,110 2,468,498 77,066,851 78,460,283 -1.78% 847,446 745,210 - - 847,446 745,210 13.72% 19,912,304 33.23% 661,168,760 2.74% 19,147,997 $ 473,164,033 5,722,007 $ 462,989,694 7,380,491 $ 206,152,372 14,190,297 $ 198,179,066 26,528,488 $ 679,316,405 $ The City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $679.3 million at the close of fiscal year 2016 and by $661.2 million in 2015, providing an overall increase in the City’s net position of $18.1 million. Current and other assets increased by $10.3 million. This increase is primarily due to an increase in cash and cash equivalents as a result of expenses being lower than budgeted. Long-term liabilities for business-type activities increased by $3.3 million as a result of the issuance of water revenue bonds in the amount of $7.5 million. The largest portion of the City’s net position totaling $542.4 million (79.8% of total net position) reflects its net investment in capital assets (e.g., land and improvements, buildings, furniture, 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. An additional portion of the City’s net position totaling $110.4 million (16.3% of total net position) represents resources that are subject to external restrictions on how they may be used. The remaining Page 6 balance of $26.5 million (3.91% of total net position) is unrestricted and may be used to meet the City’s ongoing obligations to its citizens and creditors. At the end of fiscal year 2016, the City reported positive balances in all three 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. Net Position $541.4 Net investment in capital assets $542.4 $99.8 Restricted FY2015 $110.4 FY2016 $19.9 Unrestricted $26.5 $0 $100 $200 $300 $400 $500 $600 In Millions Governmental Activities During the current fiscal year, the net position for governmental activities increased $10.2 million from the prior fiscal year for an ending balance of $473.2 million. The City’s sales tax revenue increased $4.0 million due to an increase in construction and retail activity. Capital grants and contributions also increased by $3.9 million as a result of infrastructure conveyed to the City. Business-type Activities The City business-type activities reported an increase of $8.0 million in net position bringing the total net position to $206.2 million. Charges for services revenue increased by $3.3 million due to an increase in water and wastewater rates. Page 7 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 2016 2015 2016 2015 2016 Percent 2015 Change REVENUES: Program revenues: Charges for services $ 11,541,151 $ 10,161,786 $ 37,083,883 $ 33,810,471 $ 48,625,034 $ 43,972,257 10.58% Operating grants and contributions 9,518,206 10,777,134 110,837 - 9,629,043 10,777,134 -10.65% 12,134,476 8,252,449 11,692,490 14,454,883 23,826,966 22,707,332 4.93% Capital grants and contributions General revenues: Sales taxes 49,309,600 45,333,649 - - 49,309,600 45,333,649 8.77% Property taxes 19,114,087 18,171,606 - - 19,114,087 18,171,606 5.19% Franchise taxes State shared revenue Investment income Special Assessments Miscellaneous Total revenues 2,832,759 2,718,204 - - 2,832,759 2,718,204 4.21% 16,848,837 16,361,588 - - 16,848,837 16,361,588 2.98% 710,040 361,146 237,615 151,405 947,655 512,551 84.89% - 4,980,000 - - - 4,980,000 -100.00% 393,977 975,258 22,955 103,482 416,932 1,078,740 -61.35% 122,403,133 118,092,820 49,147,780 48,520,241 171,550,913 166,613,061 2.96% EXPENSES: Program activities: Governmental activities: General government 19,824,313 18,168,821 - - 19,824,313 18,168,821 9.11% Public safety 34,823,588 33,289,918 - - 34,823,588 33,289,918 4.61% Highw ays and streets 20,753,487 17,941,162 - - 20,753,487 17,941,162 15.68% 7,920,958 3,361,822 - - 7,920,958 3,361,822 135.62% Public w orks Culture and recreation 6,880,654 6,422,764 - - 6,880,654 6,422,764 7.13% Development Services 7,981,904 7,005,308 - - 7,981,904 7,005,308 13.94% Interest on long-term debt 8,479,284 8,763,353 - - 8,479,284 8,763,353 -3.24% Business activities: Water and sew er - - 27,647,487 25,489,522 27,647,487 25,489,522 8.47% Sanitation - - 6,444,459 5,802,163 6,444,459 5,802,163 11.07% Stadium - - 12,647,134 12,407,494 12,647,134 12,407,494 1.93% Total expenses 106,664,188 94,953,148 46,739,080 43,699,179 153,403,268 138,652,327 10.64% 15,738,945 23,139,672 -35.10% Increase in net position before transfers Transfers (5,564,606) Changes in net position 10,174,339 462,989,694 Net position, beginning of year Restatement* - Net position, beginning of year-restated Net position, end of year 473,164,033 4,821,062 18,147,645 27,960,734 582,797 - - 0.00% 22,556,875 7,973,306 5,403,859 18,147,645 27,960,734 -35.10% 477,788,373 198,179,066 201,805,827 661,168,760 679,594,200 (37,355,554) 462,989,694 $ 2,408,700 5,564,606 (582,797) $ - 440,432,819 198,179,066 462,989,694 $ 206,152,372 (9,030,620) $ - (46,386,174) -2.71% -100.00% 192,775,207 661,168,760 633,208,026 4.42% 198,179,066 $ 679,316,405 $ 661,168,760 2.74% *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 8 The pie chart below is a depiction of government-wide revenue sources. Governmental activities accounts for 71.4% of total revenues, while business activities account for 28.6% of total revenues. Sales tax revenue is the largest source of City revenue at 28.7%, an 8.8% increase from the previous fiscal year due to an increase in construction and retail activity within the City. The second largest source of City revenue are charges for services at 28.3% of total revenue, which increased 10.6% over the previous fiscal year due to an increase in water and wastewater rates. Government-Wide Revenue Sources Fiscal Year 2016 State shared revenue 9.8% Other 0.8% Charges for services 28.3% Operating grants and contributions 5.6% Property taxes 11.1% Franchise taxes 1.7% Capital grants and contributions 13.9% Page 9 Sales taxes 28.7% The reported expenses for fiscal year 2016 increased by $14.8 million (10.6%) over the prior year. As seen in the following pie chart for government-wide functional expenses, governmental activities account for 69.5% of total functional expenses, while business-type activities account for 30.5% of total functional expenses. The line items that experienced notable changes were: • • • Public works expenses account for 5.2% of the total government-wide expenses, an increase of $4.6 million (135.6%) from the prior year. This increase is due to a $4.4 million developer reimbursement for infrastructure conveyed to the City in the Montecito II Special Assessment District. Highways and streets expenses account for 13.5% of the total government-wide expenses, an increase of $2.8 million (15.7%) from the prior year. The increase is primarily due to an increase in roadway preservation and maintenance expenses during the year. Sanitation expenses account for 4.2% of the total government-wide expenses, an increase of $642,296 (11.1%) from the prior year. This increase is attributed to an increase in the sanitation department’s share of the total pension obligation resulting in an increase in pension expense. Government-Wide Functional Expenses Fiscal Year 2016 General government 12.9% Business activities 30.5% Interest on longterm debt 5.5% Development services 5.2% Public safety 22.7% Highways and streets 13.5% Culture and recreation 4.5% Public works 5.2% Page 10 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 24-31) 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 98-101. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $93.6 million, an increase of 4.1% from the previous year. The increase in fund balance is due to revenues exceeding expenditures. Revenues increased by $6.7 million and expenditures increased by $9.7 million. Approximately 56.2% of the fund balance ($52.6 million) constitutes unassigned fund balance, which is available for spending at the City’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 ($2.2 million), 2) restricted for particular purposes ($32.8 million) or 3) assigned for particular purposes ($6.0 million). Revenues for governmental functions overall totaled $116.0 million in the fiscal year ended June 30, 2016, which represents an increase of $6.7 million (4.1%) from the prior fiscal year. The most significant reason for this change is due to an increase in tax revenue of $5.1 million. The increase in tax revenue was primarily due to increased sales tax collection related to construction and retail activities. Charges for services increased $1.2 million (26.6%) from the prior fiscal year primarily due to an increase in development fees collected. The expenditures for governmental functions totaled $107.2 million, an increase of $9.7 million (10.0%) from the prior year. The majority of this increase is attributed to capital outlay. Capital outlay accounted for $16.0 million in expenditures for the current fiscal year, an increase of $4.7 million from the prior fiscal year. Major additions to capital outlay include the following:    The City spent $3.4 million constructing a Patrol Operations Building to maximize the efficiency of police operations, increase collaboration between Police Department divisions and provide necessary speciality facilities. This building will include suspect and witness interview rooms, evidence and property processing, a forensics lab, offices for patrol officers and specialized functions, and a multi-lane indoor firing range. During fiscal year 2016, $513,034 was spent to make improvements to Goodyear Boulevard. A traffic signal was constructed at the intersection of Estrella Parkway and West Goodyear Boulevard. Also the need for a deceleration lane on Estrella Parkway north of West Goodyear Bouldevard was identified. These improvements will include full pavement construction and widening to accommodate full build out conditions. To address citizen concerns, the City spent $463,619 to construct a traffic signal at Yuma Road and Canyon Trails Boulevard. Page 11 General Fund Components of Fund Balance June 30, 2015 and 2016 $49.8 $52.6 Unassigned Assigned $3.7 $6.0 Restricted $5.1 $5.5 FY2015 FY2016 $1.6 $1.6 Nonspendable $0 $10 $20 $30 $40 $50 $60 In Millions 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 $52.6 million, while total fund balance increased to $65.8 million. As a measure of the general funds solvency, it may be useful to compare both unassigned fund balance and total fund balance to general fund expenditures. The unassigned fund balance represents approximately 68.5% of general fund expenditures, while total fund balance represents approximately 85.6% of general fund expenditures. Page 12 Other Governmental Funds Components of Fund Balance June 30, 2015 and 2016 $29.3 Restricted $27.3 FY2015 FY2016 $0.4 Nonspendable $0.6 $0 $10 $20 In Millions $30 $40 The fund balance of the City’s general fund increased by $5.6 million in the current fiscal year due primarily to an increase of $3.7 million in tax revenues. This was primarily driven by growth in construction sales tax. The fund balance of the McDowell road commercial corridor ID debt service fund decreased $7,231 from the prior fiscal year. The fund balance of the community facilities debt service fund decreased by $826,983 from the prior fiscal year as a result of the Community Facilities Utility District utilizing cash reserves to keep tax rates stable. The non-utility development impact fee fund had an increase in fund balance during the current fiscal year of $3.0 million to bring the year end fund balance to $12.9 million. The increase in fund balance is predominantly due to the aforementioned increase in construction sales tax. Currently 1% of construction sales tax is recorded in the non-utility development impact fee fund to comply with requirements of state law 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 34-39. The proprietary funds net position totals $206.2 million, resulting from an increase of $8.0 million from the previous fiscal year. The water and wastewater fund had an increase in net position of $10.2 million, which is $2.3 million less than that seen in fiscal year 2015 due to a reduction in capital contributions. Page 13 The sanitation fund had a decrease in net position of $205,971 due to an increase pension expense. The stadium fund had a net position decrease of $2.0 million primarily due to depreciation on stadium assets. 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 schedule can be found in the Required Supplementary Information section on page 89. The other budgetary comparison schedules can be found in the Other Supplementary Information section on pages 107-125. There were no significant changes to the original adopted budget. During the fiscal year there were two General Fund expenditure categories that came in significantly below estimates as shown below: Support Services Capital Outlay Budgeted Expenditures $13,044,969 25,825,355 Actual Expenditures $10,482,892 7,809,095 Difference $2,562,077 18,016,260 General Fund actual inflows (revenues and other financing sources) of $90.5 million, was more than budgeted inflows of $88.2 million, while expenditures and other financing uses of $85.0 million was only 64.9% of final budgeted outflows of $130.9 million. Page 14 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, 2016 amounts to $929.6 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 decrease of $1.4 million from the prior year. Capital Assets at June 30 (Net of depreciation) Governmental Activities 2016 2015 Business-type Activities 2016 2015 Total Primary Government Percent 2016 Change 2015 Land and improvements $ 24,743,807 $ 24,867,068 $ 15,435,875 $ 15,435,875 $ 40,179,682 $ 40,302,943 Artwork 204,750 204,750 146,978 146,978 351,728 351,728 Construction in progress 13,493,098 10,026,474 4,969,700 2,802,773 18,462,798 12,829,247 Right of way 90,518,661 90,397,883 90,518,661 90,397,883 Water rights 17,911,634 17,856,614 17,911,634 17,856,614 Streetscape 9,061,008 9,061,008 9,061,008 9,061,008 Infrastructure 252,888,198 252,174,241 179,278,924 178,574,586 432,167,122 430,748,827 Building and improvements 125,818,081 131,044,931 173,045,381 177,666,157 298,863,462 308,711,088 16,042,521 5,706,245 4,686,541 22,068,158 20,729,062 Vehicles, furniture and equipment 16,361,913 Total $ 533,089,516 $ 533,818,876 $ 396,494,737 $ 397,169,524 $ 929,584,253 $ 930,988,400 -0.3% 0.0% 43.9% 0.1% 0.3% 0.0% 0.3% -3.2% 6.5% -0.2% The governmental capital assets increased in fiscal 2016 for construction in progress and infrastructure. The increase in construction in progress of $3.5 million is largely due to the construction of the police operations facility. Overall there was a decrease in business-type capital assets of $674,786. Additional information on the City’s capital assets can be found in Note 4 on pages 58-59 and in the schedules on pages 127-130 of this report. Page 15 Debt Administration At the end of the current fiscal year, the City had total long-term debt outstanding of $387.2 million. Of this amount $90.3 million is general obligation bonds backed by the full faith and credit of the City, $102.3 million is Community Facilities Districts bonds which are paid by the property owners within those districts, $190.8 million of revenue bonds which are payable from user fees, assessments, and general fund revenues and $3.9 million loan payable to Water Infrastructure Finance Authority of Arizona (WIFA) which is payable from user fees. The following schedule shows the outstanding debt obligation as of June 30, 2016 and 2015: 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 2016 2015 2016 2015 2016 2015 $ 18,105,233 $ 21,035,322 $ 72,164,767 $ 76,754,678 $ 90,270,000 $ 97,790,000 -7.7% 102,340,000 46,883,994 $ 167,329,227 106,856,000 49,555,088 $ 177,446,410 3,854,322 143,885,000 $ 219,904,089 9,096,237 132,840,000 $ 218,690,915 102,340,000 3,854,322 190,768,994 $ 387,233,316 106,856,000 9,096,237 182,395,088 $ 396,137,325 -4.2% -57.6% 4.6% -2.2% Change 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 $40.3 million. In addition, the State constitution limit 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 $134.2 million. The City has $90.3 million of outstanding general obligation debt of which $90,065,000 is subject to the 20 percent limit. During the year, the City maintained the following bond ratings: Bonded Debt Ratings As of June 30, 2016 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 AA AAA Additional information on the City’s long-term debt can be found in Notes 5 – 9 on pages 60-68 of this report. Page 16 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The unemployment rate for Goodyear for June 2016 was 5.5%, which is lower than the state rate of 5.8% but higher than the national rate of 4.9%. 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, the state of the economy will likely coincide with current unemployment rates. The City is projecting a positive outlook for revenues in fiscal year 2017 in comparison to revenues for fiscal year 2016. Sales taxes are the dominant revenue source for the City and are conservatively projected to increase from $48.1 million to $49.1 million, which is an increase of 2.0%. Property taxes are projected to increase from $7.8 million to $8.2 million, which is an increase of 5.1%. 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 $16.7 million to $20.1 million in fiscal year 2017. The City’s operational budget is projected to increase by 9.1%, from $108.9 million in fiscal year 2016 to $118.8 million in fiscal year 2017. The City’s capital improvement program expenditures are budgeted for $73.0 million which includes carryover funds of $27.5 million for projects started in the fiscal year 2016 budget to be completed in fiscal year 2017 and an additional $45.5 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 online 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, by mail at P.O. Box 5100, Goodyear, Arizona 85338 or by email at gyfinance@goodyearaz.gov. Page 17 Page 18 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Basic Financial Statements Government-wide Financial Statements – includes the Statement of Net Position and Statement of Activities that use the full accrual basis of accounting for financial reporting. 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 full 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 Basic Financial Statements 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. CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2016 Governmental Activities ASSETS Current assets: Cash and cash equivalents Investments Receivables Due from other governments Inventories Prepaids Total current assets $ 36,478,895 961,840 16,004,922 134,656,469 398,433,048 550,056,279 703,822,491 (961,840) 14,614,983 20,552,553 375,942,184 410,147,880 446,626,775 30,619,905 155,209,022 774,375,232 960,204,159 1,150,449,266 DEFERRED OUTFLOWS OF RESOURCES Loss on refunding Pension plan items Total deferred outflows of resources 1,667,857 10,200,863 11,868,720 509,676 1,081,507 1,591,183 2,177,533 11,282,370 13,459,903 LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Deposits Unearned revenue Compensated absences payable Bonds payable Total current liabilities 2,359,734 2,209,896 2,066,118 6,497,764 4,657,629 1,590,785 7,243,527 26,625,453 1,465,443 286,036 3,493,009 4,313,904 218,691 295,000 10,072,083 3,825,177 2,495,932 5,559,127 10,811,668 4,657,629 1,809,476 7,538,527 36,697,536 212,598,128 212,598,128 239,223,581 414,132 230,954,674 231,368,806 241,440,889 414,132 443,552,802 443,966,934 480,664,470 3,303,597 624,697 3,928,294 361,739,970 180,640,162 542,380,132 Noncurrent liabilities: Accrued interest payable Non-current portion of long-term obligations Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Pension plan items NET POSITION Net investment in capital assets Restricted for: Charter mandates Capital projects Community facilities Debt service Transit Other purposes Unrestricted Total net position $ 4,009,183 12,882,857 1,442,536 72,480,741 847,446 613,303 19,147,997 473,164,033 $ 15,202,488 15,518,782 5,182,316 Total 50,803,403 61,986,542 74,205,586 1,241,673 1,340,105 667,798 190,245,107 Noncurrent assets: Internal balances Restricted cash and cash equivalents Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets 35,600,915 46,467,760 69,023,270 1,241,673 764,796 667,798 153,766,212 Business-type Activities 575,309 13,545,609 4,586,110 $ 7,380,491 206,152,372 The notes to the basic financial statements are an integral part of this statement. Page 19 $ $ 4,009,183 26,428,466 1,442,536 77,066,851 847,446 613,303 26,528,488 679,316,405 CITY OF GOODYEAR, ARIZONA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 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 wastewater Sanitation Stadium Total business-type activities Total primary government Expenses $ $ Charges for Services 19,824,313 $ 34,823,588 20,753,487 7,920,958 6,880,654 7,981,904 8,479,284 106,664,188 11,541,151 27,647,487 6,444,459 12,647,134 46,739,080 153,403,268 $ 27,724,410 7,125,427 2,234,046 37,083,883 48,625,034 $ Operating Grants and Contributions 2,398,256 $ 1,713,627 386,041 7,043,227 Capital Grants and Contributions $ 356,979 4,429,349 703,182 4,028,696 9,518,206 Governmental Activities $ (17,426,057) (32,738,741) (6,652,012) (7,920,958) (6,494,613) 2,448,109 2,212,614 (4,450,588) 12,134,476 (73,470,355) 14,241 9,672,126 110,837 11,637,322 110,837 9,629,043 $ 55,168 11,692,490 23,826,966 (73,470,355) General revenues: Taxes: Sales taxes Property taxes Franchise taxes State shared revenues Investment income Miscellaneous Transfers Total general revenues and transfers 49,309,600 19,114,087 2,832,759 16,848,837 710,040 393,977 (5,564,606) 83,644,694 Changes in net position 10,174,339 Net position, beginning of year Net position, end of year The notes to the basic financial statements are an integral part of this statement. Page 20 462,989,694 $ 473,164,033 Net (Expense) Revenue and Changes in Net Position Business-type Activities $ Totals $ (17,426,057) (32,738,741) (6,652,012) (7,920,958) (6,494,613) 2,212,614 (4,450,588) (73,470,355) 11,825,082 680,968 (10,357,920) 2,148,130 2,148,130 237,615 22,955 5,564,606 5,825,176 $ 11,825,082 680,968 (10,357,920) 2,148,130 (71,322,225) 49,309,600 19,114,087 2,832,759 16,848,837 947,655 416,932 89,469,870 7,973,306 18,147,645 198,179,066 661,168,760 206,152,372 $ 679,316,405 Page 21 Page 22 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 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. McDowell Road Commercial Corridor ID Debt Service Fund This fund accounts for the debt portion of the McDowell Road Improvement Assessments. 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 properties within each district’s boundaries. Non-Utility Development Impact Fees Fund This fund accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities. Non-Major Governmental Funds Other governmental funds not listed above are non-major funds that are classified as special revenue, capital projects, and debt service funds. Page 23 CITY OF GOODYEAR, ARIZONA BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2016 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 $ 22,355,061 42,151,661 6,630,010 103,872 987,195 McDowell Road Commercial Corridor ID Debt Service $ $ 88,297 38,110,000 21,296,201 740,500 839,370 961,840 $ $ 667,798 1,675,250 256,975 77,369,532 1,341,057 2,114,018 6,274,588 $ 38,214,461 $ $ 15,747,947 37,132,445 $ 89,527 10,400 9,740,063 Deferred inflows of resources: Unavailable revenues - property taxes Unavailable revenues - special assessments Unavailable revenues - intergovernmental Unavailable revenues - other Total deferred inflows of resources 2,837,543 2,927,070 71,304 1,801,688 1,872,992 Fund balances (deficits): Nonspendable Restricted Assigned Unassigned Total fund balances 1,629,638 5,462,223 6,043,771 52,620,845 65,756,477 Total liabilities, deferred inflows of resources and fund balances 104,461 Community Facilities Districts Debt Service $ 77,369,532 $ 38,110,000 40,332 21,293,508 38,110,000 21,333,840 104,461 12,871,535 104,461 12,871,535 38,214,461 The notes to the basic financial statements are an integral part of this statement. Page 24 $ 37,132,445 Non-Utility Development Impact Fees $ 10,254,451 3,440,064 Non-Major Governmental Funds Total Governmental Funds $ $ 8,476 2,886,792 876,035 119,109 2,159 2,695 501,173 564,639 $ 13,702,991 $ 4,952,602 $ $ 749,509 $ 175,294 67,166 152,551 672,116 1,809,686 2,876,813 $ 70,625 820,134 56,133 91,858 $ 564,639 1,448,029 12,882,857 (28,737) 1,983,931 13,702,991 $ 4,952,602 2,355,387 2,181,184 6,497,764 672,116 4,657,629 16,364,080 167,769 59,403,508 35,725 1,801,688 61,408,690 35,725 12,882,857 35,600,765 46,467,760 6,837,416 114,507 989,890 59,406,201 1,241,673 839,370 961,840 564,639 667,798 1,675,250 16,004,922 171,372,031 2,194,277 32,769,105 6,043,771 52,592,108 93,599,261 $ 171,372,031 Page 25 Page 26 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2016 Total governmental fund balances $ 93,599,261 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 $ 701,408,027 (168,318,511) 533,089,516 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 167,769 59,403,508 35,725 1,801,688 61,408,690 Interest payable on long-term debt, is not due and payable in the current period and, therefore, is not reported in the funds. (2,066,118) 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 10,200,863 (3,303,597) 6,897,266 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 (173,017,403) 1,667,857 (43,453,770) (4,961,266) Net position of governmental activities (219,764,582) $ The notes to the basic financial statements are an integral part of this statement. Page 27 473,164,033 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 General Revenues: Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment income Special assessments Contributions Miscellaneous Total revenues $ $ Community Facilities Districts Debt Service $ 5,465,015 3,533,669 12,840 2,562,343 643,211 3,533,669 8,683,409 1,171,094 254,428 1,500,000 2,040,900 76,818,159 3,540,900 4,171,000 5,357,204 457,825 9,986,029 11,061,969 (7,231) (1,302,620) 703,182 439,705 87,880,128 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 17,018,252 32,529,758 2,255,101 5,434,043 7,933,367 10,222,116 Excess (deficiency) of revenues over expenditures Other financing sources (uses): Refunding bonds issued Refunding bonds premium Payment to refunded bond escrow agent Transfer in Transfer out Total other financing sources (uses): 18,535,000 2,047,350 (20,106,713) 2,800,000 (8,287,472) (5,487,472) Changes in fund balances Fund balances, beginning of year Fund balances, end of year 57,729,304 7,357,205 16,848,837 3,340,308 839,108 622,479 McDowell Road Commercial Corridor ID Debt Service $ 475,637 5,574,497 (7,231) (826,983) 60,181,980 111,692 13,698,518 65,756,477 $ 104,461 The notes to the basic financial statements are an integral part of this statement. Page 28 $ 12,871,535 Non-Utility Development Impact Fees $ 2,174,146 Non-Major Governmental Funds Total Governmental Funds $ $ 5,918,735 2,448,109 4,962,735 4,530 52,278 22,443 4,674,533 320 289,225 11,197,988 414 949,969 351,890 5,347,564 333,353 17,968,635 32,881,648 5,680,917 2,255,101 5,712,191 7,933,367 15,988,901 278,148 1,013,328 4,753,457 2,930,089 936,101 $ 71,287,200 7,357,205 21,811,572 5,792,947 839,108 710,040 6,096,012 1,346,713 728,930 115,969,727 1,625,243 15,269,070 9,772,183 8,588,633 457,825 107,239,401 3,049,290 (4,071,082) 8,730,326 739,227 (803,588) (64,361) 18,535,000 2,047,350 (20,106,713) 3,539,227 (9,091,060) (5,076,196) 3,049,290 (4,135,443) 3,654,130 9,833,567 6,119,374 89,945,131 12,882,857 $ 1,983,931 $ 93,599,261 Page 29 Page 30 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, 2016 Net changes in fund balances - total governmental funds $ 3,654,130 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 9,517,983 7,323,807 (17,195,283) (353,493) Issuance of bonds provides current financial resources to governmental funds, but the issuance increases long term liabilities in the Statement of Net Position. (20,582,350) 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 (30,754) (2,712,570) (6,300) 28,139 (2,721,485) 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. 305,121 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 9,772,183 20,106,713 29,878,896 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 4,695,554 (4,078,621) 616,933 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 (375,865) (509,601) (885,466) 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 262,053 $ The notes to the basic financial statements are an integral part of this statement. Page 31 10,174,339 Page 32 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 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 33 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2016 Enterprise Funds Water & Wastewater ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Accounts receivable Inventories Total current assets $ Noncurrent assets: Restricted cash and cash equivalents Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets DEFERRED OUTFLOWS OF RESOURCES 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 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 $ 1,323,680 223,750 551 754,849 Stadium $ 464,676 692,085 1,705 168,812 2,302,830 1,327,278 11,911,127 9,177,497 272,675,477 293,764,101 326,612,888 836,690 836,690 3,139,520 2,703,856 11,375,056 102,430,017 116,508,929 117,836,207 189,403 659,131 848,534 105,405 105,405 320,273 316,971 637,244 983,864 165,476 789,153 4,269,761 439,946 30,179 41,633 90,381 2,703,856 44,143 135,431 295,000 6,638,685 21,648 61,612 491,773 2,941,625 117,351,124 117,765,256 124,403,941 794,167 794,167 1,285,940 961,840 112,809,383 113,771,223 116,712,848 374,818 62,470 187,409 176,185,432 836,690 3,618,040 414,132 DEFERRED INFLOWS OF RESOURCES Pension plan items NET POSITION Net investment in capital assets Restricted for: Capital projects Debt service Unrestricted Total net position 13,414,132 14,602,947 35,986 4,220,413 575,309 32,848,787 Sanitation $ 12,623,721 4,586,110 9,287,400 202,682,663 921,888 $ 1,059,825 1,896,515 The notes to the basic financial statements are an integral part of this statement. Page 34 $ (2,966,734) 1,573,194 Enterprise Funds Totals $ 15,202,488 15,518,782 38,242 5,144,074 575,309 36,478,895 Governmental Activities: Internal Service Funds $ 150 6 200,157 200,313 14,614,983 20,552,553 375,942,184 411,109,720 447,588,615 200,313 509,676 1,081,507 1,591,183 1,465,443 286,036 3,493,009 4,313,904 4,347 28,712 167,254 218,691 295,000 10,072,083 200,313 414,132 961,840 230,954,674 232,330,646 242,402,729 200,313 624,697 180,640,162 $ 13,545,609 4,586,110 7,380,491 206,152,372 $ Page 35 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2016 Enterprise Funds Water & Wastewater 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): Intergovernmental Investment income Gain on sale of assets Interest expense Total nonoperating revenues (expenses) 27,724,410 15,130 27,739,540 Sanitation $ 7,125,427 6,564 7,131,991 Stadium $ 2,234,046 1,261 2,235,307 4,229,457 10,975,637 7,409,039 22,614,133 1,037,325 5,422,171 87,298 6,546,794 2,528,854 1,778,293 2,750,184 7,057,331 5,125,407 585,197 (4,822,024) 6,497 102,335 108,832 5,776 8,865 (5,598,668) (5,584,027) 694,029 (10,406,051) 110,837 225,342 6,147 (5,039,501) (4,697,175) Income (loss) before capital contributions and transfers 428,232 Capital contributions Transfer in Transfer out 11,650,095 (1,900,000) (900,000) Changes in net position 10,178,327 (205,971) (1,999,050) 192,504,336 2,102,486 3,572,244 Total net position, beginning of year Total net position, end of year $ 202,682,663 55,168 8,351,833 $ 1,896,515 The notes to the basic financial statements are an integral part of this statement. Page 36 $ 1,573,194 Enterprise Funds Totals $ 37,083,883 22,955 37,106,838 Governmental Activities: Internal Service Funds $ 7,795,636 18,176,101 10,246,521 36,218,258 1,894,412 4,267 1,898,679 44,459 1,854,220 1,898,679 888,580 110,837 237,615 117,347 (10,638,169) (10,172,370) (9,283,790) 11,705,263 8,351,833 (2,800,000) 7,973,306 198,179,066 $ 206,152,372 $ Page 37 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2016 Water & Wastewater 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 $ 26,865,645 (11,516,068) (4,082,346) 11,267,231 Cash flows from noncapital financing activities: Transfers in Transfers out Due to/from other funds Net cash provided (used) for noncapital financing activities (1,900,000) 3,739,071 1,839,071 Cash flows from capital and related financing activities: Principal paid on long-term debt Interest and fiscal fees Bond proceeds Payment to WIFA for loan refunding Build America Bond interest subsidy Change in capital assets Development impact fees received Net cash provided (used) for capital and related financing activities (4,963,354) (3,988,785) 11,540,000 (5,072,682) 110,837 (3,359,034) 6,288,959 555,941 Sanitation $ 7,177,638 (5,402,546) (636,093) 1,138,999 Stadium $ 2,098,568 (2,286,319) (2,473,213) (2,660,964) 8,351,833 Cash flows from investing activities: Proceeds from sale of investments Investment income received Net cash provided (used) for investing activities (900,000) (489,796) (5,728,451) (596,856) 14,687,584 Cash and cash equivalents, beginning of year, as restated 10,637,675 (82,195) (6,300,442) (596,856) 998,855 26,486 1,025,341 Net increase (decrease) in cash and cash equivalents (3,739,071) 4,612,762 (900,000) 268,217 3,369 3,369 268,217 (354,488) (4,080,427) 1,678,168 7,248,959 Cash and cash equivalents, end of year $ 25,325,259 $ 1,323,680 $ 3,168,532 Cash and cash equivalents Restricted cash and cash equivalents $ $ 1,323,680 $ $ 13,414,132 11,911,127 25,325,259 $ 1,323,680 $ 464,676 2,703,856 3,168,532 $ 5,125,407 $ 585,197 $ (4,822,024) $ 7,409,039 (873,678) (43,353) 36,978 36,695 (217) (534,056) 42,178 68,238 11,267,231 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 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 $ $ 87,298 45,647 2,750,184 (143,515) 19,625 11,498 (508,026) 22,535 (12,050) 18,826 (10,096) 43,202 (2,660,964) 18,141 371,593 1,138,999 5,361,136 95,614 17,218 The notes to the basic financial statements are an integral part of this statement. Page 38 $ $ 55,168 162,147 32,364 Total $ 36,141,851 (19,204,933) (7,191,652) 9,745,266 Governmental Activities-Internal Service Funds $ 1,898,673 (1,885,314) (37,762) (24,403) 8,351,833 (2,800,000) 24,403 24,403 5,551,833 (5,453,150) (9,717,236) 11,540,000 (5,072,682) 110,837 (4,038,085) 6,288,959 (6,341,357) 1,267,072 29,855 1,296,927 10,252,669 19,564,802 150 $ 29,817,471 $ 150 $ $ 150 $ 15,202,488 14,614,983 29,817,471 $ 150 $ 888,580 $ $ 10,246,521 (971,546) (43,353) (451,423) 70,728 (12,267) (515,230) 50,223 483,033 9,745,266 $ (6) (29,238) (1,856) 6,697 $ (24,403) 5,416,304 257,761 49,582 Page 39 Page 40 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 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 four agency funds. The agency funds account for monies donated for G.A.I.N., Fill-A-Need, Shop With A Cop, and Arizona in Action. CITY OF GOODYEAR, ARIZONA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2016 Pension Trust ASSETS Cash and cash equivalents Investments Total assets $ LIABILITIES Accounts payable Deposits held for others Total liabilities NET POSITION Held in trust $ Agency 1,716 402,754 404,470 $ 26,198 $ 26,198 1,560 $ 1,560 $ 26,198 26,198 402,910 The notes to the basic financial statements are an integral part of this statement. Page 41 CITY OF GOODYEAR, ARIZONA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2016 Pension Trust Deductions: Benefits Investment loss Total deductions $ 38,675 9,977 48,652 Changes in net position (48,652) Net position, beginning of year 451,562 Net position, end of year $ 402,910 The notes to the basic financial statements are an integral part of this statement. Page 42 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 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 45 2. Cash and Investments 54 3. Receivables 57 4. Capital Assets 58 5. Loans Payable 60 6. General Obligation Bonds Payable 61 7. Revenue Bonds Payable 63 8. Community Facilities Districts Bonds Payable 65 9. Changes in Long-Term Liabilities 68 10. Interfund Receivables, Payables, and Transfers 69 11. Contingent Liabilities 70 12. Risk Management 70 13. Retirement Plans 71 14. Deficit Fund Balance 85 15. Fund Balance Classifications 86 16. Commitments 86 17. Subsequent Events 87 Page 43 Page 44 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. During the year ended June 30, 2016, the City implemented the provisions of GASB Statement No. 72, Fair Value Measurement and Application. This Statement addresses accounting and financial reporting issues related to fair value measurements and establishes a hierarchy of inputs to valuation techniques used to measure fair value. This Statement also enhances accountability and transparency through revised note disclosures. 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 - Community Facilities Districts 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. The following are the community facilities districts currently operating in the City of Goodyear.           Goodyear Community Facilities General District No. 1 Goodyear Community Facilities Utilities District No. 1 Wildflower Ranch Community Facilities District No.1 Wildflower Ranch Community Facilities 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 King Ranch Community Facilities District Page 45 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Complete financial statements of the individual component units may be obtained at the entities’ administrative offices or online at www.goodyearaz.gov/cfd. 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, 2016, 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 46 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, risk management, and parks asset management reserves. The accumulated appropriations for these purposes 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 $12.3 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. Page 47 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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. 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 either required to be accounted for in other funds or when the city determines there is an operational advantage to do so. McDowell Road Commercial Corridor Improvement District Debt Service Fund - This fund accounts for the debt portion of the McDowell Road Improvement District. 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. Non-Utility Development Impact Fees Fund - This fund collects fees to defray the costs of development of infrastructure. The City reports the following major proprietary funds: Water and 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 48 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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, sanitation, and stadium 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. 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 four agency funds. The four funds account for monies donated by individuals for the GAIN, Fill-A-Need, Shop With A Cop, and Arizona in Action activities. 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 position and changes in net position and employs accounting principles similar to proprietary funds. Fiduciary funds are not included in the government-wide financial statements considering they are not assets of the City available to support City programs. 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 nonmajor funds are as follows: Special Revenue Funds Highway User Revenue Fund (HURF) Community Facilities Districts Grants Fund Debt Service Fund Community Facilities Districts Capital Projects Fund Page 49 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. 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 50 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 businesstype 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, Furniture 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 51 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 52 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 fall 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 2016. 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 major program area 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 53 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 enterprise funds are considered revenue; (2) capital outlays for enterprise funds are treated as expenses; (3) debt service principal payments are treated as expenses for enterprise funds; (4) accrued compensated absences are not recognized as expenses; (5) depreciation and amortization are not recognized as expenses; (6) contributions to pension plans are recognized as an expense rather than pension expense for enterprise funds. 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. NOTE 2 CASH AND INVESTMENTS At June 30, 2016, cash and cash equivalents are presented as follows: Governmental Activities Cash and cash equivalents $ Restricted cash and cash equivalents $ 35,600,915 16,004,922 51,605,837 Business Activities $ 15,202,488 14,614,983 $ 29,817,471 Fiduciary Funds $ $ 27,914 27,914 Total $ 50,831,317 30,619,905 $ 81,451,222 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 the cash and cash equivalents in the Community Facilities Districts Debt Service Fund. 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, 2016, the City had $12,250 of cash on hand. The carrying amount of the City’s cash in bank totaled $6,191,990 and the bank balance was $8,262,998. Of the bank balance, $273,723 was covered by federal depository insurance and the remaining balance of $7,989,275 was covered by the Statewide Pooled Collateral Program. Page 54 NOTE 2 CASH AND INVESTMENTS (Continued) Cash Equivalents 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 weighted average to maturity is 22 days. The net asset value per share of the pool at June 30, 2016 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 or www.aztreasury.gov. 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, 2016, the City’s funds invested with the State Treasurer totaled $50,563,144. The City’s investment in the State of Arizona’s local government investment pool is stated at fair value which also approximates the value of the investment upon withdrawal. Investment Type Total Remaining Maturity (In Years) Less Than 1 LGIP $ 50,563,144 $ 50,563,144 Total $ 50,563,144 Investment Type LGIP Total Total $ 50,563,144 $ 50,563,144 $ 50,563,144 Rating as of Year End AAAF/S1+ $ 50,563,144 $ 50,563,144 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. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. U.S. Treasury securities are valued using quoted market prices (Level 1 inputs); while U.S. Agencies, Corporate Notes, Mutual Funds and Commercial Paper are valued using a matrix pricing model (Level 2 inputs). Page 55 NOTE 2 CASH AND INVESTMENTS (Continued) At June 30, 2016 the City’s investments included the following: Remaining Maturity (In Years) Less Investment Type U.S. Treasuries Total $ Federal Agency Securities 24,995,825 $ 3,002,694 23,392,180 Corporate Notes 9,959,088 1,701,428 3,580,829 3,580,829 402,720 402,720 58,654 58,654 Goldman Sachs Govt Fund Total $ 62,389,296 Concentration than 2 of Credit Risk $ 11,725,539 $ 10,267,592 40.06% 10,770,508 12,621,672 37.49% 3,906,307 4,351,353 15.96% - Commercial Paper Mutual Fund More 1 to 2 Than 1 $ 8,746,325 - - - - 5.74% 0.65% $ 26,402,354 0.09% $ 27,240,617 100.00% Ratings as of Year End Total Investment Type U.S. Treasuries $ Federal Agency Securities 24,995,825 AA+ $ AA 24,995,825 AA- $ - A $ - - Corporate Notes 9,959,088 1,200,188 Commercial Paper 3,580,829 - - - - - 402,720 - - - - - Goldman Sachs Govt Fund 58,654 $ 62,389,296 $ 49,588,193 3,811,090 $ 691,384 $ 3,811,090 - A-1 $ 23,392,180 691,384 - - 23,392,180 Mutual Fund - A- $ 1,839,144 $ 1,839,144 2,417,282 $2,417,282 AAAm $ - $ - Not Rated $ - - - - - - - 3,580,829 $3,580,829 58,654 $58,654 402,720 $ 402,720 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, and Bankers Trust. The money market accounts have a value of $24,683,838 at June 30, 2016. 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, 2016 the average portfolio duration was 1.8 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. 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. Page 56 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 Notes Total receivables General Fund $ 6,630,010 103,872 987,195 McDowell Road Commerical Corridor Improvement District Debt Service Fund $ - Community Facilities Districts Debt Service Fund $ 88,297 - Non-Utility Development Impact Fees Fund $ 8,476 - Non-Major Governmental Funds $ 119,109 2,159 2,695 Total $ 6,837,416 114,507 989,890 1,675,250 38,110,000 - 21,296,201 - - - 59,406,201 1,675,250 9,396,327 $ 38,110,000 $ 21,384,498 123,963 $ 69,023,264 $ $ 8,476 $ The following table summarizes the City’s receivables for the proprietary funds as of June 30, 2016. Receivables: Interest Accounts Water and Wastewater Fund $ 35,986 4,237,601 Sanitation Fund $ 551 761,439 Stadium Fund $ 1,705 168,812 Total $ 38,242 5,167,852 4,273,587 761,990 170,517 5,206,094 Less: Allowance Net receivables (17,188) $ 4,256,399 (6,590) $ 755,400 $ 170,517 (23,778) $ 5,182,316 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 $49,535 and $7,818, respectively. Page 57 NOTE 4 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2016 follows: Beginning Governm ental Activities Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ Artw ork 21,206,352 $ 172,600 $ - $ - 21,378,952 204,750 - Construction in progress 10,026,474 5,047,352 Right of Way 90,397,883 120,778 - 90,518,661 Streetscape 9,061,008 - - 9,061,008 130,896,467 5,340,730 4,443,171 - Infrastructure 347,411,674 8,912,712 - 356,324,387 Buildings and improvements 165,612,371 569,904 - 166,182,275 38,068,463 3,586,399 (1,853,136) 39,801,726 555,535,679 13,069,015 (1,853,136) 566,751,559 (1,580,728) 204,750 13,493,098 Total capital assets not being depreciated (1,580,728) 134,656,469 Capital assets, being depreciated: Land improvements Vehicles, furniture and equipment Total capital assets being depreciated - 4,443,171 Less accumulated depreciation for: Land improvements Infrastructure (782,455) (295,861) (1,078,316) (95,237,434) (8,198,754) (103,436,188) Buildings and improvements (34,567,441) (5,796,753) Vehicles, furniture and equipment (22,025,942) (2,903,916) 1,490,044 (23,439,813) (40,364,194) Total accumulated depreciation (152,613,271) (17,195,283) 1,490,044 (168,318,511) 402,922,408 (4,126,268) Total capital assets, being depreciated, net (363,092) 398,433,048 (1,943,820) $ 533,089,516 Governmental activities capital assets, net $ 533,818,876 $ 1,214,462 Page 58 $ NOTE 4 CAPITAL ASSETS (Continued) Beginning Ending Balance Business-Type Activities Increases Decreases Balance Capital assets, not being depreciated: Land $ Artw ork 15,435,875 $ - $ - $ - 2,802,773 2,195,776 (28,849) 4,969,700 18,385,626 2,195,776 (28,849) 20,552,553 Infrastructure 221,361,139 5,326,142 - 226,687,281 Buildings & improvements 206,399,167 95,338 - 206,494,505 Vehicles, machinery and equipment 14,904,533 1,828,512 Water rights 19,315,648 247,066 461,980,486 7,497,059 Infrastructure (42,786,553) (4,621,804) Buildings and improvements (28,733,010) (4,716,114) Vehicles, machinery and equipment (10,217,992) (716,557) 879,317 (10,055,232) (1,459,034) (192,046) - (1,651,080) (83,196,589) (10,246,521) 879,317 (92,563,793) 378,783,897 (2,749,462) (92,251) 375,942,184 Construction in progress - 15,435,875 146,978 146,978 Total capital assets not being depreciated Capital assets, being depreciated: Total capital assets being depreciated (971,568) (971,568) 15,761,477 19,562,714 468,505,977 Less accumulated depreciation for: Water rights amortization Total accumulated depreciation (47,408,357) (33,449,124) Total capital assets, being depreciated, net Business-Type activities capital assets, net $ 397,169,523 $ (553,686) $ (121,099) $ 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 59 $ 599,983 2,184,954 12,361,147 804,011 1,245,188 $ 17,195,283 $ 7,409,039 87,298 2,750,184 $ 10,246,521 396,494,737 NOTE 5 LOAN PAYABLE The City received a loan from the Water Infrastructure Finance Authority. The loan was used for expansion of an effluent wastewater facility and to rehabilitate an existing effluent lift station. The loan payable at June 30, 2016, is as follows: Description Business-type activities: Water Infrastructure Finance Authority Loan Interest Rate (Including Fees) Maturity 2.00% 7/1/17 - 29 Total Business-type activities Outstanding Principal June 30, 2016 Due Within One Year $ 3,854,322 $ - $ 3,854,322 $ - Annual debt service requirements to maturity on the loans payable at June 30, 2016 are summarized as follows: Fiscal Year Ending Business-Type Activities June 30, Principal Interest 2017 2018 2019 2020 2021 2022-2026 2027-2030 $ $ 262,550 267,801 273,157 278,620 1,478,950 1,293,244 79,661 74,461 69,157 63,748 58,230 204,443 52,370 Total $ 3,854,322 $ 602,070 Page 60 NOTE 6 GENERAL OBLIGATION BONDS PAYABLE Bonds payable at June 30, 2016, consisted of the outstanding general obligation and refunding bonds presented below. The bonds are generally callable with interest payable semi-annually. Of the total amounts originally authorized, $167,660,449 remains unissued. The bonds payable at June 30, 2016 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% 7/1/17 - 26 - 4.25 - 6.00% 7/1/17 - 37 7,141,882 - 5.00 - 5.25% 7/1/27 - 29 604,500 - 5.40 - 6.30% 7/1/20 - 30 105,000 - 3,500,000 - 4.00% $ Due Within One Year 6,753,851 $ 7/1/17 - 18 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, 2016 $ 18,105,233 $ - $ 16,421,149 $ - 4.25 - 6.00% 7/1/17 - 37 29,233,118 - 5.00 - 5.25% 7/1/27 - 29 4,975,500 - 5.40 - 6.30% 7/1/21 - 30 5,710,000 - 4.00 - 5.125% 7/1/21 - 30 4,610,000 - 11,215,000 - 3.00 - 5.00% 7/1/17 - 26 2.00% 7/1/17 - 20 Total Business-type activities $ 72,164,767 $ - Total $ 90,270,000 $ - Page 61 NOTE 6 GENERAL OBLIGATION BONDS PAYABLE (Continued) Annual debt service requirements to maturity on general obligation bonds payable at June 30, 2016 are summarized as follows: Fiscal Year Ending Governmental Activities June 30, 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036 2037-2038 Total Principal $ Interest Business-Type Activities Principal Interest $ 3,058,957 2,095,540 872,305 1,021,174 5,273,104 3,113,924 1,811,240 858,989 877,431 $ 753,125 639,137 568,467 522,839 1,872,590 836,539 382,281 37,029 $ 4,856,043 5,054,460 5,627,695 5,858,826 20,166,894 19,671,078 7,413,760 3,516,011 3,222,407 3,048,038 2,864,752 2,670,548 2,466,808 9,400,831 4,476,746 1,564,750 151,565 $ 18,105,233 $ 6,489,438 $ 72,164,767 $ 29,866,445 Page 62 NOTE 7 REVENUE BONDS PAYABLE Revenue bonds payable at June 30, 2016 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, 2016 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 3.00% 7/1/16 - 21 2.48% $ Due Within One Year 1,465,000 $ 235,000 12/15/16 - 6/15/23 6,525,805 864,760 3.44% 12/15/16 - 6/15/23 783,189 100,767 5.25% 1/1/17 - 32 38,110,000 1,580,000 $ 46,883,994 $ 2,780,527 $ 330,000 $ - 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 Revenue Bonds, Series 2016 Outstanding Principal June 30, 2016 4.708 - 4.782% 7/1/17 - 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 7/1/16 - 41 32,950,000 325,000 14,950,000 14,560,000 295,000 3.00 - 5.25% 7/1/23 - 27 23,515,000 - 3.00% 2.00 - 5.00% 7/1/2018 7/1/17 - 45 1,515,000 11,540,000 - Total Business-type activities $ 143,885,000 $ Page 63 295,000 NOTE 7 REVENUE BONDS PAYABLE (Continued) Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending Governmental Activities Principal June 30, 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036 2037-2041 2042-2046 2047-2050 Total $ Interest 2,780,527 $ 2,895,602 3,011,337 3,122,750 3,254,862 13,798,916 14,620,000 3,400,000 - $ 46,883,994 $ 2,223,794 $ 2,108,569 1,988,333 1,862,771 1,731,788 6,649,684 3,273,374 178,500 - Business-Type Activities Principal Interest 295,000 $ 1,420,000 2,990,000 6,595,000 7,945,000 31,105,000 52,935,000 25,925,000 11,425,000 2,925,000 325,000 7,720,629 7,623,631 7,579,268 7,128,255 6,742,574 28,678,247 18,906,723 6,061,542 2,271,124 339,550 76,781 20,016,813 $ 143,885,000 $ 93,128,324 On June 7, 2016, the City issued $11,540,000 of Revenue Bonds, with an average interest rate of 4.35%, to finance $7,500,000 in water system improvements and to refund $4,984,513 of an outstanding 2002 Water Infrastructure Finance Authority (WIFA) Loan. Additionally, $761,384 of the bond proceeds were placed into reserve. The WIFA loan was defeased with $4,227,164 of bond proceeds and $845,518 of City cash on hand. Although the refunding resulted in the recognition of a deferred loss on refunding of $88,169 for the fiscal year ended June 30, 2016, the City in effect reduced its aggregate debt service payments by $837,101 over the next five years and obtained an economic gain (difference between the present values of the old and new debt service payments) of $282,454. 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 with the last scheduled debt service payment occurring on 7/1/2049. 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 $3,655,834 and $12,759,787, 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. The last scheduled debt service payment on the bonds is 7/1/2032. Principal and interest paid for the current year and total pledged revenues for business type activity revenue bonds were $5,686,663 and $67,903,484, respectively. Page 64 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 infrastructure improvements. The last scheduled debt service payment on the bond is 1/1/2032. At June 30, 2016, 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. Principal and interest paid for the current year and total net revenues and fund balance available to service the debt were $3,540,900 and $3,645,361, respectively. 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. 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, 2016 consisted of outstanding general obligation and special assessment bonds. The bonds are generally callable with interest payable semiannually. Community facilities district bonds payable at June 30, 2016, are presented below. Page 65 NOTE 8 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE (Continued) Description General District No. 1: G.O. Refunding Bonds, Series 2013 Palm Valley: G.O. Bonds, Series 2006 G.O. Bonds, Series 2007 Utilities District No. 1: G.O. Bonds, Series 2007 G.O. Refunding Bonds, Series 2014 G.O. Refunding Bonds, Series 2015 G.O. Refunding Bonds, Series 2016 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 Interest Rate Maturity Outstanding Principal June 30, 2016 4.00 - 5.00% 07/15/28 $ 5.00 - 5.30% 4.95 - 5.80% 07/15/31 07/15/32 3,475,000 3,250,000 145,000 105,000 4.00 - 4.50% 4.00% 2.00 - 4.125% 2.00 - 4.00% 07/15/17 07/15/28 07/15/29 07/15/32 1,080,000 13,985,000 7,015,000 18,535,000 525,000 840,000 360,000 - 6.25 - 6.50% 5.70 - 5.75% 07/15/22 07/15/23 295,000 400,000 35,000 35,000 6.75 - 7.00% 5.50 - 5.90% 07/15/25 07/15/26 430,000 475,000 30,000 30,000 5.00 - 5.70% 6.20 - 6.75% 07/15/28 07/15/28 1,200,000 960,000 65,000 50,000 7.875% 7.375% 5.45 - 5.80% 5.25 - 5.80% 5.375 - 6.20% 6.00 - 6.75% 2.00 - 5.00% 07/01/25 07/01/27 07/15/30 07/01/32 07/15/32 07/01/32 07/01/39 2,963,000 2,608,000 3,790,000 5,938,000 10,630,000 5,557,000 4,844,000 284,000 164,000 160,000 231,000 360,000 234,000 135,000 5.50% 4.75 - 5.15% 6.125 - 6.625% 07/15/29 07/15/31 07/15/32 1,755,000 560,000 645,000 85,000 10,000 15,000 5.25 - 5.70% 5.00 - 5.375% 07/15/29 07/15/31 1,235,000 800,000 $ 102,340,000 60,000 25,000 $ 4,463,000 Page 66 9,915,000 Due Within One Year $ 480,000 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, 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036 2037-2039 Total $ $ Governmental Activities Principal Interest 4,463,000 $ 4,713,009 4,588,000 4,772,316 4,819,000 4,537,029 5,071,000 4,303,469 5,336,000 4,055,517 30,374,000 15,892,976 32,366,000 7,836,686 14,363,000 1,104,156 960,000 97,500 102,340,000 $ 47,312,658 On May 25, 2016, the District issued $18,535,000 of General Obligation Bonds with an average interest rate of 3.95 percent to advance refund $18,880,000 of outstanding 2007 Series General Obligation Bonds with an average interest rate of 4.84 percent. The net proceeds of $20,106,713 (after payment of $473,025 in underwriting fees and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited into an irrevocable trust with an escrow agent to provide for future debt service payments on the 2007 Series General Obligation Bonds. As a result, a portion of the 2007 Series General Obligation Bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. Although the advance refunding resulted in the recognition of a deferred loss on refunding of $994,971 for the fiscal year ended June 30, 2016, the District in effect reduced its aggregate debt service payments by $2,916,204 over the next 17 years and obtained an economic gain (difference between the present values of the old and new debt service payments) of $2,444,650. Page 67 NOTE 9 CHANGES IN LONG-TERM LIABILITIES Long-term liabilities activity for the year ended June 30, 2016 was as follows: Beginning Balance Reductions Additions Ending Due Within Balance One Year Governmental Activities: Compensated absences $ 4,451,666 $ 2,699,657 $ 2,190,056 $ 4,961,267 $ General obligation bonds payable 21,035,322 2,930,089 18,105,233 Community Facilities . Districts bonds payable 106,856,000 18,535,000 23,051,000 102,340,000 Public improvement bonds 9,945,088 1,171,094 8,773,994 Revenue bonds payable 39,610,000 1,500,000 38,110,000 Premiums Discounts Net pension liability Governmental activities long-term liabilities 4,291,554 2,047,350 (39,461) 38,624,568 4,829,202 612,911 (1,644) - Additions Reductions 4,463,000 1,200,527 1,580,000 5,725,993 - (37,817) - 43,453,770 $ 224,774,737 $ 28,111,209 $ 31,453,506 $ 221,432,440 $ Beginning Balance 1,590,785 Ending Balance Business-type Activities: Compensated absences $ 570,676 $ 331,220 $ 280,997 $ 620,899 $ General obligation bonds payable 76,754,678 4,589,911 72,164,767 Public improvement bonds 102,180,000 102,180,000 Revenue bonds payable 30,660,000 11,540,000 495,000 41,705,000 Loans payable 9,096,237 5,241,915 3,854,322 Premiums 3,125,334 1,234,957 279,987 4,080,304 Discounts (556,502) (22,227) (534,275) 7,397,348 1,077,034 Net pension liability 6,320,314 8,834,312 Due Within One Year 218,691 295,000 - Business-type activities long-term liabilities $ 228,150,737 $ 14,183,211 $ 10,865,583 $ 231,468,365 $ Page 68 513,691 NOTE 10 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At June 30, 2016, interfund balances were as follows: Fund General Fund Receivable Amount $ Payable Amount 1,801,210 $ - Non-Major Governmental Funds - 672,116 Stadium Fund Internal Service Fund - 961,840 167,254 Total $ 1,801,210 $ 1,801,210 Interfund balances resulted from (1) the borrowing of cash to cover cash deficits, (2) to account for the amount due for Community Facilities Districts’ operational expenditures paid from the General Fund, and (3) to account for a long-term loan from the General Fund to the Stadium Fund to purchase commercial retail liners at the ballpark. All interfund balances are expected to be paid within one year with the exception of the Stadium balance which will be paid back when the commercial retail liners are sold to enterprises. Transfers Out Fund General Fund Non-Major Governmental Funds Water and Wastewater Fund Sanitation Fund Stadium Fund Total $ 8,287,472 Transfers In $ 2,800,000 803,588 739,227 1,900,000 - 900,000 - 8,351,833 $ 11,891,060 $ 11,891,060 All transfers made during the year were to cover operations or debt service as approved during budget development. Page 69 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, 2016; 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 payments 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 City continues to carry commercial insurance for workers compensation. Settled claims have not exceeded commercial insurance coverage in any of the past three fiscal years. Page 70 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 $4,642,797 of pension expenditures in the governmental funds and $540,462 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 Years of service and age required to receive benefit On or After July 1, 2011 Sum of years and age equals 80 30 years age 55 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 71 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 11.47 percent (11.35 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 11.47 percent (10.85 percent for retirement, 0.50 percent for health insurance premium benefit, and 0.12 percent for long-term disability) of the members’ annual covered payroll. The City’s contributions to the pension plan for the year ended June 30, 2016 were $2,452,025. In addition for the current fiscal year, the City was required by statute to contribute at the actuarially determined rate of 9.36 percent (9.30 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: 2016 2015 2014 $ 112,997 128,393 121,012 Long-Term Disability Fund $ 27,119 26,114 48,402 Pension Liability At June 30, 2016, the City reported a liability of $36,986,742 for its proportionate share of the ASRS net pension liability. The net pension liability was measured as of June 30, 2015. 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, 2014, to the measurement date of June 30, 2015. 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, 2015 the City’s proportion was .237450 percent, which was an increase of .012636 from its proportion measured as of June 30, 2014. Page 72 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, 2016, the City recognized pension expense for ASRS of $3,035,040 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 $ 1,009,288 Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between city 1,959,721 contributions and proportionate share of contributions Contributions subsequent to the measurement date 2,452,025 Total $ 5,421,034 Deferred Inflows of Resources $ 1,938,143 1,185,343 $ 3,123,486 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, 2017. 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: 2017 $ (268,627) 2018 553,372 2019 725,401 Thereafter (855,669) 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 June 30, 2014 June 30, 2015 Entry age normal 8% 3-6.75% 3% Included 1994 GAM Scale BB Page 73 NOTE 13 RETIREMENT PLANS (Continued) A. Arizona State Retirement System (Continued) Actuarial Assumptions (Continued) The actuarial assumptions used in the June 30, 2014 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, 2014, 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 Commodities Real estate Multi-asset class Total Target Allocation 58% 25 2 10 5 100% Long-Term Expected Real Rate of Return 6.79% 3.7 3.93 4.25 3.41 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 74 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%) $ 48,465,272 Current Discount Rate (8.0%) $ 36,986,742 1% Increase (9.0%) $ 29,120,188 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 75 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 Normal retirement 50% less 2.0% for each year of 2.5% per year of credited service, credited service less than 20 years not to exceed 80% 04 plus 2.0% to 2.5% for each year of credited service over 20 years, not to exceed 80% 50 % or normal retirement, whichever is greater Accidental disability retirement Survivor benefit: Retired members Active members Highest 60 months of last 20 years 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. In addition, from and after December 31, 2015 the Legislature may enact permanent one-time increases after a Joint Legislative Budget Committee analysis of the increase’s effects on the plan. 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, 2016, the following employees were covered by the agent pension plans’ benefit terms: PSPRS PSPRS Police Fire Inactive employees or beneficiaries currently receiving benefits 17 5 Inactive employees entitled to but not yet receiving benefits 14 0 Active employees 89 92 120 97 Total Page 76 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, 2016 are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members - pension City of Goodyear: Pension Health insurance PSPRS Police 11.65% PSPRS Fire 11.65% 21.25 0.41 13.45 0.40 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, 2016, were: PSPRS Police Pension: Contributions made Health insurance premium benefit: Annual OPEB cost Contributions made $ 1,597,875 30,830 PSPRS Fire $ 1,133,359 33,706 Pension Liability At June 30, 2016, the City reported the following net pension liabilities: PSPRS - Police PSPRS - Fire $ 10,363,865 3,500,511 The net pension liabilities were measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. In May 2016 voters approved Proposition 124 that authorized certain statutory adjustments to PSPRS’ automatic costof-living adjustments. The statutory adjustments change the basis for future cost-of-living adjustments from excess investment earnings to the change in the consumer price index, limited to a maximum annual Page 77 NOTE 13 RETIREMENT PLANS (Continued) B. Public Safety Personnel Retirement System (Continued) increase of two percent. The change in the City’s net pension liability as a result of the statutory adjustments is not known. Actuarial Assumptions The significant actuarial assumptions used to measure the total pension liability are as follows: PSPRS Actuarial valuation date Actuarial cost method Asset valuation Discount rate Projected salary increases Inflation Permanent benefit increase Mortality rates June 30, 2015 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, 2015, 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 Target Allocation 2% 5 4 7 8 10 11 10 13 14 16 100% Long-Term Expected Real Rate of Return 0.75% 4.11 5.13 2.92 4.77 4.38 9.50 4.48 7.08 8.25 6.23 Page 78 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, 2015 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 Contributrions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other Changes Net changes Balances at June 30, 2016 Total Pension Liability $ 29,232,918 Increase/Decrease Plan Fiduciary Net Position $ 19,683,544 1,278,133 2,301,498 1,278,133 2,301,498 (159,382) (159,382) 1,173,950 768,858 739,152 (1,107,068) 2,313,181 $ 31,546,099 Page 79 Net Pension Liability $ 9,549,374 $ (1,107,068) (18,421) (57,781) 1,498,690 21,182,234 (1,173,950) (768,858) (739,152) 18,421 57,781 814,491 $ 10,363,865 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, 2015 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, 2016 Total Pension Liability $ 22,851,411 Increase/Decrease Plan Fiduciary Net Position $ 20,720,720 Net Pension Liability $ 2,130,691 1,409,380 1,822,450 1,409,380 1,822,450 1,030,908 1,030,908 968,726 848,048 791,715 (680,367) 3,582,371 $ 26,433,782 (680,367) (19,707) 304,136 2,212,551 22,933,271 $ (968,726) (848,048) (791,715) 19,707 (304,136) 1,369,820 $ 3,500,511 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 1percentage-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% $ 14,725,354 7.85% $ 10,363,865 8.85% $ 6,778,039 PSPRS-Fire: Rate Net Pension Liability 6.85% $ 7,801,838 7.85% $ 3,500,511 8.85% (25,765) Page 80 $ 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, 2016, the City recognized the following pension expense: PSPRS - Police PSPRS - Fire Pension Expense $ 1,538,144 476,363 Pension Deferred Outflows/Inflows of Resources At June 30, 2016, 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 Deferred Outflows of Resources 189,646 $ 1,273,239 96,957 1,597,875 $ 3,157,717 Deferred Outflows of Resources $ 936,546 508,433 125,281 1,133,359 $ 2,703,619 Page 81 Deferred Inflows of Resources $ 137,229 $ 137,229 Deferred Inflows of Resources $ 667,579 $ 667,579 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, 2017. 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: 2017 2018 2019 2020 2021 Thereafter PSPRS Police 226,139 226,139 226,140 416,703 249,541 77,951 PSPRS Fire 59,354 59,354 59,355 255,094 76,969 392,555 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, 2016 June 30, 2015 June 30, 2014 Annual OPEB Cost PSPRS - Fire - Health Insurance June 30, 2016 June 30, 2015 June 30, 2014 Page 82 Percentage of Annual Cost Contributed Net OPEB Obligation 30,830 65,983 63,164 100.0% 100.0% 100.0% - 33,706 53,722 46,653 100.0% 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 actuarial methods and assumptions used to establish the fiscal year 2016 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 PSPRS 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% 4.0%-8.0% 4.00% Page 83 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, 2015, 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, 2015 Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess 21 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value (80%/120% market) 7.85% 4.0%-8.0% 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, 2015. 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 PSPRS-Police $ 724,777 744,531 19,754 $ 97.3% 7,012,489 0.28% Page 84 $ $ PSPRS-Fire 543,197 670,220 127,023 81.0% 7,822,842 1.62% 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, 2016. As of June 30, 2016, there were 5 eligible employees participating in the plan. The plan is administered by Innes Associates LTD. As of June 30, 2016, the plan’s assets consisted of the following: Cash and Cash Equivalents Investments $ $ 1,716 402,754 404,470 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, 2016, the Grants Fund contains a deficit fund balance of $28,737 in the fund financial statements. Future revenues are expected to cover this deficit. Page 85 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 Highway user funds Transit Community facilities districts operations Assigned: IT replacement Fleet replacement Risk management Parks management Unassigned Total fund balances $ McDowell Road Commerical Corridor Improvement Debt Service 961,840 $ Community Facilities Districts Debt Service $ Non-Utility Development Impact Fees $ Non-Major Governmental Funds $ $ 564,639 667,798 4,009,183 178,351 427,243 104,461 12,871,535 13,202 12,882,857 721 847,446 1,434,106 498,851 3,196,101 1,077,452 1,271,367 52,620,845 $ 65,756,477 $ 104,461 $ 12,871,535 $ 12,882,857 Total Governmental Funds (28,737) $ 1,983,931 961,840 564,639 667,798 4,009,183 178,351 427,243 12,989,198 12,882,857 721 847,446 1,434,106 498,851 3,196,101 1,077,452 1,271,367 52,592,108 $ 93,599,261 NOTE 16 COMMITMENTS The City has active construction projects as of June 30, 2016. The balances for work not yet complete as of June 30, 2016 were as follows: Goodyear Blvd NW Quad Improvement Ph. 1&2 ST1404 $ 25,036 PD Operations Building - Phase 1 FA1404 1,866,493 Median Improvements 4 Areas ST1601 105,310 Fiber Optic - Yuma Rd/Estrella Pkwy/Cotton Lane ST1603 22,662 Adaman Well & Treatment WA1510 176,120 Vadose BOR Grant WR1401 381,938 Van Buren: Estrella to Cotton Lane ST1504 3,350 GWRF N. Digester Rehab. WW1604 339,328 GWRF 2 MGD Expansion Design WW1302 401,228 $ 3,321,465 These commitments are being financed from existing fund balances. Page 86 NOTE 17 SUBSEQUENT EVENTS City of Goodyear – Debt Issuance In October 2016, the City issued $54,975,000 of General Obligation Bonds with an average interest rate of 3.25 percent to advance refund $54,975,000 of outstanding 2007 and 2008 Series General Obligation Bonds with an average interest rate of 4.37 percent. The net proceeds of $58,536,868 (after payment of $499,835 in underwriting fees and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited into an irrevocable trust with an escrow agent to provide for future debt service payments on the 2007 and 2008 Series General Obligation Bonds with the exception of $1,900,000 and $2,675,000 remaining maturities after refunding on the 2007 and 2008 Series General Obligation Bonds, respectively. As a result, the bonds are considered to be defeased and the liability for those bonds will be removed from the financial statements. The City is expected to have a net present value savings of $6,666,850. Public Improvement Corporation – Debt Issuance In October 2016, the Public Improvement Corporation issued $71,695,000 of Municipal Facilities Revenue Bonds with an average interest rate of 4.38 percent to advance refund $77,150,000 of outstanding 2007A and 2008 Series Municipal Facilities Revenue Bonds with an average interest rate of 5.45 percent. The net proceeds of $82,821,953 (after payment of $658,360 in underwriting fees and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited into an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2007A and 2008 Series Municipal Facilities Revenue Bonds. As a result, the 2007A and 2008 Series Municipal Facilities Revenue Bonds are considered to be defeased and the liability for those bonds will be removed from the financial statements. The Public Improvement Corporation is expected to have a net present value savings of $16,477,970. Palm Valley Community Facility District – Debt Issuance In October 2016, the District issued $6,435,000 of General Obligation Bonds with an average interest rate of 3.69 percent to advance refund $6,475,000 of outstanding 2006 and 2007 Series General Obligation Bonds with an average interest rate of 5.56 percent. The net proceeds of $6,710,214 (after payment of $254,842 in underwriting fees and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited into an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2006 and 2007 Series General Obligation Bonds. As a result, the 2006 and 2007 Series General Obligation Bonds are considered to be defeased and the liability for those bonds will be removed from the financial statements. The District is expected to have a net present value savings of $1,180,565. Page 87 NOTE 17 SUBSEQUENT EVENTS (Continued) Centerra Community Facility District – Debt Issuance In November 2016, the District issued $3,423,000 of General Obligation Bonds with an average interest rate of 2.70 percent to advance refund $2,820,000 of outstanding 2005, 2006 and 2008 Series General Obligation Bonds with an average interest rate of 5.71 percent and to reimburse a developer for infrastructure costs incurred in the Centerra Community Facilities District. Proceeds of $2,936,696 were used to purchase U.S. government securities. Those securities were deposited into an irrevocable trust with an escrow agent to provide for future debt service payments with the exception of the 2008 Series General Obligation Bonds which was partially refunded with remaining maturities of $30,000 after refunding. As a result, the refunded General Obligation Bonds are considered to be defeased and the liability for those bonds will be removed from the financial statements. The District is expected to have a net present value savings of $449,189. Page 88 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Required Supplementary Information CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original Final Revenues: Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeitures Investment earnings Contributions Miscellaneous Total revenues $ 56,900,642 5,173,023 16,674,902 4,592,992 739,700 165,500 612,275 531,250 85,390,284 $ 56,900,642 5,173,023 16,674,902 4,592,992 739,700 165,500 612,275 531,250 85,390,284 Variance with Final Budget Positive (Negative) Non-GAAP Actual $ 57,729,304 7,357,205 16,848,837 3,239,808 761,958 616,768 703,182 439,706 87,696,768 $ 828,662 2,184,182 173,935 (1,353,184) 22,258 451,268 90,907 (91,544) 2,306,484 Expenditures: Administrative services Support services Public safety Development services Public works Parks & recreation Impound fund Debt service Contingency Fleet reserve Technology replacement reserve Risk replacement reserve Parks replacement reserve Capital projects Total expenditures 8,727,731 12,353,746 32,512,832 8,672,830 2,381,936 5,651,209 184,515 1,430,521 16,601,748 1,927,534 650,000 1,087,947 1,108,500 27,263,834 120,554,883 8,612,905 13,044,969 32,695,049 8,822,985 2,381,936 6,054,009 184,515 1,430,521 16,601,748 1,927,534 650,000 1,087,947 1,108,500 25,825,355 120,427,973 7,413,372 10,482,892 31,381,607 7,933,367 2,255,101 5,434,042 105,936 1,425,521 1,651,839 609,450 13,000 166,633 7,809,095 76,681,855 1,199,533 2,562,077 1,313,442 889,618 126,835 619,967 78,579 5,000 16,601,748 275,695 40,550 1,074,947 941,867 18,016,260 43,746,118 Excess (deficiency) of revenues over expenditures (35,164,599) (35,037,689) 11,014,913 46,052,602 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) 2,800,000 (10,439,024) (7,639,024) 2,800,000 (10,439,024) (7,639,024) 2,800,000 (8,287,472) (5,487,472) 2,151,552 2,151,552 Changes in fund balances (42,803,623) (42,676,713) 5,527,441 48,204,154 58,686,307 58,686,307 Fund balances, beginning of year Fund balances (deficits), end of year $ (42,803,623) $ (42,676,713) See accompanying notes to this schedule. Page 89 $ 64,213,748 $ 106,890,461 CITY OF GOODYEAR SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET PENSION LIABILITY ARIZONA STATE RETIREMENT SYSTEM LAST TWO FISCAL YEARS 2016 City of Goodyear's proportion of the net pension liability (asset) 2015 0.24% 0.22% City of Goodyear's proportionate share of the net pension liability (asset) $ 36,986,742 $ 33,264,817 City of Goodyear's covered-employee payroll $ 21,761,494 $ 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 169.96% 164.95% 68.35% 69.49% Note: Data prior to 2015 is not available. See accompanying notes to this schedule. Page 90 CITY OF GOODYEAR SCHEDULE OF CONTRIBUTIONS ALL PENSION PLANS LAST TWO FISCAL YEARS 2016 Arizona State Retirement System: Actuarially determined contribution $ Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) 2,452,025 $ 2,452,025 $ City of Goodyear's covered-employee payroll 2,369,823 $ 10.85% Public Safety Personnel Retirement System - Police: Actuarially determined contribution $ 1,597,875 Contributions in relation to the actuarially determined contribution $ City of Goodyear's covered-employee payroll $ Contributions as a percentage of covered-employee payroll $ $ 7,519,412 Public Safety Personnel Retirement System - Fire: Actuarially determined contribution $ 1,133,359 Contributions in relation to the actuarially determined contribution 1,133,359 $ Town's covered-employee payroll $ 1,173,949 1,173,949 $ 21.25% Contribution deficiency (excess) 21,761,494 10.89% 1,597,875 Contribution deficiency (excess) 2,369,823 $ 22,599,315 Contributions as a percentage of covered-employee payroll Contributions as a percentage of covered-employee payroll 2015 6,957,993 16.87% $ 968,539 968,539 $ 8,426,461 13.45% Note: Data prior to 2015 is not available. See accompanying notes to this schedule. Page 91 $ 7,674,635 12.62% 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: 2015 $ 724,777 $ 744,531 $ (19,754) 2014 638,160 732,738 (94,578) 2013 708,612 (708,612) 97.35 87.09 - % $ 7,012,489 6,630,426 6,582,586 0.28 % 1.43 10.76 Public Safety Personnel Retirement System - Fire: 2015 $ 543,197 $ 670,220 $ (127,023) 2014 466,897 634,667 (167,770) 2013 543,584 (543,584) 81.05 73.57 - % $ 7,822,842 7,338,828 7,232,076 1.62 % 2.29 7.52 See accompanying notes to this schedule. Page 92 CITY OF GOODYEAR SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - POLICE LAST TWO FISCAL YEARS 2016 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 $ 1,278,133 2,301,498 2015 $ (159,382) $ 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 $ $ $ 1,116,495 704,171 2,330,439 (1,220,650) (18,769) 31,204 2,942,890 16,740,654 19,683,544 $ 10,363,865 $ 9,549,374 67.15% $ Net pension liability as a percentage of coveredemployee payroll 7,012,489 147.79% Note: Data prior to 2015 is not available. See accompanying notes to this schedule. Page 93 $ 1,173,950 768,858 739,152 (1,107,068) (18,421) (57,781) 1,498,690 19,683,544 21,182,234 Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll (1,107,068) 2,313,181 29,232,918 31,546,099 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 67.33% $ 6,630,426 144.02% CITY OF GOODYEAR SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - FIRE LAST TWO FISCAL YEARS 2016 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 $ 1,409,380 1,822,450 2015 $ 1,030,908 $ 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 $ $ $ 948,481 754,465 2,393,724 (341,865) (19,278) 137,157 3,872,684 16,848,036 20,720,720 $ 3,500,511 $ 2,130,691 86.76% $ Net pension liability as a percentage of coveredemployee payroll 7,822,842 44.75% Note: Data prior to 2015 is not available. See accompanying notes to this schedule. Page 94 $ 968,726 848,048 791,715 (680,367) (19,707) 304,136 2,212,551 20,720,720 22,933,271 Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll (680,367) 3,582,371 22,851,411 26,433,782 1,405,013 1,640,015 (18,156) (813,497) 619,565 (341,865) 2,491,075 20,360,336 22,851,411 90.68% $ 7,338,828 29.03% CITY OF GOODYEAR, ARIZONA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2016 NOTE 1 – BUDGETARY BASIS OF ACCOUNTING The City budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America, except for the following items: • Certain activities reported in the General Fund are budgeted in separate funds. The following schedule reconciles fund balance reported at the end of the year: Beginning Fund Balance Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds Activity budgeted as special revenue funds Activity budgeted as capital projects fund Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual-General Fund Revenue Expenditures Ending Fund Balance $ 60,181,980 $ 87,880,128 $ (76,818,159) $ 65,756,477 (1,013,783) (481,890) (180,849) (2,511) 38,524 97,780 (1,156,108) (386,621) $ 58,686,307 $ 87,696,768 $ (76,681,855) $ 64,213,748 NOTE 2 – 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, 2014, valuation for ASRS were based on the results of an actuarial experience study for the fiveyear 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, 2014, actuarial valuation. The study did not include an analysis of the assumed investment rate of return. The actuarial assumptions used in the June 30, 2015, valuation for PSPRS were based on the results of an actuarial experience study for the five-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. Page 95 Page 96 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Other Supplementary Information Other Supplementary Information City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Combining Statements and Budgetary Schedules Combining Statements and Budgetary Schedules City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Non-Major Governmental Funds Financial Statements Special Revenue Funds • Highway User Revenue Fund (HURF) – Funded through fuel taxes distributed from the State of Arizona. • Community Facilities Districts – CFDs represent special districts formed for the purpose of financing the acquisition, construction, operation, and maintenance of the public infrastructure benefiting the community. • Grants Fund – Based on application to granting agencies by the City and availability of funding by grantors. 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 property tax levy sufficient to meet the debt service requirements. Community Facilities Districts Capital Projects Fund This fund accounts for acquisition of infrastructure within the boundries of the City’s Community Facilities Districts. Page 97 CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Special Revenue Community Facilities Districts 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 $ $ 2,007,237 $ 879,555 876,035 20,696 2,159 2,623 66,545 72 $ $ 434,628 564,639 999,267 114,961 64,971 152,551 101,424 $ 2,028,005 $ 1,826,917 $ 52,285 $ 8,048 2,195 533,184 433,907 1,809,686 1,819,929 585,469 Deferred inflows of resources: Unavailable revenues - property taxes Unavailable revenues - intergovernmental Total deferred inflows of resources 8,430 35,725 35,725 8,430 Fund balances (deficits): Nonspendable Restricted Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances Grants $ Page 98 564,639 721 1,434,106 565,360 1,434,106 999,267 $ 2,028,005 (28,737) (28,737) $ 1,826,917 Debt Service Debt Service $ Total NonMajor Governmental Funds $ 98,413 $ 98,413 $ $ $ 37,508 37,508 47,703 564,639 1,448,029 (28,737) 1,983,931 13,202 13,202 98,413 175,294 67,166 152,551 672,116 1,809,686 2,876,813 56,133 35,725 91,858 47,703 $ 2,886,792 876,035 119,109 2,159 2,695 501,173 564,639 4,952,602 $ 4,952,602 Page 99 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Special Revenue Community Facilities Districts Highway User Revenue Revenues: Taxes Intergovernmental Charges for services Investment income Contributions Miscellaneous Total revenues $ $ 1,195,522 4,264,827 4,530 1,524 3,397 135,237 4,406,118 75,584 1,274,503 Grants $ 695,865 15,811 320 78,404 790,400 Expenditures: Current General government Public safety Highways and streets Capital outlay Debt service Principal retirement Interest and debt cost Total expenditures 5,156,358 84,999 5,241,357 949,969 794,992 Excess (deficiency) of revenues over expenditures (835,239) 324,534 (4,592) 949,969 351,890 191,206 251,896 Other financing sources (uses): Transfer in Transfer out Total other financing sources (uses): 739,194 (33) 739,161 Changes in fund balances (96,078) 324,534 (4,559) Fund balances (deficits), beginning of year 661,438 1,109,572 (24,178) Fund balances (deficits), end of year $ Page 100 565,360 33 33 $ 1,434,106 $ (28,737) $ Debt Service Capital Projects Debt Service Community Facilities Districts Capital Projects Total NonMajor Governmental Funds $ $ 4,723,213 2,043 1,711 5,918,735 4,962,735 4,530 22,443 320 289,225 11,197,988 4,416,562 949,969 351,890 5,347,564 4,753,457 2,930,089 936,101 3,866,190 4,416,562 2,930,089 936,101 15,269,070 859,066 (4,414,851) (4,071,082) 1,711 4,725,256 739,227 (803,588) (64,361) (803,555) (803,555) $ 55,511 (4,414,851) (4,135,443) (42,309) 4,414,851 6,119,374 13,202 $ $ 1,983,931 Page 101 Page 102 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Fiduciary Fund Financial Statements Combining Statement of Assets and Liabilities Combining Statement of Changes in Assets and Liabilities Agency Funds • G.A.I.N. • Fill-A-Need • Shop With A Cop • Arizona in Action Page 103 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS JUNE 30, 2016 GAIN Fill-A-Need Shop With A Cop ASSETS Cash and cash equivalents Total assets $ $ 8,662 8,662 $ $ 111 111 $ $ 14,195 14,195 LIABILITIES Deposits held for others Total liabilities $ $ 8,662 8,662 $ $ 111 111 $ $ 14,195 14,195 Page 104 Arizona in Action Totals $ $ 3,230 3,230 $ $ 26,198 26,198 $ $ 3,230 3,230 $ $ 26,198 26,198 Page 105 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS YEAR ENDED JUNE 30, 2016 Balance June 30, 2015 GAIN: Assets Cash and cash equivalents $ Liabilities Deposits held for others $ Fill-A-Need: Assets Cash and cash equivalents $ Additions Deletions Balance June 30, 2016 9,030 $ - $ (368) $ 8,662 9,030 $ - $ (368) $ 8,662 6,084 $ 7,428 $ (13,401) $ 111 $ 6,084 $ 7,428 $ (13,401) $ 111 Shop With A Cop: Assets Cash and cash equivalents $ 11,690 $ 7,505 $ (5,000) $ 14,195 11,690 $ 7,505 $ (5,000) $ 14,195 Liabilities Deposits held for others Liabilities Deposits held for others $ Arizona in Action: Assets Cash and cash equivalents $ Liabilities Deposits held for others $ Total - All Agency Funds Assets Cash and cash equivalents $ Liabilities Deposits held for others $ 3,230 $ - $ - $ 3,230 3,230 $ - $ - $ 3,230 30,034 $ 14,933 $ (18,769) $ 26,198 30,034 $ 14,933 $ (18,769) $ 26,198 Page 106 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Budgetary Comparison Schedules Major Governmental Funds 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, 2016 Budgeted Amounts Original Revenues: Special assessments Total revenues $ Expenditures: Debt service Principal retirement Interest and debt cost Total expenditures 3,540,451 3,540,451 Final $ 1,500,000 2,040,451 3,540,451 Changes in fund balances Actual 3,540,451 3,540,451 $ $ $ Page 107 $ (6,782) (6,782) 1,500,000 2,040,951 3,540,951 1,500,000 2,040,900 3,540,900 51 51 (500) (7,231) (6,731) 111,692 111,692 Fund balances, beginning of year Fund balances (deficits), end of year 3,533,669 3,533,669 Variance with Final Budget Positive (Negative) (500) $ 104,461 $ 104,961 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, 2016 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 $ 5,491,771 4,930 4,336,173 672,000 10,504,874 Actual $ 8,874,000 8,172,941 5,465,015 12,840 2,562,343 643,211 8,683,409 Variance with Final Budget Positive (Negative) $ (26,756) 7,910 (1,773,830) (28,789) (1,821,465) 17,046,941 4,171,000 5,357,204 457,825 9,986,029 4,703,000 2,815,737 (457,825) 7,060,912 (6,542,067) (1,302,620) 5,239,447 18,535,000 2,047,350 (20,106,713) 475,637 18,535,000 2,047,350 (20,106,713) 475,637 Other financing sources (uses): Refunding bonds issued Refunding bonds premium Payment to refunded bond escrow agent Total other financing sources (uses): Changes in fund balances (6,542,067) (826,983) 5,715,084 Fund balances, beginning of year 12,652,933 13,698,518 1,045,585 Fund balances, end of year $ 6,110,866 Page 108 $ 12,871,535 $ 6,760,669 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, 2016 Budgeted Amounts Original Revenues: Taxes Charges for services Investment income Total revenues $ 1,285,714 3,379,582 Final $ 1,285,714 3,379,582 Actual $ Variance with Final Budget Positive (Negative) 4,665,296 4,665,296 2,174,146 2,448,109 52,278 4,674,533 Expenditures: Current General government Highways and streets Culture and recreation Capital outlay Total expenditures 229,346 193,500 5,121,902 5,544,748 281,728 227,500 5,400,296 5,909,524 414 333,353 278,148 1,013,328 1,625,243 (414) (51,625) (50,648) 4,386,968 4,284,281 Changes in fund balances (879,452) (1,244,228) 3,049,290 4,293,518 9,833,567 9,833,567 Fund balances, beginning of year Fund balances (deficits), end of year $ (879,452) Page 109 $ (1,244,228) $ 12,882,857 $ $ 888,432 (931,473) 52,278 9,237 14,127,085 Page 110 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 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, 2016 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): 4,038,191 10,000 Final $ 25,000 4,073,191 25,000 4,073,191 4,264,827 4,530 1,511 135,237 4,406,105 5,426,231 5,140,885 84,999 5,225,884 359,346 5,426,231 5,500,231 84,999 5,585,230 (1,353,040) (1,512,039) (819,779) 692,260 1,353,040 1,353,040 1,353,040 1,353,040 739,194 739,194 (613,846) (613,846) (158,999) (80,585) 78,414 645,945 645,945 Changes in fund balances 4,038,191 10,000 Actual $ Fund balances, beginning of year Fund balances (deficits), end of year Variance with Final Budget Positive (Negative) $ $ Page 111 (158,999) $ 565,360 $ 226,636 (5,470) 1,511 110,237 332,914 359,346 $ 724,359 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL LTAF I YEAR ENDED JUNE 30, 2016 Budgeted Amounts Non-GAAP Actual Original & Final Revenues: Investment income Total revenues $ Expenditures: Current Highways and streets Total expenditures Excess (deficiency) of revenues over expenditures $ 13 13 2 2 (15,475) (15,460) 15 (33) (33) (33) (33) (15,493) (18) 15,493 15,493 (15,475) $ $ 15,473 15,473 Fund balances, beginning of year Fund balances (deficits), end of year 13 13 15,475 15,475 Other financing sources (uses): Transfer out Total other financing sources (uses): Changes in fund balances Variance with Final Budget Positive (Negative) (15,475) Page 112 $ $ 15,475 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL PARK AND RIDE MARQUEE YEAR ENDED JUNE 30, 2016 Budgeted Amounts Non-GAAP Actual Original & Final Revenues: Charges for services Investment income Total revenues $ Changes in fund balances 100,500 $ 100,500 100,500 1,736 102,236 100,500 102,236 1,736 745,210 745,210 Fund balances, beginning of year Fund balances, end of year $ Variance with Final Budget Positive (Negative) 100,500 Page 113 $ 847,446 $ 1,736 1,736 $ 746,946 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COURT ENHANCEMENT YEAR ENDED JUNE 30, 2016 Budgeted Amounts Non-GAAP Actual Original & Final Revenues: Fines and forfeits Investment income Total revenues $ Expenditures: Current Public safety Total expenditures 60,000 $ 60,000 43,813 358 44,171 60,000 60,000 38,524 38,524 21,476 21,476 5,647 5,647 86,219 86,219 Changes in fund balances Fund balances, beginning of year Fund balances, end of year Variance with Final Budget Positive (Negative) $ $ Page 114 91,866 $ $ (16,187) 358 (15,829) 91,866 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL JCEF YEAR ENDED JUNE 30, 2016 Budgeted Amounts Non-GAAP Actual Original & Final Revenues: Fines and forfeits Investment income Total revenues $ 16,000 $ 16,000 Expenditures: Current Public safety Total expenditures $ 60,000 60,000 Changes in fund balances (44,000) $ (44,000) Page 115 (3,417) 851 (2,566) 60,000 60,000 Fund balances, beginning of year Fund balances (deficits), end of year 12,583 851 13,434 Variance with Final Budget Positive (Negative) $ 13,434 57,434 73,051 73,051 86,485 $ 130,485 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FILL THE GAP YEAR ENDED JUNE 30, 2016 Budgeted Amounts Non-GAAP Actual Original & Final Revenues: Fines and forfeits Investment income Total revenues $ Changes in fund balances 7,000 $ 7,000 7,034 250 7,284 7,000 7,284 284 81,360 81,360 Fund balances, beginning of year Fund balances, end of year $ Variance with Final Budget Positive (Negative) 7,000 Page 116 $ 88,644 $ $ 34 250 284 81,644 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OFFICER SAFETY EQUIPMENT YEAR ENDED JUNE 30, 2016 Budgeted Amounts Non-GAAP Actual Original & Final Revenues: Fines and forfeits Investment income Total revenues $ Changes in fund balances 14,400 $ 14,400 13,720 4 13,724 14,400 13,724 (676) 27,943 27,943 Fund balances, beginning of year Fund balances, end of year $ Variance with Final Budget Positive (Negative) 14,400 Page 117 $ 41,667 $ $ (680) 4 (676) 27,267 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COMMUNITY FACILITIES DISTRICTS YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original & Final Revenues: Taxes Investment income Miscellaneous Total revenues $ 1,200,455 1,100 315,771 1,517,326 Actual $ 1,195,522 3,397 75,584 1,274,503 Variance with Final Budget Positive (Negative) $ (4,933) 2,297 (240,187) (242,823) Expenditures: Current General government Total expenditures 1,611,366 1,611,366 949,969 949,969 661,397 661,397 Changes in fund balances (94,040) 324,534 418,574 Fund balances, beginning of year 890,291 1,109,572 219,281 Fund balances, end of year $ 796,251 Page 118 $ 1,434,106 $ 637,855 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GRANTS YEAR ENDED JUNE 30, 2016 Variance with Final Budget Positive (Negative) Budgeted Amounts Original Revenues: Intergovernmental Investment income Contributions Miscellaneous Total revenues $ Expenditures: Current General government Public safety Highways and streets Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures 2,229,717 Final $ 2,229,717 Actual $ 2,229,717 2,229,717 695,865 15,811 320 78,404 790,400 2,000,000 416,939 229,717 2,646,656 1,434,573 362,317 488,939 426,237 2,712,066 351,890 191,206 251,896 794,992 1,434,573 10,427 297,733 174,341 1,917,074 (416,939) (482,349) (4,592) 477,757 33 33 33 33 (4,559) 477,790 (24,178) (24,178) Other financing sources (uses): Transfer in Total other financing sources (uses): Changes in fund balances (416,939) (482,349) Fund balances (deficits), beginning of year Fund balances (deficits), end of year $ (416,939) Page 119 $ (482,349) $ (28,737) $ $ (1,533,852) 15,811 320 78,404 (1,439,317) 453,612 CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL DEBT SERVICE YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original Revenues: Taxes Intergovernmental Total revenues $ Expenditures: Debt service Principal retirement Interest and debt cost Total expenditures 4,738,940 Final $ 4,738,940 4,738,940 4,723,213 2,043 4,725,256 3,419,885 1,319,055 4,738,940 2,930,089 1,005,297 3,935,386 2,930,089 936,101 3,866,190 69,196 69,196 803,554 859,066 55,512 (803,555) (803,555) (803,555) (803,555) 55,511 (748,043) (42,309) (42,309) Excess (deficiency) of revenues over expenditures 4,738,940 Actual $ Other financing sources (uses): Transfer out Total other financing sources (uses): Changes in fund balances 803,554 Fund balances (deficits), beginning of year Fund balances, end of year Variance with Final Budget Positive (Negative) $ $ Page 120 803,554 $ 13,202 $ $ (15,727) 2,043 (13,684) (790,352) CITY OF GOODYEAR, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL CAPITAL IMPROVEMENT PROJECTS YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original Revenues: Investment income Total revenues $ Expenditures: Capital outlay Total expenditures Changes in fund balances Non-GAAP Actual Final $ $ $ $ 2,511 2,511 686,538 686,538 478,804 478,804 97,780 97,780 381,024 381,024 (686,538) (478,804) (95,269) 383,535 481,890 481,890 Fund balances, beginning of year Fund balances (deficits), end of year 2,511 2,511 Variance with Final Budget Positive (Negative) (686,538) Page 121 $ (478,804) $ 386,621 $ 865,425 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, 2016 Budgeted Amounts Original & Final Revenues: Investment income Total revenues $ Expenditures: Capital outlay Total expenditures Changes in fund balances Fund balances, beginning of year Fund balances, end of year 5,000 5,000 Actual $ 1,711 1,711 Variance with Final Budget Positive (Negative) $ (3,289) (3,289) 4,830,706 4,830,706 4,416,562 4,416,562 414,144 414,144 (4,825,706) (4,414,851) 410,855 4,825,706 4,414,851 (410,855) $ $ Page 122 $ CITY OF GOODYEAR, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL WATER AND WASTEWATER ENTERPRISE FUND YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original Final Operating revenues: Charges for services Miscellaneous Total operating revenues $ Operating expenses: Administration Cost of sales and services Total operating expenses 27,189,785 73,000 27,262,785 $ 27,189,785 73,000 27,262,785 Non-GAAP Actual $ 27,724,410 15,130 27,739,540 Variance with Final Budget Positive (Negative) $ 534,625 (57,870) 476,755 4,088,276 39,591,239 43,679,515 4,237,442 39,143,706 43,381,148 4,119,041 14,369,667 18,488,708 118,401 24,774,039 24,892,440 Operating income (loss) (16,416,730) (16,118,363) 9,250,832 25,369,195 Nonoperating revenues (expenses): Intergovernmental Investment income Bond proceeds Debt service Total nonoperating revenues (expenses) 18,380 7,500,000 (10,639,047) (3,120,667) 18,380 7,500,000 (10,639,047) (3,120,667) 110,837 225,342 12,774,957 (14,969,699) (1,858,563) 110,837 206,962 5,274,957 (4,330,652) 1,262,104 Income before capital contributions and transfers (19,537,397) (19,239,030) 7,392,269 26,631,299 8,268,542 (2,213,906) 8,268,542 (2,213,906) 6,288,959 (1,900,000) (1,979,583) 313,906 (13,482,761) (13,184,394) 11,781,228 24,965,622 192,504,336 192,504,336 204,285,564 $ 217,469,958 Capital contributions Transfers out Change in net position Net position, beginning of year Net position, end of year $ (13,482,761) Page 123 $ (13,184,394) $ CITY OF GOODYEAR, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL SANITATION ENTERPRISE FUND YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original Final Operating revenues: Charges for services Miscellaneous Total operating revenues $ Operating expenses: Administration Cost of sales and services Total operating expenses 7,195,474 3,500 7,198,974 $ 751,078 6,655,041 7,406,119 Operating income (loss) (207,145) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) 2,500 2,500 7,195,474 3,500 7,198,974 Non-GAAP Actual $ 7,125,427 6,564 7,131,991 103,486 302,455 405,941 24,078 363,036 338,958 2,500 2,500 6,497 6,497 3,997 3,997 342,955 26,578 369,533 Transfers out (900,000) (900,000) (900,000) (1,104,645) (873,422) (530,467) Net position, beginning of year 342,955 2,102,486 $ (1,104,645) Page 124 $ (70,047) 3,064 (66,983) 647,592 6,121,363 6,768,955 (204,645) Net position, end of year $ 751,078 6,423,818 7,174,896 Income before transfers Change in net position Variance with Final Budget Positive (Negative) (873,422) $ 1,572,019 2,102,486 $ 2,445,441 CITY OF GOODYEAR, ARIZONA SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL STADIUM ENTERPRISE FUND YEAR ENDED JUNE 30, 2016 Budgeted Amounts Original Final Operating revenues: Charges for services Miscellaneous Total operating revenues $ Operating expenses: Administration Cost of sales and services Total operating expenses 1,854,152 40,000 1,894,152 $ 1,854,152 40,000 1,894,152 Non-GAAP Actual $ 2,234,046 1,261 2,235,307 Variance with Final Budget Positive (Negative) $ 379,894 (38,739) 341,155 2,383,190 3,984,515 6,367,705 2,515,169 2,193,389 4,708,558 2,495,748 1,869,353 4,365,101 19,421 324,036 343,457 Operating income (loss) (4,473,553) (2,814,406) (2,129,794) 684,612 Nonoperating revenues (expenses): Investment income Debt service Total nonoperating revenues (expenses) 2,000 (5,416,214) (5,414,214) 2,000 (6,219,767) (6,217,767) 5,776 (6,088,464) (6,082,688) 3,776 131,303 135,079 Income before transfers (9,887,767) (9,032,173) (8,212,482) 819,691 7,800,270 7,800,270 8,351,833 551,563 (2,087,497) (1,231,903) 139,351 1,371,254 3,572,244 3,572,244 Transfers in Change in net position Net position, beginning of year Net position, end of year $ (2,087,497) Page 125 $ (1,231,903) $ 3,711,595 $ 4,943,498 Page 126 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Capital Assets Schedules Capital Assets Schedules CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE For the fiscal year ended June 30, 2016 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 127 $ 21,378,952 4,443,171 90,518,661 9,061,008 166,182,275 39,801,726 356,324,387 204,750 13,493,098 $ 701,408,028 $ 701,408,028 $ 701,408,028 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY For the fiscal year ended June 30, 2016 Function General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Land, Land Improvements, Artwork, Right of Way, Streetscape $ 3,781,508 1,992,705 99,579,669 13,218,409 7,034,251 $ 125,606,542 Page 128 Buildings $ 25,557,510 813,910 25,417,045 $ 51,788,465 Improvements Other Than Buildings $ 2,380,333 89,024 89,766,766 15,924,236 6,233,450 $ 114,393,809 Vehicles, Machinery and Equipment $ Infrastructure Construction in Progress Total 7,622,676 21,142,886 7,854,610 1,689,481 1,492,073 $ 356,324,387 - $ 5,285,059 8,150,847 57,191 - $ 19,069,576 48,782,125 561,676,281 31,703,227 40,176,819 $ 39,801,726 $ 356,324,387 $ 13,493,098 $ 701,408,028 Page 129 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY For the fiscal year ended June 30, 2016 Function General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets Governmental Funds Capital Assets July 1, 2015 Additions Deductions Governmental Funds Capital Assets June 30, 2016 $ 15,165,433 48,634,418 550,343,175 31,917,019 40,372,101 $ 5,103,183 704,153 12,098,019 442,085 62,305 $ (1,199,040) (556,446) (764,913) (655,877) (257,587) $ 19,069,576 48,782,125 561,676,281 31,703,227 40,176,819 $ 686,432,146 $ 18,409,745 $ (3,433,863) $ 701,408,028 Page130 City of Goodyear Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 STATISTICAL SECTION STATISTICAL SECTION STATISTICAL SECTION Contents Page Financial Trends (Table 1 – 7) 132 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) 152 These schedules contain information to help the reader assess the City’s local revenue sources, property tax, and sales & use taxes. Debt Capacity (Table 15 – 19) 166 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) 173 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) 175 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 Report for the relevant year. Page 131 City of Goodyear Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2016 2015 2014** 2013 2012* Governmental Activities Net investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position $ 361,739,970 92,276,066 19,147,997 473,164,033 $ 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 Business-type Activities Net investment in capital assets Restricted Unrestricted Total Business-type Activities Net Position 180,640,162 18,131,719 7,380,491 206,152,372 176,380,867 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 11,229,680 193,461,606 542,380,132 110,407,785 26,528,488 $ 679,316,405 541,400,816 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 Primary Government Net investment in capital assets Restricted Unrestricted Total Primary Government Net Position Notes: *Net position adjusted for adoption of GASB Statement No. 65 **Net position adjusted for adoption of GASB Statement No. 68 Source: Statement of Net Position Page 132 Table 1 Fiscal Year 2011 2010 2009 2008 2007 $ 327,503,686 110,105,296 18,249,626 455,858,608 $ 317,162,459 115,881,050 19,272,548 452,316,057 $ 309,491,989 117,787,315 20,522,420 447,801,724 $ 256,047,572 70,835,115 36,122,934 363,005,621 $ 206,294,183 60,388,579 57,992,720 324,675,482 179,254,929 3,567,237 9,263,439 192,085,605 191,582,614 4,365,725 195,948,339 506,758,615 113,672,533 27,513,065 $ 647,944,213 508,745,073 115,881,050 23,638,273 $ 648,264,396 199,696,564 (11,409,545) 188,287,019 509,188,553 117,787,315 9,112,875 $ 636,088,743 159,530,687 (13,193,174) 146,337,513 415,578,259 70,835,115 22,929,760 $ 509,343,134 101,366,083 8,166,207 109,532,290 307,660,266 60,388,579 66,158,927 $ 434,207,772 Page 133 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2016 2015 2014 2013 2012 Expenses*** Governmental Activities: General government Public safety Community services** Highways and streets Public works Culture and recreation Development services Interest on long-term debt Total Governmental Activities Expenses $ 19,824,313 34,823,588 20,753,487 7,920,958 6,880,654 7,981,904 8,479,284 $ 106,664,188 $ 19,624,056 31,834,683 17,941,162 3,361,822 6,422,764 7,005,308 8,763,353 $ 94,953,148 $ 18,216,169 30,710,193 19,368,539 2,773,348 5,827,309 5,836,254 9,282,269 $ 92,014,081 $ 17,652,646 27,987,404 14,355,644 3,090,345 5,539,612 7,194,428 10,411,562 $ 86,231,641 $ 18,353,630 25,423,233 13,179,678 4,168,252 4,962,070 6,225,917 10,441,684 $ 82,754,464 Business-type Activities Water utility Wastewater utility Sanitation Stadium* Total Business-type Activities Expenses $ 16,515,949 11,131,538 6,444,459 12,647,134 $ 46,739,080 $ 14,565,710 10,923,812 5,802,163 12,407,494 $ 43,699,179 $ 13,832,573 9,678,822 5,472,534 12,529,987 $ 41,513,916 $ 11,570,223 10,342,364 5,246,666 12,204,354 $ 39,363,607 $ 11,907,022 8,747,778 5,154,201 11,634,491 $ 37,443,492 $ 153,403,268 $ 138,652,327 $ 133,527,997 $ 125,595,248 $ 120,197,956 Total Primary Government Expenses Notes: * Stadium Fund did not have operating activity until 2008 ** Community Services was reorganized into General Government and Development Services for fiscal year 2011 *** Beginning in fiscal year 2016 expense functions were consolidated to align with the basic financial statements Source: Statement of Activities Page 134 Table 2 Fiscal Year 2011 2010 2009 2008 $ 17,207,556 28,032,217 14,798,670 3,658,756 4,439,181 5,150,677 10,710,302 $ 83,997,359 $ 15,810,359 27,463,658 454,550 12,179,531 11,070,853 4,023,639 2,555,353 11,210,504 $ 84,768,447 $ 14,147,399 27,830,608 1,248,219 8,436,341 14,370,096 5,435,750 9,583,326 12,001,714 $ 93,053,453 $ 18,425,609 27,331,416 1,290,021 9,104,717 59,138,044 1,909,303 14,731,322 9,710,526 $ 141,640,958 $ $ 12,454,200 8,279,732 4,815,314 11,958,862 $ 37,508,108 $ 10,475,189 7,649,704 4,782,565 11,547,500 $ 34,454,958 $ 11,608,878 7,046,385 5,090,150 6,475,960 $ 30,221,373 $ 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 $ 121,505,467 $ 119,223,405 $ 123,274,826 $ 164,325,142 $ 118,429,294 2007 $ 12,163,207 21,220,241 1,277,245 9,581,333 25,397,680 3,181,071 19,683,385 5,785,031 98,289,192 continued Page 135 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2016 Program Revenue* Governmental Activities: Charges for Services: General government Public safety Public works Culture and recreation Developmental services Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Program Revenues Business-type Activities Charges for Services: Water utility Wastewater utility Sanitation Stadium* Operating Grants and Contributions Capital Grants and Contributions Total Business-type Activities Revenues $ $ 2015 2,398,256 1,713,627 386,041 7,043,227 9,518,206 12,134,476 33,193,833 $ $ 2014 2,766,974 1,624,427 416,607 5,353,778 10,777,134 8,252,449 29,191,369 $ $ 2013 2,603,723 714,614 433,384 6,899,047 7,565,511 6,171,185 24,387,464 $ $ 2012 2,884,854 1,176,336 304,128 6,206,750 4,654,268 11,358,824 26,585,160 $ $ 1,691,455 807,498 322,215 4,163,050 7,636,691 9,701,254 24,322,163 $ 14,113,484 13,610,926 7,125,427 2,234,046 110,837 11,692,490 48,887,210 $ 11,691,267 12,959,420 6,922,425 2,237,359 14,454,883 48,265,354 $ 12,417,092 12,350,336 6,641,318 2,182,278 5,962,050 39,553,074 $ 11,746,194 10,921,207 6,368,920 1,741,609 7,987,680 38,765,610 $ 10,573,584 9,531,422 6,115,977 1,633,230 9,252,599 37,106,812 Total Primary Government Revenues $ 82,081,043 $ 77,456,723 $ 63,940,538 $ 65,350,770 $ 61,428,975 Net (Expense)/Revenue Governmental Activities Business-type Activities Total Primary Government Net Revenues $ (73,470,355) $ (65,761,779) $ (67,626,617) $ (59,646,481) $ (58,432,301) 4,566,175 (1,960,842) (597,997) (336,680) 2,148,130 $ (71,322,225) $ (61,195,604) $ (69,587,459) $ (60,244,478) $ (58,768,981) Note: * Beginning in fiscal year 2016 program revenues were consolidated to align with the basic financial statements Source: Statement of Activities Page 136 Table 2 Fiscal Year 2011 $ $ 1,977,735 628,671 325,552 3,879,823 5,818,158 13,951,581 26,581,520 2010 $ $ 2009 $ 2008 1,715,692 657,270 287,805 3,615,255 5,648,867 16,436,375 28,361,264 1,031,722 264,347 357,039 4,776,076 4,843,140 102,028,190 $ 113,300,514 $ $ 2007 4,674,927 268,337 343,274 12,183,231 4,587,630 85,108,447 107,165,846 $ $ $ $ 9,391,674 8,243,147 5,774,010 1,564,324 4,570,849 29,544,004 $ 9,022,576 7,235,503 5,790,357 1,530,799 6,211,533 29,790,768 $ 8,880,151 6,389,190 5,625,426 1,014,221 25,000 41,595,562 63,529,550 $ 8,894,793 6,244,742 5,145,922 762,200 27,405,133 48,452,790 $ 56,125,524 $ 58,152,032 $ 176,830,064 $ 155,618,636 $ (34,475,112) $ 25,768,606 (8,706,506) $ $ $ (57,415,839) $ (7,964,104) (65,379,943) $ (56,407,183) $ (4,664,190) (61,071,373) $ 20,247,061 33,308,177 53,555,238 $ 1,035,160 182,927 3,527,777 272,516 13,241,940 895,854 62,732,783 81,888,957 7,588,225 6,137,152 4,392,794 20,000 24,414,623 42,552,794 $ 124,441,751 (16,672,751) 22,412,692 5,739,941 continued Page 137 City of Goodyear Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2016 Revenues and Other Changes in Net Position Governmental Activities: Taxes Intergovernmental Investment income Special assessments* Miscellaneous Transfers Total Governmental Activities Business-type Activities Investment income Proceeds from the sale of water rights Miscellaneous Transfers Total Business-type Activities Total Primary Government Changes in Net Position Governmental Activities Business-type Activities Total Primary Government $ $ $ 2015 71,256,446 $ 16,848,837 710,040 393,977 (5,564,606) 83,644,694 $ $ $ 237,615 22,955 5,564,606 5,825,176 $ $ $ 2014 66,223,459 $ 16,361,588 361,146 4,980,000 975,258 (582,797) 88,318,654 $ $ $ $ 136,531 222,911 5,138,252 5,497,694 89,469,870 $ 89,156,338 $ 10,174,339 7,973,306 18,147,645 $ 22,556,875 5,403,859 27,960,734 $ $ $ 95,839 432,983 4,876,544 $ 5,405,366 $ 82,929,078 $ 75,577,024 $ 69,028,647 9,804,767 3,536,852 13,341,619 $ 10,525,177 4,807,369 $ 15,332,546 $ 6,493,633 3,766,033 $ 10,259,666 Note: * Prior to fiscal year 2014 Special Assessments were shown in Public Works-Capital Grants and Contributions Source: Statement of Activities Page 138 2012 63,495,983 $ 58,957,595 $ 55,301,512 15,285,440 14,194,960 12,704,826 414,689 439,982 319,017 2,189,906 1,183,618 1,455,665 493,244 (5,138,252) (4,876,544) (3,892,665) 77,431,384 $ 70,171,658 $ 64,925,934 151,405 103,482 582,797 837,684 $ 2013 92,945 117,103 3,892,665 $ 4,102,713 Table 2 Fiscal Year 2010 2011 2009 2008 2007 $ 53,595,119 $ 55,623,884 $ 59,003,971 $ 61,251,635 $ 59,428,806 9,699,146 10,907,518 12,236,437 12,654,235 15,053,501 227,446 179,114 148,687 4,268,448 4,723,886 827,619 2,026,285 911,254 4,075,011 1,029,445 (7,815,285) (7,751,307) (9,444,077) (56,622) (3,390,940) $ 60,958,390 $ 60,921,516 $ 64,549,042 $ 72,805,252 $ 80,179,016 $ $ 71,819 638,611 3,390,940 4,101,370 57,527 4,352,000 100,698 7,815,285 $ 12,325,510 $ $ 73,247,026 3,542,551 $ 4,514,333 7,661,320 (3,862,734) (320,183) $ 12,175,653 $ 65,059,760 $ $ $ 1,379,832 212,708 9,444,077 $ 11,036,617 $ $ 72,500,835 $ 83,841,869 $ 81,709,767 $ 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 $ 121,900 78,586 7,751,307 7,951,793 $ $ 1,447,446 26,683 56,622 1,530,751 concluded Page 139 Page 140 Table 3 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year Property Taxes 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 $ 19,114,087 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 Sales & Use Taxes $ 49,309,600 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 Franchise Taxes $ 2,832,759 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 State Shared Revenues - not Restricted for Specific Programs State Shared State Revenue Highway User Sales Sharing Revenue $ 8,988,686 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 Source: City Financial Records and Reports Page 141 $ 7,859,101 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 $ 4,264,827 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 City of Goodyear Excise Tax Collections Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2016 2015 2014 2013 2012 City Privilege (Sales) Tax State-Shared Sales Tax State-Shared Income Tax State-Share Vehicle License Tax Fines and Forfeitures Franchise Taxes $ 49,309,600 6,258,721 7,859,101 2,729,966 839,108 2,832,759 $ 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 Total $ 69,829,255 $ 65,273,754 $ 62,556,655 $ 57,756,502 $ 52,355,875 Source: City Financial Records and Reports Page 142 Table 4 Fiscal Year 2011 2010 2009 2008 2007 $ 32,729,749 3,661,678 4,498,039 1,539,429 849,060 2,316,820 $ 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 $ 45,594,775 $ 45,435,968 $ 49,299,531 $ 56,391,182 $ 59,196,234 Page 143 City of Goodyear Sales & Use Taxes by Industry Classification Last Ten Fiscal Years (Unaudited) Fiscal Year 2016 Mining & Government Construction Manufacturing Utilities Wholesale Trade Retail Trade Restaurant & Bar Real Estate Hotels Services Miscellaneous $ 6,534 7,545,663 1,410,894 4,077,652 1,032,679 17,279,498 7,032,111 5,575,550 1,096,710 2,833,590 839,592 Total* $ 48,730,473 2015 $ 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 $ 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 Note: 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 144 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 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 Table 5 Fiscal Year 2008 2009 $ 11,412 12,779,596 508,454 2,448,686 538,279 9,568,935 3,687,991 2,227,491 854,203 1,176,780 622,042 $ 34,423,869 $ 6,391 17,256,194 451,147 2,397,905 775,843 9,526,853 3,740,867 2,698,200 1,006,334 1,451,721 1,035,306 $ 40,346,762 2007 $ 1,055 19,305,179 405,882 2,115,344 815,930 9,789,605 3,996,446 2,603,404 944,488 3,725,380 2,286,662 $ 45,989,375 Page 145 City of Goodyear Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2016 General Fund Reserved Unreserved $ 2015 - $ 2014 - $ 2013 - $ 2012 - $ - Nonspendable: Advances to other funds Inventories Prepaid items 961,840 961,840 961,840 961,840 - 21,656 25,261 8,916 961,840 16,258 667,798 573,473 504,865 486,842 500,911 Restricted by: Charter mandates 4,009,183 3,841,444 3,676,547 3,528,982 3,377,572 Court 178,351 240,631 221,290 234,813 261,229 Law enforcement 427,243 309,112 274,392 208,085 125,812 Transit 847,446 745,210 644,135 543,022 - Assigned to: IT replacement 498,851 108,301 1,484,148 170,684 437,873 Fleet replacement 3,196,101 2,508,319 1,502,483 3,032,429 1,730,168 Risk management 1,077,452 1,088,234 792,947 357,741 811,244 Parks management 1,271,367 - - - - 52,620,845 49,783,760 43,707,677 33,325,255 23,074,844 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 $ 65,756,477 $ 60,181,980 $ 53,795,585 $ 42,858,609 $ 31,297,751 $ - $ - $ - $ - $ - - - - - - 564,639 487,413 650,344 595,675 412,916 - - - 36,182 45,225 Debt service 12,989,198 13,810,210 14,848,703 15,482,259 15,663,838 Development impact fees 12,882,857 9,833,566 7,892,792 16,241,644 21,720,718 721 174,025 47,570 493,395 400,610 - 4,414,851 274,106 1,695,700 1,109,573 (66,487) 803,837 (73,354) Nonspendable: Inventories Prepaid items Restricted by: Highway user funds Capital projects Community facilities districts operations Unassigned Total All Other Governmental Funds 1,434,106 (28,737) $ 27,842,784 $ 29,763,151 $ 24,443,998 $ 35,230,762 Note: *Starting with fiscal year 2011, fund balances were stated in classification required by GASB Statement No. 54 Source: City Financial Records and Reports Page 146 - 711,980 (26,073) 538,410 (9,854) $ 38,771,863 Table 6 Fiscal Year 2011 * $ 2010 - $ 2009 17,812,619 10,742,777 $ 2008 29,117,875 $ 2007 42,219,809 $ 61,037,128 961,840 - - - - 3,627 - - - - 422,681 - - - - 3,209,321 - - - - 198,457 - - - - 129,231 - - - - - - - - - 407,961 - - - - 383,225 - - - - 558,310 - - - - - - - - - 21,481,088 - - - - $ 27,755,741 $ 28,555,396 $ 29,117,875 $ 42,219,809 $ 61,037,128 $ $ 14,891,228 1,393,549 47,213 $ 13,597,749 4,110,554 - $ 15,356,746 10,942,787 - $ - 20,452,179 - 23,153,403 1,435,331 25,851,665 27,462,037 289,782 - - - - 46,238 - - - - - 8,726,046 7,810,178 20,649,813 10,220,953 15,113,512 - - - - 21,992,019 - - - - 285,914 - - - - - - - - - - - - - 36,784,169 $ 42,297,037 $ 79,613,235 $ 47,406,990 536,230 (2,336,765) $ 35,926,930 $ Page 147 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 Public safety Community services* Highways and streets Public works Culture and recreation Development services Capital outlay Debt Service: Principal retirement Interest and debt cost Total Expenditures Excess of Revenues over (under) Expenditures 2016 2015 2014 2013 2012 2011 $ 71,287,200 7,357,205 21,811,572 5,792,947 839,108 710,040 6,096,012 1,346,713 728,930 115,969,727 $ 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 17,968,635 32,881,648 5,680,917 2,255,101 5,712,191 7,933,367 15,988,901 18,081,622 29,505,746 5,494,087 2,268,109 5,265,454 6,933,854 11,326,103 16,895,276 28,310,822 5,585,966 2,045,578 4,975,947 5,823,318 18,496,444 17,376,427 26,764,289 4,674,325 2,093,312 4,884,349 5,232,999 18,252,039 16,953,769 24,862,833 3,340,208 2,967,386 4,115,701 4,557,391 6,437,600 15,913,718 24,045,015 3,808,328 3,047,742 3,936,203 4,376,985 9,234,659 9,772,183 9,046,458 107,239,401 9,291,703 9,323,202 97,489,880 9,441,923 9,765,514 101,340,788 10,226,228 10,987,906 100,491,874 12,433,024 10,687,152 86,355,064 11,254,524 10,645,162 86,262,336 8,730,326 11,802,040 4,556,722 2,003,780 7,420,383 792,511 Notes: * Community Services was reorganized into General Government and Development Services for fiscal year 2010 ** Beginning in fiscal year 2016 expenditure functions were consolidated to align with the basic financial statements Source: Statement of Revenues, Expenditures and Changes in Fund Balances Page 148 Table 7 Fiscal Year 2010 2009 2008 2007 $ 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 15,316,159 24,367,955 4,098,986 3,075,759 3,882,621 4,654,052 13,494,149 14,752,949 26,043,960 1,248,219 5,686,483 3,901,157 4,393,748 9,723,957 47,556,824 16,714,850 24,573,051 1,329,505 3,994,494 4,261,005 4,667,176 9,262,010 135,249,363 15,546,781 19,104,839 1,255,467 4,756,383 4,294,102 3,431,934 6,028,162 71,999,738 10,942,758 11,158,130 90,990,569 7,392,618 11,930,502 132,630,417 5,141,143 10,466,384 215,658,981 4,836,000 5,740,194 136,993,600 1,629,205 (39,692,047) (91,395,729) (14,534,628) continued Page 149 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2016 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 2015 3,539,227 $ (9,091,060) 18,535,000 2,047,350 (20,106,713) 3,654,130 18.4% $ 2013 2012 4,588,019 $ 5,356,364 $ 4,726,150 $ 5,504,462 (9,923,248) (10,494,616) (9,602,694) (9,397,127) 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) (96,492) (5,076,196) $ 2014 11,705,548 20.6% Source: City Financial Records and Reports Page 150 (4,406,510) $ 150,212 22.3% 6,015,977 $ 8,019,757 25.8% (1,033,440) $ 6,386,943 28.9% Table 7 Fiscal Year 2011 2010 2009 2008 2007 $ 8,388,300 $ 6,376,290 $ 4,123,384 $ 11,561,671 $ 17,288,179 (10,837,705) (14,191,575) (11,874,691) (21,005,748) (17,387,710) 105,000 604,500 112,248,000 16,969,302 5,733 5,722 2,300,192 (72,151) 6,415,000 (3,585,000) (6,734,459) - . (2,449,405) (10,726,085) 104,784,656 16,797,620 $ (1,656,894) $ (6,075,347) $ (50,418,132) $ 13,388,927 $ 2,262,992 27.3% (7,704,552) 27.0% 21.5% 11.0% 12.4% concluded Page 151 City of Goodyear Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years (Unaudited) City Direct Rate Overlapping Rates County-Wide Jurisdictions Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Debt Operating Service Rate Rate 1.1637 0.7063 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 Total County City Operating Rate Rate 1.8700 1.3609 1.8700 1.3209 1.9000 1.2807 1.7750 1.2407 1.6000 1.2407 1.4233 1.0508 1.5999 0.9909 1.6000 1.0327 1.6000 1.1046 1.5936 1.1794 County Library Fire District District Assistance Rate Rate 0.0556 0.0116 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 Source: Maricopa County Assessor's Office County County Flood Education District Equalization Rate Rate 0.1592 0.5054 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 - continued Page 152 Table 8 Overlapping Rates School Districts County-Wide Jurisdictions Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Community College Rate 1.4940 1.5187 1.5340 1.3778 1.2082 0.9728 0.8844 0.9386 0.9760 1.0646 Central Arizona Project Rate 0.1400 0.1400 0.1400 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1200 Special Health Care District Rate 0.1494 0.1122 0.0914 0.0856 0.0935 0.1184 Total Agua Fria/ County Avondale Litchfield Rate Rate Rate 3.7267 9.4960 3.8352 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 Buckeye/ Tolleson/ Liberty Littleton Rate Rate 7.6149 9.9303 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 Mobile Rate 7.8876 7.8876 7.7572 6.9350 4.9490 5.4994 6.2147 8.3984 N/A N/A continued Page 153 City of Goodyear Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years (Unaudited) Overlapping Rates Other Special Taxing Districts Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 West Maricopa Education Center District Rate 0.0698 0.0810 0.0592 0.0500 0.0500 0.5000 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 Estrella Centerra Cortina Cottonflower Mtn. Ranch Roosevelt Community Community Community Community Irrigation Facilities Facilities Facilities Facilities District District District District District Rate Rate Rate Rate Rate 27.1000 3.1327 2.5999 3.3377 1.3000 27.1000 3.0361 2.6034 3.2768 1.3000 17.1000 3.3559 2.8500 3.9890 1.3000 17.1000 3.2961 2.8500 3.8528 1.3000 17.1000 2.1961 2.7298 3.4033 1.3000 17.1000 2.3797 2.2087 2.9776 1.3000 17.1000 2.6829 1.2146 2.1198 1.3000 17.1000 2.6965 0.1520 1.2843 1.3000 15.0000 3.0000 2.8500 1.7639 1.3000 15.0000 3.0000 2.8500 3.0000 1.3000 continued Page 154 Table 8 Overlapping Rates Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 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 0.7075 1.1497 1.1097 0.3000 2.9103 3.1070 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 concluded Page 155 Page 156 Table 9 City of Goodyear Principal Property Tax Payers Current Fiscal Year and Nine Years Prior (Unaudited) Fiscal Year 2007 2016 Taxable Assessed Value Taxpayer Arizona Public Service Company $ Rank Percentage of Total Taxable Assessed Value Taxable Assessed Value 20,875,460 1 3.11% 14,196,349 2 2.12% First American Title Insurance Company 9,574,547 3 1.43% Macy's Retail Holdings, Inc. 8,372,268 4 1.25% - Cardinal Capital Co 7,810,665 5 1.16% - DH Goodyear LLC 7,042,194 6 1.05% - Broadway Goodyear, LLC 6,808,160 7 1.01% - Southwest Gas Corporation 4,824,209 8 0.72% - The Market at Estrella Falls, LLC 4,737,035 9 0.71% - TPP 211 Canyon Trails LLC 4,195,273 10 0.63% - VHS of South Phoenix, Inc. Rank Percentage of Total Taxable Assessed Value $ 11,178,451 2 2.26% 10,790,514 4 2.18% Sun MP LLC - 16,048,088 1 3.24% BT Goodyear LLC - 6,635,498 5 1.34% Suncor Development Company - 10,991,797 3 2.22% PVPW Corporation - 4,218,587 7 0.85% Byrd Enterprises of Arizona Inc. - 4,307,193 6 0.87% Snyders of Hanover - 2,971,563 10 0.60% Wal-Mart Stores Inc. - 4,164,098 8 0.84% NNP Estrella Mountain Ranch LLC - 4,104,822 9 0.83% Total $ 88,436,160 13.18% Source: Maricopa County Treasurer Page 157 $ 75,410,611 15.24% 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 30 427,218,918 $ 223,077,763 Other Less: Tax-Exempt Property 149,242,505 $ 1,127,677 $ 129,713,965 Agricultural/ Vacant Land $ Net Assessed Value 2016 Limited Property Value 2015 Primary Secondary 393,827,703 416,834,896 192,119,198 196,638,563 158,537,781 169,043,455 1,158,177 1,167,249 115,918,333 122,400,093 629,724,526 661,284,070 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 2007 $ Total Assessed Value Commercial Property Notes: Beginning in fiscal year 2016, the Net Assessed Limited Property Value is statutorily required to be used for the calculation of primary and secondary property taxes. Prior to fiscal year 2016, the primary levy was calculated using the limited assessed valuation and the secondary levy was calculated using the full cash assessed valuation. Detail data prior to 2009 for "primary" is not available. Source: Maricopa County Assessor's Office Page 158 $ 670,952,898 Table 10 Estimated Actual Taxable Value Total Direct Tax Rate $ 1.8700 $ Assessed Value as Percentage of Actual Value 6,479,932,484 10.4% 1.1836 0.6864 6,012,798,998 6,332,435,414 10.5% 10.4% 1.1994 0.7006 5,485,036,603 5,562,951,789 10.7% 10.6% 1.1115 0.6635 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% Page 159 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) 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 $ 12,599,829 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 Collected within the Fiscal Year of the Levy Collection in Percentage Subsequent Amount of Levy Years $ 12,392,149 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 98.35% 98.47% 97.89% 98.22% 97.31% 96.92% 95.78% 94.91% 96.38% 96.82% 113,307 51,739 47,705 101,729 24,739 317,754 346,004 212,386 157,676 Total Collections to Date Percentage Amount of Levy $ 12,392,149 11,921,870 11,001,355 10,571,359 10,556,037 11,316,702 14,646,371 14,070,440 10,663,267 7,346,164 98.35% 99.41% 98.36% 98.67% 98.25% 97.14% 97.90% 97.30% 98.34% 98.95% (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 160 Table 12 City of Goodyear Utility Statistical Data Ten Largest Water Users Current Fiscal Year and Eight Fiscal Years Ago (Unaudited) Fiscal Year Entity Canyon Trails 4 - South Las Brisas Community Assoc Avondale Elementary School Dist. Canyon Trails HOA Unit 3 Canyon Trails HOA Unit 4 Sarival Paseo Joint Community Canyon Trails HOA Cancer Treatment Center Agua Fria Union High School Dist. Centerra, LLC Evergreen Lawn Sprinklers Park Shadows Estrella Vista HOA Type of User Homeowner's Association Homeowner's Association School Homeowner's Association Homeowner's Association Homeowner's Association Homeowner's Association Hospital School Homeowner's Association Homeowner's Association Apartments Homeowner's Association 2008 2016 Fees & Fees & Rank Charges Rank Charges 1 $ 323,114 2 $ 166,139 2 298,246 3 234,467 6 105,348 4 232,358 8 93,896 5 217,015 5 145,474 6 196,995 3 154,195 7 188,427 8 171,801 9 165,807 1 173,266 10 141,870 7 102,443 4 148,800 9 76,401 10 64,527 Total $ 2,170,100 Total as a percent of total Water System Operating Revenue 15.37% Note: Water information not available prior to fiscal year 2008 Source: City customer service and billing records Page 161 $ 1,230,489 13.94% Page 162 Table 13 City of Goodyear Utility Statistical Data Ten Largest Wastewater Users Current Fiscal Year and Eight Fiscal Years ago (Unaudited) Fiscal Year Entity Arizona State Prison/Perryville Cancer Treatment Center Poore Brothers, Inc. Park Shadows Fairfield Centerra LLC Fairfield Goodyear LLC Avondale Elementary HSL Encantada Goodyear LLC Airport Training Center Schoeller Arca Systems Inc Agua Fria Union High School District Wal-Mart Stores McLane Sunwest La Jolla Court, Inc. Estrella Joint Committee 2016 2008 Fees & Fees & Type of User Rank Charges Rank Charges Prison 1 $ 1,387,822 1 $ 317,331 Hospital 2 115,763 Food Manufacturer, Snacks 3 85,507 6 22,656 Apartments 4 75,147 2 50,512 Real Estate 5 68,621 Apartments 6 60,801 Education 7 54,833 7 21,794 Apartments 8 49,595 Airport 9 48,053 5 22,656 Manufacturer 10 46,215 Education 3 32,000 Retail 4 24,273 Grocery Distributor 8 19,253 Apartments 9 18,044 HOA - 10 17,581 Total $ 1,992,358 Total as a percent of total Wastewater System Operating Revenue Note: Wastewater information not available prior to fiscal year 2008 Source: City customer service and billing records Page 163 14.64% $ 546,100 8.74% City of Goodyear Schedule of Existing and Adopted Monthly Water & Sewer Service Charges (2011 - 2016) (Unaudited) Description of Water System Services Adopted Adopted Adopted Adopted Adopted 2011 2012 2013 2015 2016 (1) $ 12.70 Existing Fees Base Charge (Meter Size) 9.94 $ 10.05 $ 10.23 $ 11.24 1 Inch 3/4 Inch $ 17.56 12.70 $ 11.81 12.74 14.14 15.54 17.56 1 1/2 Inch 28.39 16.36 19.74 22.86 25.12 28.39 2 Inches 45.96 26.22 32.02 37.01 40.67 45.96 3 Inches 77.67 48.43 61.64 70.67 77.67 77.67 4 Inches 126.65 83.36 99.58 115.24 126.65 126.65 6 Inches 240.36 159.83 189.08 218.71 240.36 240.36 Monthly Volume Charge - Residential 0 - 6,000 gallons (per thousand) $ 1.47 (2) $ 1.32 $ 1.46 $ 1.18 $ 1.30 $ 1.47 6,001 - 12,000 (per thousand) 2.93 (3) 2.64 2.92 2.36 2.59 2.93 12,001 - 30,000 (per thousand) 4.40 (4) 3.96 4.38 3.54 3.89 4.40 30,001+ gallons (per thousand) 7.06 (5) 5.15 5.69 5.69 6.25 7.06 Monthly Volume Charge - Commercial 0 - 40,000 gallons (per thousand) $ 3.73 $ 2.30 $ 2.60 $ 3.00 $ 3.30 $ 3.73 40,001 - 100,000 gallons (per thousand) 5.97 3.68 4.16 4.80 5.28 5.97 100,001+ gallons (per thousand) 7.75 4.78 5.41 6.24 6.86 7.75 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 2016 (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 (2011-2016) 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% Fiscal Year 2016 13.00% 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 164 Table 14 Description of Sewer System Services Existing Fees Adopted Adopted Adopted Adopted 2011 2012 2013 2016 Residential Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 5.95 $ 4.45 $ 4.90 $ 5.78 $ 5.95 General Commercial Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 5.95 $ 4.45 $ 4.90 $ 5.78 $ 5.95 $ 21.75 $ 17.52 $ 18.96 $ 21.12 $ 21.75 Base Charge (Meter Size) 3/4 Inch 1 Inch 33.38 23.70 28.02 32.41 33.38 1 1/2 Inch 41.14 29.75 34.61 39.94 41.14 2 Inches 79.91 54.57 67.16 77.58 79.91 3 Inches 115.22 84.74 99.68 115.22 115.22 4 Inches 152.86 130.37 139.10 152.86 152.86 6 Inches 378.70 285.03 328.83 378.70 378.70 Schedule of Wastewater System Rate Increases (2011-2016) Rate Date Fiscal Year 2011 Increase 9.30% Fiscal Year 2012 9.50% Fiscal Year 2013 15.20% Fiscal Year 2014 N/A Fiscal Year 2015 N/A Fiscal Year 2016 3.00% Page 165 City of Goodyear Ratios of Outstanding Debt by Type Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 $ 18,564,501 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 Contract Payable $ 1,755,628 3,755,628 5,755,628 11,755,628 - Governmental Activities Public Improvement McDowell Greater Arizona Corporation Road Development Municipal Corridor Authority Facilities Improvement Loan Revenue Bond District $ 3,185,000 $ 8,859,189 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 $ 39,304,278 40,881,328 42,383,378 42,390,000 43,675,000 44,900,000 46,060,000 47,165,000 47,165,000 - Source: US Census Bureau, Applied Geographic Solutions/TIGER Geography, and City Financial Records Page 166 Community Facilities District Bonds $ 106,289,435 108,520,857 107,194,657 109,823,000 113,555,000 117,182,000 122,313,000 127,125,000 131,116,000 76,844,000 Table 15 General Obligation Bonds $ 73,018,360 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 Business-Type Activities Public Improvement Corporation Municipal Facilities Revenue Revenue Bond Bonds $ 104,164,132 103,970,274 104,096,689 102,180,000 102,180,000 102,300,000 102,300,000 102,300,000 67,850,000 - $ 42,413,304 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 Water Infrastructure Finance Authority Loan $ 3,854,322 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 Water Rights $ 10,314,041 11,173,544 - Page 167 Total $ 396,467,521 401,866,908 412,112,868 421,153,409 426,394,231 439,926,724 445,292,958 440,790,280 394,179,400 185,989,012 Percentage of Personal Income 21.18% 20.07% 21.92% 21.26% 22.40% 20.74% 24.79% 24.89% 25.65% 12.34% Per Capita 5,098 5,377 5,582 5,900 6,341 6,634 6,822 7,047 6,742 3,335 Table 16 City of Goodyear Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 $ 91,582,861 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 Less: Amounts Available in Debt Service Fund $ 13,202 98,876 841,716 1,246,110 668,186 828,016 592,244 3,026,753 587,476 Percentage Estimated Actual Taxable Value of Property Total $ 91,569,659 99,245,534 106,631,246 111,098,284 117,148,890 121,811,814 125,526,984 123,532,756 126,818,247 89,607,524 Source: City Financial Records and Reports Page 168 13.59% 15.01% 18.07% 18.34% 17.41% 14.35% 12.77% 12.34% 16.59% 18.11% Per Capita $ 1,177 1,328 1,444 1,556 1,742 1,837 1,923 1,975 2,169 1,607 Table 17 City of Goodyear Direct and Overlapping Governmental Activities Debt As of June 30, 2016 (Unaudited) Net Assessed Limited Property Value Overlapping Jurisdiction Debt Outstanding 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 Facilities District Subtotal of overlapping debt: $ 34,623,670,323 34,623,670,323 12,790,483,748 197,234,465 314,961,281 212,667,831 661,374,248 8,117,347 656,613,462 937,650,210 976,335,529 4,305,958 4,297,123 110,488,180 284,659,081 70,154,783 8,192,888 10,281,712 8,858,634 56,291,650 $ 86,560,308,776 $ Direct Debt: City of Goodyear $ 670,952,898 Estimated Percentage Applicable (a) Net Debt Amount $ 557,390,000 71,220,000 17,035,000 32,990,000 19,140,000 44,425,000 65,100,000 28,600,000 60,520,000 695,000 905,000 9,915,000 40,615,000 36,330,000 2,160,000 2,960,000 2,035,000 6,725,000 998,760,000 1.97 % $ 1.97 10,980,583 5.35 3,810,270 57.89 9,861,562 83.13 27,424,587 0.03 5,742 44.78 19,893,515 44.18 18.35 11,945,850 0.01 2,860 56.96 34,472,192 100.00 695,000 100.00 905,000 100.00 9,915,000 100.00 40,615,000 100.00 36,330,000 100.00 2,160,000 100.00 2,960,000 100.00 2,035,000 100.00 6,725,000 $ 220,737,161 $ 64,989,227 100.00 % $ 64,989,227 Total Direct and Overlapping Debt $ 285,726,388 Total Governmental and Business-Type General Obligation Bonds $ 670,952,898 $ 90,270,000 100.00 % $ 90,270,000 (a) Proportion applicable to the City of Goodyear, Arizona is computed on the ratio of net assessed limited property value for 2015/16. Sources: Maricopa County Assessor's Office and Official Statements Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Goodyear. This process recognizes that when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the county's taxable assessed value that is within the government's boundaries and dividing it by the county's total taxable assessed value. Page 169 City of Goodyear Legal Debt Margin Information Last Ten Fiscal Years (Unaudited) Fiscal Year 2016 2015 2014 2013 2012 $ 670,952,898 $ 659,588,897 $ 590,258,652 $ 605,642,183 $ 673,001,828 134,190,580 131,917,779 118,051,730 121,128,437 134,600,366 Total Debt Applicable to 20% Limit 90,065,000 97,570,000 104,775,000 111,690,000 118,130,000 Legal 20% Debt Margin (Available Borrowing Capacity) $ 44,125,580 $ 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 67.12% 73.96% 88.75% $ 92.21% 87.76% $ 40,257,174 $ 39,575,334 $ 35,415,519 $ 36,338,531 $ 40,380,110 Total Debt Applicable to 6% Limit 205,000 220,000 250,000 250,000 265,000 Legal 6% Debt Margin (Available Borrowing Capacity) $ 40,052,174 $ 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 0.51% 0.56% Source: Maricopa County Treasurer's Office and City financial records and reports Page 170 0.71% 0.69% 0.66% Table 18 Fiscal Year 2011 $ $ 2009 2008 2007 982,856,423 $ 1,000,721,049 $ 764,237,138 $ 494,913,013 169,751,777 196,571,285 200,144,210 152,847,428 98,982,603 122,205,000 126,070,000 123,830,000 129,540,000 90,195,000 76,314,210 $ 23,307,428 848,758,886 47,546,777 2010 $ $ 71.99% $ 50,925,533 50,650,533 0.54% $ 64.13% $ 58,971,385 61.87% $ 285,000 275,000 $ 70,501,285 $ 58,686,385 0.48% $ $ 84.75% 8,787,603 91.12% 60,043,263 $ 45,854,228 $ 29,694,781 295,000 305,000 - 59,748,263 $ 45,549,228 $ 29,694,781 0.49% 0.67% Page 171 0.00% Table 19 City of Goodyear Pledged-Revenue Coverage Last Ten Fiscal Years (Unaudited) Public Improvement Corporation Municipal Facilities Revenue Bonds* Fiscal Year Ended Operating Revenue June 30 2016 $ 87,880,128 2015 82,672,164 2014 81,109,035 2013 76,004,072 2012 65,501,422 2011 57,697,609 2010 57,363,961 2009 62,281,214 2008 85,680,828 Pledged Revenue $ 67,903,484 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 235,000 $ 5,451,663 230,000 5,458,563 85,000 5,702,661 590,000 5,505,685 570,000 4,925,626 745,000 5,562,612 720,000 5,594,412 680,000 4,907,984 505,000 2,019,691 Coverage 11.94 10.52 10.85 9.51 9.57 7.26 7.28 8.83 22.36 Water & Sewer Bonds & Loans Fiscal Year Ended Operating Revenue June 30 2016 $ 27,964,881 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 Note: Less: Operating Expenses $ 15,205,094 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 Net Operating Revenue $ 12,759,787 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 $ Debt Service Principal Interest 1,496,834 $ 2,159,000 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 Coverage 3.49 3.09 3.37 1.68 1.72 3.13 4.62 3.93 3.29 2.40 *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 172 Table 20 City of Goodyear Demographic and Economic Statistics Last Ten Fiscal Years (Unaudited) Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Population 77,776 74,743 73,832 71,381 67,239 66,309 65,275 62,554 58,462 55,775 Personal Income (in thousands) $ 1,871,990 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 Per Capita Personal Income $ 24,069 26,784 25,459 27,746 28,304 31,986 27,521 28,315 26,290 27,026 Median Age 36.7 35.6 36.5 38.4 35.2 33.5 35.5 39.1 36.1 36.3 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 5.5% 5.7% 7.2% 8.3% 8.2% 9.8% 7.1% 6.9% 3.6% 2.1% Source: US Census Bureau, Applied Geographic Solutions/TIGER Geography, and City Financial Records Page 173 Table 21 City of Goodyear Principal Employers Current Fiscal Year and Nine Fiscal Years Prior (Unaudited) Major Corporation Fiscal Year 2016 Percentage of Total City Employees Rank Employment* Abrazo West Campus 1,009 1 2.78% Macy's 1,008 2 2.78% Amazon.com 975 3 2.69% Arizona State Prison/Perryville 850 4 2.34% Cancer Treatment Centers of America 768 5 2.12% City of Goodyear 531 6 1.46% Sub-Zero / Wolf 472 7 1.30% McLane Sunwest 345 8 Cavco Industries, Inc. 325 Snyder's of Hanover 215 Fiscal Year 2007 Percentage of Total City Employees Rank Employment* 350 7 1.82% 750 2 3.90% 560 3 2.91% 0.95% 510 4 2.65% 9 0.90% 475 6 2.47% 10 0.59% Lockheed Martin 800 1 4.16% Rudolfo Brothers 260 9 1.35% Walmart Supercenter 488 5 2.54% Safeway 285 8 1.48% Target 191 10 0.99% Total 6,498 17.90% Source: City Records *2016 labor force = 36,311 ; 2007 labor force = 19,240 Page 174 4,669 24.27% Table 22 City of Goodyear Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years (Unaudited) 2016 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 2015 2014 2013 2012 2011 2010 2009 2008 2007 55 29 18 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 96 35 50 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 92 10 10 0 6 13 63 27 19 8 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 13 531 527 487 489 474 486 498 515 519 444 Source: City Financial Records and Reports Page 175 City of Goodyear Operating Indicators by Function Last Ten Fiscal Years (Unaudited) Function Fiscal Year 2015 2016 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 2014 629 598 504 3,608 3,623 3,170 93% 95% 88 NA 144 136 543,565 633,643 1,472,765 1,855,914 103 135 95% 76 114 491,540 1,850,471 275 Police # of total arrests # of moving violations citations 2,661 3,479 2,846 5,919 2,612 10,586 Fire # of emergency responses # of fires extinguished # of inspections 6,002 165 1,253 6,972 205 1,539 8,298 242 752 5,914 1,442 201,704 6,254 1,009 196,863 6,403 1,091 191,189 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) (1) HR budgeted operating cost as a % of City budgeted payroll Parks and Recreation # attending Park & Recreation facilities and Libraries annually (2) # of square feet of medians and rights of way maintained NA 5,610 <1 2,868 <1 3,580 1 1 1 0.96 1 1 362 5.06% 144 5.05% 180 4.85% 188,000 23,151,438 Page 176 74,527 23,151,438 74,527 23,151,438 Table 23 2012 2013 Fiscal Year 2010 2011 2009 2008 2007 470 484 550 504 613 648 576 2,514 3,827 3,380 3,395 2,494 2,469 3,653 94% 94% 90% 90% 94% 94% 94% 59 112 804,542 2,185,489 254 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 2,532 10,259 2,402 11,468 2,254 12,581 4,731 11,810 2,829 13,313 2,614 11,452 2,814 12,422 5,604 243 969 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 6,298 1,238 184,638 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 <1 3,529 <1 3,576 <3 3,269 <3 4,232 <5 3,401 <5 5,874 <5 1,340 1 1 1 0.7 1 1 1 1 1 1 1 1 1 1 178 5.01% 118 4.86% 125 4.11% 247 4.18% 158 4.11% 179 4.36% 164 5.50% 69,596 23,151,438 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 Page 177 50,093 15,320,000 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 Fiscal Year 2015 2016 8.86% 2.75% 26,323 503 2014 3.85% 25.71% 8.76% -4.12% 25,320 24,346 536 550 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) 16,132 36 865 17,034 11.70 0.63 15,404 36 1,055 17,533 12.70 0.63 14,959 35 1,025 17,533 11.70 0.32 Wastewater # of residential customers # of multifamily customers # of commercial customers Sewer Service Connections Sewage Treated (millions gallons per day) 16,064 36 382 18,236 4.15 15,335 69 373 17,139 3.81 14,877 36 370 16,918 4.20 Other Public Works Street resurfacing (miles) Potholes repaired 109.00 1,339 83.23 1,253 19.20 1,166 3,544 2,863 3,018 Citizen & Neighborhood Resources # of new Code Enforcement cases processed per year Source: City Financial Records and Reports Page 178 Table 23 2012 2013 Fiscal Year 2010 2011 2009 2008 2007 11.29% 1.41% 10.45% 14.15% 4.42% -7.31% -10.40% -3.90% -12.30% -15.00% -10.25% 6.00% 20.71% 6.98% 23,387 22,363 21,489 20,928 20,149 19,811 18,664 546 503 729 848 0 634 510 14,430 36 999 17,533 9.60 0.39 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 14,231 38 382 16,918 4.15 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 30.00 296 24.00 264 12.50 260 372 4.00 681 783 34.20 1,096 2,841 2,069 2,016 2,255 2,155 2,698 2,755 Page 179 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) 2016 2015 2014 2013 Fiscal Year 2012 2011 2010 2009 2008 2007 4 134 7 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 4 934 9,041 89 934 8,832 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 18 206 1 6 1 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 1 330 3,031 16 308 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 11 254 54 5.6 242 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 Source: City Financial Records and Reports Page 180 City of Goodyear Comprehensive Annual Financial Report City of Goodyear Finance Department 190 N. Litchfield Rd. Goodyear, AZ 85338 623-932-3015